I hate gifts, both giving and receiving them. But I’ve misunderstood them for most of my life. I thought of them as mostly about giving people things they want or need, and in that role they are usually inefficient, because the recipient generally knows what they need better than the gift giver.
But there are a lot of social functions that I didn’t appreciate to gifts:
They can efficiently transfer material wealth, either redistributively (e.g. from older relatives to children) or as a form of communal insurance, in that the community’s wealth flows where it is needed (e.g. to families of newborn babies, or to a newlywed couple to help create a basis for their life together). In these situations, it may be more efficient to give cash, but the different circumstances of the giver and the recipient reduce this.
They can serve to demonstrate the gift-giver’s wealth, power, or savvy: the giver is the kind of person who can give such a gift. In some cultures, this kind of giving dominates, and wealth is virtually synonymous with the amount of giving one does. This can also be seen in reverse in the rejection of gifts: “no gifts please” says, “we have everything we need”.
Between peers, they often serve to strengthen a social bond: we are the kind of friends who exchange gifts. In these exchanges, the material value of the gift can signal the value of the bond, or imply the value the recipient should place on the giver’s friendship (e.g. as a potential source of communal insurance). But non-material criteria matter at least as much, signaling how well the giver understands the recipient. Serendipity and surprise that make the gift memorable, or spark further social connections are valuable as well.
These exchanges also ‘feel out’ a relationship: Do we agree that we are the kind of friends who exchange gifts? Do we exchange gifts of similar material value? Do we really understand each other?
Thinking of gifts as just giving people things they want or need misses the point of gift-giving. People pretend that it’s the real point of gift-giving, because like most social signaling, these don’t work (or don’t work as well) when they are made explicit.
I still hate gifts, but thinking through these things will probably make me give more gifts, and be more gracious about gifts I receive. And it helps me realize that I don’t actually need to give gifts to get the benefits. It often really is “the thought that counts”, so a postcard or a text message can do nearly as much work as a gift – thus the “Christmas cards”, sent to a long list of people, and updated yearly to add/remove people based on cards received in previous years.