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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). 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.

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. 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.

Traditional gift economies

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. Lewis Hyde locates the origin of gift economies in the sharing of food, citing as an example the Trobriand Islandermarker 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. The potlatch also originated as a 'big feed'. Hyde 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 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. 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."

A gift economy normally requires the gift exchange to be more than simply a back-and-forth between two individuals. For example, a Kashmirimarker 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. 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.


  • 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.

  • Native American who lived in the Pacific Northwest, 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.

  • In Southeast Asia, Theravada Buddhists continue to sponsor 'Feasts of Merit' that are very similar to the potlatchs. Such feasts usually involve many sponsors and occur mainly before and after the rainy season.

  • Pacific Island societies prior to the nineteenth century were essentially gift economies. This practice still endures in parts of the Pacific today - for example in some outer islands of the Cook Islandsmarker. In Tokelaumarker, 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. On Anutamarker as well, a gift economy called "Aropa" still exists.

  • There are also a significant number of diasporic Pacific Islander communities in New Zealandmarker, Australia, and the United Statesmarker 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 ("Samoanmarker way of life"), the anga fakatonga ("Tonganmarker way of life"), and the culture of other diasporic Pacific communities.

  • 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.

In modern-day economies

Some elements of a gift economy continue to exist even within the context of the contemporary world economy. For example, small-scale gift economies exist in most families, with gifts of time, money, nourishment, shelter, and expertise being given without any overt negotiation of reciprocal behavior. Similarly, private 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.

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

Aspects of gift economies also exist among religious groups. Amongst the Amish, "Barn Raising" is a form of gift giving to others in the community. In Islamic societies, the free gift of alms is a religious requirement, which has made social "foundations" an important part of Muslim communities

The blood bank system prevalent in several countries, including the United Statesmarker, 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.

The production of Graffiti or artworks belonging to the 'Street Art' movement may be termed as a form of gift economy. The artists involved produce public works to be viewed by the general population, often risking legal reprisals. These artworks are often recorded photographically by others, with a gain in reputation the reward for the artists.

Gift Exchanges[19092] are generally associated with gift support activities among family and friends. Events such as white elephant gift exchanges or Yankee Swaps are used to swap gifts between members of an invited group. Gift exchanges are now becoming a part of the social networking systems on the internet.

Regiving networks are becoming very common in on-line forums where people offer items to anyone who wants them. These networks usually prohibit any form of quid pro quo. They generally operate at a local level, using volunteers to act as administrators to help run the forums. Freecycle is one popular example of such a network.

Information gift economy

Information is particularly suited to gift economies, as information is a nonrival good and can be gifted at practically no cost. Traditional scientific research can be thought of as an information gift economy. Scientists produce research papers and give them away through journals and conferences. Other scientists freely refer to such papers. All scientists 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.

The free software community is another example of an information gift economy. Programmers make their source code available, allowing anyone to copy and modify or improve the code. People may benefit from any improvements. Markus Giesler in his ethnography "Consumer Gift Systems" has developed music downloading as a system of social solidarity based on gift transactions.

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 on the open source community (although referring to it as a barter economy), essentially describes a gift culture, where reciprocity is a broad community custom, rather than an explicit quid pro quo: "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."

Other examples

  • The Wikipedia web-based collaborative encyclopedia is, in most of its operations, a gift economy. Millions of articles are available on Wikipedia, and none of their innumerable authors and editors receives any material reward.

  • Yahoo's provision of servers in Asia 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 gained.

  • 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.

  • "Can I bum a cigarette?" Smokers engage in a gift economy by giving when they have a full pack, and asking when they are out.

  • De-commodification, with reliance on a gift economy, is one of the "ten guiding principles" of the annual Burning Manmarker festival. Entry into the week-long event requires a paid ticket; however, once inside the event, buying and selling of any kind is prohibited.

  • BookCrossing "the practice of leaving a book in a public place to be picked up and read by others, who then do likewise."

In literature

The concept of a gift economy has played a large role in works of fiction about alternate societies, especially in works of science fiction. Examples include:
  • News from Nowhere (1890) by William Morris is a utopian novel about a society which operates on a gift economy
  • The Great Explosion (1962) by Eric Frank Russell describes the encounter of a military survey ship and a Gandhian pacifist society that operates as a gift economy.
  • The Dispossessed (1974) by Ursula K. Le Guin is partly about a society using a gift economy.
  • The Mars trilogy, a series of books written by Kim Stanley Robinson in the 1990s, suggests that new human societies that develop away from Earth could migrate toward a gift economy (notably the economy of Mars in the story).
  • The movie Pay It Forward (2000) centers on a schoolboy who, for a school project, comes up with the idea of doing a good deed for another and then asking the recipient to "pay it forward". Although the phrase "gift economy" is never explicitly mentioned, the scheme would, in effect, create one.
  • Down and Out in the Magic Kingdom (2003) by Cory Doctorow describes future society where rejuvenation and body-enhancement have made death obsolete and material goods are no longer scarce, resulting in a reputation-based (whuffie) economic system.
  • Wizard's Holiday (2003) by Diane Duane describes two young wizards visiting an utopian-like planet whose economy is based on gift-giving and mutual support.

Social theories

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." He describes the spirit of a gift economy (and its contrast to a market economy) as:

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."

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," 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. And as Hyde writes, "There are times when we want to be aliens and strangers." 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.

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 Chicagomarker 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.

Additionally, in some kinds of gift economies, 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 chieftain 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.

Anarchists, particularly anarcho-primitivists and anarcho-communists, believe that variations on a gift economy may be the key to breaking the cycle of poverty. Therefore they often desire to refashion all of society into a gift economy. Anarcho-communists advocate a 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."

Peter 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.

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. Among the Trobrianders, for example, treating Kula as barter is considered a disgrace.

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.

More critically, 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."

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.

Obstacles to a pure gift economy

Several obstacles that might oppose the implementation of a pure gift economy (as advocated by 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 commune, 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 to apply the proper punitive measures to those who refuse to work when they have such an ability.

Milton Friedman and other free market economists argue that alternatives to free market economies will provide weak incentives. With such weak incentives, they believe that very few goods or services will be produced for society compared to a market economy. Without property arrangements, prices, and wages, there is no way to calculate individuals' needs and wants, and hoarding may result. Because such views generally do not attack gift economies directly, but instead alternatives to capitalism or free market economies, proponents of a pure gift economy advocate that other social mechanisms within a gift economy will replace the need for prices.

See also


  2. Marshall Sahlins cited at Hyde, op. cit., 22.
  3. Hyde, Lewis, The Gift: The Erotic Life of Property, 8-9.
  4. Hyde, op. cit., 9.
  5. Wendy James cited at Hyde, op. cit., 4.
  6. Hyde, op. cit., 5.
  7. Hyde, op. cit., 18.
  8. Crocombe, Ron & Crocombe, Marjorie Tua’inekore, 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. Aropa-system
  11. MACPHERSON & al., Tangata O Te Moana Nui: The Evolving Identities of Pacific Peoples in Aotearoa/New Zealand, 2001, ISBN 0-86469-369-9
  12. National Geographic Magazine, March 23, 2009
  13. [Augustin Souchy, "A Journey Through Aragon," in Sam Dolgoff (ed.), The Anarchist Collectives, ch. 10]
  14. Kung, Hans "Islam: Past, Present and Future" (One World)
  15. Hyde, op. cit., xvi.
  17. Markus Giesler, Consumer Gift Systems
  18. Jordan Hubbard, "Open Source to the Core", Queue magazine p.24–31, May 2004. The quoted passage is on page 29.
  19. Wikimedia announces Yahoo support, Wikimedia Foundation press release April 7, 2005, accessed 17 July 2005.
  20. Nate Mook, Google Offers to Host Wikipedia, Beta News, February 11, 2005. Retrieved March 2, 2005.
  21. Talk:Yahoo! hosting on the MediaWiki Meta-Wiki, accessed 17 July 2005.
  22. Hyde, op. cit., xv.
  23. Hyde, The Gift, 4, emphasis in the original.
  24. Hyde, op. cit., 70.
  25. Marcel Mauss cited at Hyde, op. cit., 69.
  26. Hyde, op. cit., 67.
  27. Hyde, op. cit., 68.
  28. Hyde, op. cit., 56.
  29. Carol Stack, cited at Hyde, op. cit., 75-76.
  30. Hyde, op. cit., 5.
  31. Hyde, op. cit., 15.
  32. Hyde, op. cit., 61, 88.


  • Originally published as Essai sur le don. Forme et raison de l'échange dans les sociétés archaïques. Lewis Hyde calls this "the classic work on gift exchange".
  • 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.

Further reading

  • Cheal, David: "The Gift Economy" (1998). Routledge
  • Godbout, Jacques: "The world of gift" (1998). Kingston, Ont.: McGill-Queen's University Press
  • Infeld, Max: "Viral Monetary Unit: Internation Bank of Gifting and Exchange" (2008). Infeld Press, Chico,CA. Free online.
  • Mallios, Seth: "The Deadly Politics of Giving" (2006). University of Alabama Press.
  • Sahlins, Marshall: "Stone Age Economics" (1972). Aldine. ISBN.
  • Tapscott, Don and Williams, Anthony: "Wikinomics : How Mass Collaboration Changes Everything" (2006). Portfolio
  • Titmuss, Richard: "The Gift Relationship: From Human Blood to Social Policy" (1970). Reprinted by the New Press
  • Vaughan, Genevieve: "ForGiving: a Feminist Criticism of Exchange" (1997). Free online.
  • Vaughan, Genevieve: "Homo Donans" (2006). Austin, Texas: Anomaly Press. Free online.

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