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How technology eased the deadweight loss of Christmas

Christmas is upon us. Will Santa bring you what you asked for this year? The chances are much improved these days – at least if you’re an adult.

Barely a day goes by without the leviathans of Silicon Valley attracting opprobrium for some social crime, whether it’s destroying our attention spans, pushing fake news or tearing apart communities – you name it.

But this is also a time of year when the convenience and value these internet technology firms bring to our lives actually comes into focus.

In a book published in 2009, the economist Joel Waldfogel laid into the inefficiency of gift buying for relatives at Christmas. “We make less-informed choices, max out on credit to buy gifts worth less than the money spent, and leave recipients less than satisfied,” he complained in Scroogenomics. Christmas is, he complained in the jargon of economists, a festival of “deadweight loss”, the term economists often use for waste.

Yet Amazon has delivered a way around this deadweight loss – at least for adults who want to buy gifts for each other. For those who don’t know, its “Wish List” function allows you to browse the “everything store” and put some of the items you’d like on a special list which you can then share with your friends and family.

Top it up through the year and there’s a good chance you’ll be pleasantly satisfied on Christmas day. Your relatives may well have got you something you actually want. The surprise element might be there too, if like me you tend to forget what you put on your wish list on a whim back in March.

Online shopping is another way technology has made many of our lives in the festive season merrier. In 2008, online sales as a proportion of all retailing was 4.2 per cent. In November it hit an all-time high of 17 per cent. Expect it to go higher still in this year’s Christmas shopping period.

No doubt there are some people who actually enjoy schlepping through the town centre laden down with bulky bags and parcels. But for many it’s much nicer to get the clobber delivered to one’s home by a delivery man: less deadweight Christmas-time loss.

Waldfogel’s thesis was criticised by other economists for missing the point: namely, the intrinsic value of the act of exchanging gifts at Christmas. One woman’s deadweight loss is another’s social “signal” of love and affection.

Yet technology can facilitate both. Our daughter received a birthday party invitation recently which asked for no presents for the child, but a donation to a chosen charity instead. Go online. Enter the code on the invitation. Make a donation and an automatic message goes to the family to notify them.

It won’t be for everyone, but imagine, parents, if this caught on: no more last-minute trips to Toys R Us to buy some piece of moulded plastic, uncertain about whether the child has it already, uncertain over whether another parent is buying the same piece of plastic, unsure about whether it will even get played with. Just a few clicks online instead, and much of the deadweight loss involved in children’s birthdays is instantly wiped out.

And this goes for charitable giving more generally. 

Making donations to charity, such as The Independent’s Help a Hungry Child Appeal, is easier than it ever has been thanks to the internet. As contactless technology rolls out, it should become simpler to donate to street fundraisers too. Boris Johnson’s “Penny for London” scheme failed, but the large potential for contactless charity microdonations surely remains.

These are the kind of subtle ways in which technology – for all the undeniable new social headaches it brings – is enhancing our lives and experiences. So merry deadweight loss to one and all.

This article appeared in The Independent on 24/12/17


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