Tuesday, 12 August 2014

The Political Economy of Duckburg - Instalment 1: Scrooge McDuck and His Money

Yes, I do read Donald Duck, but I am still an adult with fully-functioning mental faculties. The lovable Duck turned eighty earlier this summer, so it is perhaps fitting that he and his relatives and fellow Duckburgers get a few blog posts, of which this is the first instalment. When I read Donald Duck, my favourite author is the late Carl Barks, whose universe, centred at Duckburg with fairly consistent relations among the ducks, is generally considered the best depiction of the amusing ducks (the popular cartoon series DuckTales is largely based upon Carl Barks' stories, though several characters, such as Launchpad McQuack, Fenton Crackshell and Bubba, are specific to the TV show). Barks' stories were my favourites as a child, but I find they work on many different levels, and the detailed boxes contain visual jokes one may not notice until the nth reading.

Thus, I feel myself in a good position to describe the political economy of Duckburg according to Duckman Carl Barks. This first instalment of the series is a blog post about some standard themes of price theory and economic organization, as illustrated primarily by the dealings of one Scrooge McDuck, often characterized as a ruthless monopolist who goes to any length to save a farthing. While he certainly has a penchant for the penny, the following will illustrate the superiority of a more nuanced perspective.

For instance, in 'The Money Champ' (Uncle $crooge 27), we initially follow Scrooge strolling down the street casually chatting and joking with people he passes by. The citizens take the liberty of joking with him ("Wanna borrow a buck, Mr McDuck?") and seem very pleased indeed to see and interact with the world's richest duck. These facts indicate to me that, if Scrooge is a monopolist, he is a Schumpeterian monopolist who reaches his enviable position though skilful entrepreneurship and by offering the people what they want at prices low enough to discourage competitors from entry. Time after time, the comics emphasize that Scrooge reached this position by being "tougher than the toughies and sharper than the sharpies" (e.g., in the Classic 'Only a Poor Old Man', Uncle $crooge Four Color 386), and of course Schumpeter ably argued that monopolists must have these traits or they won't succeed. And their success is for the benefit of society, which can enjoy their innovations.

Indeed, Duckburg turns out to be rather a prosperous society. There is a fairly large upper class, and the small underclass consists, essentially, of Donald Duck, the people of Shacktown (as seen in the Christmas story in Donald Duck Four Color 367), Grandma Duck's farmhand Gus Goose, and Goofy, though the latter is not a figure of the Barksian universe. Virtually everyone else is middle class. Even Donald and Gus lead fairly comfortable lives whose every misfortune is due, respectively, to gross incompetence and pathological lethargy.

Scrooge's love for money is often believed to be a twisted perversion, but given his nephew Donald's general ineptitude, Scrooge is very generous to pay him a few nickels an hour (the exact rate varies in my sources) for sinecures such as making plaintive cries so Scrooge won't have to do it on his own time (e.g., in the wonderful 'Terror of the Beagle Boys, Donald Duck Four Color 356, and in 'All at Sea', Uncle $crooge 31). By my reading, Scrooge sees Donald as someone requiring a bit of tough love, and no-one is better at providing it than Scrooge.

Since Donald Duck is what Tyler Cowen might call a Zero Marginal Product worker, Scrooge's paying him a positive wage is an act of generosity rather than callous exploitation. Indeed, keeping a bin full of money is an even greater, unrecognized, act of generosity, since by taking such copious amounts of cash out of circulation, he raises the purchasing power of the money that remains in circulation by the quantity equation (MV=PT, so when Scrooge halts velocity, money-denominated prices must fall). Such "wastefulness" forces Scrooge to be even more innovative and offer even better products than do his rivals, such as Flintheart Glomgold and John D. Rockerduck.

In conclusion, Scrooge is a widely misunderstood character. An immensely successful Schumpeterian entrepreneur rather than an unscrupulous monopolist who keeps Duckburgers on their knees, his favourite hobby (swimming in his money) requires that he raise the purchasing power of circulating money and on top of that he gives Donald more money than his services are worth. No wonder Scrooge is off to Tralla La (Uncle $crooge 6) when begging letters and charities still won't leave him alone.

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