If you are behind in your Christmas shopping, this is the perfect intellectual excuse for your shortcomings. In his new book Scroogenomics, Joel Waldfogel claims that Christmas is an economic calamity of the order of the worst natural disasters. The professor from the University of Pennsylvania blames the winter celebrations for the destruction of a full $12 billion of wealth.
What is so seriously wrong with Christmas? Waldfogel believes that it is festival of inefficiency, where people give each other things of little use. The reason is simply that people don’t understand one another and are poor judges of other people’s preferences. Your close ones may display delight from your gifts, but this is only polite deceit; in truth they would have found something better with the money you used.
Waldfogel’s claims are based on a survey he has done with potential victims of Christmas. He asked a range of people how much they would be willing to pay for the things they had been given. It showed that, as a rule, gifts were worth one fifth less to their recipients than their actual price. That new jumper that your aunt bought you for £50? You may find that it is not worth a pence over £40. This means that economic value of £10 has disappeared into thin air.
Waldfogel is right to question how much just producing precious commodities adds to social welfare. In trying to adjust measures of exchange value to better reflect the worth of things he comes close to much of the work that nef has been pioneering.
At the same time, Waldfogel suffers from a bias that is not untypical to people of his profession. In his view the only good that can result from gifts is the utility that the recipient gets from the commodities exchanging hands. If the object does not match the wishes of its receiver, the whole ordeal has been a waste. Does this view not miss many important sides of our habits of giving? Some examples can show what Waldfogel forgets to take into account.
There are times when the usefulness of the goods being given is completely secondary. One extreme example of this is the tradition of potlach, observed by some natives of North America. In its most extravagant form, potlach involved chiefs giving away valuable pots, blankets and food, which were promptly destroyed and burned after being received. Potlach is a case where gifts are used to maintain certain types of social relations: The group that gives more lavishly is able to express and reassert their superior power. In less competitive settings, giving gifts can also support equal and communal relationships.
Modern societies have some practices more bizarre than potlach. One recent innovation are so-called charity gifts. By donating the right amount you can purchase, for instance, a goat for someone in a developing country, then give your donation as a present to someone else. It is unlike regular gifts because when the present exchanges hands, the owner of the goat stays the same. The point of the present is not to allow its receiver to get something new, but to let them assume the role of a benefactor. It is, to use an obscure term, a meta-gift: a gift of giving. What better proof could there be of the fact that people place value on giving things in itself?
Even when a gift is meant to be useful, it is not always given with the preferences of the other in mind. Some presents are aim to have an educative function. Here the point is not to match the recipient’s preferences. On the contrary, it is to actively shape them. For instance, I have been at times pretentious enough to give complicated books or fringe films with the hope of kindly nudging someone’s cultural tastes. To the credit Waldfogel and his approach to gifts, such attempts have never been met with much enthusiasm.
All the same, I would not recommend buying Scroogenomics as a gift. It seems like a guaranteed failure. If the premonition of the book is correct and you did not predict your friend’s preferences, they will be unhappy with the present. In case they enjoy your book and accept its message, they may berate you for so lavishly investing in a present.
(for nef blog)
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Google Earth makes it drastically easier to locate maps and images of the planet and jump between different scales. One of the silly pastimes it allows is to spin the globe wildly and pick some random spot to zoom in to. Obviously, most of the time it is a boring, unfocused bit of water. Whenever you hit land, there is one thing curious about it. Almost wherever you focus on, you would see signs of people: Patches of fields like a pale Mondrian painting, roads dividing the landscape, or just vast stretches of inhabitation. When no signs of humans were visible, one usually doesn’t have to let the program slide for long in some aimless direction to come across them.
This is, to me, a tangible and concrete display of the sheer size of human influence over the globe. For a playful demonstration of the same principle, the images above display the landscape from 9 randomly chosen places within Europe. It shows in just a glance the monotony of human-built environments in our continent. I experimented also with taking the pictures from North African deserts. Somewhat surprisingly they often produced more variant shades of colour and appealing shapes.
The places are chosen by your browser and will be changed by refreshing the page. For simplicity’s sake, the spots are selected from within a rectangle that has Dunkerque and Odessa as its opposite corners.
For a similar type of argument see the Google Maps application for anthropogenic biomes.
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It does exist after all. Apparently it has been broken for a while and now requires enlargement. In a speech at the Guardian, David Cameron stated that he wanted a “big society”, in place of Labour’s “big state”. He believes that the “growth of the state has promoted not social solidarity, but selfishness and individualism”. The alternative is to “help families, individuals, charities and communities come together to solve problems”.
Cameron’s calls for cuts in the scale of government are obviously pandering towards the fiscal conservative wing of his party. To some extent he continues the tradition of earlier conservatism, defined by Thatcher, in which the state was blamed for the moral degradation of society. The state fosters a dependency culture, discharges people from their responsibilities, and displaces families as the proper purveyor of moral values.
Cameron’s true volte face is in coming up with new victims for the state’s malice. Cameron blames government for worsening many of the themes that have traditionally been the concern of the left: the gap between the rich and the poor and material deprivation. The large size of the state, he claims, is “inhibiting, not advancing, the progressive aims of reducing poverty, fighting inequality, and increasing general wellbeing”.
This appears to be a canny political move. Issues such as poverty and particularly inequality would traditionally be far from the conservative agenda. Cameron believes that by naming big government the culprit, he can mobilise conservative support even for traditionally lefty topics. He can move into Labour’s territory without losing his party’s base, as long as a smaller state is presented as the solution. So far his political gambit seems successful.
In Cameron’s view, society consists of individuals, families and communities. Government is external to society and engaged in a zero-sum game with it: The expansion of the state can only be to the detriment of society.
Third sector organizations and social enterprise are put forward as the vehicle for delivering on social goals. Cameron believes these institutions to be almost like an extension of communities, accountable to their will and able to engage them in “self-improvement, mutuality and responsibility”.
The premise that third sector organizations would be representative of community is often false. Many charities that have been tasked with delivering public services have grown so large they are as unresponsive to the needs of their clients as state departments but devoid of any formal accountability. With a large size they also acquire monopoly-like power over the services that they deliver, and can begin to work for an interest of their own. In that sense they have more in common with large corporations. The opening up of competitive markets in public services to third sector organisations has explicitly encouraged this development.
Conversely, the government providing things need not be opposed to citizens taking responsibility. Ideas of design such co-production can make sure that the clients have an active role in the delivery of services. The interface between government and civil society is what matters. Cameron forgets that the state is a part of society too, and that a good society requires strong public investment to maintain public goods and collective solutions. This philosophy makes no provision for preventative services, or long-term solutions of the kind that we now need. In spite of the rhetoric about outcomes, he has reverted with the Conservative obsession with the mode of delivery.
Cameron’s emphasis on decentralization and active citizenship is commendable. Who would not want people holding power and being actively engaged in shaping their lives? As means for delivering the changes in society the “progressive conservatives” are after – social mobility and reductions in poverty – they are blatantly insufficient.
To reduce inequality we must make a political topic of another forgotten part of society – the economy. All major parties today regard the economy as a sphere with its own natural laws and best left to its own devices. The role of government is merely to correct market failures and fix some of the resulting unjustness after the free reign of economic forces. The question all of the parties fail to ask is whether the economic system itself, with its gross inequalities and individualistic bent could be the root of the problem.
Labour’s measures such as the minimum wage and tax credits have obviously mitigated some of the growing disparities in the economy. The Tory promises to lift the threshold of the inheritance tax and cut unemployment benefits can only aggravate them and don’t fit well for Cameron’s newly found interest in the poor.
What is needed is a society of many parts: a fair economy, an effective state and a committed community – all of appropriate size.
(written with Eilis for nef blog)
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