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Does Christmas destroy value? A givers guide

Published: Dec 21 , 2020
Author: Alan Smith

The older I get the more I think I might be turning into a Grinch!

Christmas is really not the same without family, and this year because of the restrictions it is unlikely that my extended family will have the opportunity to get together. Puts a bit of a dampener on the whole event. Season’s greetings indeed.

On top of that no Christmas Office party (Zoom party? pro or con, discuss), no boozy lunches with pals and a general feeling that 2020 needs to be done and dusted and bugger off!

So, when I listened to the Reith Lecture on BBC sounds maybe I should have switched it off and put Slade on instead.

This year’s lectures have been delivered by Mark Carney. Carney is an economist and banker who served as the Governor of the Bank of Canada from 2008 until 2013 and the Governor of the Bank of England from 2013 to 2020. I have to say I expected his delivery to be as dry as the bottom of a budgies cage, but actually, he talked a lot of sense and with energy and wit.

He did, however, talk about something that Economists call the “Deadweight Loss of Christmas”. What on Earth is that?

Well, the deadweight loss of Christmas is just the waste that arises from people making choices for other people. Now I’ll only buy myself something that costs £50 if it’s worth at least £50 to me. When I go out and spend £50 on you, because I don’t know what you like and what you need, I could spend £50 and buy something that would be worthless and at worst nothing to you.

Economists would suggest the best solution to this would be to give presents of cash or gift cards, to enable the recipient to get what they want, rather than assume you know. The Grinch in me really likes that. No waste and no time thinking about what to get. My wife was appalled when I offered to give her some cash and she could buy her own gift.

(I though cash was better than a friend of mine who bought his wife a new duvet, after all, she had been saying they needed one he rationalised. They are now divorced by the way).

She pointed me to a story she had heard. Apocryphal maybe but made a point.

In this historical story, a young married couple both individually worried themselves sick about the upcoming Christmas season. As they were starting out in life and had very little money, they could not afford to buy each other a gift.

The wife decided to cut her beautiful long hair and sell the locks to a local wig maker. She then used the money she made to buy a watch chain for her husbands prized pocket watch.

When she came home, she discovered her husband had sold his watch in order to buy his wife a set of combs for her lovely long hair.

Both were amazed at the other, it was in the giving that receiving resides.

What does the negotiator in me learn from this?

That pure economics are not the only metrics we should be measuring in the long-term deals that we do. If we want to foster long-term relationship building partnerships, we need to really understand the other sides drivers and motivations, and if we can find ways of meeting those needs in ways that also meet our own, we will create value not destroy it. Of course, this relies on the other side being prepared to working in the same way as us, otherwise, all bets are off. But you can protect yourself by the structured way you make proposals. Come on one of our courses to find out how?

This Christmas I hope you have a wonderful time with as many of your loved ones as you can, in however you can do it.

Thank you for your support this year and a Merry Christmas to you all.


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About the author:

Alan Smith
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