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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.
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 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. 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 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. 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.
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 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 White elephant gift exchange 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 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."
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:
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:
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."
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 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.
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 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.
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.
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.
Several obstacles that might oppose the implementation of a pure gift economy (as 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 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.
The gift economy is an ancient phenomenon and nothing new at all. This learning project will expand and build on what we already have going for us as a service community.
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