It’s Christmas Time. That magical time of year where friends get together, families visit, and, for a little while, all seems well.
But, as sure as Christmas time comes around, we also get economic defenses of Scrooge and calls for cash to be given rather than gifts. From a mainstream economic point of view, there’s nothing inherently wrong with these articles. However, they miss a larger point, a point once known to economists, but have since been forgotten (or trivialized): moral rules matter.
Humans, as social creatures, live in two worlds at once (to paraphrase Hayek). We live in our personal worlds, which have their rules, and we live in the commercial/interpersonal world, which has its own set of rules. We must move in between these worlds constantly and manage the two rule regimes. What is appropriate in one world may not be appropriate in the other.
By way of example, imagine if a friend asked you for a ride somewhere. It’d be frowned upon if you asked him for money (outside gas money or maybe tolls). However, for a taxi to do the same thing, you’d expect to pay and there’d be no impropriety. No one would accuse the taxi driver of inappropriate behavior and no disapprobation levied on him. However, for a friend to make a profit, it’d be inappropriate and he would be saddled with disapprobation (considered a bad friend, etc). Asking for money would violate the rules in the personal world but not the interpersonal world. To try to apply the rules of one to the other would be problematic.
We expect people to behave in certain ways. The cold indifference Scrooge shows toward Cratchit elicits feelings of disapprobation, especially during Christmas. We expect this time of year to bring about beneficence and we expect employers to treat their employees a certain way. When the interpersonal rules are applied in this situation, they appear wholly inappropriate, at least within a certain level of propriety. Further, Scrooge’s transformation at the end of A Christmas Carol is itself praiseworthy. He becomes benevolent, which is virturous.
I hasten to point out that nothing Scrooge does, either before or after his transformation, is unjust. Scrooge, at no time, violates any rules of justice: he does no harm to anyone. But simply because an act is just does not mean it is praiseworthy. As Adam Smith says, the rules of justice can be obeyed by sitting still and doing nothing; but that behavior is hardly grounds for any approbation. Justice is a negative virtue; it only affects other people when ignored. Benevolence and the other virtues are positive, and they can do real good through acting. While Scrooge was surely just, he was hardly praiseworthy.
Another example of the difference between these two worlds is from cash as a Christmas gift. Again, from a purely economic point of view, there is hardly anything to object to. But we are not in the interpersonal world of economics, but rather the personal world, where different rules exist. One of those rules is: you give gifts to those you love. Money is unacceptable according to these rules. Loved ones are expected to exchange thoughtful gifts, not cash. Violations of those expectations lead to hurt feelings and disapprobation.
One of the things these economic models of gift-giving do not take into account is the moral currency from obeying the rules. This is likely why an institution that is so inefficient on its face (gift-giving) has remained a tradition for centuries.
Humans are social creatures and we live in multiple worlds at once. Using a set of behavior from one world as a role-model for the other is a poor choice. We must consider what makes a person good and just. And that is the role of moral philosophy.