The paradox of gift

Will Baude responds to my previous post, The Social Construction of Matrimony.

I certainly agree with Will that actively asking for gifts is quite tactless. The more interesting question is why we give gifts to each other in the first place. Will presents a few possible explanations, such as temporary, voluntary income redistribution given to those who need money (or objects of value like dishes, appliances, and other household goods) at particular points in time and given by those who do not need the money as much as the recipients. One can combine the sociological and economic explanations and say that the social norm of giving wedding gifts to newly-weds is a way to allocate society's scarce resources from lower-valued to higher-valued uses.

But the real question, as Will points out, is why people are expected to give gifts reciprocally on certain holidays, like Christmas or Chanukah. Wouldn't we all be better off if we just kept our money and bought something for ourselves that we at least know we want or need? Will submits that this kind of gift giving is a form of symbolic signaling and can serve the dual purpose of having the recipient remember the act of giving for far longer than one would remember a gift of cash.

This is true, as far as it goes, but it still seems a bit strange that we are expected to give gifts to the same people, year after year. After all, how many of these gifts actually serve this stated purpose? I find it incredibly frustrating to shop for (or create) meaningful gifts for a large number of friends and family, and I only do so in order to reciprocate the same frustrating shopping my friends and family do for me. It is one thing to give a meaningful gift every now-and-then, when the gift giving feeling strikes. If one were to do a cost-benefit analysis of the effects of annual reciprocal gift giving on the social welfare of society, I would expect the result to be far in the red.

My cynical side is starting to lend much more credence to the theory of "conspicuous consumption" held by Thorstein Veblen as an explanation of this gift-giving phenomenon. If I begin to exhibit signs of outright Marxism, somebody shoot me, please.

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George Gilder had an

George Gilder had an interesting take on gift giving in Chapter 3 of his book Wealth & Poverty. He cites economic anthropological works about gift cultures being the beginnings of market trade. But that leaves us with only two possibilities: it is just trading goods in which case economic arguments may apply, or it is hard wired into us and we just can't help it.

Since this is supposed to be a blog about Austrian economics, let's look at it from an Austrian perspective.

Since humans act to make things better then we must believe that giving gifts will make things better. The why of gift giving is probably better studied by psychologists than economists. We give non-monetary gifts not because it is economical in the neo-classical sense, but because we receive greater subjective value as understood by Austrian economics. For whatever reason, we believe we are or will be better off by giving gifts than not giving a gift. The individual reasons are as plentiful as individuals themselves.

Why do we spend tens of

Why do we spend tens of thousands of dollars on a one-day ceremony/party (the wedding/reception)?

I've never understood it. My sister had a very elaborate wedding in May of last year. I wouldn't know the precise amount, but I'd bet $40,000 was blown on the whole event. I find that kind of expenditure, in light of the fact that neither her husband's family nor my family are near what you'd call "rich," to be nearly indefensible.

I'm much more into the "it's the thought that counts" gifts these last few years -- getting and giving. If its clothing, or entertainment media, or electronics, I'll just research it and purchase it myself at my leisure, thank you very much.

Although gift-certs have their utility as well. ;)