Now that Christmas has passed, I’m afraid I have some bad news for you – if you add up the value of the presents you bought for other people and subtract the value of those you received then you almost certainly made a loss.
It has nothing to do with your relative generosity or having children to buy for, but something that clever economists call a deadweight loss.
The theory goes something like this. Imagine that you really love stripy socks so much so that you will happily pay £10 for a pair. But you’re not so keen on polka dot socks and wouldn’t pay more than £5 for some. So stripy socks are worth a tenner to you and polka dot a fiver.
But your mother doesn’t know this and thinks you’d look good in spotted socks and she spends £10 on a pair which duly come wrapped on Christmas Day. Between the two of you, you have just lost a fiver. And the problem is that you’ll have done the same for your mum so the total loss is a tenner.
This economic inefficiency can only be solved by perfect knowledge of each other’s tastes. The problem is that Christmas presents must be a surprise which absolutely guarantees that we all lose out.
Clever economists from America, the land of clever economists, have worked out that there is four billion dollars worth of deadweight loss in that country every year which I’m sure the soon to be President Trump will put right by insisting that everyone buy their own presents in future for the benefit of their happiness and the country’s economic wellbeing.
Now, I’m no clever economist as you are no doubt aware and I don’t claim credit for any of the above. In fact, it is paraphrased from A Christmas Cornucopia by Mark Forsyth that I bought for myself having read some extracts in a newspaper. And this illustrates the theory because it has been my favourite reading over the last few days.
I hasten to add that this is not a book about economic theory, far from it. Neither is it a ‘bah humbug’ critique of Christmas but rather an explanation of the whys and wherefores of Christmas traditions, answering such questions as why 25th December, why we have Christmas trees and where does Santa really come from?
Forsyth writes the Inky Fool blog and I have written before about his previous books, The Etymologicon and The Horologicon, and his Christmas Cornucopia is very much in the same vein in that it is written with wit and style as well as being an eye-opener on things we might otherwise take for granted.
My advice to you then is not to mention this to anyone, but order your own copy now, wrap it in paper and ribbon, then tuck it away ready to open next Christmas Day. If you are like me, you will almost certainly have forgotten what’s in the parcel by then, but you will thank yourself most sincerely on the most perfect of gifts when you open it.