War on Christmas talking points: The case against gift giving:
The gift-based economy died out because currency rendered it obsolete. So it's curious that one month out of the year we resurrect this brutally inefficient custom. It has little to do with generosity: gift transactions are enforced by threat of social alienation--the accusation of being a "Scrooge"--and undertaken with the expectation of receiving compensation. (Unilateral gifts, like those from parents to young children, are OK in my book.) But if greed is the motivation for holiday gift giving, then it's misplaced. Which brings me to the crux of my economic argument against rampant present-purchases. Gift givers and receivers actually deprive one another of wealth. How? Well, holiday presents are usually not functional goods, such as cereal, but instead luxuries that we wouldn't buy for ourselves, such as fancy chocolates (or some such frippery), we've essentially forced one another to purchase chocolates for ourselves. But there's a reason people don't often buy themselves fancy chocolates: most of us would rather get M & Ms and spend the rest of the money on something else. Christmas spawns industries devoted to useless goods like fruitcake and flavored popcorn. More commonly, it forces us to pay for things we like, but whose cost exceeds their worth to us. Suppose a box of chocolates costs $15. I don't buy chocolates for myself, because they're worth only $5 to me. You choose not to buy $15 cologne because it's worth only $5 to you. Swapping chocolates for cologne penalizes each of us $10. Yes, sometimes you can buy somebody a gift he would buy for himself. But the more likely this is, the higher the likelihood that he actually has it already. OK, so gifts detract from our material welfare. But, you point out, they still provide psychological benefits--goodwill, etc.--beyond their tangible value. The problem is, you can use that argument to preserve any inefficient practice. Gift-based societies also buried the dead with all their worldly possessions. This often impoverished the deceased's surviving family, but it gave them considerable psychological benefits. Of course, once society figured out its wastefulness, those psychological benefits disappeared. Why should we derive satisfaction from impoverishing those we hold dear?