February 14th is that special day of the year where you treat your admirer to some candy hearts, roses, dinner, pajama-grams, Vermont teddy bears, or, perhaps, some goodies from Victoria’s Secret. It’s a day that was commercialized by the greeting card industry, but not created by it.
Valentine’s Day had its beginnings as an annual Roman pagan celebration called Lupercalia, held every year on February 15th. The Roman Catholic Church wasn’t a big fan of the tradition and tried to attach the festival to the legend of St. Valentine. The Catholic Church made a habit of linking Pagan holidays to their own, as people liked their traditions.
According to legend, Valentine refused to comply with Claudius II’s decree that young men should not marry. The emperor was trying to bolster his army. So Valentine performed marriages in secret, only to be caught and executed in A.D. 270, on February 14th.
Before Hallmark was around, Valentines began gaining steam in the US during the Revolutionary War. Americans usually would pass out handwritten notes from the heart for Valentine’s Day. The greeting card industry fired up the presses in mass production in the early 20th century and Hallmark started writing notes for us (and drawing pretty pictures) in 1913.
Only a month a half after Christmas, we look to consume once again for a holiday. I’ve written about the deadweight loss of Christmas, and the inefficiencies are no different on Valentine’s Day. Our spend, tax, borrow, print, and spend government leads by example to show us that stimulus and consumption are something to embrace. Maybe when the National Retail Federation tells us that the average person will shell out $116.21 on traditional Valentine’s Day merchandise this year, we should celebrate. Besides, the figure is up 12.8 percent over last year’s $103.00 and total holiday spending is expected to reach $15.7 billion. Yipeeee!
These figures include everything from a nice dinner out on the town, to jewelry, candy, and Vermont teddy bears. Because we’re talking stimulus, let’s talk aggregates:
Consumers will spend…
Men will pick up the majority of the consumption slack on Valentine’s Day, with the average man spending $158.71 to the average woman’s $75.79. Naturally. This more than doubles the women, which I will fondly refer to as “rolling on dubs.”
I venture to say that if you’re spending money you don’t have for this holiday AKA financing Valentine’s Day on a credit card, this probably isn’t positive consumption. If you barely have any savings, this, too, probably falls under that category. All spending isn’t created equal. For example, war spending isn’t as good for our economy as buying American cars. When it comes to spending, you must consider where the money for consumption comes from, what you’re spending it on, and if there is consumer surplus. Just getting cash out into the circular flow isn’t enough.
The economy is not a collection of aggregates. We don’t live in a static world where you divide a constant pie. We live in a dynamic world which constantly changes and where order emerges. If you want to max out an economy’s productive capacity, the money must start from real savings. This means you must consume less to build up real savings. The utility function of your lady friend is a strong incentive, I know … but so is a productive economy and higher levels of employment.
The heart is in the right place with the spirit of Valentine’s Day. We can all be extra nice, attentive, and romantic to our significant others or spouses. But it doesn’t necessarily have to come with all of the fanfare. A quiet night at home could do. A home cooked, candlelit meal would be a nice option. You could really go old school and write your own note from the heart, instead of paying Hallmark to do it. The trouble for guys is that, in general, expectations from women have already been set. If you don’t meet those ingrained expectations, you get disappointment … or worse: sadness, not so pleasant emotion, and tears. So goes the baggage with a century plus of commercialization and brainwashing. Here is one such example:
Enjoy your Valentine’s Day and remember what really counts: you have each other. Consume wisely my friends.