In his recent column for the FT, Tim Harford discusses the idea of Scroogenomics. The idea, conceived by economist Joel Waldfogel, proposes that Christmas be abolished. No, Waldfogel is not the Grinch made flesh, but rather an economist who has rather narrow views on gifts and gift valuation. Waldfogel argues that each year at Christmas the worldwide deadweight loss is approximately $25bn. The reason? If someone gives you a gift with a price of $50, you may value it at $35-40. Extrapolate this outwards and you can arrive at suitably large numbers. Waldfogel's proposal for Christmas is that people give cash rather than physical gifts. Giving gift certificates (vouchers) also isn't efficient because people often don't use them and they expire, not serving their purpose. Thus give money.

Harford challenges Waldfogel's idea of deadweight loss by calling on 'Warm Glow' effects, i.e. how we feel about giving gifts and how we could attach a monetary value to the warm glow that would diminish the deadweight loss. I agree with Harford, but two other criticisms come to mind. First, the much researched notion of framing. The problem is that when people frame things as financial interactions rather than as gift-giving they often behave less cooperatively and less prosocially. Imagine at Christmas not giving any non-monetary gifts whatsoever, but only exchanging envelopes of cash - it may come to feel like an exchange of cash for services rendered, even if the service was just a big 'thank you' afterwards (note, there might be an optimum at some combination of gifts and cash-in-hand). Secondly, people are known to experience the endowment effect for goods, that is to value goods more than their listed price when given the option to exchange that gift with someone else. Highlighting the endowment effect somehow could overpower the straight monetary losses by affecting how people value the gain. I'm not suggesting here that we try to set up post-christmas trades between siblings, but playful commentary on the 'subjective worth' rather than the 'monetary worth' of things could be justified, and potentially more in the spirit of Christmas, regards of your religious or secular affiliation.

I finally got around to reading Fred Halliday's article at OpenDemocracy 'What Was Communism?' I found it quite edifying, from the little things I appreciate, such as expanding my vocabulary (I did not know, or do not recall looking up previously, that 'aporia' was the Greek for impasse, specifically in the case of understanding potentially divergent or ambiguous meaning), to larger and more significant contributions such as finding a worthy critique and commentary on the lessons that we must learn from Communism and its failure; particularly how it is necessary for us to realise the ways in which capitalism adapted to the presence of, and how it now adapts to the lack of, communism as a an alternative for state policy.

Though one may be sceptical of the 'if you don't know history you'll be doomed to repeat it' trope, Halliday articulates the role of 'communism as reminder' well:

Judging from the politics and intellectual debates of today, neither those who celebrate the end of communism, nor those who are now articulating a radical alternative, have carried out such an assessment: between (on one side) the still resilient complacency of market capitalism and an increasingly uncertain world of liberal democracy, and (on the other) the vacuous radicalisms that pose as a global alternative, the lessons of the communist past remain largely ignored. And so, as they say, they will be repeated.

The greatest achievement of communism may well turn out to have been not the creation of an alternative and more desirable system contrasted to capitalism, but its contribution to the modernisation of capitalism itself. No account of the spread of the suffrage, the rise of the welfare state, the end of colonialism, or the economic booms of Europe and east Asia after 1945 could omit the catalytic role which, combined with pressure from within, the communist challenge from without played.

Last Wednesday evening I attended a lecture by Will Hutton at the LSE titled 'Them and Us: How Capitalism without Fairness is Capitalism without a Future' [podcast]. Though some did not like it, I appreciated the talk, but I got the sense that it was, as Hutton said at the outset, the first time he was discussing in public the topics he intends to put into his next book and he was therefore not as structured nor as well-articulated as I expect him to be once he has the book done and dusted.

Hutton covered several broad areas of interest ranging from a theory of justice based on fairness and equality of opportunity (relating to an open access society as he articulates it), improved democracy, a better functioning market, increased government investment in innovation and technology, and improved regulation of financial markets. That was a lot to cover in one lecture, and I think he lost a few people because of being a bit all over the place. Nevertheless, I have rarely come across a lecturer who so closely mirrors my own position on things.

First, he articulated how, consistent with Marc Hauser's Moral Minds, humans seem to have a native, persistent and seemingly ubiquitous moral intuition about most things that affects us regardless of our stated rational positions. Though we may think rationally otherwise, we seem to have an inclination to punish those who infringe social norms, and reward those who we believe act responsibly and exert effort. Hauser backs this up with experimental evidence and surveys. I believe more in experiments, and I'm not so big on straight surveys for this kind of stuff. Anyway, the basic point stands: human moral judgements seem to be based on biological rather than purely rational pathways of thought and emotion. Hutton argues that this moral intuition oddly enough mirrors a sentiment that Marx articulated early on - from each according to his ability, to each according to his contribution - note contribution and not need. Moreover, he proposes an argument for equality of opportunity - or an open access society - that I thought was similar to John Roemer's in his Equality of Opportunity - control for luck, allow for personal responsibility over effort. [I asked Hutton about this connection during the question time and he replied that the contemporary milieu calls for a re-annunciation of Roemer's theory, which was apposite when it appeared in 1998, but even more apt and urgently needed now.]

Richard Dowden's recent Times article is entertaining and contains some truth.I found the following paragraph particularly amusing though disturbing:

There is a widespread perception that saintly Britain had adopted this poor little girl called Africa and was busy saving her from hunger, war, disease and poverty. Suddenly big, greedy China, flashing huge deals and cheap goods, has seduced the girl and is leading her astray, even raping her. And to make it worse for Britain, ungrateful Africa sometimes feels that although Chinese intentions may not be entirely honourable, China at least treats her like a grown up.