A Gift for George Will

Photo by V Smoothe

Recently George Will published a column bemoaning the economic irrationality of holiday gift-giving. I’m as happy as the next guy to read something scroogy at this time of the year, but his column misses the boat pretty badly. Therefore, I offer the following contribution to Mr. Will’s understanding; think of it as my holiday gift to him.

Mr. Will was actually reviewing a new book on Christmas gifts, a book with the subtitle “Why you shouldn’t buy presents for the holidays,” An enormous store of economic value is destroyed by such gifts, says Mr. Will, because very often the giver pays much more for the gift than the recipient would. That is, the recipient doesn’t really get anything of appreciable value, because the gift isn’t anything he or she especially wants. Since many gifts are poorly matched to recipients preferences, and millions of gifts are given, billions of dollars of economic value evaporate nation-wide. The columnist compares this to the economic destruction wrought by a hurricane.

I don’t know if this analysis holds up from an economic perspective. However, it doesn’t work very well from a common sense perspective. It is an error–a pretty obvious one, actually—to consider gift giving a form of economic exchange. Gift giving, as anthropologists and sociologists established long ago, is a form of ritual.

In a typical economic transaction in our society—such as a purchase–the ideal is to exchange one thing of value (usually money) for something else of equivalent value to the purchaser. If gifts were economic exchanges of this sort, then we would pay the giver for them, or perhaps just hand them right back to the giver (a perfect exchange!). Obviously, if anything like that happened, the event wouldn’t qualify as “receiving a gift.”

At the same time, however, it is also obvious that gifts aren’t the same thing as “free stuff.” If you want a clue about what a gift really is, think about whether you would want to accept a nice gift from somebody you think is rather creepy. Most of us, I think, will recognize that even if Mr. Creepy is offering us something we’d like to have, we are not going to want to take it. The reason is that a gift creates a social relationship. Accepting a gift is a way of saying, “I am willing to be in your debt and do something for you in the future.” Unless you were raised by wolves, you will feel some sort of obligation to someone who gives you a gift. And you probably don’t want to have obligations to creepy people.

The fact that gifts create obligations has been used by human beings in many times and places to create various sorts of social relationships, but that’s a topic for another time. For the moment, I’ll stick to the main point: An economic analysis of holiday gift giving is like a chemical analysis of sex, it sort of misses the heart of the matter for human beings. People aren’t trying to maximize economic value with holiday gifts, they are trying—sometimes, admittedly, in awkward ways–to express their feelings for one another.

Tagged as: consumption, economic exchange, gifts, holidays