05 March 2011

The Anti-Gift: Value-Preserving Cold, Hard Cash

The basic premise of Scroogenomics  must have wide appeal, based on the extensive coverage it's received, including NPR, BBC, Marketplace, Time, New York Times, Los Angeles Times  and Slate.

That premise, in case you've been under a rock during the media blitz that seems recently to accompany a certain breed of economist-firebrand, is that gift-giving destroys economic value.  Destroys. How uncharitable, unAmerican, anti-Christian — worse, obliguely anti-leisure.

What sort of reception has Waldfogel received?  In interviews, he adeptly recites the easy observations:  folks are generally unable to give gifts that the recipient values as highly as the gift-giver (think $50 sweater feeding moths in the closet).  Waldfogel writes in Slate that ". . . we value items we receive as gifts 20 percent less, per dollar spent, than items we buy for ourselves. Given the $65 billion in U.S. holiday spending per year, that means we get $13 billion less in satisfaction than we would receive if we spent that money the usual way—carefully, on ourselves. Americans celebrate the holidays with an orgy of value destruction. Worldwide, the waste is almost twice as large."  (There's a silver lining there; Americans aren't that generous.)

Chris Dillow at Stumbling and Mumbling believes the thesis takes instrumental rationality too far.  What about the great memories created by a good gift?  The social ties cemented?  The romances initiated by good intentions? "Roger" on Dillow's site reminds us that some gifts are intentionally at cross-purposes with the recipient;  he's thinking of parental "good-for-you" gifts like chemistry sets, I imagine. ProEthics LTD   takes Waldfogel to task for ethical lapses - reminding his readers of the affecting value assymetry in "Gift of the Magi" and no less than an episode of The Waltons. The Guardian's Aditya Chakrabortty is more unkind, calling Waldfogel's world "consumer-onanism." 
"Imagine being a dinner-party guest, Scroogenomics-style. You don't fancy the hosts' trout and muscadet, so you pitch up with a KFC bucket and a giant bottle of Strongbow. The conversation drags so you spend the evening with the Nintendo Wii. They'll never invite you back, but Waldfogel will understand – you were merely being efficient."
On the other side of the ledger is Fast Company's Kate Rockwood, who contrasts Scroogenomics with Shoptimism, describing Waldfogel's book as "crackling with insight."  .  George Will, too.  Will, in his piece about the book, observes that "Between 1998 and 2005, gift card sales grew 27 percent a year. They now are about one-third of Christmas spending and rank near the top of lists of preferred gifts."   Retailers such as Amazon seem to understand this with "wish lists" that can be shared with prospective gift buyers. (Note to family: Ignore my Amazon wish list;  it's my purchase-avoidance archive, not a wish list.)

Waldfogel himself makes exceptions for gifts between persons who know each other well.  But he argues that far too much gift-giving reflects poor economic decision-making.  Perhaps one approach, admittedly impersonal when compared to one's third Stephenie Meyer book, is the charity gift card, suggested on another Marketplace story.  Find a charity that's meaningful to the recipient.  You may discover that cash is neither cold nor hard.


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