A system in which goods of equivalent value are exchanged as tokens of social relationships. The use value of the goods may be minimal, and gifts may consist of specialized items, such as personal ornaments or items of display. Sometimes, as in the North American potlatch, the exchanges become competitive, in a quest for higher status.
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A gift economy is an economic system in which the prevalent mode of exchange is for goods and services to be given without explicit agreement upon a quid pro quo, or the concept of "a favor for a favor" in the Latin language. A family, in which each generation pays for the education of the next: this is an example where the gift creates an implicit obligation to give a gift to a third party, rather than to the giver.
The concept of a gift economy stands in contrast to a planned economy or a commodity-based economy, a category embracing both market economy and barter economy.
A gift economy is sometimes referred to as a "sharing economy," although many economists reserve the term "sharing" for the use of a single resource by more than one consumer, such as a commons, a public library, or a shared car.
One of the possible benefits of a gift economy (which it has in common with some planned economies) is that it can provide for the needs of some who have no current means with which to reciprocate.
Some have suggested that variations on a gift economy may be the key to breaking the cycle of poverty. Anarcho-communists advocate a pure gift economy as an ideal, with neither money, nor markets, nor central planning.
Characteristics
As remarked above, in a typical gift economy, gift recipients are expected to give something in return, such as political support, military services and general loyalty, or even return gifts and favors.
Lewis Hyde expresses the spirit of a gift economy (and its contrast to a market economy) as follows:
The opposite of "Indian giver" would be something like "white man keeper"… [W]hatever we have been given is supposed to be given away not kept. Or, if it is kept, something of similar value should move in its stead… [T]he gift may be given back to its original donor, but this is not essential… The only essential is this: the gift must always move.
He further remarks that a traditional gift economy is based on "the obligation to give, the obligation to accept, and the obligation to reciprocate," and that it is "at once economic, juridical, moral, aesthetic, religious, and mythological."
Hyde argues, somewhat against Mauss, that there is a difference between a "true" gift given out of gratitude and a "false" gift given only out of obligation. In Hyde's view, the "true" gift binds us in a way beyond any commodity transaction, but "we cannot really become bound to those who give us false gifts."
While it is easy to romanticize a gift economy, humans do not always wish to be enmeshed in a web of obligation. Marcel Mauss wrote, "The gift not yet repaid debases the man who accepts it," a lesson certainly not lost on the young person seeking independence who decides not to accept more money or gifts from his or her parents. But the gift economy can also take hideous turns, as when a gift is given mainly to create an obligation, a matter often treated in myths of the hazards of accepting a gift in hell or from the fairies. The gift economy can also be turned to the service of command economy, as when Che Guevara insisted, "Labor should not be sold like merchandise but offered as a gift to the community."
Carol Stack's All Our Kin describes both the positive and negative sides of a network of obligation and gratitude effectively constituting a gift economy.
Another problem of gift economies is the source of the gifts. In many historical gift economies, the giver derived the goods from raiding and plundering. The need to procure gifts can make a gifting society very warlike and create little opportunity for less bellicose rulers.
Traditional gift economies
Marshall Sahlins writes that Stone Age gift economies were, by their nature as gift economies, economies of abundance, not scarcity, despite their typical status of objective poverty.
Hyde locates the origin of gift economies in the sharing of food, citing for example the Trobriand Islander protocol of referring to a gift in the Kula exchange as "some food we could not eat," when it is not food at all, but an armband or shell necklace made for the explicit purpose of passing as a gift.
Many societies have strong prohibitions against turning gifts into commodities or capital.
A true gift economy normally requires gift exchange to be more than simply a back-and-forth between two individuals.
The mixing of gift and commodity-based economies
Hyde argues that when a primarily gift-based economy is turned into a commodity-based economy, "the social fabric of the group is invariably destroyed." Much as there are prohibitions against turning gifts into capital, there are prohibitions against treating gift exchange as barter. It is possible, however, to reintroduce elements of a gift economy into commodity exchange, such as lagniappe given to a loyal customer, or a professional discount given to a colleague.
Less happily, elements of a gift economy can enter commodity exchange as nepotism, corruption, and bribery.
Hyde writes that commercial goods can generally become gifts, but when gifts become commodities, the gift "…either stops being a gift or else abolishes the boundary… Contracts of the heart lie outside the law and the circle of gifts is narrowed, therefore, whenever such contracts are narrowed to legal relationships."
Even the most commodity-based economies have social (and/or legal) prohibitions on what may be commodified.
Examples in modern culture
Elements of gift economy exist within the contemporary world economy.
Information is particularly suited to gift economics, as information can be copied and transmitted at practically no cost.
Traditional scientific research is an information gift economy.
The free software community is an information gift economy. Markus Giesler in his ethnography "Consumer Gift Systems" has developed music downloading as a system of social solidarity based on gift transactions.
Jordan Hubbard, writing in Queue magazine although referring to open source as a barter economy, describes it as a gift economy: "The volunteer software engineers in the open source software community are far more likely to help those who have demonstrated their commitment to the success of the overall open source software development process."
The Wikipedia web-based collaborative encyclopedia is, in most of its operations, a thriving gift economy.
Because Wikipedia exists within a money economy, some expenses must be met with money, such as paying for servers, domain registration, and for certain IT work involved in server maintenance. Therefore, the information in Wikipedia is a gift economy, but some operational aspects of its website and related entities are not.
Small-scale gift economies also exist in most families, with gifts of time, money, nourishment, shelter, and expertise being given without any overt negotiation of reciprocation. Similarly, parties can be considered to be small-scale, temporary gift economies, at which food, accommodation, beverages, entertainment and a gathering place are provided freely, with all or most attendees contributing without formal payment.
Free schools are an example of educational opportunities in a gift economy.
A gift economy is also an important cornerstone of the annual Burning Man festival, and of the give-away shop.
Pacific Island societies prior to the nineteenth century had essentially gift economies, which still endure in parts of the Pacific today - for example in some outer islands of the Cook Islands. In Tokelau, despite the gradual appearance of a market economy, a form of gift economy remains through the practice of inati, the strictly egalitarian sharing of all food resources in each atoll. Although they have become participants in those countries' market economies, some seek to retain practices linked to an adapted form of gift economy, such as reciprocal gifts of money, or remittances back to their home community.
Criticism
According to critics, the English word "gift" is usually a very poor translation of the wide variety of words actually used by hunter-gathererer and other native cultures to describe their transactions and obligations. This colonial legacy has been overlaid by a romantic yearning for the more innocent sounding transactions of our childhood, perpetuating the myth of a "gift economy" into post-colonial anthropology and ideology.
Theoretical obstacles to a pure gift economy
Several obstacles that might oppose its pure implementation as advocated by Peter Kropotkin in an anarchist communist society have been put forward by theorists from a range of disciplines. Limited forms of a gift economy exist between families, in the context of friendship, or within small communes, such as the Economy of the Iroquois in their relatively small tribes. However, as the size of the economy increases such as in modern cities, the ability of a gift economy to comply with this economy of scale may encounter obstacles because the links or memories individuals must make or have about between other members of the community become more numerous in order to apply the proper punitive measures to those who refuse to work when they have such an ability. Milton Friedman and other free market and rational choice theorists argue that alternatives to free market economies will provide weak incentives, and criticises such alternatives because he does not believe there is any incentive for innovation or production as time progresses.
Austrian economists argue that general prosperity in the modern economy depends on a highly elaborate and global division of knowledge and labor. The "gift economy," on the other hand, depends on high degrees of reputation, trust, and mutual knowledge of those with whom one transacted.
Because such views generally do not attack the gift economy per se, but alternatives to free market economies in general, proponents of a pure gift economy advocate that other social mechanisms within a gift economy will replace the need for prices, which carry information about needs and wants. The reason given is that a gift economy stresses the concept of increasing the other's abilities and means of production, which would then (theoretically) increase the ability of the community to reciprocate to the giving individual. Other solutions to prevent inefficiency in a pure gift economy due to wastage of resources that were not allocated to the most pressing need or want stresses the use of several methods involving collective shunning where collective groups keep track of other individuals' productivity, rather than leaving each individual having to keep track of the rest of society by him or herself.
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