Gift economy

Gift economy
Watercolor by James G. Swan depicting the Klallam people of chief Chetzemoka at Port Townsend, with one of Chetzemoka's wives distributing potlatch.
A Freebox in Berlin, Germany 2005, serving as a distribution center for free donated materials

In the social sciences, a gift economy (or gift culture) is a society where valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. no formal quid pro quo exists).[1] Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community. The organization of a gift economy stands in contrast to a barter economy or a market economy. Informal custom governs exchanges, rather than an explicit exchange of goods or services for money or some other commodity.[2]

Various social theories concerning gift economies exist. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that social status is awarded in return for the gifts.[3]

Gift economies were prevalent before the advent of market economies[citation needed], but gradually disappeared as societies became more complex. Some gift economies survived until modern historical times[citation needed], particularly in pre-industrial societies[citation needed], but no modern-day society is structured as a gift economy[citation needed]. Aspects of gift societies still exist in the modern world, particularly in religious gift giving and in the information technology community.



Contrary to popular conception, there is no evidence that societies relied primarily on barter before using money for trade.[4] Instead, non-monetary societies operated largely along the principles of gift economics[citation needed]. When barter did in fact occur, it was usually between either complete strangers or would-be enemies.[5]

Lewis Hyde locates the origin of gift economies in the sharing of food, citing as an example the Trobriand Islander protocol of referring to a gift in the Kula exchange ring as "some food we could not eat," even though the gift is not food, but an ornament purposely made for passing as a gift.[6] The potlatch also originated as a 'big feed'.[7] Hyde argues that this led to a notion in many societies of the gift as something that must "perish".[citation needed]

The anthropologist Marshall Sahlins writes that Stone Age gift economies were, as evidenced by their nature as gift economies, economies of abundance, not scarcity, despite modern readers' typical assumption of objective poverty.[8]

Gift economies were replaced by market economies based on commodity money, as the emergence of city states made money a necessity.[9]


A gift economy normally requires the gift exchange to be more than simply a back-and-forth between two individuals. For example, 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.[10] This notion of expanding the circle can also 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.[10]

Many societies have strong prohibitions against turning gifts into trade or capital goods. 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.[11] 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 is reprehensible. "In folk tales," Hyde remarks, "the person who tries to hold onto a gift usually dies."[12]

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.[13]


Social structures

There are many examples of how a gift economy works in modern culture within a mixed economy, such as marriage, family, friendship, kinship, and social network structures[citation needed].


Pacific islanders

Pacific Island societies prior to the nineteenth century were essentially gift economies.[citation needed] This practice still endures in parts of the Pacific today - for example in some outer islands of the Cook Islands.[14] 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.[15] On Anuta as well, a gift economy called "Aropa" still exists.[16]

There are also a significant number of diasporic Pacific Islander communities in New Zealand, Australia, and the United States that still practice a form of gift economy. 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.[17]

Papua New Guinea

The Kula ring still exists to this day, as do other exchange systems in the region, such as Moka exchange in the Mt. Hagen area, on Papua New Guinea.[citation needed]

Native Americans

Native Americans who lived in the Pacific Northwest (primarily the Kwakiutl), practiced the 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.[citation needed]


In the Sierra Tarahumara of North Western Mexico, a custom exists called kórima. This custom says that it is one's duty to share his wealth with anyone.[18]


In place of a market, anarcho-communists, such as those who inhabited some Spanish villages in the 1930s, support a currency-less gift economy where goods and services are produced by workers and distributed in community stores where everyone (including the workers who produced them) is essentially entitled to consume whatever they want or need as payment for their production of goods and services.[19]

Burning Man

Burning Man is a week-long annual art and community event held in the Black Rock Desert in northern Nevada, in the United States. The event is described as an experiment in community, radical self-expression, and radical self-reliance. The event outlaws commerce (except for ice, coffee, and tickets to the event itself)[20] and encourages gifting.[21] Gifting is one the 10 guiding principles,[22] as participants to Burning Man (both the desert festival and the year-round global community) are encouraged to rely on a gift economy. The practice of gifting at Burning Man is also documented by the 2002 documentary film "Gifting It: A Burning Embrace of Gift Economy",[23] as well as by Making Contact's radio show "How We Survive: The Currency of Giving [encore]".[21]

Religious gift giving


In Southeast Asia, Theravada Buddhists continue to sponsor "Feasts of Merit" that are very similar to potlatch. Such feasts usually involve many sponsors and occur mainly before and after the rainy season.[24]


Bhiksha is a devotional offering, usually food, presented at a temple or to a swami or a religious Brahmin who in turn provides a religious service (karmkand) or instruction.


In Islam, the free gift of alms is a religious requirement, which has made social foundations an important part of Muslim communities.[25]


According to the Hebrew Bible, tzedakah is a religious obligation that must be performed regardless of financial standing. It is considered as one of the three main acts that can annul a less than favorable heavenly decree.

Information gift economies

Information is particularly suited to gift economies, as information is a nonrival good and can be gifted at practically no cost.[26][27]


Traditional scientific research can be thought of as an information gift economy. Scientists produce research papers and give them away through journals and conferences, though access to the journals themselves can be expensive. Other scientists freely refer to such papers. All scientists with access to those journals can therefore benefit from the increased pool of knowledge. The original scientists receive no direct benefit from others building on their work, except an increase in their reputation. Failure to cite and give credit to original authors (thus depriving them of reputational effects) is considered improper behavior.[28]


Markus Giesler, in his ethnography "Consumer Gift Systems" has developed music downloading as a system of social solidarity based on gift transactions.[29]

Open-source software

In his essay "Homesteading the Noosphere", noted computer programmer Eric S. Raymond opined that open-source software developers have created "a 'gift culture' in which participants compete for prestige by giving time, energy, and creativity away".[30] Members of the Linux community often speak of their community as a gift economy.[31]


Millions of articles are available on Wikipedia, a free on-line encyclopedia, and almost none of its innumerable authors and editors receive any direct material reward.[32][33]

Social theories

Various social theories concerning gift economies exist. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that social status is awarded in return for the gifts.[3] Consider for example, the sharing of food in some hunter-gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily foraging. This custom may reflect concern for the well-being of others, it may be a form of informal insurance, or may bring with it social status or other benefits.


According to Lewis Hyde, 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."[34] He describes the spirit of a gift economy (and its contrast to a market economy) as:[35]

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.

Hyde also argues 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."[36]

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."[12] 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.[37] 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."[38]


Sociologist Marcel Mauss argues a different position, that gifts entail obligation and are never 'free'. According to Mauss, while it is easy to romanticize a gift economy, humans do not always wish to be enmeshed in a web of obligation. Mauss wrote, "The gift not yet repaid debases the man who accepts it,"[39] 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.[40] And as Hyde writes, "There are times when we want to be aliens and strangers."[41] 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.[42] The French writer Georges Bataille in his book La part Maudite use Mauss's argument in order to construct a theory of economy: to his point of view the structure of gift forms the presupposition for all possible economy. Particularly interested about the potlatch as described by Mauss, Bataille claims that its antagonistic character obliges the receiver of the gift to confirm a subjection; the structure of the gift can refer thus immediately to a practice that bears out different roles for the parts that undertake an action in it, installing in this act of donating the Hegelian dipole of master and slave.