Gift Economy

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Definition

"A gift economy is a social theory in which goods and services are given without any explicit agreement for immediate or future quid pro quo. Typically, a gift economy occurs in a culture that emphasizes social or intangible rewards for solidarity and generosity: honor, loyalty or other forms of gratitude.In some cases, simultaneous or recurring giving serves to circulate and redistribute valuables within a community. This can be considered a form of reciprocal altruism. Sometimes there is an implicit expectation of the return of comparable goods and services, or the gift being later passed on to a third party. The concept of a gift economy stands in contrast to a planned economy or a market or barter economy. In a planned economy, goods and services are distributed by explicit command and control rather than informal custom; in barter or market economies, an explicit quid pro quo — an exchange of money or some other commodity — is established before the social transaction takes place. In practice, most human societies blend elements of all of these, in varying degrees." (http://www.gcredit.org/)



Introduction

The internet is often called a "gift economy".

However, in P2P Theory, I argue that peer production is not a form of reciprocity-based gift economy, but non-reciprocal communal shareholding. For more information on this argument, see here at http://www.p2pfoundation.net/3.4_Placing_P2P_in_an_intersubjective_typology

However, both peer production and the gift economy proceed from the same 'gifting spirit' and are therefore related. A gift creates a future obligation for reciprocity, if favors a more personalized economy; in a market economy money is exchanged for past expenditure of effort, and no reciprocity or obligation is created, it is a totally impersonal process. In peer production, value is created not in exchange from a gift by another, but in exchange for the emotional and spiritual value, and recognition, that derives from working on a project of common value.

The Wikipedia article on the Gift Economy is here, at http://en.wikipedia.org/wiki/Gift_economy


Description

Gifford Pinchot [1]:

"In the potlatches of the Chinook, Nootka, and other Pacific Northwest peoples, chiefs vied to give the most blankets and other valuables. More generally, in hunter-gatherer societies the hunter's status was not determined by how much of the kill he ate, but rather by what he brought back for others.

In his brilliant book The Gift: The Erotic Life of Property, Lewis Hyde points to two types of economies. In a commodity (or exchange) economy, status is accorded to those who have the most. In a gift economy, status is accorded to those who give the most to others.

Lest we think that the principles of a gift economy will only work for simple, primitive or small enterprises, Hyde points out that the community of scientists follows the rules of a gift economy. The scientists with highest status are not those who possesses the most knowledge; they are the ones who have contributed the most to their fields. A scientist of great knowledge, but only minor contributions is almost pitied - his or her career is seen as a waste of talent.

At a symposium a scientist gives a paper. Selfish scientists do not hope others give better papers so they can come away with more knowledge than they had to offer in exchange. Quite the reverse. Each scientist hopes his or her paper will provide a large and lasting value. By the rules of an exchange economy, the scientist hopes to come away a "loser," because that is precisely how one wins in science.

Antelope meat called for a gift economy because it was perishable and there was too much for any one person to eat. Information also loses value over time and has the capacity to satisfy more than one. In many cases information gains rather than loses value through sharing. While the exchange economy may have been appropriate for the industrial age, the gift economy is coming back as we enter the information age." (http://context.org/ICLIB/IC41/PinchotG.htm)


Typology

Five dimensions of online giving, by Jorgen Skageby at http://www.eurekalert.org/pub_releases/2007-06/ip-tfd061307.php

"There are five dimensions to gift giving among users of online communities, Skågeby explains.

These are "initiative" in which an individual decides spontaneously to give a gift to another member of the community. This can be active with one person giving a piece of advice or a useful link in an online forum or passive where community members download something from a specific user automatically through a peer to peer network. In this case, the gift giver plays no role other than making the digital goods available online.

The second dimension is "direction" and tracks the path of a gift. For example, a public gift might come from an individual or organisation, a musician say, who loads their mp3 files on to their MySpace page, or a photographer who shares her photos using Flickr.com. Direction can also apply to gifts given to small communities or groups or given among online friends. An entirely private gift would be a single individual giving a gift to another or a very select group of friends.

The peer to peer networks, including the BitTorrent approach exploit another dimension of gift giving, the "incentive". Incentives can be enforced or voluntary. In the case of BitTorrent file sharing, users can only download a given gift, or file, if they simultaneously share that file as it downloads with other users, so the incentive process is often bidirectional.

Incentive gifting is exploited in illicitly distributing copyright materials such as movies and music, but also has a legitimate use in distributing large files within businesses and other communities. Voluntary incentive involves a points system so that users who share most, gain kudos or better access to additional gifts.

The final two dimensions of gift giving online are "identification", knowing who is giving or receiving a gift, or remaining anonymous. In some systems, such as BitTorrent, gifting is essentially anonymous, while users are known on MySpace when they share digital gifts.

Another dimension is "limitation", which controls the level of access to gifts, either giving or receiving can be open to all or restrictive. An open gift system might be the free software available for anyone to download on the free software network sourceforge.net, whereas a private BitTorrent or other network would be considered a restrictive gift network." (http://www.eurekalert.org/pub_releases/2007-06/ip-tfd061307.php)


Citations

Johan Soderbergh on the gift economy:

"On the question if peer-to-peer is a gift economy, I take a slightly different viewpoint on what archaic gift economy is really about. In my mind, when discussed on the Internet, the focus has wrongly been on gift economy as an inversion of the logic of market economy, where accumulation of capital is simply replaced with accumulation of moral debt. My reading of Marcel Mauss and Levi-Strauss is that gift economy is not primarily about allocating resources. Usually, tribal people are self-sustaining in life-supportive goods and gift swapping are restricted to a particular class of goods, tokens such as clams and jewelry. The real importance of gift is to strike aliances between giver and receiver. Both of them are winners, to put it pointingly, the loser is the third part who was left out from the exchange. Hence, I think the gift economy parallel is valid in parts of the virtual community, where aliances and communal bonding is key, and not valid in other parts, where relations are completely impersonal." (personal communication, March 2005)


John Frow on the gift economy, citing Gregory:

"a gift economy depends upon the creation of debt, where what is at stake is not the things themselves or the possibility of material profit but the personal relationships that are formed and perpetuated by ongoing indebtedness. Things in the gift economy are the vehicles, the effective mediators and generators, of social bonds: putting this in terms derived from Marx's theory of commodity fetishism, Gregory writes that `things and people assume the social form of objects in a commodity economy while they assume the social form of persons in a gift economy'."

Recall the schematic opposition that Gregory sets up between two modes of exchange:

commodity exchange gift exchange alienable objects inalienable objects reciprocal independence reciprocal dependence quantitative relationship qualitative relationship between objects between subjects"

(source: personal communication)


Discussion

See: Gift Economy - Discussion

Examples

Eric Raymond on the Hacker Culture as a Gift Economy

Eric Raymond [2]:

"To understand the role of reputation in the open-source culture, it is helpful to move from history further into anthropology and economics, and examine the difference between exchange cultures and gift cultures.

Human beings have an innate drive to compete for social status; it's wired in by our evolutionary history. For the 90% of that history that ran before the invention of agriculture, our ancestors lived in small nomadic hunting-gathering bands. High-status individuals (those most effective at informing coalitions and persuading others to cooperate with them) got the healthiest mates and access to the best food. This drive for status expresses itself in different ways, depending largely on the degree of scarcity of survival goods.

Most ways humans have of organizing are adaptations to scarcity and want. Each way carries with it different ways of gaining social status.

The simplest way is the command hierarchy. In command hierarchies, allocation of scarce goods is done by one central authority and backed up by force. Command hierarchies scale very poorly; they become increasingly brutal and inefficient as they get larger. For this reason, command hierarchies above the size of an extended family are almost always parasites on a larger economy of a different type. In command hierarchies, social status is primarily determined by access to coercive power.

Our society is predominantly an exchange economy. This is a sophisticated adaptation to scarcity that, unlike the command model, scales quite well. Allocation of scarce goods is done in a decentralized way through trade and voluntary cooperation (and in fact, the dominating effect of competitive desire is to produce cooperative behavior). In an exchange economy, social status is primarily determined by having control of things (not necessarily material things) to use or trade.

Most people have implicit mental models for both of the above, and how they interact with each other. Government, the military, and organized crime (for example) are command hierarchies parasitic on the broader exchange economy we call `the free market'. There's a third model, however, that is radically different from either and not generally recognized except by anthropologists; the gift culture.

Gift cultures are adaptations not to scarcity but to abundance. They arise in populations that do not have significant material-scarcity problems with survival goods. We can observe gift cultures in action among aboriginal cultures living in ecozones with mild climates and abundant food. We can also observe them in certain strata of our own society, especially in show business and among the very wealthy.

Abundance makes command relationships difficult to sustain and exchange relationships an almost pointless game. In gift cultures, social status is determined not by what you control but by what you give away.

Thus the Kwakiutl chieftain's potlach party. Thus the multi-millionaire's elaborate and usually public acts of philanthropy. And thus the hacker's long hours of effort to produce high-quality open-source code.

For examined in this way, it is quite clear that the society of open-source hackers is in fact a gift culture. Within it, there is no serious shortage of the `survival necessities' -- disk space, network bandwidth, computing power. Software is freely shared. This abundance creates a situation in which the only available measure of competitive success is reputation among one's peers.

This observation is not in itself entirely sufficient to explain the observed features of hacker culture, however. The crackers and warez d00dz have a gift culture that thrives in the same (electronic) media as that of the hackers, but their behavior is very different. The group mentality in their culture is much stronger and more exclusive than among hackers. They hoard secrets rather than sharing them; one is much more likely to find cracker groups distributing sourceless executables that crack software than tips that give away how they did it.

What this shows, in case it wasn't obvious, is that there is more than one way to run a gift culture. History and values matter. I have summarized the history of the hacker culture in A Brief History of Hackerdom ; the ways in which it shaped present behavior are not mysterious. Hackers have defined their culture by a set of choices about the form which their competition will take. It is that form which we will examine in the remainder of this paper.

The Joy of Hacking

In making this `reputation game' analysis, by the way, I do not mean to devalue or ignore the pure artistic satisfaction of designing beautiful software and making it work. We all experience this kind of satisfaction and thrive on it. People for whom it is not a significant motivation never become hackers in the first place, just as people who don't love music never become composers.

So perhaps we should consider another model of hacker behavior in which the pure joy of craftsmanship is the primary motivation. This `craftsmanship' model would have to explain hacker custom as a way of maximizing both the opportunities for craftsmanship and the quality of the results. Does this conflict with or suggest different results than the `reputation game' model?

Not really. In examining the `craftsmanship' model, we come back to the same problems that constrain hackerdom to operate like a gift culture. How can one maximize quality if there is no metric for quality? If scarcity economics doesn't operate, what metrics are available besides peer evaluation? It appears that any craftsmanship culture ultimately must structure itself through a reputation game -- and, in fact, we can observe exactly this dynamic in many historical craftsmanship cultures from the medieval guilds onwards.

In one important respect, the `craftsmanship' model is weaker than the `gift culture' model; by itself, it doesn't help explain the contradiction we began this paper with.

Finally, the `craftsmanship' motivation itself may not be psychologically as far removed from the reputation game as we might like to assume. Imagine your beautiful program locked up in a drawer and never used again. Now imagine it being used effectively and with pleasure by many people. Which dream gives you satisfaction?

Nevertheless, we'll keep an eye on the craftsmanship model. It is intuitively appealing to many hackers, and explains some aspects of individual behavior well enough.

After I published the first version of this paper on the Internet, an anonymous respondent commented: ``You may not work to get reputation, but the reputation is a real payment with consequences if you do the job well. This is a subtle and important point. The reputation incentives continue to operate whether or not a craftsman is aware of them; thus, ultimately, whether or not a hacker understands his own behavior as part of the reputation game, his behavior will be shaped by that game.

Other respondents related peer-esteem rewards and the joy of hacking to the levels above subsistence needs in Abraham Maslow's well-known `hierarchy of values' model of human motivation. On this view, the joy of hacking is a self-actualization or transcendence need which will not be consistently expressed until lower-level needs (including those for physical security and for `belongingness' or peer esteem) have been at least minimally satisfied. Thus, the reputation game may be critical in providing a social context within which the joy of hacking can in fact become the individual's primary motive.


The Many Faces of Reputation

There are reasons general to every gift culture why peer repute (prestige) is worth playing for:

First and most obviously, good reputation among one's peers is a primary reward. We're wired to experience it that way for evolutionary reasons touched on earlier. (Many people learn to redirect their drive for prestige into various sublimations that have no obvious connection to a visible peer group, such as ``honor, ``ethical integrity, ``piety etc.; this does not change the underlying mechanism.)

Secondly, prestige is a good way (and in a pure gift economy, the only way) to attract attention and cooperation from others. If one is well known for generosity, intelligence, fair dealing, leadership ability, or other good qualities, it becomes much easier to persuade other people that they will gain by association with you.

Thirdly, if your gift economy is in contact with or intertwined with an exchange economy or a command hierarchy, your reputation may spill over and earn you higher status there.

Beyond these general reasons, the peculiar conditions of the hacker culture make prestige even more valuable than it would be in a `real world' gift culture.

The main `peculiar condition' is that the artifacts one gives away (or, interpreted another way, are the visible sign of one's gift of energy and time) are very complex. Their value is nowhere near as obvious as that of material gifts or exchange-economy money. It is much harder to objectively distinguish a fine gift from a poor one. Accordingly, the success of a giver's bid for status is delicately dependent on the critical judgement of peers.

Another peculiarity is the relative purity of the open-source culture. Most gift cultures are compromised -- either by exchange-economy relationships such as trade in luxury goods, or by command-economy relationships such as family or clan groupings. No significant analogues of these exist in the open-source culture; thus, ways of gaining status other than by peer repute are virtually absent." (http://futurepositive.synearth.net/stories/storyReader$223)

The above essay is taken from: http://www.tuxedo.org/~esr/writings/homesteading/homesteading/


Reading Resources

Richard Barbrook. The High-tech Gift Economy

URL = http://www.firstmonday.dk/issues/issue3_12/barbrook/

This is a seminal essay that was often discussed during the first phase of the dotcom era. Abstract from First Monday: "During the Sixties, the New Left created a new form of radical politics: anarcho-communism. Above all, the Situationists and similar groups believed that the tribal gift economy proved that individuals could successfully live together without needing either the state or the market. From May 1968 to the late Nineties, this utopian vision of anarcho-communism has inspired community media and DIY culture activists. Within the universities, the gift economy already was the primary method of socialising labour. From its earliest days, the technical structure and social mores of the Net has ignored intellectual property. Although the system has expanded far beyond the university, the self-interest of Net users perpetuates this hi-tech gift economy. As an everyday activity, users circulate free information as e-mail, on listservs, in newsgroups, within on-line conferences and through Web sites. As shown by the Apache and Linux programs, the hi-tech gift economy is even at the forefront of software development. Contrary to the purist vision of the New Left, anarcho-communism on the Net can only exist in a compromised form. Money-commodity and gift relations are not just in conflict with each other, but also co-exist in symbiosis. The 'New Economy' of cyberspace is an advanced form of social democracy."


- Yochai Benkler on peer production

Coase’s Penguin, or Linux and the Nature of the Firm.

URL = http://www.yale.edu/yalelj/112/BenklerWEB.pdf

The Political Economy of the Commons

URL = www.upgrade-cepis.org/issues/2003/3/up4-3Benkler.pdf

The concept of Information Commons is defined by Yochai Benchler in "The Political Economy of Commons", in Upgrade, juin 2003, vol. IV, n° 3


Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production.

URL = http://www.yalelawjournal.org/pdf/114-2/Benkler_FINAL_YLJ114-2.pdf

"The paper offers a framework to explain large scale effective practices of sharing private, excludable goods. It starts with case studies of distributed computing and carpooling as motivating problems. It then suggests a definition for “shareable goods" as goods that are lumpy and mid-grained in size, and explains why goods with these characteristics will have systematic overcapacity relative to the requirements of their owners. The paper then uses comparative transaction costs analysis, focused on information characteristics in particular, combined with an analysis of diversity of motivations, to suggest when social sharing will be better than secondary markets to reallocate this overcapacity to non-owners who require the functionality. The paper concludes with broader observations about the role of sharing as a modality of economic production as compared to markets and hierarchies (whether states or firms), with a particular emphasis on sharing practices among individuals who are strangers or weakly related, its relationship to technological change, and some implications for contemporary policy choices regarding wireless regulation, intellectual property, and communications network design." (http://www.yalelawjournal.org/pdf/114-2/Benkler_FINAL_YLJ114-2.pdf )

- Marshall Sahlins

The Original Affluent Society

URL = http://www.appropriate-economics.org/materials/Sahlins.pdf

Marshall Sahlins, celebrated anthropologist, was one of the first to challenge the industrial-era myth of progress, showing in his essay on The Original Affluent Society, that tribal economies were in fact operating in a context of abundance.

"When Herskovits (13) was writing his Economic Anthropology (1958), it was common anthropological practice to take the Bushmen or the native Australians as "a classic illustration; of a people whose economic resources are of the scantiest", so precariously situated that "only the most intense application makes survival possible". Today the "classic" understanding can be fairly reversed- on evidence largely from these two groups. A good case can be made that hunters and gatherers work less than we do; and, rather than a continuous travail, the food quest is intermittent, leisure abundant, and there is a greater amount of sleep in the daytime per capita per year than in any other condition of society. The most obvious, immediate conclusion is that the people do not work hard. The average length of time per person per day put into the appropriation and preparation of food was four or five hours. Moreover, they do not work continuously. The subsistence quest was highly intermittent. It would stop for the time being when the people had procured enough for the time being. Which left them plenty of time to spare. Clearly in subsistence as in other sectors of production, we have to do with an economy of specific, limited objectives. By hunting and gathering these objectives are apt to be irregularly accomplished, so the work pattern becomes correspondingly erratic."


Genevieve Vaughan

  • the Gift Economy and gift philosophy from a feminist viewpoint

URL = http://www.gift-economy.com

Books:

  1. For-Giving, a Feminist Criticism of Exchange, 1997
  2. Homo Donans
  3. Editor of: Athanor Il Dono/the Gift and Women
  4. Editor of: the Gift Economy: A Radically Different Worldview is Possible

More Information

  1. The Potlach Protocol proposal for a decentralized gift economy
  2. María Suárez: The gift economy in the Net

Feminist gift theory:'

  1. Feminist Gift Theory at http://www.gift-economy.com/theory.html
  2. Rauna Kuokkanen: The gift as a world view in indigenous thought
  3. Paola Melchiori: Insights on the gift and the insight of the gift
  4. Rokeya Begum: On the feminism of the gift economy

See Also