Give Unto Others As You Would Have Them Give Unto You

It’s a key part of the human condition: Christmas and the end of the year always inspires a bit of soul-searching. And in the 21st century, that soul-searching is as political as it is personal.
So this year, as sure as Christmas pudding, the anti-consumerist Australia Institute has released a survey suggesting most Christmas presents are a waste of money, resources and time: “millions of unused foot spas require enormous amounts of resources”.
Better to reject what the Australia Institute’s executive director, Richard Denniss, calls the “growing culture of obligatory giving”.
This Christmas, scepticism does have a strand of scholarship on side. Economists have claimed that, at the very least, gift giving appears to be highly inefficient – rarely does a recipient value their gift as much as the giver paid.
Obviously, we know what we want better than others do. So we never manage to buy each other quite the right present.
In a famous paper, now nearly two decades old but trotted out every holiday season, the economist Joel Waldfogel argued Christmas constituted a major “deadweight loss” – we were all poorer for having indulged in the Christmas spirit. It’s now a book: Scroogenomics.
One could respond to Scrooge and the Australia Institute that gift vouchers or cash might be a solution to this apparent dilemma.
It’s hardly romantic, but if holiday makers were serious about cutting down the deadweight loss of Christmas, then bank transfers would probably be best. No need for environmentally unfriendly cards either, with an email notifying the recipient of an incoming money transfer.
But we don’t just email each other receipts at Christmas. The idea that Christmas is really just an enormous waste of money and resources would make sense if it was simply a transfer designed to increase aggregate financial wealth.
But gifts are in the giving. Tallying up the relative value of items exchanged misses the whole point of gifts. Gifts are a mechanism we use to convey private information about the closeness of our relationship with each other. The better the gift, the better the relationship.
Waldfogel found the closer the giver is to the recipient, the more efficient their gift buying. (He also confirmed that aunts and uncles are bad at giving high-value gifts.)
So maybe giving a loved one a foot spa, despite the cost, waste and how rarely it gets used, actually fulfils a real function – to signal you want that loved one to relax and look after themselves.
It may seem like those millions of foot spas are wasted – it’s not clear where the Australia Institute got the “millions” figure from – but the promotion of our interpersonal relationships may be well worth the money.
The Australia Institute recommended that instead of giving unwanted gifts, we could instead donate to charity on each other’s behalf. Oxfam offers gift cards that purport to donate goats or sheep or buffalo or seeds to someone in the developing world.
Read the fine print. Oxfam are careful to say that just because the card has a photo of a goat, no goats may be exchanged – “your donation might also be covering the cost of buying a goat or the cost of something else . . . tracking each individual item and the community it goes to would be expensive.”
In other words, the money may be used for something goat-related, or just for general development. Probably better that than a surfeit of unneeded goats dumped in sub-Saharan Africa.
But it’s Christmas. Think of what you’re signalling. Gifts should be about what the recipient wants, not about the giver’s compassion for development.
So if the recipient finds donations endearing, then great, and we can only hope your money is deployed effectively. But if not, then donate to charity in your own name later. Christmas gifts are not an ideal medium for broadcasting your conspicuous compassion for the third world.
Christmas gifts should be a statement about the strength of our relationships, not a statement about our personal politics.