Featured: SCROOGENOMICS by Joel Waldfogel [Vol. 3, #44]

December 4, 2010

 

“Compelled to put a Price Tag on Everything?

A review of
Scroogenomics:
Why You Shouldn’t Buy Presents for the Holidays

By Joel Waldfogel
.

Reviewed by Chris Smith.

Scroogenomics:
Why You Shouldn’t Buy Presents for the Holidays

Joel Waldfogel
.
Hardback: Princeton UP, 2010.
Buy now: [ Amazon ]

Scroogenomics - Joel WaldfogelThe Christmas season is not my favorite time of year; the busy-ness, the shopping, the over-the-top giving of gifts, they all drive me insane.  I was therefore intrigued when I heard about the new book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays by economist Joel Waldfogel.  Although Waldfogel makes some good points over the course of the book, it was disappointing overall.  I’m sure you are familiar with the old adage “If the only tool you have is a hammer, everything starts to look like a nail.”  Well, there must be a parallel adage describing economists, something along the lines of “If the only tool you have is economic theory, then everything starts looks like it needs a price tag.”  Or at least that was what kept popping into my head as I was reading through this book.  Gift-giving itself isn’t the problem for Waldfogel – a point on which I heartily agree – but for him the big issue is the obligatory giving of gifts that are not appreciated, or dare I say valued, by their recipients.  Waldfogel is particularly bothered by the “waste” inherent in gift-giving, and here waste has a very specific meaning, which may be a common definition among economists but was one with which I was unfamiliar; waste, for Waldfogel, is the difference between what was paid for a gift and the monetary value that the recipient puts on it.  As an example, if I buy you a gadget that costs $30, and you are less than enthralled with the gift and if surveyed about it, would have only bought the item if you could pay $5 for it, the $25 difference in these two values is the “waste” to which Waldfogel so vigorously objects.  I’m not completely sure, especially in the present economy, that the money is wasted, as it does go to fund jobs at a number of points along its production and distribution cycles.

However, leaving that issue to the economists, I am much more disturbed by the assumptions about money and happiness inherent in Waldfogel’s definition.  Is the ideal Christmas really the one that maximizes the happiness of gift recipients?  And what about the utilitarian sort of gift – say a piece of clothing or a kitchen utensil – that may not be the most exciting gift on Christmas morning, but may come to be appreciated deeply over time.  And how much do generational or other social issues play into the equation of how recipients value gifts – the same gift might be valued higher when given by a favored relative versus a relative of lesser favor?  Or, similarly, the valuing of gifts might fluctuate dramatically with the emotional state of recipient.  All these sorts of questions, and more, hopefully will cast some doubt on the practice of placing monetary value on Christmas gifts received.

Although Waldfogel apparently goes way overboard in following this train of thought, I do appreciate the basic sentiment of minimizing or eliminating the practice of giving gifts solely out of obligation.   Waldfogel’s solution to the problem of waste in gift-giving is – not surprisingly for an economist – the giving of cash or gift cards, which allow recipients to choose their gift and thus presumably maximize their happiness.  Thus, we see that the fundamental issue for him here is not over-consumption, but rather who is doing the consumption and how pleasurable or fulfilling that consumption is.  Scroogenomics does, perhaps indirectly, remind us that as the Church, Christmas is not fundamentally about gifts but rather remembering and celebrating the coming of the Christ child.  Thus, despite making some keen economic and social observations, Waldfogel’s ranting against gift-giving ultimately misses the point of Christmas.  Perhaps the most intriguing chapter – and the one most truly in the spirit of Christmas – in this little volume is the one on redistribution, which Waldfogel rightly emphasizes must be voluntary, not coerced as in the economies of Communist states. If only his message here would be heard be not just the uber-rich, but by all Americans, who are rich by the standards of most of the non-Western world.  Waldfogel does argue here, as elsewhere, that the happiness of the recipient is primary, observing that such redistribution “benefits the poor (recipients) more than it costs the rich (givers).”  However, there is a glimmer of hope here that I didn’t find elsewhere in the book that Christmas might be more about justice and compassion than about the exchange of luxury (in the sense of not a necessity for life) consumer goods.

Waldfogel is a fine and insightful writer, even humorous at times, but if you pick up this book looking for a critique of consumer culture, as I did, you will be sorely disappointed.