Home
/
RELIGION & LIBERTY ONLINE
/
An economist’s Christmas: Is gift-giving wasteful?
An economist’s Christmas: Is gift-giving wasteful?
Sep 11, 2025 1:43 AM

During a season such as Christmas, where hyper-consumerism and hyper-generosity converge in strange and mysterious ways, it’s a question worth asking: How much of our gift-giving is inefficient and wasteful?

For some, it’s a buzz-kill question worthy of Ebenezer Scrooge. For an economist, however, it’s a prodthat pushes us to createmore value and better align our hearts and hands with human needs.

In a new video at Marginal Revolution, economists Tyler Cowen and Alex Tabarrock explore this at length, asking how we might maximize the value of gift-giving:

For Cowen and Tabarrock, gift-giving typically suffers from knowledge and incentive problems. “When people buy something for themselves, value is created, because the buyer values the good more than it costs the seller to produce,” Tabarrock explains. “But when people give gifts that aren’t wanted, the recipient values the gifts at less than the cost. Gift-giving: it can be kind of a negative trade.”

Cowen proceeds to note that gift-giving often “works” just fine, such as when a gift is appreciated and valued panied, no doubt, by lower search costs). He also notes that gifts can be given for “paternalistic reasons” (giving a child mittens or clothes), where the eventual utility is by no means a “waste” (wants and wishes aside).

Their ultimate conclusion: giving cash directly is the most efficient gift you can give.

It’s an argument well worth digesting, with diligent qualifiers throughout. But in the middle, Cowen offers a brief aside on “value” that gets at what I think is the trickier bit: “Gifts can also signal our intentions and our values, even when the gift is imperfect.”

I have my reservations about the perceived “wastefulness” of gift-giving (or it being a bad thing), but the argumentdoes challenge us toward those other questions. In a society and season that’s increasingly driven by hedonism and blind consumerism, what sits at the center of our gift-giving? As we hustle and bustle to check off our various shopping lists and make sure we have a gift for every family member, co-worker, and friend, how prone are we to the whims of advertising, consumer anxiety, or good, old-fashioned traditions?

As Christians, how might we acknowledge thereal issues and problems of surface-level utility and efficiency while also remembering that gift-giving is about so much more than transactional exchange? When do we bypass that calculus, remembering that, as Cowen quietly alludes, even “imperfect” gifts can have tremendous impact, sometimes because they are given wastefully, extravagantly, and gratuitously?

The answer is simple, but mysterious. Slow down. Keep your focus on neighbor-love and gratitude in the service of God, not man. Be wise and prudent, but don’t be haunted by illusions of scarcity. Remember that all is gift. Ours is a vision of abundance, and it’s driven by a love that meets real human needs, social, spiritual, material, and otherwise. Let the Spirit empower and lead and let the joy of the Lordflow from our hearts into the lives of our neighbors and across civilization.

If we do that, stubborn old economic “efficiency” might justtake care of itself.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Another Book Trend
I’ve noted the recent rash of books roughly on the theme of the danger of theocracy. As though in (indirect) response, several books celebrating Christianity’s impact on Western civilization (and democracy) have appeared. There was Thomas Woods’ How the Catholic Church Built Western Civilization. Then there was Rodney Stark’s The Victory of Reason, about which others mented in this venue. Now there is Robert Royal’s The God that Did Not Fail: How Religion Built and Sustains the West. ...
Which of These is More Offensive?
As a brief follow up to my last post and the point about nationalism, see the Liberty Bible offered by the American Bible Society. The Kruse Kronicle passes along some more partisan options for those of us who put being a Republican or a Democrat above being an American (which are both above being a Christian). For my use of the quote appearing on the GOP Bible, go here. I’m willing to bet that the Liberty Bible will sell pretty...
Protestants and Natural Law: A Forgotten Legacy
In this mentary, “Protestants and Natural Law: A Forgotten Legacy,” I ask the question: “So, why don’t Protestants like Natural Law?” The short answer is: There isn’t a short answer. Tracing out the reasons that twentieth-century Protestants have given for why natural law is off limits plicated and can take a person in many different directions. In my judgment, the great tragedy in the Protestant rejection of natural law is not merely that Protestants (and particularly evangelicals) have had tremendous...
Corporate America and the Campus
More news on the campus that may disturb those who are already hyperventilating about corporate involvement in higher education: university newspapers are receiving increasing corporate attention. In an article in today’s WSJ, Emily Steel writes, “Hip, local, relevant and generated by students themselves, college newspapers have held steady readership in recent years while newspapers in general have seen theirs shrink. Big advertisers are going on campus to reach these young readers. Ford Motor Co., Microsoft Corp., Samsung Electronics Co., and...
Rwandan Coffee Competes and Wins
Unlike the flooded market for conventional coffee products, the specialty coffee market enjoys increasing demand along with limited supply. This means that the potential exists for developing countries to increase the quality and quantity of their coffee production to meet the demand. Rwanda is a case in point, and shows how market pressures help to effectively and efficiently signal which and in what quantity modities should be produced. As Laura Fraser writes in The New York Times, “From the late...
Interview: Lotteries Prey on the Poor
The Acton Institute’s Jordan Ballor was a guest on the Michigan Gaming and Casino Show on the Michigan Talk Radio Network on Sunday afternoon to discuss his March 3rd, 2004 article, “Perpetuating Poverty: Lotteries Prey on the Poor”. Ballor and host Ron Pritchard discussed the negative financial impacts of gambling on the poor and the larger question of the morality of games of chance in general. To listen to the interview, click here (4.3 mb mp3 file, 25 minutes). ...
The Cash Cow
CRC has made two good articles available recently (these are Adobe .pdf linked documents) that dispell the myth that large corporations are conservative monoliths supporting anti-environment causes. The first is Funding Liberalism with Blue-Chip Profits; Fortune 100 Foundations Back Leftists Causes. The other is called The Price of Doing Business: Environmentalist Groups Toe Funders’ Lines. Both have page after page of data on the amounts that organizations like Earth Justice, Nature Conservancyਊnd Sierra Club are getting from big business and billion dollar...
Second Phase of Welfare Reform
“I’ve got a bunch of government checks at my door / Each morning I try to send them back / But they only send me more.” –Nelly Furtado, “Hey Man,” Whoa, Nelly! (Dreamworks, 2000). Here’s a question maybe our own Karen Woods can address: Does the second phase of welfare reform make it harder for people to get off welfare for good? That seems to be the implication of this article in today’s WaPo, “Welfare Changes A Burden To States,”...
Vitalism Leads to Nihilism
I saw a post on the Web somewhere in the last few days (I can’t recall where), about the trend toward worshiping human life itself as the highest principle…detached from recognition of any higher theological realities. Then I ran across this quote from Dietrich Bonhoeffer that struck me as especially relevant, and so I wanted to pass it along: Vitalism ends inevitably in nihilism, in the destruction of all that is natural. In the strict sense, life as such is...
‘The Almighty has His own purposes.’
This Sunday’s sermon at the church I visited was on Joshua 5:13-15: Now when Joshua was near Jericho, he looked up and saw a man standing in front of him with a drawn sword in his hand. Joshua went up to him and asked, “Are you for us or for our enemies?” “Neither,” he replied, “but mander of the army of the LORD I have e.” Then Joshua fell facedown to the ground in reverence, and asked him, “What message...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved