Wednesday, October 3, 2012

421: The Aftermath of Neoliberalism: Don't buy Xmas presents....

- quote -
"You were right. The toast was a HUGE hit! I used the version with the dance quote. One person told me it was the best toast they had ever heard. 
I had at least 3 dozen people congratulate me on it throughout the night. Many of them pointing out a different part that they enjoyed. The groom's parents and uncle were especially touched by what I said." - end quote -
Isn't this great?! And this only for US$149 !!!! This is about the speech of the best friend of the groom (or something like that) at his wedding. He didn't write it, but bought it at
How would have been the reactions of the people have been when he had ended his speech by telling that he didn't write the speech himself but had it written for US$149 by someone else?
Are there things that ought not to be bought? And if this is true, then what things are ok to sell or buy and which not? Or to say it in other words: do there exists things which money can not buy.
Ok, friendship, or a Nobel prize or an Oscar can not be bought, but Richard Allen Posner (born January 11, 1939), an American jurist, legal theorist, and economist, suggested that adoption babies would be better of when sold to the highest bidder.
Let's talk about gifts. You like getting gifts? Then you are economically pretty dumb :-) Let me explain. You contribute to an enormous value destruction.
December 1993, the economist Joel Waldfogel, published an article with the title "The Deadweight Loss of Christmas". You can find it on the internet, very technical article.
His conclusion: "Estimates in this paper indicate that between a tenth and a third of the value of holiday gifts is destroyed by gift-giving.  (…) holiday gift expenditures in 1992 totaled $38 billion according to one estimate. 
If between a tenth and a third of this spending was wasted, then the deadweight loss of 1992 holiday gift-giving was between $4 billion and $13 billion." - end quote -
In 2009 Waldfogel restyled his ideas  on the subject and published them in a nice book  (US$9.95 only) Maybe a nice gift ;-) for Xmas. "Scroogenomics: Why You Shouldn't Buy Presents for the Holidays"
- quote -
"Another huge, value-destroying hurricane is about to slam America, destroying billions of dollars of value. Another Katrina? No, another Christmas. 
This voluntary December calamity is explained in a darkly amusing little book that is about the size of an iPhone. 
Scroogenomics comes from a distinguished publisher, Princeton University Press, and an eminent author, Joel Waldfogel of the University of Pennsylvania's Wharton business school."--George Will, Washington Post
Let's listen to Waldfogel himself: "Gift giving is a poor way to allocate resources……" , a quote from a 6 minutes video interview with the author. I'll give you the URL at the end of the lecture and you HAVE to watch it.
- quote -
"The bottom line is that other people who go shopping  for us and buy clothes, music or whatever , are probably not as good in choosing as we would be ourselves. 
There is a good chance that their choices, no matter how well intended, are ineffective. If we consider their gifts to the degree of satisfaction that the money spent could have given us, we see that there is value destruction."
"Economic theory - and common sense- tell us that things, we bought ourselves, offer us more satisfaction per euro, dollar or shekel than things others bought for us."
- end quote -
Of course this lecture may cause a smile on your face or make you laugh, but my real intention is to ask you: do you think this is all ok or comes there over you a feeling that we are loosing here things we value?
You may just go home and think about this. In my next lecture I'll come to conclusions. Now just have fun and watch Joel Waldfogel.

watch this (unfortunately only in French and German):

The Discussion

[13:28] herman Bergson: thank you
[13:28] Lizzy Pleides: thank you Professor, ...i have one problem with this
[13:29] herman Bergson: I hope you understand what Waldfogel is saying in the interview...talking like an economist
[13:29] herman Bergson: ok Lizzy what is the problem?
[13:29] Lizzy Pleides: we shouldn't make the same mistake as Ayn Rand and only ask for values, we also have ideals
[13:30] Lizzy Pleides: a gift is also a symbol for love
[13:30] Barbie Alchemi is online.
[13:30] herman Bergson:'ve got the point of what I am saying...
[13:30] Lizzy Pleides: this is an immense value
[13:30] herman Bergson: but you'll be shocked when you hear economists talk about this
[13:31] Lizzy Pleides: i thought so
[13:31] herman Bergson: and this issue of the economic ineffectiveness of giving gifts is just the (fun)tip of the iceberg
[13:32] Lizzy Pleides: but if you consider that a present is chosen with much passion it has a completely different value, ... not to count in €
[13:32] Kime Babenco: Let me say , for example Christmas presents... ... some get a hugh present, some get fe pairs of socks
[13:33] Lizzy Pleides: lol
[13:33] herman Bergson: yes I know Lizzy...and yet the market economy is pushing aside these qualities....
[13:33] Kime Babenco: Depends on the family of course, the economical situation
[13:33] Lizzy Pleides: socks are useful kime
[13:34] herman Bergson: it is not the size of the present what is the issue here...
[13:34] herman Bergson: it is the question...should I give the socks (he doesnt like) or the 10 euro/dollar, so he can buy whatever he likes
[13:34] Kime Babenco: Yes, but you needed anyway... It's not exactly a present of love or whatever
[13:35] Clerisse Beeswing: I like to give money and creive
[13:35] herman Bergson: Yes Clerisse....
[13:35] Kime Babenco: ceive ?
[13:35] Kime Babenco: creive ?
[13:35] Clerisse Beeswing: With giving money the chances of the person getting the gift might not be disappointed
[13:35] Jannah (jannahnura) is offline.
[13:35] Lizzy Pleides: many presents are chosen in an embarrassing situation, ... only for having a present, these are the gifts which are meant probably
[13:36] Kime Babenco: I agree
[13:36] herman Bergson: In Japan it is custom to accept present and not open them in the presence of the giver ^_^
[13:36] Clerisse Beeswing: wow I like that
[13:36] Kime Babenco: Most people know kids like toys , but to adults they never ask what they want as a present...
[13:37] Lizzy Pleides: so you can't show that you are disappointed
[13:37] herman Bergson: It shows the essence of giving presents in a way...the giving is the value...not the object itself...
[13:37] Lizzy Pleides: never ask children what they want Kime!
[13:37] Clerisse Beeswing: that isa hard thing sometimes
[13:38] herman Bergson: There is an in between....the Gift card
[13:38] Kime Babenco: I did once here, in Brasil, at my 15th birthday, and people leaved angry
[13:38] Clerisse Beeswing: I like the video
[13:38] herman Bergson: smiles
[13:38] herman Bergson: Isn't it amusing Clerisse?
[13:38] Clerisse Beeswing: yes very
[13:39] Clerisse Beeswing: I might get the book
[13:39] Kime Babenco: You have to open it while the people who gave you are around !
[13:39] Kime Babenco: Even I knew I knew what was in it
[13:40] Lizzy Pleides: well, a present is always s symbol of appreciation, but i like more something my children made themselves and that they didn't spend money
[13:40] herman Bergson: Well I once gave my wife flowers she didn't like that much....I mean the flowers....
[13:40] Lizzy Pleides: poor herman
[13:41] Clerisse Beeswing: ahh I love flowers
[13:41] herman Bergson: then I asked her...well I could have given you the 15 Euro....maybe you would have liked that better then
[13:41] herman Bergson: she said no...never....
[13:41] Lizzy Pleides: i don't like graveyard flowers
[13:41] herman Bergson: you better give me flowers which aren't my favorite than money..
[13:42] Clerisse Beeswing: I remember a grab bag present I got
[13:42] The Silent one (odie.rhosar) is online.
[13:42] Kime Babenco: It's always complicated
[13:42] Clerisse Beeswing: socks
[13:42] herman Bergson: But this also shows the point Lizzy makes ...
[13:43] herman Bergson: the value of a gift is not only its economic and usefulness is the meaning, the intention, the attention and care of the giver he put into his choosing the gift that you receive too
[13:43] Lizzy Pleides: herman, i guess you are married more that 10 years, ... you should know which flowers your wife likes:-))
[13:44] herman Bergson: grins....and blushes
[13:44] Kime Babenco: For my 18th anniversary, my friends gave me an extremely large box, well designed in gifts paper 
[13:44] Kime Babenco: It was almost an empty box
[13:45] Kime Babenco: Full with foiled news papers
[13:45] Clerisse Beeswing: ahhh wow
[13:45] herman Bergson: a joke?
[13:46] Kime Babenco: In the middle of it was a small box... with 200 R$ in it
[13:46] herman Bergson: oh ..!
[13:46] herman Bergson: Nice find :-)
[13:46] Lizzy Pleides: awesome
[13:46] Kime Babenco: Just as the size of a box of matches
[13:46] Clerisse Beeswing: nice present
[13:47] herman Bergson: I guess you bought yourself a diamond ring of the money ^_^
[13:47] Lizzy Pleides: what did you do wit the news papers?
[13:47] Kime Babenco: yeeeeaaaahhhhhh!!!!!!!! , very nice, ands surprising...
[13:47] herman Bergson: lol
[13:47] Clerisse Beeswing: nice friends
[13:48] Kime Babenco: The originall box they had from a supermarket, , was originally a box of pampers... for babies
[13:49] herman Bergson: oh dear....the hidden message ^_^
[13:49] Lizzy Pleides: yes, hehe
[13:49] Kime Babenco: Huge box
[13:49] herman Bergson: did you buy pampers for the money Kime? ^_^
[13:50] Lizzy Pleides: Hahahaha.....    
[13:50] Kime Babenco: Lol
[13:51] Lizzy Pleides: the news papers were the waist
[13:51] Kime Babenco: Of course we went to party
[13:51] herman Bergson: Well thank you all...our discussion brought some fun
[13:51] Clerisse Beeswing: It was very good professor
[13:51] Clerisse Beeswing: Thank you
[13:51] Kime Babenco: Yes , those were to fill up the box and make it heavy...
[13:52] herman Bergson: I hope next Thursday the weather will be better :-)
[13:52] Lizzy Pleides: yes, this was an almost private lesson
[13:52] Kime Babenco: You have bad weather there now ?
[13:52] herman Bergson: I guess a number of people had trouble flying in here today ^_^
[13:53] herman Bergson: or even trouble getting into SL
[13:53] Kime Babenco: That's another kind of flying of course
[13:53] Lizzy Pleides: perhaps with bad weather more people are sitting in front of the screen
[13:54] herman Bergson: Yes Lizzy....cold and stormy autumn nights !

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