Gift Economies

Gift economies differ from market economies in several respects. Whereas a market economy assigns a precise monetary value to a good or service, in a gift economy the value of the exchange remains unspecified. In this sense, gift economies also differ from barter economies, which are based on a mutual understanding of the comparable worth of the items being exchanged. 

In addition to promoting solidarity, gift economies also help safeguard the economic security of vulnerable members of a community. A gift economy can cultivate a general sense of happiness among its participants, a quality-of-life metric sometimes referred to as subjective well-being (SWB). Further, as acts of generosity enhance social status in a gift economy, prominent givers provide a model for other community members to emulate.

Gift economies originated early in human history, in hunter-gatherer societies, where the scarcity of resources made mutual assistance crucial for survival. Various examples of gift economies continue to thrive throughout the world. Māori tribes in Aotearoa (New Zealand) observe a custom known as koha, in which all members contribute what they can to the upkeep of a communal gathering place. Indigenous communities in the Pacific Northwest engage in potlatch, a gift-giving ceremony held on important occasions. Villagers in Papua New Guinea exchange adornments made of shells to promote good faith between communities, a ritual known as kula.

This model of reciprocal aid can also emerge in response to a crisis. In the aftermath of the 1994 genocide in Rwanda, community members formed mutual savings accounts, helped neighbors rebuild houses and established communal reserves of food and water to ensure the security and well-being of the group. This collective action drew inspiration from a tradition known as gufashanya (“helping each other”), a form of gift economy practiced by Rwandans to commemorate major life events. 

Founded on camaraderie, generosity and trust, gift economies represent an alternative model of coexistence in the 21st century. In the face of overconsumption and environmental depredation, a mode of exchange stimulated by cooperation and reciprocity – not market forces – could invigorate efforts to build and maintain strong communities.

Contributors: Maha Tazi, Stephen Meyer