sharp drop as government subsidies turn into increased taxation and fewer Christmases are observed during the good times. With output and employment remaining flat, government subsidies and additional Christmases will merely produce more debt and higher prices. AUSTRIAN SCHOOL LIBERTARIANS: Supporters of Friedrich von Hayek and Ludwig von Mises have two major objections to Christmas. First, there is the illiberal aspect of the holiday season: The state has no right – and no reason – to force entrepreneurs to close down against their will (for two days – December 25 and January 1) over the course of a week. Second, the ever-lengthening pre-Christmas consumption boom tends to expand credit, thus causing bubbles in the toy and electronics market during the fall that will burst in January, with potentially damaging consequences for the rest of the year. EMPIRICISTS: Convinced that observation is our only tool against economic ignorance, empiricists are certain that the only defensible theoretical propositions are those derived from discerning patterns whereby changes in exogenous variables constantly precede changes in endogenous variables, thus establishing empirically (for example, through Granger tests) the direction of causality. This perspective leads empiricists to the safe conclusion that Christmas, and a spurt in gift exchanges, is caused by a prior increase in the money supply
MARXISTS: In societies in which profit is derived exclusively from surplus value “donated” (as part of the capitalist labor process) by workers, and which reflects the capitalists’ extractive power (bequeathed to them by one-sided property rights over the means of production), the Christmas tradition of gift exchange packs dialectical significance. On one hand, Christmas gift giving is an oasis of non-market exchange that points to the possibility of a non-capitalist system of distribution. On the other hand, it offers capital another opportunity to harness humanity’s finest instincts to profit maximization, through the commodification of all that is pure and good about the festive season. And purists – those who still defend the “law of the falling (long-term) rate of profit” – would say that capital’s capacity to profit from Christmas diminishes from year to year, thus giving rise to social and political forces which, in the long run, will undermine the festive season. Obviously, none of these theories can possibly account for why people participate, year in and year out, in the ritual of holiday gift- giving. For that, we should be grateful.
Yanis Varoufakis , a former finance minister of Greece, is a Professor of Economics at the University of Athens.
and, ceteris paribus, a drop in savings. THE ECONOMISTS WHO STOLE CHRISTMAS
American Consequences 71
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