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The Gift Economy

Burning Man, an annual festival in Nevada that celebrates radical self-expression, operates based on a ‘gift economy.’ Its principles stipulate that ‘the value of a gift is unconditional. Gifting does not contemplate a return or an exchange for something of equal value.’ 

 

In contrast, everyday life often reduces gifting to a transaction. 

 

In the animal kingdom, for example, gifting is strategic. In chimpanzee communities, sharing food is a social tool to build and nurture social connections for survival. 

 

Throughout human history, communities have often relied on a chimpanzee-style ‘gift economy’ where individuals supported others in need, trusting that goodwill would be reciprocated in some undetermined form in the future. Such a system was more efficient than barter, which required that all goods to be available and exchangeable in a specific place and at a specific time. In fact, there is scant evidence of the existence of Adam Smith’s ‘barter economy‘ as a precursor to money. 

 

In international diplomacy, gifts take on a symbolic dimension, representing the ‘essence of a nation’ and emphasizing shared history and values, like the Statue of Liberty. Andrew Carnegie’s Dinosaur diplomacyoperate within this framework. But diplomatic gifting is a subtle art that involves the exercise of soft power. As a US diplomat aptly put it, gifts must be ‘thoughtful, meaningful, culturally appropriate… and send the right message to advance strategic goals.Beware of Greeks bearing gifts

 

More generally, psychology suggests that giving—whether in the form of time, resources, or simple acts of kindness—enhances the well-being of the giver. 

 

Based on the above, it would be tempting to argue that gifting is not only transactional but may also benefit the giver more than the receiver.  

 

Yet, this conclusion overlooks the Benjamin Franklin Effect previously discussed in these notes. According to it, a person who does a favor for someone else is likely to develop positive feelings toward the recipient of the favor to justify the generous gesture. Therefore, in addition to benefiting from the value of the gift or favor, recipients enjoy givers’ positive attitude toward them. 

 

In summary, giving can unexpectedly create significant value for both givers and receivers.  

 

This principle applies even in corporate settings. In ’Givers take all: the hidden dimension of corporate culture(2013), it is established that the single most relevant factor driving team effectiveness is the amount of help members give each other. ‘In giver cultures, employees […] help others, share knowledge, offer mentoring, and make connections without expecting anything in return.’ Shifting a corporate culture away from a ‘taker culture’ is a winning proposition for employees and employers. 

 

The Burning Man’s economy may seem idealistic, but the concept of a gift economy or giver culture may not be so far-fetched when viewed through the lens of human history and nature. In fact, it may represent a higher intelligence form of market-based efficiency. 

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