There is a lot of economics in Christmas, and I’ve been waiting to post this article since I first saw a recent episode of South Park. South Park just recently finished up its 20th season in which they commented on a wide range of topics as they usually do. However, one particular joke in one particular scene stuck out to me.
Did you catch it? When Cartman’s laptop, iPad, and iPhone are being destroyed he pleads to the boys by saying “This is like two Christmases and a birthday worth of stuff!” Imagine if Cartman had been perhaps a 30 year old man. He very likely would have cried out, “This is like 3000$ worth of stuff!”. Kids, especially before they’re teenagers, are in a very different economic situation than most people, but they still function alongside many of the same basic rules.
Money is used for many different purposes, one of which is that it functions as a unit of account. This means that when we try to measure value between items we refer to how much money we would be willing to spend on it to give our desire a numerical value. Since money is divisible, transferable, and valuable it lends itself to this use. However, it is only useful to this purpose from a perspective where you are actually using money regularly.
Children rarely buy a majority of their own needs with money, but they still spend something. When an adult spends money on something their cost is an opportunity cost. They lose the opportunity to buy the next best thing for the same amount of money. Kids often make a list of things that they want for Christmas, and they also often order their list. When children ask for the top present for Christmas or their Birthday they lose the opportunity to ask for the second thing on their list. Thus to children, Christmases and birthdays function like a unit of account allowing Cartman to say that his electronics are worth to him Two Christmases and a birthday. Gift-giving occasions are still not money as they can’t be exchanged, spent on anything, or saved up over time, but they offer a route for children to receive one of the many societal benefits that we gain from a currency system.