Dave Pollard's chronicle of civilization's collapse, creative works and essays on our culture.
A trail of crumbs, runes and exclamations along my path in search of a better way to live and make a living, and a better understanding of how the world really works.



July 31, 2005

Can We Make the Gift Economy Work?

Filed under: Preparing for Civilization's End — Dave Pollard @ 20:57
giftReaders know I’m an advocate of the Gift (or ‘Generosity’) Economy as a replacement for the Market Economy. Where the Market Economy tends to concentrate wealth, rewards distortion and abuse by the rich and powerful, is predicated on self-interest and scarcity, and is amoral, the Gift Economy (<– this is an excellent link, BTW) distributes wealth, provides no significant incentive for abuse, is predicated on collective interest and abundance, and is profoundly moral. It could be argued that the Market Economy (like genetic manufacturing, automation and most other constructs of civilization) is very efficient, but the Gift Economy (like nature) is more effective (nature always bats last). But some people argue that the Gift Economy is naive, that we can’t trust people to give as well as receive, and that hence, ultimately, it will break down.

There is some evidence that this could be true. Let’s take a look at some of the major examples of the Gift Economy that are already at work at the edges of our Market Economy, and the challenges they’re facing:

  • Open Source: Many articles have suggested that Open Source is not sustainable, and use the fact that many shareware products are now sold commercially (because too few people paid the suggested shareware contribution) as evidence of its unsustainability. This article argues that a better business model for Open Source is that the software itself is just the free ‘core’ offering, and compensation will be received ‘at the edges’ of this offering, in payment for add-ons, customization, personal service, and hardware on which the software resides. But this is more akin to scavenging than it is a true Gift Economy. There is a mindset today that software, and anything that consists of bits rather than atoms, should be free. With such thinking, how are the people who put their time and effort into developing Open Source products supposed to make ends meet? Who ‘pays forward’ to them?
  • Free Libraries: The idea of libraries as a public good is ancient, dating back to the days when few people could afford books of their own. Before libraries were paid for by governments, they were provided by philanthropists. Today, thanks to the Internet, anyone can be a librarian and provide their own and others’ Creative Commons content (information and entertainment) to the world. But again, this is not an entirely free undertaking. Google ads and PayPal donation requests can look tacky and pathetic, but when your site becomes very large or very popular, storage and bandwidth costs can skyrocket, and few people can subsidize that from their own pockets. So for example, we have Rock Chicks Radio, one of my favourite Internet radio stations, shutting down today, because its owners can no longer spare the time to do it up right, and refuse to beg. Another tragic Gift Economy ‘failure’.
  • Scientific Exchange: Some scientists work outside the Market Economy, and they share openly with each other because they have more to gain from collaboration than competition. They are subsidized by universities and hospitals, which in turn are subsidized by government, just like libraries. And these days, governments (in North America at least) are becoming stingier about subsiding public institutions that don’t repay them in campaign contributions and politically useful collateral. As a result, more and more scientists are becoming beholden to large corporation funding, which is decidedly ungenerous. These corporations want to own what the scientists produce, and they don’t want what they’re paying for being shared with anyone else, including other scientists not under contract to them. If this trend continues, this example of the Gift Economy could also dry up.
  • Social Exchanges: Social exchanges also date back centuries. From barn raisings and work bees to book exchanges, shared worktools, cultural exchanges and the new phenomenon of couch surfing, people have been helping each other out and sharing what they own with others, without expectation of repayment, as long as they’ve had stuff to share. It worked well when our communities were small and people stayed most of their lifetime in one place, because everyone more or less knew who was and wasn’t generous, and those who weren’t quickly found that people became hesitant to share with them. As our society has become larger, more transient and more impersonal, such exchanges have become proportionally rarer.
  • The Internet (and Blogs in particular): The Market Economists are still puzzling over the popularity of Creative Commons and  ‘how to make money on the Web’. Even the A-list bloggers aren’t making a profit, and most of the few websites that are making money (Google being the notable exception) are actually brokering cash transactions of hard goods (e.g. eBay and Amazon). And while the number of bloggers and websites and the number of users of both continue to rise despite the lack of profit, some of the best writing and information sources are still not available online, because their authors refuse to do what they do without getting paid for it.
  • Philanthropy: With the number of public and charitable organizations skyrocketing, and government funding for such organizations waning, more and more philanthropy depends on either a few ultra-rich donors (who sometimes have their own agendas and attach strings to their contributions), and hard-sell tear-jerker appeals that play on public guilt, rather than generosity.
  • File-Sharing: Many file-sharers ungenerously turn off out-going file transfers, and hence take from other file-sharers without giving in return, but despite this fact there are usually enough givers online to find most of even the most esoteric music online. But of course, file-sharing is under siege by the music and movie industries, who can’t fathom that they could increase both the quality and quantity of their product if they embraced, rather than fought, the Gift Economy. Their argument: The Gift Economy can’t work, it will bankrupt the industry and make us all losers. Lawrence Lessig has eloquently argued (in a book you can download free) that innovation, not lawsuits and anti-piracy technologies, is the way to find a balance that will compensate artists and producers (though perhaps not to the extreme degree some are compensated today) while still making information and entertainment affordable (and in many cases free) to everyone.

One of the principles of the Gift Economy is that the gift must always move (each time we receive, we must pay it forward). A second principle is that in the Gift Economy we are agents, not (passive) consumers — and what we give is generally what we have some mastery over, something we do well. Market Economy fans work hard to undermine these principles: The ‘value’ of every exchange, they say (usually some product in return for money, a surrogate for ‘equivalent’ goods or services) must be provided back to the giver, rather than forward to someone else. And the act of consumption is advertised as a pleasure in and of itself, a reward for previous personal sacrifice (unpleasant work), which imposes no obligation or responsibility on the consumer (or on the producer, for that matter).

It is hard to overcome the constant propaganda barrage of the Market Economy, whose adherents invest billions of dollars in their ‘commercial messages’ and take up between 10% (some radio stations) and 75% (many magazines) of the total ‘information bandwidth’ of the media — a cost we ‘passive consumers’ of course pay back to them in the final cost of the product.

Let’s not kid ourselves: This is war. File-sharing is just the tip of the iceberg in the battle between advocates of the Gift Economy and the Market Economy. Believers in the Market Economy see everything as property, and the use of any property without payment as theft. They are using absurdly anti-innovative patent law, armies of lawyers and their control of major political parties to try to crush every aspect of the Gift Economy. Even philanthropy is viewed through a Market lens — they expect a generous tax deduction, and will spend more on self-aggrandizing commercials (for which they also get a tax write-off) telling ‘consumers’ about their ‘generosity’ (for which they expect consumers to give them a lot of additional full-price business in gratitude) than they spend on the philanthropic contribution itself. They don’t like the Internet, which they see as anarchic and uncontrolled, and once planned to set up an Alternate Internet which would be run as a commercial operation.

So we’re up against a lot: Failed Gift Economy projects, anti-Gift Economy propaganda, and political, legal and economic measures perpetrated by the rich and powerful to prevent ‘price-less’ transactions. How do we contend with this? Are the prospects for a Gift Economy doomed by the Tragedy of the Commons — the sense that if something belongs to everyone, it is no one’s responsibility and has no value?

I believe we need to do three things simultaneously:

  1. Use our collective ingenuity and collaborative skills to make the Gift Economy work: The successes of the Gift Economy to date are primarily due to a combination of human creativity and innovation, applied to create enabling, sharing technologies. We need to apply these same skills to ensure that we find ways that will address its failings-to-date: 
    • The exploitation, exhaustion and even bankruptcy of many of those who give much more than they receive, from open source programmers to bloggers to independent artists. 
    • The precarious dependence of many Gift Economy institutions (like libraries, public broadcasters and public research programs) on government and other public-sector largesse.
    • The loss of trust essential to community sharing as communities become larger and more impersonal.
    • The degradation of the creative commons as a consequence of the Tragedy of the Commons.
    • The trend for more and more online information to require a paid subscription or pay-per-use.
    • The use of increasingly manipulative, hard-sell techniques to coerce charity as more positive appeals to generosity prove inadequate.
    • The steady loss of electronic freedom and discouragement of innovation in the face of huge, expensive ‘digital rights’ campaigns and over-reaching intellectual property law campaigns.
  2. Personalize the messages and workings of the Gift Economy: If you know the person who gives you a gift, you are far more likely to pay it forward. That’s not (primarily) because we know the donor will ask us if we’ve done so, it’s because we tend to value something more highly when we know, trust and respect who it came from. We need to find ways to personalize the gifts we receive from others, to make them more one-to-one, more human. 
  3. Fight the regressive forces opposed to the Gift Economy with everything we have: It will take a long time for the Gift Economy to eat away at and finally replace the Market Economy from the outside in. We cannot hope to eliminate the Market Economy quickly — in fact it would be hugely disruptive, perhaps disastrous, to do so even if we could. We must focus our fight on the reactionaries — those who are so ideologically obsessed with privatizing everything, making everything property, and undermining public belief in public institutions, government and self-regulation. And we must focus on those who are trying to destroy and undermine Open Source, the Creative Commons, the Internet and our electronic freedoms, ‘price-less’ sharing of assets and information, true philanthropy and volunteerism, self-sufficient individuals and communities, collective effort and collaborative innovation. It’s a fight against doctrinaire corporatism, against lawyers who are trying to patent and copyright everything forever, and against ignorance that there are workable alternatives to an untrammeled Market Economy.

These actions won’t happen by themselves, and disorganization is what the anti-Gift Economy forces are counting on. We need a concerted effort to do these three things. But first, we need a lot more discussion, research and education about what the Gift Economy is, and what it could be. In just a few articles, this blog has jumped into Google’s top 20 sources for information on the Gift Economy. We need university courses on this subject, books and conferences and collaborative studies.

What do you think? Could we make the Gift Economy work, the way that some dreamers a few centuries ago came up with the Market Economy and then invented money and other technologies to make it work? And if we could, could the Gift Economy be the key, the thin edge of the wedge to change everything, to save the world?

3 Comments

  1. How does a “Gift Economy” deal with greed?

    Comment by zach — July 31, 2005 @ 20:59

  2. It seems that a Gift Economy is only going to work on a smaller scale, and that it must not involve crucial resources for survival, such as food.When one group is relying on the gift/generosity of their neighbor for survival (basic necessities, which in our society often involves money) that’s when the Gift Economy seems to fall apart. Hunter-gatherers shared food readily because there was no fear of starvation… there was plenty to go around. When one person or group has power over these basic necessities, they can use them to coerce others and manipulate themselves into having even more power.It seems that the Gift Economy has to function separately from the Market Economy, hierarchy, division of labor, and the dependency scheme of civilization. That’s my theory, at least. All of the gifts given must be somewhat superfluous — above and beyond the basic needs.There’s a book I recommend to you, Dave, if you haven’t already read it: A Theory of Power (free online). Particularly Chapter 9: Forward, to Rhizome about an alternative social structure to Hierarchy. Jeff Vail describes a rhizome trade network this way:

    Power remains distributed to the level of the individual rhizome node through local, functional self-sufficiency

    Comment by Devin — July 31, 2005 @ 22:14

  3. Zach: It renders it impotent via social rejection. Devin: This strikes me as a bit counter-intuitive. It is precisely the essentials of life that should be free, and the luxuries that (if you want them) you should be prepared to pay for. I’ll read more about Theory of Power (someone else recommended this to me). Self-sufficiency and the defeat of hierarchy are definitely required to make the Gift Economy work.

    Comment by Dave Pollard — August 3, 2005 @ 08:29

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