The waste of Christmas consumerism

From TNR

According to New York department stores, each year about 15 percent of all retail dollar purchases at Christmas are returned. Allowing for the fact that many misdirected gifts are retained because people feel obliged to keep them (such as appliances, tablecloths, etc., which must be displayed when the relative who gave them to you comes for a visit), and allowing for the widespread inability of children to return gifts, this indicates that up to a third of purchases may be ill-suited to their recipients. Christmas is really a throwback to all the inefficiencies of the barter economy, in which people have to match other people's wants to their offerings. Of course, money was invented precisely to solve this "double coincidence of wants" problem. One solution would be to require people to give each other cash as presents, but that would quickly reveal the absurdity of the whole institution.

"Forced giving" also artificially pumps up consumption and reduces savings, since it is unlikely that all the silly and expensive presents given at Christmas would be given at other times of the year. One particularly noxious aspect of Christmas consumption is "conspicuous giving," which involves luxury gifts such as Tiffany eggs, crystal paperweights, and $15,000 watches that are designed precisely for those who are least in need of any present at all ("the person who has everything''). Most such high-priced gifts are given at Christmas; the fourth quarter, according to a sampling of New York department stores, provides more than half the year's diamond, watch, and fur sales.

Naturally, gratuitous spending delights retailers. Christmas accounts for more than a fifth of their sales and two-fifths of their profits, which suggests a Marxist explanation for the holiday--a powerful economic interest underlying the season's gift-centered ideology. But for the nation as a whole it increases the burden of consumer debt (almost a quarter of Christmas season sales are financed by credit cards or charge accounts, and January is the peak month for credit card delinquencies) and reduces our flagging savings rate (now below 5 percent of national income).

For parents, one especially exasperating aspect of Christmas is mindless toy fetishism. Christmas now accounts for 60 percent of the United States' annual $17 billion expenditure on toys and video games, according to the Toy Manufacturers Association. Much of this rapidly depreciating toy capital consists of TV-show tie-ins (there are 350 separate Teenage Mutant Ninja Turtle products and scores more of Ghostbusters and Bart Simpson figures) and expensive gadgets that do not work or hold interest for more than a day. According to the toy association, the country now spends nearly as much on video games like Nintendo's Super Mario and Gameboy (nearly $4 billion), activity figures like World Wrestlers ($500 million), and dolls like Barbie and My Pretty Ballerina ($1.1 billion) as on all retail book sales ($6.6 billion). Since six of the top ten toys are made by Japanese companies, one might adduce a subtle long-run Japanese strategy here.

And, presumably, most of the remaining toys are made by the Chinese.