EKIP– Expert Club for Economics and Politics A Different Opinion
Is Christmas the most commercialized holiday of the year?! While it is stigmatized with such statements, people rarely think about where Christmas comes from and what it actually celebrates. With this article, we bring some clarity to the historical origins of the holiday and its contemporary significance, especially in economic terms.
How was Christmas born? The distant history
An interesting read on these issues is The True Origin of Christmas ( https://rcg.org/books/ttooc.html ) According to him, Christmas does not have Christian roots, but the holiday itself subsequently acquired Christian elements and characteristics. Nothing emerges overnight, everything has its "roots" in an earlier historical period. In the 5th century, the Western Christian Church declared the celebration of this day to be related to the rituals of Mithraism on the occasion of the "birth" of the sun after the end of the Roman holiday - Saturnalia. The latter is associated with the celebration of the winter solstice, honoring the god of sowing - Saturn. This is actually considered the first historical celebration around this date. Later, after the Christianization of the Roman Empire, from veneration of the sun, it moved to veneration of the birth of the Holy Son.
Today, the holiday has become an annual source of significant sales. In the United States, for example, sales in the months of November and December alone in 2000 amounted to approximately $400 billion, and this year it is predicted to reach $680 billion. [1] And now that we have briefly touched on the Christian basis of the celebration, we should pay a little more attention to the white-bearded Santa Claus.
Santa Claus is the “god” in the world of holiday fans. Historically, the belief and worship of this figure is actually a kind of Frankenstein between his various variants – a mixture of Saint Nicholas, Saint Nick, Kris Kringe, Father Christmas, Santa Claus. Many children, of course, are firmly convinced of his existence and put forward a number of arguments for this. Some stubbornly claim that he must exist because they have seen him and had their picture taken with him in some shopping mall, because their parents told them so, and they never lie, because he is connected with the birth of Christ, because the latter works miracles, and the white-bearded old man himself is a miracle because he teaches people to believe and maintains the Christmas spirit.
In support of the claim about the commerciality of the holiday, it should be noted that you can come across the argument that the image of Santa Claus was created by Coca Cola. In fact, the use of his image was an exceptional idea in the early 1930s, during which Coca Cola used the figure of the old man to increase its sales. It is believed that his figure did not crystallize through religious traditions, but the legend of Santa Claus certainly starts from the figure of Saint Nicholas, from whose image the idea of secretly giving gifts begins. The latter is also believed to have sold all his inherited wealth and traveled, helping the poor and sick. Probably from here we can also extract the foundations of the very spirit of the Christmas holiday and its connection with charity.
The most economically significant holiday of the entire year
While at this time of year there is a lot of talk about gifts, charity, Christmas trees, decorations, festive meals, etc., it is noticeable that despite the reasons for Christmas and the symbolism that is inserted into it, the main thing that characterizes the holiday is spending money. This is probably the reason why it is looked down upon by some as a feast of materialists and commercial capitalist society. Let us assume that this is so. However, if we imagine that all people are born on the same day of the year, does this make buying gifts, celebrating and generally all expenses for activities related to the celebration commercialized, immoral, even selfish? In a situation of such an analogy, will we continue to talk in the same way about the commercialization of this sacred holiday?
Ultimately, from an economic perspective, the supply of goods should be driven by demand. There would be no Christmas if there were no people who believed in it or found it enjoyable enough to celebrate or pay homage to, in the name of, something or someone. If the idea of the holiday appeals so much to consumers, it makes perfect sense that manufacturers would use it as a means to maximize their profits. This leads to the emergence of specific Christmas products, the decoration of stores, and the playing of Christmas carols earlier and earlier each year. As long as there is a demand for more such products around Christmas, the market will provide everything needed to celebrate the holiday season.
A Brief Economics of Christmas
What happens to the economy during the Christmas season, after it is claimed that the specificity of the season is such as a result of this bad, bad capitalism? At this time of year, a large part of personal funds usually goes to gifts and the "spirit of Christmas". These funds, let's assume, are either taken from savings, or are fat Christmas bonuses for a job well done, or simply future funds are spent - it is bought on credit. Let us be guided in our analysis by the categorization of the four ways of spending money by Nobel laureate Milton Friedman.
To buy gifts, we take our own money to spend on the recipient of the gift. In this case, we will care how much of our money goes on holiday gifts, but we will not look for the value of the money in the goods we buy, expressed in quality. They will not be ours after all. The choice will not benefit us, but someone else. The decision of what to buy as a gift from an economic point of view will depend on your available resources. Consumer choice is also not at its full glory, because we ignore utility at the expense of the simple need to have something to give. We have neither complete information about the product, nor do we have any idea how the person for whom the gift is intended would arrange the options that our wallet allows. Economically, the motive behind the exchange is generally to improve the condition of one person, but the hope that you will receive something in return that you value highly – whether materially or emotionally/sentimentally – also plays a role here. The latter is a problem for the choice of donors and its effectiveness.
There is almost no material on the Internet on the subject that does not cite Joel Waldfogel's analysis of the cost and losses of Christmas. He is also guided by what has been mentioned so far. According to him, the losses that Christmas causes are expressed through the assessment of the gift received for its cost and its real value. In most cases, the assessment is lower than the real (monetary) value of the gift received. The general conclusion that he makes is that due to the differences between the two assessments, a total of 10% of value is lost when giving gifts, which in the United States is equivalent to between 4 and 13 billion US dollars. The recommendation? The best solution in the absence of information about the preferences of the person you are buying for is to give cash. This way you would save yourself valuable time that you could spend with your family before the holidays instead of racking your brains over something that you are unlikely to guess.
So... the next time you're wondering how to express your gratitude at Christmas - just pay cash!
Merry Christmas!
[1] https://www.statista.com/statistics/243439/holiday-retail-sales-in-the-united-states/
