Content warning: this article contains mention of depression and suicide
Santa Claus was not always the white-bearded, red-suited and stocking-capped fellow we know today. This archetype, like many other beloved elements of Christmas, has consumerist roots. Santa’s modern look was standardized by a 1931 Coca-Cola advertisement. Prior to the advent of modern consumer society, depictions of Santa Claus were influenced heavily by local cultures and varied worldwide. Early celebrations of the holiday were different as well, characterized by modest feasts, family gatherings and small gift exchanges. Now, however, Christmas celebrations are characterized by extravagant events and excessive spending. Although historically associated with love and happiness, Christmas causes many to make poor financial decisions that lower their well-being and the well-being of the planet. We should rethink how we celebrate Christmas and remove the commercial elements that have come to define it.
The culture of indulgent holiday gift-buying, while morally admirable, has adverse effects for many Americans. In 2022, 31% of consumers took on debt to finance their holiday spending. These were not strategic financial decisions, either. Sixty-three percent of people who took on debt in 2022 didn’t plan to do so, a large increase from 54% of people in 2020. Part of this trend results from the social pressure to spend a lot when gift shopping. Ahead of the 2022 holiday season, nearly one in four Gen-Z shoppers said that they felt pressured to spend more than they were comfortable with. The financial insecurity caused by holiday splurging is detrimental to mental health. People with debt are three times more likely to have depression, anxiety and stress. These effects can have scary consequences, as those in debt are more likely to attempt suicide.
When people do buy expensive gifts, they might be wasting their money. Joel Waldfogel, an economist and associate dean of MBA programs at the University of Minnesota, wrote a paper in 1993 called “The Deadweight Loss of Christmas.” Deadweight loss is the cost to society when supply and demand are in disequilibrium. In his paper, Waldfogel asserted that people’s inability to guess other people’s gift preferences creates deadweight loss, meaning that gift receivers are left worse off than they would have been if given the power to make their own consumption decisions.
In a survey of Yale University undergraduates, he found that gift-giving eliminates between one-tenth and one-third of the value paid by the buyer. Based on the 2001 aggregate holiday spending of $40 billion, Waldfogel found that the deadweight loss associated with Christmas is about 10% as large as the social cost created by income taxation. This percentage is likely far higher today, given that Americans are expected to spend between approximately $957 billion to $967 billion during the holidays in 2023. In an economic sense, people would be better off by planning not to give and receive gifts during the holidays, and instead just spend their money on themselves.
It is, however, difficult to quantify the emotional utility that giving or receiving a gift produces. A gift is rarely valued solely by its monetary value. We use the phrase “it’s the thought that counts” for a reason. In an interview with The Michigan Daily, Engineering sophomore Victoria Jan reaffirmed this notion.
“For me, I value gifts that are given with intent the most,” Jan said. “A gift that someone clearly put a lot of thought into finding based on what they know I would like feels like an extension of their care for me.”
This emphasis on thoughtfulness might be the key to reducing consumerism. Over-consumption results in people buying things they don’t need for no emotional benefit. This trend can be reversed by giving more personalized consideration to each gift, bringing greater satisfaction to both the buyer and the receiver.
Holiday splurging is disastrous for the environment as well. In the United States, excess waste increases by up to 25% between Thanksgiving and New Year’s Day. Nearly all of this ends up in landfills. Municipal solid waste is the third-largest source of anthropogenic methane emissions in the U.S. — 14.3% of it in 2021. For the first 20 years after the gas is released, methane has a warming power 80 times greater than carbon dioxide. The Christmas season is just the most extreme example of excessive consumerism in the U.S.; buyers should adopt more minimalist purchasing habits year-round.
Supporters of today’s commercialized brand of Christmas might defend it using a free-market approach. Christmas is, for many countries, the largest economic stimulus of the year. However, what is the point of this consumption if it does not increase our well-being? Excessive consumption is extremely inefficient at producing happiness. Those most likely to splurge during the holidays — highly materialistic people — tend to be less gracious and generally less happy than those who live more minimalist, sustainable lifestyles.
I’m not here to recommend we abolish Christmas. That said, this holiday season, you should opt to give a few modest, meaningful gifts instead of a dozen, thoughtless ones. Buying things is not the road to happiness, nor will it lead to stronger relationships. Prioritize your financial security, your well-being and your planet by rejecting the modern, commercialized brand of Christmas.
Ethan Bittner is an Opinion Columnist from Santa Rosa, California. He writes about the global climate crisis and American culture. You can reach him at ebittner@umich.edu.