Joel Waldfogel, in his new book Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays, argues that we should give up giving gifts at Christmas time because we inevitably waste money on gifts that others don’t want. From the publisher:
When we buy for ourselves, every dollar we spend produces at least a dollar in satisfaction, because we shop carefully and purchase items that are worth more than they cost. Gift giving is different. We make less-informed choices, max out on credit to buy gifts worth less than the money spent, and leave recipients less than satisfied, creating what Waldfogel calls “deadweight loss.”
I’ll admit that I haven’t read the book, so there may be more to Waldfogel’s argument in the book, but I have a few issues with the main thesis.
First, the actual economic transaction between the retailer and the gift-giver creates value. When we go to the store to purchase a gift, say for $20, we value giving that gift more than the $20 we use to purchase it. So, without taking into account how much the receiver values the gift, the transaction creates positive economic value.
More generally though, by focusing on gifts as a method of allocating resources, Waldfogel misses the point of giving gifts at Christmas. The Christmas gifts we give each other symbolize the gift humanity received from God. As Dan Ariely points out in Predictably Irrational, the symbolic exchange of gifts is a perfectly rational exchange, governed not by a market mechanism, but by social expectations. Indeed, under the assumption that individuals maximize value, no one would ever give away anything of value for free. Economists like to think of people as rational utility-maximizers, mostly to simplify mathematical models. That assumption doesn’t always hold.
However, Waldfogel does correctly discern that individuals can choose best what goods benefit them the most. His logic applies to government welfare programs that collect taxes in order to spend money on goods that people may or may not want.
A Better GOP Platform
Thursday, December 3rd, 2009James Bopp, Jr., the vice chairman of the Republican National Committee, has circulated a draft proposal of a ten point platform for the RNC to adopt in its January meeting. The resolution would require that candidates to support at least eight of the ten points before receiving RNC funding, which has prompted some media outlets to label it a “purity test.”
I don’t see the big deal about the resolution. All parties adopt a platform. They exist to advance an agenda, and they have to define an agenda and agree to it before they can advance it. Besides, it’s mostly Democrat strategists telling the Republicans that they need to have a “big tent” and that they must moderate (i.e. adopt Democrat talking points) or get permanently relegated to minority status. If that were really the case, why wouldn’t the Democrats welcome a GOP purity test?
Anyway, the 10 points are:
I wonder how many Republicans already disagree with three or more of these positions? They are defined broadly and simply stated. For instance, what does “victory” in Iraq and Afghanistan mean? Does it mean building functioning democratic states, or does it mean preventing al Qaeda from using the countries as operating bases? As AllahPundit notes at Hot Air, only points five and eight are seriously contested within the party.
Moreover, the list is not inspiring in any way. As much as it positively defines what the party should stand for, the list seems composed as a response to the current Democrat agenda. Republicans will not return to power unless they can get Obama out of their minds. The party needs candidates in 2010 and 2012 that can clearly articulate conservative thought. Simply stating positions won’t get the job done; they need someone who can put together an argument, educate the public, and explain why the party has its platform.
Nonetheless, here’s what I’d propose as the party platform that articulates those first principles that should motivate the next elections:
1. We respect human individual freedom and the ability of the individual to dispose of his reason with respect for the law.
2. We support abliity of individuals to acquire personal property through labor and the ability of individuals to freely exchange their property in markets.
3. Given that monopolies discourage opportunity and choice, we support limited regulation that keeps markets free, open, and competitive.
4. All Americans are equal before the law. However, individual Americans have a diverse array of talents, which are not all distributed equally. Our republic should allow individuals to use their talents to the best of their abilities.
5. No two American cities or states are alike. Where possible, local solutions at the city, county, and state level will provide better outcomes than a uniform solution imposed from the federal government.
6. We support public discourse that welcomes religious dialogue, but recognizes that Americans have many beliefs.
7. We support a national defense that protects the life and limb of every American and protects our international commercial interests.
8. We support government policies that recognize human nature as it is. We oppose government attempts to change human nature through social engeneering. People are not pawns in a social science experiment; they are not objects under the control of some social planner.
9. We support incremental reform of our political system — reform that preserves what is good and seeks to improve what can be improved. We oppose any attempt to completely remake our society in an untested and unseen manner. Reforms should fall in line with our Constitution and the intents of our Founders.
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