A gift economy is an economic system in which goods and services are given without any explicit agreement for immediate or future quid pro quo. Typically, a gift economy occurs in a culture or subculture that emphasizes social or intangible rewards for generosity: karma, honor, loyalty or other forms of gratitude. In some cases, simultaneous or recurring giving serves to circulate and redistribute valuables within a community. This can be considered a form of reciprocal altruism. Sometimes there is an implicit expectation of the return of comparable goods or services, political support, or the gift being later passed on to a third party. However, in what is considered to be in the true spirit of gift economics, many times giving is done without any expectation of reciprocity.

Everyone has something they do not need, something that will expire if left unused. It is the sharing of these unneeded resources that make up Gift economy.

The concept of a gift economy stands in contrast to a planned economy or a market or barter economy. In a planned economy, goods and services are distributed by explicit command and control rather than informal custom; in barter or market economies, an explicit quid pro quo — an exchange of money or some other commodity — is established before the transaction takes place. In practice, most human societies blend elements of all of these, in varying degrees.

The three stagesEdit

  • Sharing/Donating - in this stage a group of individuals decide to share or donate their private property, like food, books, Audio CDs, DVDs, money, etc.
  • Middle-man Network - in this stage an entity facilitates the distribution of the available "gifts".
  • Client - in this stage individuals who need it gets it in return for something of equal value, that will be shared with other individuals who need them.

Examples and benefitsEdit

Some examples would be:

  • Peer to Peer File-sharing
  • Sharing of food in a hunter-gatherer society, where sharing is a safeguard against failure of any individual's daily foraging.
  • The Pacific Northwest Native American potlatch ritual, where leaders give away large amounts of goods to their followers, strengthening group relations. By sacrificing accumulated wealth, a leader gained a position of honor.
  • Southeast Asia Theravada Buddhist Feasts of Merit, very similar to the Potlach. Such feasts involve many sponsors of all types, and continue to this day mainly before and after Rainy Seasons rather than chiefly in winter.[1]
  • Religious tithing.
  • Offerings to a deity, spirit, intercessionary saint or similar entities.
  • A "favor network" within a company.
  • 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.
  • Charitable giving or philanthropy.
  • Open source development and other forms of commons-based peer production.

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 common, a public library, or a shared car. It is also sometimes referred to as a "gift culture."

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. For example, if some in a society are so poor as to have nothing material to barter and no goods or money to bring to market, they can still receive charity if sufficient resources exist. Similarly, in the vast majority of societies, parents support their children at least in early childhood (and, in some societies, into adolescence and adulthood) without any explicit negotiation of what is expected in exchange.

SomeTemplate:Who have suggested that variations on a gift economy may be the key to breaking the cycle of poverty. This position, and the desire to refashion of all of society into a gift economy, are particularly characteristic of anarcho-primitivism and anarcho-communism. Anarcho-communists advocate a pure gift economy as an ideal, with neither money, nor markets, nor central planning. This view traces back at least to Peter Kropotkin, who saw in the hunter-gatherer tribes he had visited the paradigm of "mutual aid."

Traditional gift economiesEdit

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. [2]

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.[3] The potlatch also originated as a "big feed."[4] He argues that this led to a notion in many societies of the gift as something that must "perish."

Many societies have strong prohibitions against turning gifts into commodities or capital. Anthropologist Wendy James writes that among the Uduk people of northeast Africa there is a strong custom that any gift that crosses subclan boundaries must be consumed, rather than invested.[5] For example, an animal given as a gift must be eaten, not bred.

However, as in the example of the Trobriand armbands and necklaces, this "perishing" may not consist of consumption as such, but of the gift moving on. In other societies, it is a matter of giving some other gift, either directly in return or to another party. To keep the gift and not give another in exchange, though, is reprehensible. "In folk tales," Hyde remarks, "the person who tries to hold onto a gift usually dies."[6]

A true gift economy normally requires gift exchange to be more than simply a back-and-forth between two individuals. A Kashmiri tale tells of two Brahmin women who tried to fulfill their obligations for alms-giving simply by giving alms back and forth to one another. On their deaths they were transformed into two poisoned wells from which no one could drink, reflecting the barrenness of this weak simulacrum of giving.[7]

This notion of expanding the circle can be seen in societies where hunters give animals to priests, who sacrifice a portion to a deity (who, in turn, is expected to provide an abundant hunt). The hunters do not directly sacrifice to the deity themselves.[7]

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. [8] 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.[9] Today, there are significant diasporic Pacific Islander communities in New Zealand, Australia and the United States. 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. The notion of reciprocal gifts is seen as essential to the fa'aSamoa ("Samoan way of life"), the anga fakatonga ("Tongan way of life"), and the culture of other diasporic Pacific communities.[10]

Examples in modern cultureEdit

Elements of gift economy exist within the contemporary world economy. The blood bank system prevalent in several countries, including the United States, gives no significant explicit reciprocation for donations of blood. Most organ donation systems give no compensation of any sort to the donor or their family; payment in this matter is often considered suspect, even criminal.[11]

Regiving networks are becoming very common in on-line forums where people offer items to anyone who wants them. A feature of these is that they explicitly prohibit any reward, financial or otherwise. They generally operate at a local level using volunteers who act as moderators to help efficiently run the forums.

Information is particularly suited to gift economics, as information can be copied and transmitted at practically no cost. It can be treated as a nonrival good: when you share information, you do not deprive yourself of the information (although you may deprive yourself of certain revenues that could be gained in the market economy from the intellectual property rights).

Traditional scientific research is an information gift economy. Scientists produce research papers and give them away through journals and conferences. Other scientists freely refer to such papers. The more citations a scientist has, the more prestige and respect he or she has, which can attract funding and positions. All scientists therefore benefit from the increased pool of knowledge.

The free software community is an information gift economy. Programmers make their source code available, allowing anyone to copy and modify/improve the code. Individual programmers gain prestige and respect, and the community as a whole benefits from better software. Markus Giesler in his ethnography "Consumer Gift Systems" has developed music downloading as a system of social solidarity based on gift transactions.[12]

Yochai Benkler in his paper Coase's Penguin, or Linux and the Nature of the Firm writes that Ronald Coase described the firm as a more efficient form of production than the market. Benkler suggests a third mode of production called Commons-based peer production. Charles Leadbeater writes about the Pro Am revolution and the Pro Am economy where amateurs motivated by non-economic reasons are growing in power and supporting the sharing economy. Efforts such as Creative Commons led by Lawrence Lessig encourage sharing and argue that society and corporations will benefit from sharing.

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."[13] In other words, reciprocity is a broad community matter rather than explicit quid pro quo.

The Wikipedia web-based collaborative encyclopedia is, in most of its operations, a thriving gift economy. Millions of articles are available on Wikipedia, and none of their innumerable authors and editors receives any material reward. Wikipedia has been constructed entirely out of gifts, and gives information freely. From time to time Wikipedia has engaged in fundraising activities, asking people to contribute funds toward operating expenses; these donated funds are gifts, albeit explicitly solicited ones. A tiny portion of Wikipedia's income comes from product sales, mostly T-shirts, mugs, and the like, with Wikipedia logos. 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. Yahoo's provision of servers in Asia[14] for Wikipedia is on a gift basis; there is no explicit quid pro quo. However, several people raised concerns that future reciprocation may be expected beyond the prestige.[15][16]

A long-term broadly based example is Beyond Barter, also known as The Los Angeles Skills Pool. The members of Beyond Barter have, since 1975, shared services of all kinds with each other. Although there is no quid pro quo for receipt of a service, applicants for membership must offer one or more useful services, that will be available as needed.

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.

Another example would be when mentorship instills the gratitude that eventually leads the protegé to become a mentor in his or her own right.

Free schools are an example of educational opportunities in a gift economy. Members of a community share skills, information, and knowledge outside of institutional control.

A gift economy is also an important cornerstone of the annual Burning Man festival (even though it costs quite a lot of money to gain admission), and of the give-away shop.


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. This was common in warrior societies where kings and chieftains gave freely to their followers and could expect their loyal service in return. Such systems have social sanctions built in to punish freeloaders or miserly chiefs. A default punishment would be to halt gifts or services from one party to the alleged party in wrong. Typical sanctions might also include a bad reputation, formal eviction from the lord's hall, a challenge to a duel, or public ridicule. A stingy lord would find it difficult to attract followers.

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.[17]

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."[18]

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."[19] Referring to Alcoholics Anonymous — which functions internally largely as a gift economy — Hyde passes on a piece of AA jargon: a "Two-Stepper" is a person who tries to go directly from stopping drinking alcohol to the twelfth step of giving back to others. That person has received a gift (sobriety) for which he or she feels an obligation; however, instead of doing the necessary labor (the next ten steps) to be in a position to fulfill the obligation, he or she attempts to give that which he or she does not yet possess.[20]

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,"[21] 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.[22] And as Hyde writes, "There are times when we want to be aliens and strangers."[23] We like to be able to go to the corner store, buy a can of soup, and not have to let the store clerk into our affairs or vice versa. We like to travel on an airplane without worrying about whether we would personally get along with the pilot. A gift creates a "feeling bond." Commodity exchange does not.[24]

The lack of such a "feeling bond" can, of course, be taken to hideous extremes, as when the Ford Motor Company did a cost-benefit analysis and decided not to fix a potentially fatal flaw in the Ford Pinto gas tank.[25] 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.[26] 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."[27]

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. Her narrative of The Flats, a poor Chicago neighborhood, tells in passing the story of two sisters who each came into a small inheritance. One sister hoarded the inheritance and prospered materially for some time, but was alienated from the community. Her marriage ultimately broke up, and she integrated herself back into the community largely by giving gifts. The other sister fulfilled the community's expectations, but within six weeks had nothing material to show for the inheritance but a coat and a pair of shoes.[28]

The mixing of gift and commodity-based economiesEdit

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."[29] Much as there are prohibitions against turning gifts into capital, there are prohibitions against treating gift exchange as barter. Among the Trobrianders, for example, treating Kula as barter is considered a disgrace.[30]

Commodity exchange bypasses the web of gratitude and obligation involved in gift-giving. 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 may be viewed from the standpoint of contract law and commodity exchange as nepotism, corruption, and bribery. Conversely, contract law based rational economic action aiming at profits may be viewed from the standpoint of a gift economy as unethical, amoral behavior.

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."[31]

Even the most commodity-based economies have social (and/or legal) prohibitions on what may be commodified. In many societies, one may give up a child for adoption, but may not sell one's child. In most U.S. states, almost any private sexual activity between consenting adults is either legal or informally tolerated if it does not involve the exchange of money; most intimate acts move into the realm of the criminal if money is exchanged. Organ donation is actively encouraged; however, the sale of organs is not merely considered a crime, but is almost universally considered a particularly unsavory crime.


According to the critics the English word "gift" is usually a very poor translation of the wide variety of words actually used by hunter-gatherer and other cultures to describe their transactions and obligations. It is also a poor metaphor for describing the wide variety of such forms. The term "gift" was applied to "primitive cultures" by missionaries and colonial anthropologists who oversimplified their sophisticated and obscure transactions. The term is also paternalistic, comparing sophisticated native transactions to the traditions of Western children, such as the Christmas gift exchange. 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. [32]

On a more fundamental level, staunch advocates of a free-market economy and trading value-for-value criticize the notion of a gift economy as immoral, impractical, or both.

“Well, your network gift economy is undermining the lawful, government-approved, regulated economy!”
“Well,” Tsuyoshi said gently, “maybe my economy is better than your economy.”
“Says who?” she scoffed. “Why would anyone think that?”
“It’s better because we’re happier than you are. What’s wrong with acts of kindness? Everyone likes gifts."

-From “A Good Old-Fashioned Future” by Bruce Sterling (1999)

Theoretical obstacles to a pure gift economyEdit

Several obstacles that might oppose the implementation of a pure gift economy (advocated by Peter Kropotkin) 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. Template:Fact

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. With such weak incentives, they believe that very few goods or services will be produced for society compared to a market economy. They believe that without property arrangements, prices, and wages, there is no way to calculate individuals' needs and wants, and hoarding may result.

Austrian economists argue that general prosperity in the modern economy depends on a highly elaborate and global division of knowledge and labor. Non-local division of labor in turn requires a market price mechanism based on transactions between strangers who, beyond prices and some other simple contractual terms, are generally ignorant of each other's needs. The "gift economy," on the other hand, depends on high degrees of reputation, trust, and mutual knowledge of those with whom one transacted. It is necessarily thus limited to a network of friends and relatives, a group no larger than the Dunbar number. According to their analysis, it would thus reduce the division of labor, and result in universal poverty in larger groups.

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. In this context, other individuals make the judgment which wants or needs is to be fulfilled first, in contrast to a market economy where goods would be allocated to the consumer offering the highest price. Those offering and giving the best products would then gain standing in the community.

Kropotkin argues that mutual benefit is a stronger incentive than mutual strife and is eventually more effective collectively in the long run to drive individuals to produce. 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.

Gift economy in fictionEdit

See alsoEdit




  • Marcel Mauss: The Gift: The Form and Reason for Exchange in Archaic Societies. Originally published as Essai sur le don. Forme et raison de l'échange dans les sociétés archaïques in 1925, modern English edition: ISBN 0-393-32043-X. Lewis Hyde calls this "the classic work on gift exchange". [33]
  • Lewis Hyde: The Gift: Imagination and the Erotic Life of Property, 1983 (ISBN 0-394-71519-5), especially part I, "A Theory of Gifts", part of which was originally published as "The Gift Must Always Move" in Co-Evolution Quarterly No. 35, Fall 1982.

External linksEdit


  1. Template:Cite book
  2. Marshall Sahlins cited at Hyde, op. cit., 22.
  3. Hyde, op. cit., 8-9.
  4. Hyde, op. cit., 9.
  5. Wendy James cited at Hyde, op. cit., 4.
  6. Hyde, op. cit., 5.
  7. 7.0 7.1 Hyde, op. cit., 18.
  8. Crocombe & Crocombe, ed., Akono'anga Maori: Cook Islands Culture, 2003, ISBN 982-02-0348-1
  9. Huntsman & Hooper, Tokelau: A Historical Ethnography, 1996, ISBN 0-8248-1912-8
  10. MACPHERSON & al., Tangata O Te Moana Nui: The Evolving Identities of Pacific Peoples in Aotearoa/New Zealand, 2001, ISBN 0-86469-369-9
  11. Hyde, op. cit., xvi.Template:Inote
  12. Markus Giesler, Consumer Gift Systems
  13. Jordan Hubbard, "Open Source to the Core", Queue magazine p.24–31, May 2004. The quoted passage is on page 29.
  14. Wikimedia announces Yahoo support, Wikimedia Foundation press release April 7, 2005, accessed 17 July 2005.
  15. Nate Mook, Google Offers to Host Wikipedia, Beta News, February 11, 2005. Retrieved March 2, 2005.
  16. Talk:Yahoo! hosting on the MediaWiki Meta-Wiki, accessed 17 July 2005.
  17. Hyde, The Gift, 4, emphasis in the original.
  18. Hyde, op. cit., xv.
  19. Hyde, op. cit., 70.
  20. Hyde, op. cit., 46.
  21. Marcel Mauss cited at Hyde, op. cit., 69.
  22. Hyde, op. cit., 67.
  23. Hyde, op. cit., 68.
  24. Hyde, op. cit., 56.
  25. Hyde, op. cit., 62-64.
  26. Hyde, op. cit., 72.
  27. Che Guevara, cited at Hyde, op. cit., 67.
  28. Carol Stack, cited at Hyde, op. cit., 75-76.
  29. Hyde, op. cit., 5.
  30. Hyde, op. cit., 15.
  31. Hyde, op. cit., 61, 88.
  32. Island Money Michael F Bryan
  33. Hyde, op. cit., xv.

Further readingEdit

  • Seth Mallios: "The Deadly Politics of Giving" (2006). University of Alabama Press.
  • Sahlins, Marshall: "Stone Age Economics" (1972). Aldine. ISBN.
  • Titmuss, Richard: "The Gift Relationship: From Human Blood to Social Policy" (1970). Reprinted by the New Press, ISBN.
  • Tapscott, Don and Williams, Anthony: "Wikinomics : How Mass Collaboration Changes Everything" (2006). Portfolio, ISBN.
  • Cheal, David: "The Gift Economy" (1998). Routledge, ISBN.
  • Godbout, Jacques: "The world of gift" (1998). McGill-Queen's University Press, ISBN.
  • Vaughan, Genevieve: "ForGiving: A Feminist Criticism of Exchange" (1997). ISBN. Free online.
  • Vaughan, Genevieve: "Homo Donans" (2006). Anomaly Press, Austin, Texas. Free online.

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