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Commentary :: Social Welfare
Charles Dickens as Economist
02 May 2014
At the end of the 19th century, the GDP in England was six times as high as 1834. Human possibilities of life and consumption improved to a tremendous extent. Dickens described this exciting process of humanization without hiding its dehumanizing costs.

Charles Dickens saw himself as a radical liberal, not the social critic as Germans describe him

By Rainer Hank

[This article published on 3/19/2014 is translated from the German on the Internet, Charles Dickens lived from 1812 to 1870. Rainer Hank, b.1953, is an economics editor for the Frankfurter Allgemeinen Zeitung newspaper.]

In the early 19th century, England was a welfare state as many desire today. Everyone was guaranteed the right to legal aid whether working or not, a guaranteed basic income whose amount was coupled to the price of bread. This amount was paid out by the communes that had to meet their welfare duty to the needy. Everyone was entitled to a “right to live.”

This humane right encountered problems because it deprived capitalism – unbridled by the industrial revolution of workers. The poor did not seek work in the industrial centers because they would have lost the claim to support by their home community.

This changed in 1834 through a radical new right to legal aid – one of the most important social-political revolutions of economic history. Henceforth the principle was in force that care may not be financially more attractive than work. As deterrence, all the poor who were able to work were stuck in work camps where they had to earn their livelihood.

The nine-year old Oliver Twist, a foundling and orphan child, also arrived in such a poorhouse. When the children were overcome by hunger, the destiny fell on Oliver to hurl one of the most famous sentences of world literature to the warden after dinner: “Please, Sir, I want some more.” His rebellion brought Oliver the curse that he would end on the gallows. The poorhouse offered everyone a bonus of five pounds that Oliver Twist would take from the community. The casket-maker Mr. Sowerberry did that.

“Oliver Twist,” appearing as a serialized novel between 1837 and 1839 was entirely written from the perspective of a child and described the experiment of a life under the new capitalist right to legal aid. Its author Charles Dickens (1812-1870) was a famous man since the sensational success of “Posthumous Notes of the Pickwick Club” (1836). When Dickens’ works appeared in monthly serialized issues up to a hundred thousand buyers rushed for every delivery. In this way the author had an annual income of 5000 to 10,000 pounds which was a hundred – to two-hundred times the income of an industrial worker, the Dickens biographer Hans-Dieter Gelfert estimated.


Dickens was also a famous economist and not only a successful entrepreneur. That “Great Transformation,” as the Austrian-Hungarian Bohemian Karl Polanyi (1866 to 1964) described the industrial revolution was taken up narratively by Dickens and translated conceptually. Poverty was his great theme. However he was greatly misunderstood as a “social-critical” author or social-romantic revolutionary, as Dickens is often seen in Germany. He always saw himself as radical and standing on the side of liberals. He called the industrial progress of his time good and condemned the protectionism of the Corn Laws for humane reasons because the rise in the price of grain robbed workers of their bread.

In “Oliver Twist,” Dickens illustrated the new market economy in the organizational principle of the criminal band of the Jewish receiver of stolen goods Fagin. Fagin, “the boss of thieves,” was the greedy master capitalist who preserved Oliver from certain death on the street. High morals were in effect with his criminal beggar organization. No one steals from another was the internal command. From Fagin and his hoodlums, Oliver learns how one can be happy in no time in a modern economic society by drawing material advantages from commerce as the gang of crooks was taught by Adam Smith. The gang works as an efficient firm (a precursor of the “Sopranos”) “in the way of business,” Fagin insisted.

Fagin’s education strengthened Oliver’s self-confidence that he could be liberated from the underworld, master the class exodus and become “a good man” at the end. “Oliver Twist” is the liberal approved novel that dreamt the dream of social mobility. The new right to legal aid of early capitalism had a positive effect. It brings people bread (even if it is the bread of crooks or swindlers). It teaches the morality of the market (even among thieves) and opens up a middle-class existence to them at the end.

Dickens’ optimistic theory of progress represents a radical reconstruction with the doctrine of surplus population of the economist and pastor Thomas Malthus (1789), a bestseller of that time. For Malthus, the old grouch or sourpuss, there is no progress in economic history because all growth is immediately snatched away by the subsequent human joy in propagation and birth. Ebenezer Scrooge, the greedy and tight-fisted hero of the Christmas fairytale “A Christmas Carol in Prose,” was Malthus’ faithful student. The fairytale is hardly known in Germany. He held giving handouts or alms to be waste. “The poor should die to reduce the population.”

However Malthus falsified the productivity progress of the early 19th century. In Dickens’ fairytale, an angel confronted the old miser with a universalist morality: “Will you decide what persons should live and which should die?” the angel asks. To prove that his morality was consistent, he leads him to the market – where else – where there is treasure for all galore thanks to international exchange: geese, roast venison, oysters and even oranges for the poor.

Ultimately the whole industrial revolution appears like a fairytale that becomes true. At the end of the 19th century, the GDP in England was six times as high as 1834. Despite undreamt-of population growth, human possibilities of life and consumption improved to a tremendous extent. Dickens described this exciting process of humanization without hiding its dehumanizing costs.
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