Opinion and Economic Analysis

HICKS: Let's all maximize utility over the holidays

December 22, 2012

It is no accident that some of the most popular holiday songs were penned during the Great Depression and World War II. “White Christmas,” “Winter Wonderland” and “I’ll Be Home for Christmas” are just three examples dating to 1930s and 1940s.

Although I doubt any of these songs will be as long-lasting as the traditional carols, they certainly speak to sacred memories of family and home. Of course, the vintage and durability of these songs carry an important economic lesson for our times.

The holiday seasons remind us of how we live. Most individuals have some desire to obtain happiness, known in economic jargon as “utility-maximizing behavior.” This is a complex process, of course, depending upon some level of physical well-being, the happiness of others, and of loving and being loved.

Beyond that, we also derive happiness from everything from running marathons to stamp collecting to finding success in our occupations—a uniquely first-world luxury. For most of recorded history, humans sought happiness in the simple act of surviving and raising a family.

The abundance of our times allows even very poor Americans to live in material comfort and technological diversion far beyond the dreams of a half-century ago.

Still, for most of us, the greatest joys, triumphs and lasting happiness come from more simple matters. I believe that is why “I’ll be Home for Christmas” remains popular after almost 70 years.

Perhaps the trying times of depression and war unlocked creative energies focusing on the simple, lasting joys of life. Perhaps the trials of those years meant that any poignant tune would be well remembered. Either way, it meant the recollections of hard times would be softened by a closer memory of the things that matter to us most.

My brief thesis, then, is that, as we face tough times, we become closer to the essential parts of what it means to be alive. And that better illuminates who we really are as economic beings.

As economic research has long concluded, we don’t live simply to accumulate wealth or gain status in society. Nor do we labor exclusively to consume the goods and services others produce.

These are all good things, of course, but it is clear they are not our primary motivation in life, especially as we mature.

In this holiday season, we continue to face real tests. Our economy is weak and though few really want for basics, the dreams of many are on hold. We are a nation at war in distant places, and we grieve over violence at home.

But for the wise among us, such difficulties signal a chance to ponder a bit more about the things that really make us happy, like the happiness of others, of loving and being loved, and how to maximize them all.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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