A Theory of Gift Exchange

25 December 2011


There is a tension and a paradox at the heart of gift exchange. The pure gift is given without thought of reciprocity and out of generosity for its own sake, but the very idea of a gift exchange implies that two or more parties will engage in a ritualized and mutual transfer of gifts. Thus in gift exchange, there is an expectation of reciprocity and even of symmetry: gifts are expected to be of roughly equal value, except in special circumstances. And the fact that there are (tacitly acknowledged) exceptions to axiological symmetry is a nod to the fact that gift exchange is a calculation, and nothing is farther from the spirit of a pure gift than the spirit of calculation.

Still, we try, and sometimes we are successful. Moreover, sometimes we are surprised by the unexpected generosity of the other. Sometimes we are presented with a gift completely unexpectedly, from someone we had no expectation of gift exchange. In such circumstances, we are not prepared to give anything in exchange, so we are “forced” to accept the pure gift, for to refuse it would be inexcusable in most circumstances.

Still, unexpected gifts are sometimes refused. It is not uncommon for an individual who looks to another as a potential romantic partner will give an unexpected gift as a way to announce their interest in that person. In a sense, announcing one’s interest in another with a gift is much like announcing one’s intentions and expectations of future exchange. Thus such a gift may well be refused for the implicit contract of future exchange that it suggests. Charitable person will be polite about this and say things like, “Oh, I could never accept such a present, it is much to expensive.” Perhaps they might also add, “I would feel obligated if I accepted a gift like this.”

In this way — and while I have used the example of a gift exchange between potential romantic partners, but it is by no means limited to the romantic dyad — even a forced pure gift, exempt of necessity from immediate exchange, can in fact be part of a gift exchange when understood in a larger context, and therefore fails to constitute a pure gift.

The model of a pure gift is grace, and so the pure gift may be exclusive to theological contexts. While a pure gift may be a rare thing, to what extent can we approximate a pure gift? May be come so close to approximating a pure gift that our gift is, for all practical purposes, a pure gift? I suspect so, as I expect that the more closely a gift approximates the ideal of the pure gift, the more rare it becomes.

Nietzsche wrote the following in his Mixed Opinions and Maxims:

How duty acquires splendor.–The means for changing your iron duty to gold in everyone’s eyes is this: always keep a little more than you promise.

This last suggestion — always keep a little more than you promise — has stayed with me ever since I first read this many years ago. Nietzsche formulates this in the context of duty, and duty is not only a reciprocal and symmetrical relationship, it is usually felt to be a burden. Nietzsche has asked himself, “How can this burden be transformed into something welcome to all?” The surprising answer he gives to this self-posed question is, “Transform duty into a gift” — for when you keep a little more than you promise you go beyond duty in keeping your duty. This is a Nietzschean transvaluation of values of an unexpected sort.

One finds this same idea of Nietzsche’s in the New Testament, in famous admonition, “And whosoever shall compel thee to go a mile, go with him twain.” (Nietzsche was, after all, a preacher’s son, and he absorbed some of the radical character of the gospels.) In the Holy Land during classical antiquity, a Roman soldier could legally compel a Jew to carry his pack for one mile. Only one mile was required, after which the Jew impressed into such service was free. Obviously, the Jew felt this law to be a humiliation. The obvious response to such an unjust law would be its repeal. The radical response, the response of the gospels, is not only the go the mile without complaint, but to go an extra mile.

If we can inform our duties, including our duties of gift exchange, with the spirit of keeping a little more than you promise or going the extra mile, our duties are transformed into gifts, and since these gifts grow out of duties, they are unexpected and therefore approximate pure gifts. But there are few who have the moral strength to overcome the feeling of humiliation and moreover to transform this humiliation into what Nietzsche called “golden.” This the world is more marked by impure than pure gifting.

Impure gift exchanges are undertaken with no pretense of being given out of pure generosity. Most gifts are of this kind. When an employer plays an employee more than he strictly has to pay that employee, and the employee works harder than they strictly might be expected to work, economists call this a “gift exchange.” I realized recently that we can narrow this and call it an “economic gift exchange” and contrast it to other forms of gift exchange.

Recently in the Financial Times I read the following in David Pilling’s column, Modern China is yearning for a new moral code:

“Day to day, most Chinese people are able to put aside the broader moral confusion to perform the little acts of kindness and decency that make a society function.”

What Pilling describes here as the little acts that make a society function constitute what we might call a social gift exchange: in a smoothly functioning society individual citizens do more than a narrow interpretation of their social and legal duty would stipulate, and the presumptive exchange for this is to live in a society than is better than that which fulfills the minimum social and legal requirements.

There are many kinds of social gift exchange: a teacher who makes an extra effort to teach and a student to learn, a social worker who goes the extra mile for a client and a client that responds by making an extra effort, and when people yield the right of way for each other in traffic, or when pedestrians, bicyclists, and vehicles do so mutually and on the large scale (and, just as importantly, the anonymity) of urban population densities.

There are also many instances when social gift exchange fails, and people behave rather badly with each other. I’m sure that anyone reading this can recall many instances from their own experience when others gave only the minimum but demanded an extra measure for themselves in return, or when people engage in conflict over who is and who is not abiding by the minimum social and legal standards.

This idea of social gift exchange can be used to define a healthy and fully functioning society: in a healthy society, social gift exchange is routine and unexceptional; in a pathological society, social gift exchange is mostly absent. In the big picture, it is to be expected that most societies fall somewhere in the middle of this continuum stretching between the pathological and the healthy, though it is also be expected that in smaller, culturally and ethnically homogenous societies that social gift exchange functions more easily because of shared expectations and a shared understanding — what sociologists call normative consensus.

Thus out of the impure giving of gift exchange, even when undertaken in a spirit of reciprocity and axiological symmetry, something truly noble and socially beneficial can emerge. A social gift exchange that is moreover informed by the spirit of capitalism, that prioritizes delayed gratification as the sure way to wealth, is all the more powerful, since one is not looking for an immediate and symmetrical payoff of one’s social gifting.

As I see it, then, what Marx called “callous ‘cash payment’” and “icy water of egotistical calculation” may be in fact the thin edge of the wedge for a more just and even a more human social and moral order. Of course, as we practice it, it is imperfect in the extreme. Whether or not we might perfect social gift exchange brings us to the traditional question of the perfectibility of man. Yet, short of the perfectibility of man, we can still sensibly ask about, say, the betterment of man, even if short of perfection.

This, then, is the challenge for the large and diverse societies of contemporary nation-states (presumptively established on the basis of nationhood, but in fact established on the basis of the territorial principle in law): how can social gift exchange be encouraged to flourish in a context in which shared expectations and shared understanding may be absent?

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Grand Strategy Annex

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4 Responses to “A Theory of Gift Exchange”

  1. MisterEgo said

    You misunderstand how humans work, almost every gift expects a form of a return of value – how often do you gift your enemies?

    The problem being of course, is that it’s not as effective as whip-lashing humans into wage slavery. At least, it’s not effective enough for the humans to form a society that completely revolves around it. Yet, it exists, and it is, through technological advancement, becoming more and more possible.

    And it does, and can work. You’re just using a form of it. You are, for all intents and purposes, being charitable to your readers, providing a service that does not rely on payments of any kind, and you are not, in fact, profiting in any way from this blog, are you?

    Also, the core idea of gifting something for profit might seem so wrong to you, doesn’t it? It’s hard to understand how a gift can turn into profit, when everybody can game the system by not gifting back, eh?

    Back to you, you spend a lot(at least to me, even a few hours is a lot) of your free time on this, in one way or another, don’t you? Interesting behaviour from an economic perspective, isn’t it?

    Even more interesting is the service that offers you this ability, wordpress.com. It has payable options, but the core service is free. Another interesting economic behaviour, isn’t it? Why would anybody gift you a blogging environment? Why would anybody find it *profitable* to gift you resources?

    It has to do with cheap, or for purposes of normal use, infinite resources. WordPress is offering you a service that is, for most intents and purposes, an infinite resource. Maybe not infinite, but so cheap that it is more effective to use it as a marketing tool then to not share it with total strangers. Even if 2 or 3 percent of people pay for additional resources or services. Again, those are rather infinite resources for probably most things they sell you. Even in that case it’s enough to support everybody.

    What about resources that wordpress uses to offer you this service? Yes, workers and hardware are rather finite resources, so those 2,3% pay for that. What about wordpress software? Free and open source… what about opering systems for wordpress servers? Linux probably, el cheappo again…

    Do you begin to see a pattern? Digital resources are mostly el cheapo, read free. All, for most intents and purposes, cheap or infinite resources. And people share them, like you do. And companies leverage them to offer both free and payed services. Would you print these blogs in a book? Would you bother? Would most?

    Look at the whole internet. It’s free… Few things have been as free before it… TV maybe, radio before it… Pamphlets, or rare books even before that? Technological advance makes things cheaper. Industrialization, call it whatever you want…

    It brings another issue into reality. Competition. It’s in the core of our society currently, not to mention economy. Limited competition, that is. Perfect competition is, of course, nor achievable, nor desirable, for there would be no profit there, and no incentive. Not that much incentive anyway.

    What about collaboration, instead of competition? It doesn’t work well with finite resources. It’s not efficient enough, unfortunately. Limited competition, of course, with a little bit of cooperation in the form of enterprises. Pure colaboration seems to work just fine with a combination of finite and infinite resources, though, and I’ve explained in an example up there. Colaboration is a much bigger aspect there instead of competition. There is some, but it does not dominate, and it would probably not be healthy to get rid of it completely. It also allows things to flourish that would not otherwise, like linux and other open source software. Microsoft dominating more or less only because of piracy-marketing cash. Only in the desktop aspect, losing or (at least) not dominating almost all other battles. For mobile there is Android, but there is Apple of course, where rich Westeners can afford it, server software is linux dominated, etc yada yada. I’ll end this paragraph by noting that linux, the sheer scale of it, and lots of other open source software, would not be possible without the power of colaboration as opposed to competition, who would work for free for a comercial company?

    I live in a world where a metric craptop of things is free for me. You probably don’t. Different generations, I suppose… It does help that I spend most of my time in front of a computer, of course. And that I am a pirate. This is probably hard for you to swallow (the fact that piracy and it’s legal offshots can improve the life of millions) but that’s fine, I don’t expect a different reaction. I won’t bug you here with the finer points of piracy or profit maximization (http://en.wikipedia.org/wiki/Profit_maximization). I’m mostly mentioning it to strenghten the point of a gifting economy, to show you visible and working alternatives to crony capitalism and that we are closer to the comunist ideal of “take how much you need, give how much you can” then you might think (I know this is another hard swallow for an American, that’s fine though). And I’m talking a little bit about Bittorrent here.

    Bittorrent, the thing that pretty much enables piracy, with and without the context of piracy is another great example of the usage of limited resources (user bandwidth) coupled with a gifting social contract (maybe I should say social economy) enforced by the programming of bittorent clients (programs that implement the bittorrent protocol). I wont bore you with the details though, except to say that less then 1% of people actually contribute pirated (and legal) software, but that is more then enough for all to enjoy the platform.

    Bitcoin (http://www.weusecoins.com/) is another great example of the power of social contracts (err, mathematical contracts as well) and how social contracts, once given to the singleminded minds of computer programs can bring about the ideals of gifting economies into reality, by instituting working checks and balances into systems to make them function, or, in the case of bitcoin, to combine the computing power to make it impossible in practical terms to game the systems core. And yes, it is a decentralised implementation of money, but I’m talking about the fact that it’s free to participate in the monetary system established, and that the service of ensuring safety from counterfitting is mostly free, or at least much, much less then what banks would charge.

    I think I mentioned these aspects of gifting economies made possible by computers in a previous comment some time ago, but choose not to elaborate since it’s a complex subject. I have barely scrapped the surface here.

    I could go on until tommorow, but it’s pointless in this type of medium (comments). I’ll end with the mention of a thought I have not been able to place so far into this essay. I don’t know whether you are able to comprehend the minds of some of my generation. Those that fully experience what I wrote above. Those that experience the internet in it’s fullest, but do not realise it’s full potentials (like you do not probably), and those that do, like I and some likeminded people. Those that understand fully try to conform even our financial lives to the concepts of sharing/gifting of resources, even when we fail to conform to the ideal, like some pirates I know that are making comercial products without free parts but are still pirates in their heart. And in the last sentence, I use the term pirate as an idealogy that’s springing up in Europe, comming from Sweden mostly…

    Those that don’t understand the internet fully stil enjoy the benefits, in the spirit of that unfortunate commie idea of “take how much you need, give how much you can”.

    I’ll end with the point that I do understand that a lot of free content is not created by poeple that consider themselves pirates. It’s about the ideology, or at least the idea of what I’m writting here, the idea of free stuff… not about names.

    Gifting economies are possible, and the amazing thing is that they overtake petty monetary exchange economies when it comes to infinite resources. We will not need to fight the croonies, they will simply wither away once true conditions emerge, those of almost free hardware, like http://www.reprap.org and printrbot.com. For printrbot.com, take a look at the right, the kickstarter update for some nice (bloody amazing) news.

  2. MisterEgo said

    “How can social gift exchange be encouraged to flourish in a context in which shared expectations and shared understanding may be absent?”

    Software, see comment above.

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