4 thoughts on “The economics of Christmas presents: how Michael Sandel gets beaten by his own straw man”

  1. Posted 10/12/2013 at 17:46 | Permalink

    Surely an additional point about gift giving is that it also gives a reward to the giver of the gift?
    The problem in general with Sandel – aside from basic errors like this – is that he seems to believe that everything which is not provided by markets must be provided by the state, forgetting that this is a) false and b) ignores the effects of state intervention in distorting behaviours and c) state provision of goods creates moral problems of its own. Alas, it’s not surprising he gets away with it as this is the attitude of his readers who love having their prejudices confirmed

  2. Posted 11/12/2013 at 16:49 | Permalink

    If you give cash as a present, it’s obvious you haven’t spent much trouble — just cash. Whereas if you attempt to give something specifically for the donee’s benefit, of course you may make mistakes but at least you’ve taken some trouble — and that knowledge may well also gratify the donee. Of course the aim is mainly to benefit the donee not to maximise the cost to the donor. (One of my brothers always argues that people should give something that they themselves value, not something that they think the donee will value!)

  3. Posted 19/12/2013 at 20:06 | Permalink

    Or one could point out that christmas is not about gifts unless your an economist. And that showing appreciation for another human being could be expressed in other ways. Small tokens “gifts” could be given at anytime one feels compelled. I feel I have been tricked. I want life not an economy.

  4. Posted 15/05/2014 at 01:35 | Permalink

    Your criticism of Michael Sandel surprises me. The whole purpose of his book is to question whether money can take the place of (or be used to quantify) human values. Of course he doesn’t believe this nonsense of utility-maximization in gift-giving. Read the chapter again, please.

    If you have never met an economist who mistakes Christmas gifts for an inefficient attempt to maximise consumer surplus, you should introduce yourself to Joel Waldfogel at the University of Pennsylvania. It is Waldfogel’s 1993 article in the American Economic Review (The Deadweight Loss of Christmas) and his 2009 book (Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays) that is clearly cited by Sandel as the source of this ridiculous notion. (Wow – economist Waldfogel has been plugging this for at least 16 years!)

    I think it as obvious to Sandel as it is to the rest of us that the objective of gift giving has little to do with utility-maximization and more to do with a communication between two human beings, incorporating, as you rightly point out, elements of surprise, information-sharing, etc.

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