Santa Claus converts Scrooge with new economics

Noted activist investor Scrooge has changed his mind about Santa Claus.

It is not an exaggeration to say that I have undergone a complete conversion in my view of St Nicholas. Warren Buffett advises investors to seek exceptional managers and I now see that few achieve your longevity.
You embodied the new economy before the idea had been conceived. St Nicholas is a global business, receiving signals from far corners of the earth and delivering packets over an integrated network. It works at super-high speed, faster than broadband in South Korea, and knows no boundaries. The internet is antique by comparison.
Your lack of interest in profitability struck the traditionalist in me as foolish but I have come to understand the virtues of reinvesting revenues over several centuries in order to dominate your market and entrench your monopoly. 
Jeff Bezos, your closest logistics competitor, has copied your tactics but, although Amazon crushes small shops, department stores and big box retailers, it cannot topple you.
This has helped you to build the biggest social network in the world, putting Facebook to shame. Everyone includes your messages in cards and parents pretend the gifts they buy for their children come from you — you outsource many deliveries at zero cost. By combining a jolly presence with sophisticated viral marketing, you have expanded your reach everywhere

Elf on the Shelf

Not having any kids of my own, I had not heard of the whole Elf on the Shelf tradition until this Christmas break when I spent a lot of time with my nephews and nieces. Every morning my niece Averie would wake up and do a search for her elf, whose name I've forgotten already. I had no idea this had been all the rage with young kids since 2005.

Some researchers have studied the cultural phenomenon and concluded it may be a troubling way of acclimating children to life in a surveillance state.

Through play, children become aware about others’ perspectives: in other words, they cultivate understandings about social relationships. The Elf on the Shelf essentially teaches the child to accept an external form of non-familial surveillance in the home when the elf becomes the source of power and judgment, based on a set of rules attributable to Santa Claus. Children potentially cater to The Elf on the Shelf as the “other,” rather than engaging in and honing understandings of social relationships with peers, parents, teachers and “real life” others.

What is troubling is what The Elf on the Shelf represents and normalizes: anecdotal evidence reveals that children perform an identity that is not only for caretakers, but for an external authority (The Elf on the Shelf), similar to the dynamic between citizen and authority in the context of the surveillance state. Further to this, The Elf on the Shelf website offers teacher resources, integrating into both home and school not only the brand but also tacit acceptance of being monitored and always being on one’s best behaviour--without question.

By inviting The Elf on the Shelf simultaneously into their play-world and real lives, children are taught to accept or even seek out external observation of their actions outside of their caregivers and familial structures. Broadly speaking, The Elf on the Shelf serves functions that are aligned to the official functions of the panopticon. In doing so, it contributes to the shaping of children as governable subjects.

Parents who have enthusiastically embraced Elf on the Shelf are likely rolling their eyes right now. I'm no parent, and I stay far away from teaching folks how to raise their kids, but linking Elf on the Shelf to the Benthamite Panopticon was too much to resist.

I am intellectually curious about the impact of childhood culture and mythology on children's personalities, however. For example, should we teach our kids to believe in Santa Claus?

Will Wilkinson plans to.

Well, we’re atheists. I don’t intend to proselytize atheism to my kid, because I’m not interested in getting him to believe anything in particular. What I’m interested in is teaching him how to reason in a way that maximizes his chances of hitting on the truth. Now, one of the most interesting truths about the empirical world is that there are all these powerful systems of myth that are kept afloat by a sort of mass conspiracy, and humans seem disposed to pick one from the ambient culture and take it very seriously. But it can be hard to get your head around the way it all works unless you participate in it. Santa is a perfect and relatively harmless way to introduce your child the socio-psychology of a collective delusion about the supernatural. The disillusionment that comes from the exposure to the truth about Santa breeds a general skepticism about similarly ill-founded popular beliefs in physics-defying creatures.

Tyler Cowen has contemplated this issue as well:

I say why not leave them guessing, hovering in a state of Bayesian Santa doubt?  My parents never told me Santa “was real,” but they didn’t tell me he “wasn’t real” either, so I slid rather gracefully into my Santa non-belief.  I don’t recall ever feeling disillusioned by a sense of loss and in fact those presents kept on coming.  I even had a clearer sense of the appropriate channel for making gift requests, what’s not to like about that?

This all seems rather harmless, and I do think in many cases, as with fairy tales, fiction offers a smoother psychic transition to some of the harsher truths of the world. For example, if you're getting a bitter divorce and have young kids, I doubt the best way to break the news to them is to explain that the institution of marriage is an unnatural and brittle one, or that their mother or father had an affair with someone they picked up at the corner pub. It takes time to build up that armor.

However, I am suspicious of the behavioral enforcement effectiveness of the Santa Claus and the Elf on the Shelf mythologies. The whole idea of a naughty or nice list, or the Elf on the Shelf observing you and reporting back to the North Pole, I've yet to see any evidence it encourages kids to behave any better. Perhaps that's not the point, and I don't know any parents who've ever withheld gifts from their kids. If so, why keep that whole naughty list panopticon surveillance state portion of the mythology at all? Why not have the story be about unconditional love?

Personally, I think it would be just as miraculous to teach kids about Jeff Bezos instead of Santa Claus, and about how Amazon delivers a gazillion packages worldwide through a vast coordinated interconnected system of computers, people, and vehicles. Sometimes the truth is magical.

(h/t Clive Thompson)

The economics of Christmas

A holiday satire, one that does a good job personifying some of our more prominent online economic commentators:

Open Borders: Why should they stop at Christmas?

By Tyler Cowen, Marginal Revolution

Every year the American government briefly relaxes its stranglehold on our borders to permit the entrance of Santa Claus and his team of reindeer. If this is a good thing on Christmas, imagine how much better it would be if we made this our year round policy? Have you ever eaten in an Elven restaurant? The candy canes are sublime.

While there are some who think that competition with elf workers would impoverish American workers, there is not a lot of evidence to support this. In fact, the toy making of the elves would likely be complimentary to native production. What's more, the wealth generated by elven labor would add to economic growth.


Is Christmas Deflationary or not?

By Izabella Kaminska, FT Alphaville

As we pointed out quite some time ago, there are serious questions to be raised about the deflationary possibilities of Christmas. 

[The rest of this article is free but you must register with the Financial Times. And later, if you want to read this again, you will have to register again. And again.]


I rode on Santa's sleigh and it was surprisingly comfortable

By Henry Blodget, Business Insider

I have very long legs. The seats are made for jolly old elves. Take a look at all these pictures I took.


Here's what you need to know about this year's big Christmas econ-war

By Joe Weisenthal, Business Insider

[Click to view this 28 page slide show on one page]

Makes a great companion to this list of the 10 least successful holiday specials of all time.

Bob & Carol & Ted & Santa (1973)

This ABC Christmas special featured Santa as a happy-go-lucky swinger who comically wades into the marital bed of two neurotic 70s couples, and also the music of the Carpenters. It was screened for television critics but shelved by the network when the critics, assembled at ABC’s New York offices, rose as one to strangle the producers at the post-viewing interview. Joel Siegel would later write, “When Santa did his striptease for Carol while Karen Carpenter sang ‘Top of the World’ and peered through an open window, we all looked at each other and knew that we television critics, of all people, had been called upon to defend Western Civilization. We dared not fail.”


Noam Chomsky: Deconstructing Christmas (1998)

This PBS/WGBH special featured linguist and social commentator Chomsky sitting at a desk, explaining how the development of the commercial Christmas season directly relates to the loss of individual freedoms in the United States and the subjugation of indigenous people in southeast Asia. Despite a rave review by Z magazine, musical guest Zach de la Rocha and the concession by Chomsky to wear a seasonal hat for a younger demographic appeal, this is known to be the least requested Christmas special ever made.

I'm likely the exception, but I'd watch some of these if they were made.