Greedy Goblin

Tuesday, December 20, 2011

Buy nothing for Christmas!

This is the usual, annual Christmas post. I write it every year, I'm sure no one listens but I won't give up. Buying presents is bad. Let me separate the question to two parts:

The fist part is the "mutual giftgiving". You buy gifts to someone who will buy gifts for you. Such action is just economically wrong as your knowledge about his priorities is surely lower than his own and vica versa. So the utility of your present will be lower than the utility of the item he'd buy for himself, just like his present will worth you less than the item you'd buy. The typical example is the 10th terrible colored sweater from aunt Marlene. It cost the nominal price to the good aunt and worth zero to you. So the best way to save your and your friends money is to mutually declare to buy noting. It doesn't mean you can't send a card or some other low-cost thingy that reminds him of you or give him good feeling. Just don't spend money.

The second part is the "one-sided giftgiving". You give it to someone, typically a child who give nothing in return. This isn't just a complete waste of money from the goblinish point of view. It's directly harmful to children as it teaches them that they are entitled to valuable stuff "just because". It's Christmas, so I get something. It's my birthday, I get something. It's children's day, I get something. I get, I get, I get. On this "funny" video, kids do get something, just not valuable enough. Look at the reactions of the spoiled little brats. Do you want to unleash more such things to the World?

The other, even more harmful message of giftgiving is "you show love via consumables". Giftgiving teaches people that they must waste money to prove their love. Such person will be forever broke, regardless of his income. It's funny if I have to tell it, but the proper way of showing love is spending time with him, listening to his problems and do things together.

May the Grinch guide you this Christmas and don't buy a damn thing!


Anonymous said...

I'd just like to thank you for campagning against the largest most ridiculous thing in the whole of modern society. As a Christian it irritates me to no end that I am told that I must buy presents to celebrate the birth of one of the least materialistic people ever born (if he did exist) on a day that he most certainly was not born. Thank you for spreading the good word of logic and reason during these dark times :)

Ry said...

I've thought about this quite a bit, and realise that there IS a good reason for buying gifts.

If you know someone well enough to know exactly what they would like, then you can buy a gift that to them is more valuable than the marginal cost of the gift. Value is created when you buy something for someone that they don't know about, and therefore cannot make a rational decision to buy or not buy.

Makes sense to me, I guess. Showing people that you care about them by showing them that you know enough to buy them something they would like.

Gesh said...

"You buy gifts to someone who will buy gifts for you. Such action is just economically wrong as your knowledge about his priorities is surely lower than his own and vica versa."

Well, not quite. My girlfriend wants a book on inner medicine, I want kindle (from the cheaper ones). Since we both have mouths, we have exchanged this information and guess who is getting what for xmas.

Anonymous said...

I tryed that with my family one year. Not because of you, I came to roughly the same reasoning myself.

We said no presents and went instead to a nice little pension in the woods, with snow and all for three days. I thought it was fantastic, the pension was christmassy decorated, weather was nice. All agreed it was a nice vacation but presents were missing so I got overruled and we had presents again the following years -.-

Bones said...

Well, while I do agree to you pont that we live in a consumerist world, where expectations are hig and climbing, where "wants" are indulged to the point of excess, I gotta say I found that "funny" video of dissapointed kids very upsetting.

Maybe because I watched it with the sound down and only saw their faces, but I think some of the pranks were akin to pulling butterfly's wings off for kicks.

I like a joke as much as the next guy, I find spoilt demanding kinds noisome (and an indictment of their parents), but some of those clips take a joke too far.

As I said, I agree in essence with the spirit of your post, but proliferating that kind of internet trash is not good.

Azuriel said...

Technically, you aren't saving children from any harm by not giving gifts considering they get food and shelter despite being completely useless from a goblinish point of view. Even if they are your own children, it is not as though you derive any utility from their existence after your personal death.

Damn entitled parasites, amirite?

Or maybe gift-giving during auspicious times of the year has some hitherto dismissed utility, such as demonstrating a willingness to commit resources towards the well-being (and by extension, survival) of genetically similar social animals.

Christmas is a lousy reason to give gifts, but let's not pretend "objective utility" exists, beyond what's necessary for survival.

chewy said...

Children will always react more strongly than adults when they're expectations are not met. Encouraging parents to video this obvious reaction in order to increase your shows ratings is rather sad (but probably effective).

The answer to the imbalance of gift giving is to not give or to ask the person what they would like.

And I'd like to thank the idiot Anonymous christian at the top of your replies for declaring his christianity in the same paragraph as thanking you for your logic... You don't see the contradiction, well it made me chuckle ?

Anonymous said...

I know you are a well-read goblin, so forgive me if you already know of Joel Waldfogel's (1993) 'The Deadweight Loss of Christmas' from the American Economic Review. In the paper Waldfogel attempts to calculate how much wealth is destroyed by people buying gifts instead of giving the equivalent amount of money directly.

Waldfogel's calculations were based on American data. For a holiday exercise you can make similar calculations for your own country.

Google the name and title and you can access the .pdf from the University of Exeter.

KhasDylar said...

Egy gyors nyelvtani javítás, kérlek, ezt a részt töröld majd a kommentemből: "Aunt Marlene"-t írsz, utána pedig "his"-t vagyis hímneműként hivatkozol rá. Ráteszem a havi fizetésemet, hogy a nagynénid nem hímnemű. A helyes forma ugye itt a "her" lenne. Köszönöm a javítást!

You, sir, are again right. Well, mostly. About the child part, I completely agree with you. I don't have a child yet and as far as I know, you neither, but when I'll become a parent, I'm quite sure I won't buy any unnecessary stuff for my little one - my child won't find Christmas special because he'll get something, but because the whole family is together.

About the other part, namely grownups buying stuff to each other at Christmas, you are wrong - at least in my case. I don't buy presents to my friends. Don't even send them any holiday cards. And no, no funny text messages on Xmas eve. If I need my friends to remember me, I call them to get a beer or go to movie together or something - and this can be arranged any time of the year. I buy stuff to those whom I would buy these any time of the year and not unnecessary present, but things we know the other wants. This is why I know what I will get and mostly anyone who I'll buy something knows what he/she will get from me. I'll get things which I would buy anyways within a year for myself. Okay, that's not a surprise - and? I don't really care about surprises. On the other hand, I mostly give them things that either we can use together (for example a board game which we both like, Munchkin or Citadels or Arkham Horror or something like these) or something we can share fun with (for example a book, which we have both read or will read and can talk about it later). I would be really interested about your opinion about that way of giving presents.

Aureon said...

Actually, you forgot a thing.
Presents are also social transfers. Suboptimal ones, but transfers nonetheless.

Basically, as you surely know, the more money you have, the less utility you get from more. The transition from "No food" to "Shitty food" is every living being first priority.
Going from shitty food to decent food is quite easy, and probably more rewarding than going from decent to top-tier.
The example can be applied to everything.

With buying presents, you have the occasion of helping someone you respect who'll actually make better use of you on that money.
Since you're choosing who gets anything and how expensive is that, you're not really wasting anything.

Oh, and also, you're moving the goddamn idiot-made economy, which, as you often forget, is equally based on people consuming and people producing.

Me said...

I agree to a point. That point is that I would rather have money than a thoughtless gift. A thoughtless gift is one someone bought because they felt they had to buy a gift, not one where they are trying to show they care about the receiver. That usually winds up in the trash anyway.

I guess that is why I buy my nieces gift cards for restaurants or itunes... Then they can choose what they wish. Otherwise, I really try to think of the other person and what they enjoy when buying a gift.

It would be nice if we could spend time together, but when family is spread across a country the size of the U.S., sometimes a gift is all you can do.

Andru said...

@ Aureon

The economy would be working better if, instead of people 'consuming' Christmas presents, they would be consuming stuff like, I don't know, orbital telescopes, a cure for cancer, or the human genome project.

Every time you buy a Christmas present, you're creating demand for superfluous stuff, the resources in it being put to better use.

FredR said...

Giving gifts is a way for people to demonstrate (or not demonstrate) how much relationships mean to them. A good, well-considered gift shows people that you know and care about them enough to figure out what they want. A bad gift or no gift demonstrates the opposite. This aids in social coordination by demonstrating to people which relationships will repay further investment, and which should be abandoned, or at least receive a reduced commitment.

WIthout people sending such signals as to how allow their behavior in higher-level organizations (family, romantic relationships, friendships) to be predictable, such organizations will be more difficult to protect from free-riders, etc.

Dangphat said...

The question comes down to wants and needs.

I would agree that you should never give someone what they need. If I were to give a friend what they need I would give:
a) Food and drink but purely for nutrition purposes
b) Clothes designed for dealing with local climatic conditions
c) Stationary equipment if they are in education
All of these they can/would/should buy for themselves, if they can afford to get you a like priced present.

However if you get them what they want, you are helping them overcome any social inhibition that prevents them from buying an item “I can’t spend X amount of money on Y item, it would be frivolous”.

Regarding your theory on non-zero sum giving, especially that it causes needy children. Well children are encouraged at Christmas to spend time with their family and helping others, this may be considered work by them. They will also realize that this time of year brings reward. So they will associate spending time with the family and helping others with reward.

I wonder then what your opinion on charity is as a concept. Do you see at as indulging the lazy or as a noble act?

Paul said...

I've read that economists estimate there's an 80% average loss of value when you give a gift. That is: if you spend $1 on a gift, the recipient gets value that averages 20 cents.

As an aside: I just noticed this year that the verb "giving" seems to have been replaced by "gifting". I know english is a language where any noun can be verbed, but we had a perfectly fine verb already.

Anonymous said...

I think you are right that from an economical standpoint, gift-giving is inherently irrational and wasteful. However, there is the social aspect to consider too. I read a book the last year, which I thought was pretty nice and that a friend of mine would like it. So I didn't tell him about it and gave it to him for Christmas. I think in that case, the value of the gift was larger than the value of the book itself - he read the book and liked it, so there is no loss between what I paid for it and the value he received from it.

However, he also got happy that I knew him well enough to know his preferences in books that well, and that I decided to buy him a gift. All in all I think the utility to him was larger than the utility he would have received from randomly finding the price of the book in cash on the ground.

Also there is a social contract to consider here. For my aunt Marlene, which I would guess you don't know well enough to (want to) give something she would appreciate properly, not buying something for them will not translate into zero gain in utility, but a negative gain - she will not think "My situation is now the same as before Christmas", but "My nephew dislikes me enough that he would refrain from buying me a present - I/he must be a bad person". I think you can offset this somewhat by telling people in advance that you will not buy any presents this year, though, but some people seem to have difficulty understanding this as anything but "I do not want to spend money", and take it the wrong way.

Jacklemaniac said...

Chocolate and things you know people will use or like, are fine. One per person. You can talk to each other first and see what they would like. If it is something they would buy anyway, buying for them doesn't change a thing.

Giving money is good, too.

Social behaviour? Maybe. Still, I do not think people see it so badly. When I receive gifts, now, as an adult, I truly appreciate the thought. Even more when I didn't ask. I think it's okay when people are mature enough to understand. I did find stupid to buy my father stuff when he'd give me cash, as in "but then you're kinda buying your gift" but then I realized it's about the thought.

It's an exchange of good. And NOT useless goods. Books are (mostly, if you make a good choice) useful, timeless entertainment or information/learning tools. You won't see me buy electronic gimmicks for anyone.

I agree with your post for the most part. But I still think gift exchange between mature people is a fun thing to do.

Before you say it (again) I'd like to remind you we (the people on this blog) discussed time and again to arrive at the logical conclusion that fun =/= bad.

What's bad is retard not using the optimal way to get their fun fast.

Deepfriedegg said...

Maybe, just maybe it is beautiful feeling to see the pure happiness in my sons´eyes when they draw with a new set of pencils or play with a new train set?

I am getting that for the gifts I buy, that is quite priceless.

Anonymous said...

I don't even buy presents for birthday for the same reason. I buy a present for someone when I find they could use or need something. This can occur at any time of the year, have any cost or value, and at any pace. For example, for my mother I buy a bouquet usually because I know she loves those. My father gets nothing, there is nothing I can think of. However, I'd take him out or read before him (my father is an ill, old man). And so on, and so on. If I buy a present for someone and they give it back, want money back, or pass it on (after a while) I am 100% not insulted. It simply means I made a wrong decision giving it to them, or they found better use of it (by passing it on). This efficiency I try to pass on to my friends and family, with some success. I've also never hidden that I do not like a certain present when I received one, and as far as I remember from childhood I dislike the whole facade behind Christmas and other parties. Not in the least because I am not a Christian, and never have been one.

Anonymous said...

Since it's customary to give presents you might make use of it to "educate" others to some ideas you find valuable. Books are exceptional gifts for this, as long as the recipient's mind is receptive enough.

The cost is relatively low, and the potential gain is changing the point of view of another human being, making it understand and maybe even embrace ideas you find valuable yourself.

Yaggle said...

The best part of Christmas is the competition of the businesses to sell for the lowest price because they know there is a raised opportunity for sales volume. If you wait until right before Christmas to buy something you need, or even just want, like a better television, you can get a lower price than the rest of the year. Yes, I am saying Christmas is a great time to get YOURSELF some things. Be the Grinch that kept Christmas - for HIMSELF!

Anonymous said...

You're right for lots of gifts but not all.

Like many economists, you're thinking of utility as a one dimensional value: high or low. Instead, if you consider options along the dimensions of need and enjoyment, you have the following four quadrants:
1) high need, high enjoyment. Sex and food may be in this area.
2) high need, low enjoyment: going to the dentist, shelter, employment. They can't be ignored and might be quite unpleasant.
3) low need, high enjoyment: fashion, leisure, games, sports. Fun but optional.
4) low need, low enjoyment: aunt Marlene's sweater.

You can assign a single utility value for each particular thing but what's interesting is that, given limited time and money, people tend to satisfy the highest-need items first and then fill in with enjoyable but less necessary things.

The problem with the sweater as a gift is that it offers low enjoyment and isn't needed. The opportunity for good gift-giving is in the 3rd quadrant where the recipient will enjoy it but not buy it for him/herself. The skill in gift-giving is giving something that's on the cusp of being bought for pleasure.

Bernard said...

Gift giving can provide high utility for the gift giver. In such circumstances, we tend to call it 'bribery'...

Anonymous said...

What if two gift-exchanging people have 100% accurate information on their priorities?

Gevlon said...

@Last anonymous: then that just reached the point where giving gifts is equal (but not better) than keeping their money and buy for themselves.

Eenheid said...

“The skill in gift-giving is giving something that's on the cusp of being bought for pleasure.” This seems exactly right. You give a gift of something that they almost bought for themselves and really enjoy; you learn their preferences better than they know them.

Also, why is the “proper way of showing love is spending time with him” rather than “showing love via consumables”? You work for money, your time has a certain money value. Let’s says $50/hour. Why is spending 1 hour with them better or worse than giving $50 worth of consumables? What if they prefer the consumables to your time?

Joshua said...

To be absolutely fair the first 6 children on that video actually handled the situation pretty well. They were more confused than irate.

Armond said...

Single people like myself use gifts as part of courtship rituals, relying partially on the social instincts of others. That said, it's not a christmas-specific thing, but then neither is giving gifts in the first place.

Anonymous said...

I just want to say I DO NOT AGREE with you on this, I love this time of year were I can have time with my families n my husband n I love giving gifts so if its to family or to a stranger anytime of the year who cares if I receive one that's not as valuable as I give. MERRY CHRISTMAS!!!!! We hope you n your family have many blessings.

Yagamoth said...

I thought about this topic a while ago. My conclusion is rather simple: Presents are in my opinion only useful, if I couldn't/wouldn't have gotten it myself for one of the following reasons:

- I didn't know it existed
- It's something special crafted (for example: self made)
- It would've been too expensive

I argue, these three are valid reasons to make a gift.

eudaimonean said...

Adding to the theme of edge cases where giving a gift actually has excess utility over cash: there are some category of gifts that count as indulgences, which the recipient would in fact like to own for themselves, but are unable to justify purchasing because it seems like such an indulgence. In this case, the added utility of the gift is in "absolving" the recipient's indulgence, thus allowing them to enjoy the full value of the gift without the added cost of the guilt involved in purchasing it.

I personally experienced this when I received as a gift the iPad shortly after it was released. Now I made a conscious decision not to purchase an iPad, despite it clearly being affordable and accessible to me despite living in Taiwan (my friends and family regularly travel back and forth between Taiwan and the US so it would have been a simple matter for them to pick one up for me). But I received one as a gift anyway. Shortly afterwards, someone offered me the equivalent of $600 US for it (it wasn't out in Taiwan yet, so they were offering over the list price), and I realized that I did not want to sell. In other words, that I valued the iPad more than its material cost in dollars, but that the added psychological cost in guilt at self-indulgence was what prevented me from purchasing it in the first place. By giving it to me as a gift, the gift-giver waived that cost for me.

Now I will grant that this thinking is entirely irrational and merely a product of psychology. If I'm unwilling to sell an iPad for $600 then from a purely rational perspective I should be equally willing to buy an iPad for $500. But of course, everyone has these psychological quirks, and it's precisely because of these psychological quirks that gift-giving, when done right, delivers excess utility than cash.

However, I will completely agree that 99% of the time cash or no present is better, and in fact the exceptions merely prove the rule: as a general rule, society would be better off if the custom were to not give gifts, or to give cash. Another example from Taiwan - one fantastic element of Asian cultures is that the traditional gift as weddings is cash, so that couples either break even or make a profit when they throw a wedding. This is better all around - young couples don't beggar themselves throwing a party for everyone else to enjoy, and the participants of the party are essentially "customers" who pay for the privilege of attending the party. The parties themselves, of course, are something that can only occur in the context of social gatherings, so there's added utility there, too - even if you wanted to, you couldn't buy a great party with friends and family by yourself for $500, it takes collective activity to throw a party together. It's a far better system than the Western custom, where people want to be part of the party and bring a stupid gift as compensation, so the couple ends up with all sorts of useless items they probably didn't really want anyway, and certainly didn't cover the cost of the party they got to enjoy.

I'm actually oversimplifying a bit, as it turns out that Asian weddings are incredibly boring compared to Western weddings. All of the social rituals that are part of Asian weddings (basically, a banquet where guests sit at different tables and eat while some boring slide show plays on stage) are incredibly dull for the guests, whereas the rituals at Western weddings (dance, reception, bar, etc.) are a lot of fun. But the gift-giving component of Asian weddings is undoubtedly superior. What we need is Asian wedding gift customs combined with Western wedding rituals.

Hippo said...

There is onyl one reason to exchange gifts. Bonding, or the furtherance of bonding between individuals. Increasing you status within you collective circle and giving you the opportunity to increase that circle allows you the chance to increase your overall influence on the world giving you a slightly larger edge over others in the long term. For example letting go a drop for an epic item that is a slight upgrade to other guide members so that they will not challenge you on the bigger upgrade of the higher teir item you might find later on. It's a gamble, but it might just pay off in the end, however, you might end up with nothing. But there would lie the root of the saying "Nothing ventured, nothing gained" given that the world is a slight negative sum return on average, you need to take advantage of every opportunity to increase you odds of rising about the average line even slightly.

Anonymous said...

i stopped giving gifts years ago. i was standing in a walmart one day and looked around at all the shoppers shoving, pushing, looking at stuff and seriously considering whether to buy it or not and realized everyone was insane. Christmas is a mass psychosis with no logical reason for being outside of making corporations rich. Bah, humbug! ive since liberated myself and the freedom feels great. thanx goblin i wholeheartedly agree with you.