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Economy and Government in the Postmodern Era PDF Print E-mail
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Written by Dick Stanford   
Friday, 26 July 2013

Dick Stanford: Economy and Government in the Postmodern Era : Gift Economy [Chapter 6]

Gift Economy - FreeeBay.net

 

 

 

 

This chapter is licensed under the Creative Commons.

Several Postmodern thinkers have advocated replacing both market capitalism and authoritarian forms of economic organization with a “gift economy”.  The concept of a gift economy has emerged more at the hands of anthropologists than economists. It seems that there are numerous examples of what economists might have called a "transfer economy" in the primitive societies usually studied by anthropologists.

Anthropological literature contains accounts of various tribal and feudal societies within which a wealthy member, often the tribal chief or lord of manor, provided sustenance and other bequests to members of the local community, and in so doing achieved and maintained elevated status within the community. Such "gifting" may have served as the basis of allegiance and loyalty.  It could preserve the status of authority and control as long as the benefactor was able to continue the beneficence.

 

Dick Stanford: Economy and Government in the Postmodern Era : Gift Economy [Chapter 6]

Several Postmodern thinkers have advocated replacing both market capitalism and authoritarian forms of economic organization with a “gift economy”.  The concept of a gift economy has emerged more at the hands of anthropologists than economists. It seems that there are numerous examples of what economists might have called a "transfer economy" in the primitive societies usually studied by anthropologists.

Anthropological literature contains accounts of various tribal and feudal societies within which a wealthy member, often the tribal chief or lord of manor, provided sustenance and other bequests to members of the local community, and in so doing achieved and maintained elevated status within the community. Such "gifting" may have served as the basis of allegiance and loyalty.  It could preserve the status of authority and control as long as the benefactor was able to continue the beneficence.

Gifts in the Modern Economy

Eric Raymond argues that gift cultures are predicated upon material abundance.[1] In contrast, market-based economies have arisen to deal with allocating resources and distributing product through trade in an environment of material scarcity.

Most transactions in a modern market economy are of the quid pro quo nature, i.e., a two-way (bilateral) exchange of values, "this for that." A "transfer" is a one-way (unilateral) flow of value from one party to another with no counter flow of value, "quid non quo". Such transfers may occur at the individual level or the international level. Examples of individual-level transfers include birthday and Christmas gifts and charitable contributions. Contributions to support foreign mission efforts are international transfers. Foreign aid is a so-called "unilateral transfer" of purchasing power, commodities, weapons and ordinance, etc., from one government to another.

In modern market-based economies, status has traditionally been ascribed to members of society on the basis of education, earning power, and inherited or accumulated wealth. Lewis Hyde points out that in a gift economy, status is accorded to those who give the most to others.[2] In the early twenty-first century, people like Michael Blumberg and Bill and Melinda Gates have been socially acclaimed not only because of their great accumulations of wealth, but also for their generosity in giving away substantial portions of their wealth. To the extent that status ascription by giving becomes more prominent, education, earning power, and inheritance will recede as bases of social status. This leaves ever less room for those at the lower ends of the income/wealth spectrum to achieve social status. For churches and other charitable organizations to take advantage of status ascription by giving, ways will have to be found to make public both the identities of the givers and the amounts given.

True Gifts

A "true gift" is a unilateral transfer of value that does not incur any obligation to reciprocate to the giver. "Gifts" that are predicated upon the expectation of a return gift or which elicit a return gift are actually quid pro quo transactions, possibly with a delay built in between the original gift and the reciprocal gift.

Within a household, the sustenance provided by parents to their offspring is usually construed as a true gift, but it may not be a true gift if there is a hope on the part of the parents that the offspring who mature to adulthood will reciprocate care and sustenance to the parents in their dotages. Aside from expectation of care during old age, parental sustenance may be a true gift to offspring even if it creates an obligation on the part of the children to "pay it forward" to their offspring in subsequent generations.

If the motivation to donate to a charity or contribute to a church is a "feel-good" effect in return, it can be argued that such donations and contributions are not true gifts, but rather implicit quid pro quo transactions. From the perspective of the economic theory of consumer behavior, it is rational for a person to incur the cost of doing something only if he or she can expect the same or greater value in return. People often assist neighbors during times of need with the expectation that the neighbors would do the same for them in their times of need. Such neighborly assistance would also be a form of implicit quid pro quo transactions rather than true gifts. What about the Old Testament dictum of an eye for an eye and a tooth for a tooth? How do Jesus' teachings bear upon this? Do unto others..., ...turn the other cheek, the rich young ruler instructed to give away all, the good Samaritan, the widow's mite, etc.

Micro-Level Gift Economies

There are numerous examples of modern gift economies at the microeconomic level, e.g., the household, churches, charities, close communities, etc., all of which are nested within macroeconomies organized around markets with invested capital, i.e., "market capitalism". It is also possible and likely that micro-level gift economies have existed in authoritarian economies (e.g., fascism and authoritarian socialism) within households and very close local communities.

Micro-level gift economies seem to be quite workable as long as the number of constituents remains relatively small, perhaps no more than 150, the so-called Dunbar number first proposed by R. I. M. Dunbar as a theoretical limit to the number of people with whom one can maintain stable social relationships.[3] Once the number of members of a micro-level economy increases beyond some such relatively small number, quid pro quo market transactions enabled by the formal institution of contract law make it possible for people who do not know each other well to take advantage of specialization and division of labor and to engage in exchange.

In a seminal article entitled "The Nature of the Firm", Ronald Coase described the business firm as a hierarchically-organized productive entity operating within a competitive market environment.[4] Coase quoted D. H. Robenson's description of firms as "islands of conscious power in this ocean of unconscious co-operation like lumps of butter coagulating in a pail of buttermilk".[5] Coase noted that resources flow among firms in response to competitive market signals, but within firms in response to authoritarian direction. Business enterprises may thus exhibit the characteristics of a micro-level gift economy because the limited resources available to the enterprise are directed (given) to its various activities and departments (gift recipients) by an internal budget authority (the gift giver). Gifting through this same budgeting process applies to government agencies and eleemosynary institutions as well.

The Gift Economy at Large Scale

There are a number of examples of gift economies at larger scale. Gifford Pinchot points out that academics across the world operate a gift economy with the products of their academic research and writing that are made freely available to colleagues in print and internet.[6] Voluntary blood-bank, food-bank, and organ donation systems are large-scale gift economies. The open software community is in effect a global-scale gift economy. And the Wikipedia project exhibits the characteristics of a global-scale gift economy.

Feminist Advocacy

The Postmodern feminist movement has taken up the cause of the gift economy on the macroeconomic level. In her book, For-Giving: A Feminist Criticism of Exchange, author Genevieve Vaughan makes a case that women are naturally giving by virtue of their childbirth and child-rearing roles.[7] Men are conditioned toward quid pro quo exchange that is the basis for what she asserts to be the patriarchial orientation of both capitalism and communism.  In Vaughn's words, "The agenda of feminism is to liberate everyone--women, children and men--from patriarchy" with the replacement of capitalism by a feminist gift economy on a global scale.

Vaughan, in a paper given in the summer of 2002 at the Women's World Conference at the University of Makerere in Uganda,[8] questioned the morality of market exchange because "exchange creates adversarial relations since each of the exchangers is trying to get the most possible out of the transaction." She further indicts patriarchal capitalism: "By possessing and dominating large amounts of wealth Capitalists - along with other powerful men in political and religious institutions, can not only keep the wealth in their own hands and but they can also keep it away from the needs of the many." This is the basis upon which she advocates a feminist movement to replace patriarchal capitalism with gift economy: "In order to combat this state of affairs it is important to unite the women's movement with the movement against Globalization and Patriarchal Capitalism, not to look at feminist issues as those having to do with the self interest of women - according to the logic of exchange - but to look at feminist issues as having to do with a logic of gift giving as opposed to the logic of the market."

An economic response to Vaughn’s characterization of exchange as adversarial is that exchange, if it is voluntary, results in both parties to the exchange gaining from the exchange, even if each party perceives him- or herself to gain at the expense of the other.  A voluntary exchange will not take place unless both parties perceive themselves to gain from the prospective exchange.  In this sense, instead of being adversarial, exchange is a process of meshing diverse human wants to the benefit of both parties to the exchange.  Such market meshing surely is socially preferable to theft or a military process of invasion and capture, both of which clearly are adversarial.  Vaughn also seems to be unaware that most of the market traders in lower-income countries are women, and that department stores, grocery stores, and other shops in higher-income countries are both staffed and frequented more often by women shoppers than by men.

Problems for a Macro-Level Gift Economy

While Vaughn and other postmodern thinkers have advocated replacing market and authoritarian forms of economic organization with a gift economy at the macro level, it is questionable (and perhaps doubtful) that such is possible. One reason is that while gift giving might serve as the distributional mechanism in a macroeconomy, there is no obvious resource allocation mechanism in a gift economy other than that the gift giver must be the sole user of all resources in producing and generating all value to be distributed by gift-giving. In this sense, the concept of a macro gift economy converges upon that of an authoritarian socialist economy in which the state owns and allocates all resources as well as distributes all product.

Also missing in a hypothetical macro-level gift economy is a production incentive mechanism. Who other than the gift giver has any incentive to produce goods, provide services to others, or improve the efficiency of production or provision?  In an authoritarian economy, these activities can be forced only with strong-arm methods of direction and compliance.

As has been demonstrated in the welfare states emerging in Europe and North America, gift giving in the form of welfare distributions, both to those who cannot find work and those who choose not to work, results in dependence upon the welfare provider (the gift giver). This welfare dependence can develop into a culture of dependence that persists from generation to generation as children born into welfare support perceive the world (or the welfare provider-giver) to owe them sustenance. The emerging language of "entitlement" reinforces the culture of dependence. Should an entitlement culture become pervasive in a society, its production incentive structure might become permanently and irreversibly impaired.

Another problem with a gift economy is the absence of price signals that would communicate changes of demand and supply to producers and demanders of goods and services. In the absence of such market-implemented price signals, it is up to the gift giver's perception and judgment to allocate resources and distribute products. The larger and more complex a society, the more heroic would be the requisites of perception and intelligence to accomplish these necessary functions.

Yet another reason that a macro-level gift economy is unlikely to be workable is that in a hypothetical gift economy the gift-giver exercises sole discretion over the self-perceived needs and wants of the gift recipients. The preferences of the gift giver would have to dominate and displace the preferences of the gift recipients. The paternalism (or maternalism) of such an authoritarian gift giver would be completely incompatible with the Postmodern belief in the subjectivity of values.  Such a distributional mechanism might be workable if the gift giver asks and acquiesces in the expressed preferences of the prospective gift recipients. Within the household, the parental gift givers may indulge their offsprings' expressed wants. Within an organization, preferences are expressed as budget requests that the budget authority may grant, deny, or modify.

Alternately, the gift giver must be all-knowing of the needs (irrespective of the wants) of the prospective gift recipients, or at least must be empowered to exercise personal (and political) authority to override the personal needs and wants of the prospective gift recipients. Parents often ignore or override the wants of their children in providing for their needs. Parents who regularly acquiesce in their children’s pleadings may find that that they have raised “spoiled brats” who as adults have every expectation that society will take care of them, whether or not they contribute to society.  Budget authorities, when constrained by limited resources within the organization, may have to deny or diminish selected budget requests.

Liberty and the Gift Economy

If the gift giver asks prospective recipients what they want, they might enjoy some modicum of liberty to the extent that their expressed needs and wants are honored by the gift giver. If the gift giver is empowered to override the expressed wants and needs of the prospective recipients, they enjoy no such liberty. For example, people who are incarcerated are entirely at the mercy of the "gift" food, clothes, etc., provided by their imprisoners.

Gift recipients may perceive that the gifts make them better off only to the extent that there is a coincidence between what the giver chooses to distribute and their own perceptions of their needs and wants. But they may perceive themselves worse off if the gifts were not sought or are not wanted.

Chapter 6 Endnotes:

[1] Eric Steven Raymond, "The Hacker Milieu as Gift Culture",  [http://www.freeebay.net/site/content/view/35/34/ ]

[2] Lewis Hyde, The Gift: Imagination and the Erotic Life of Property, Vintage Books, 1983.

[3] R. I. M. Dunbar, “Neocortex Size as a Constraint on Group Size in Primates”, Journal of Human Evolution 22 (1992): 469-493.

[4] Ronald Coase, "The Nature of the Firm", Economica, November 1937, Volume 16, Number 4, pp. 386-405.

[5] D. H. Robenson, Control of Industry, 1923, p. 85.

[6] Gifford Pinchot, "The Gift Economy", [http://www.freeebay.net/site/content/view/45/34/ ]

[7] Genevieve Vaughan, For-Giving: A Feminist Criticism of Exchange, Plain View Press, 1997, [http://www.for-giving.com/ ]

[8] Genevieve Vaughan, paper given in the summer of 2002 at the Women's World Conference at the University of Makerere in Uganda, [http://www.gift-economy.com/articlesAndEssays/theGiftEconomy-article.html ]

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