08 December 2006

The virtuous cycle of the Gift Economy

«Everyone thinks of changing the world,
but no one thinks of changing himself
Leo Tolstoy (1828 - 1910)

You all must read Dave Pollard’s latest post “The virtuous cycle of the Gift Economy” ( ). It did make me realise that I already intuitively knew this but it just needed to rise from my sub-conscience. It did!

This virtuous cycle looks great but I believe that a more realistic state would be somewhere in between the Capitalist and the Gift Economies. These two as defined in Dave’s diagram are extremes and as such should be avoided. Our current world tends to gravitate closer to the capitalist end of the spectrum so we need to collectively push in the other direction. However, I don’t see the World moving all the way to a “complete” Gift Economy. I am not sure that it would be such a great World to leave in anyway. If all hierarchies were to disappear and everyone would share most of what they need/want and purchase only what they need and cannot obtain in any other way, some would quickly seize opportunities for taking advantages and build monopolies by controlling the production of what must be purchased.

Another potential flaw of the extreme Gift Economy model is the relative loose definition of an individual’s “needs”. What is seen as non-essential for some will be seen as essential for others. This is already the case in our mostly capitalist economy of course, but it is regulated by each individual’s purchasing power. I cannot afford a large home with a swimming pool therefore it wont even appear in my list of short-term needs, but I can still work towards it because I would love to swim every morning. In a Gift Economy, you could ideally imagine that I would team up with 10 neighbours and finance our shared swimming pool (or better build it ourselves!). Two problems: 1) not exactly the same level of privacy and convenience; and 2) I might struggle to find the necessary number of neighbours with the same “need”. Therefore, I might find myself force to still work enough to be able to afford my pool. Now, if you assume that most people will face a similar issue for a specific need within the communities (virtual or not) they are part of, wouldn’t we end up with a capitalist-like spiral again?

Having said that, we should still steer the Economy away from the all-encompassing Capitalism.

How can each one of us contribute to this effort? By “simply” doing more things ourselves (I will start by sorting out this annoying faulty living-room light switch myself). It also means engaging in more value-adding social networks. Two other recent blogs from Dave illustrates what this mean.
First, a social network diagram:
Then a list of examples of SNAs (social networking applications) sorted by function:

I will use more of these tools myself and will promote their use around me and see what happens.

Peter-Anthony Glick


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