What is the economic impact of Christmas?
Photo: Andree Autza. Source: Morguefile
There are lots of ways that people celebrate Christmas. There’s the religious holiday, which is outside the scope of this blog. There is the secular holiday, where people take time off to be with family and friends. It’s been noted that a lot of homeless shelters are pretty empty at Christmas—it’s the one time of the year many of those folks have someone to take them in. And then there’s the economic holiday—the massive retail rush to clothing stores and grocery stores and—increasingly—online shopping sites. For some retailers, up to a half of all their sales come during the holiday season. No wonder Christmas has become so embedded into our economic landscape.
But have you ever considered the wealth of expertise that sits underneath a Christmas tree? From planning to engineering to manufacturing to distribution, each present is a marvel of cooperation. Just consider the humble Christmas sweater: sheep are raised in some cooler climate, their wool fleeced, spun, and dyed, the sweater designed, knitted, and basted together, then the whole thing marketed and distributed to where it needs to be for a holiday purchase. (Triple the complication if the sweater has flashing lights.) And all this coordinated with no central plan, just a lot of people working together voluntarily.
Public Domain. Source: Wikimedia
Yes, there are Scrooge-like economists who remind us that many people prefer a check to ill-fitting sweaters, and that most toddlers play as much with the boxes that their toys came in as they do with the toys themselves. But gift-giving isn’t so much about the presents as it is about participation in each other’s lives: in our families, our workplaces, and our communities. That may not be very efficient, but there’s a lot more to life than just doing more stuff.
Let’s remember this as we celebrate the holidays. The miracle of the market is that we all benefit from the countless people who know how to do things we don’t. The miracle of this season is that—despite our personal follies—we all have others who care for us.
Merry Christmas to all!
Douglas R. Tengdin, CFA
Chief Investment Officer