SPEAKER_01: Amazing, fascinating stories of inventions, ideas and innovations. Yes, this is the podcast about the things that have helped to shape our lives. Podcasts from the BBC World Service are supported by advertising.
SPEAKER_00: Hello, tis the season for surprise gifts and my gift to you is a brand new episode of 50 Things That Made the Modern Economy. But also glad tidings. 50 Things That Made the Modern Economy season two is going to be launched in March together with another new podcast from the BBC World Service called 30 Animals That Made Us Smarter. If you're not already subscribed to this podcast, you may want to do that. Catch up with the first 50-odd episodes and then in March, surprising new stories of everyday inventions and their far-reaching consequences will start to drop into your listening gadget like Satsuma's Into a Christmas Stocking. A curious ritual takes place each year in Japan. It's called Kurisumasu ni wa Kentaki
SPEAKER_00: or Kentucky for Christmas, the habit of eating Kentucky Fried Chicken on the 24th of December. It began as an inspired bit of marketing when KFC noticed in the 1970s that expatriates who craved Christmas turkey were turning to fried chicken as the closest available substitute. It's since become a popular Japanese tradition. There are queues around the block and customers will pre-order their chicken as early as October. Christmas of course is not a religious holiday in Japan where a tiny minority of the population is Christian. But Kurisumasu ni wa Kentaki demonstrates how easily commercial interests can hijack religious festivals. From Diwali in India to Passover and Rosh Hashanah in Israel but most notoriously Christmas in America. Why after all does Santa Claus wear red and white? Many people will tell you that the modern Santa is dressed to match the red and white colours of a can of coke and was popularised by Coca Cola's advertising in the 1930s. A good story. But the red and white Santa wasn't created to advertise Coca Cola. Why he was touting the rival beverage White Rock back in 1923. Rudolph the Red-Nosed Reindeer was the one who was invented as a marketing gimmick. The modern Santa Claus is actually a century older, adapted from Dutch traditions in the once Dutch city of New York by prosperous Manhattanites such as Washington Irving and Clement Clark Moore in the early 1800s. Irving and Moore also wanted to turn Christmas Eve from a raucous partying of street gangs into a hushed family affair. Everyone tucked up in bed and not a creature stirring. Not even a mouse.
SPEAKER_00: Moore who penned the line, "'Twas the night before Christmas in 1823, did as much as anyone to create the American idea of Santa Claus, the patron saint of giving presents to everyone whether they want them or not. It was in the 1820s too that advertisements for Christmas presents became common in the United States. By the 1840s Santa himself was a frequent commercial icon in advertisements. The gift giving tradition took firm hold. 10,000 people paid to see Charles Dickens give readings of his Christmas Carol in Boston in 1867. It's a story light on biblical details and heavy on the idea of generosity. Down the coast in New York the same year, Macy's department store decided it was worth keeping the doors open until midnight on Christmas Eve for last minute Christmas shoppers. The Christmas blowout then isn't new. Joel Waldfogel, an economist and author of Scrudinomics, has been able to track the impact of Santa on the US economy across the decades. By comparing retail sales in December with sales in November and January, Professor Waldfogel has estimated the size of the Christmas spending bump all the way back to 1935, the era of the Coca-Cola Santa. It may surprise some to know that relative to the size of the economy, Christmas spending was three times bigger then than now. Waldfogel has also compared the Christmas boom in the United States to other high-income countries around the world. Again, perhaps surprisingly, the December spending boom in the US is not particularly large relative to other countries. Portugal, Italy, South Africa, Mexico and the United Kingdom have the largest Christmas retail boom compared to the size of their economies. The US is an also-ran. In the grand scheme of things, Christmas is a modest affair, financially speaking. In the US, for every $1,000 spent across the year, just $3 are specifically attributable to Christmas. After all, you are going to have lunch anyway and pay your rent and fill your car with petrol and buy clothes to wear. For certain retail sectors, however, notably jewellery, department stores, electronics and useless tat, Christmas is a very big deal indeed. And a small fraction of a big number is still a big number. Waldfogel reckons that at least $60 or $70 billion is spent on Christmas in the United States alone, and worldwide perhaps $200 billion. Is that money well spent? There are worlds of money wasted at this time
SPEAKER_02: of year in getting things that nobody wants and nobody cares for after they are gone.
SPEAKER_00: What was the author of Uncle Tom's Cabin, Harriet Beecher Stowe, back in 1850, an early example of what is an annual complaint? Economists and religious moralisers don't often find themselves having common cause, but on the subject of Christmas, we do. We think that a lot of Christmas spending is wasteful. Santa's gifts rarely miss the mark. He is, after all, the world's number one toy expert. The same cannot be said of the rest of us. Professor Waldfogel's most famous academic paper is The Deadweight Loss of Christmas, which simply tried to measure the gap between how much various Christmas gifts had cost and how much the recipients valued them, leaving aside the warm glow of it's the thought that counts. He concluded that the typical $100 gift was valued at, on average, just $82 by the recipient. This wastage figure seems to be fairly robust across countries. There's even a research paper by two Indian economists estimating the deadweight loss of Diwali, and it suggests that $35 billion is being thrown away around the world in the form of poorly chosen Christmas gifts. That's about what the World Bank lends to developing country governments each year. This is real money, and it's really being wasted. And that's before pondering the strain put on the economy by squeezing the retail spending together in a single month rather than spreading it out, and the time and aggravation devoted to the task of shopping, which is not always pleasant during the December rush. So other economists have examined alternatives to clumsy gift giving. Gift cards and vouchers don't help as much as one might hope. They're often unredeemed or resold online at a discount. If you must buy a gift card, note that vouchers for lingerie sell well below face value on eBay, but vouchers for office supplies and coffee hold up pretty well. Wish lists fare better. Research suggests that recipients are generally delighted to receive a gift they've already specified. Givers are deceiving themselves to think that an off-piece choice will be more welcome. Even Santa Claus likes to receive a polite wish list from children. Who are the rest of us to think that we can do better? Or we could learn from the reformed Ebenezer Scrooge, who, Charles Dickens declares, knew how to keep Christmas well if any man alive possessed the knowledge. On Christmas morning, the only physical gift he gave was a prize turkey. The Christmas spirits had shown him that the turkey was sorely needed. Other than that, he gave people his company and his money, including a rise for Bob Cratchit. Money! That's the true spirit of Christmas. God bless us, everyone! I hope you enjoyed that special extra edition of our podcast. Please do leave us a review or grab a couple of friends and relatives and tell them all about us. See you in March 2019.
