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As Gift Economies Rise, Will Traditional Markets Falter?

Words by 3p Contributor
Investment & Markets
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By Martin Dejnicki

Imagine waking each morning with a realization that you will be in total control of your actions for the day, which will directly aid others. In addition, imagine being comfortable in knowing the products or services you offer will be given away freely, without any explicit agreement for instant or future rewards.

This gift economy reality is the most idealistic of the sharing economy family, which itself encompasses many terms -- Rachel Botsman outlines some of the many overlapping terms here.

The gift economy challenges traditional market behaviors by offering goods and services without a financial reward. This gifting can occur through technology via collaborative consumption. It can match needs and haves with unused and under-utilized assets through decentralized networks and marketplaces of the collaborative economy. This extends to the free sub-facets within the sharing economy and on-demand services.

Gift economies prior to proliferation of the Internet


‘Dama,’ a gift economy in Mali, has thrived for thousands of years. It places an emphasis on human relationships and community over profits. The only expectation is that the receiver will ‘pay it forward’ for the system to flourish.

Modern charity and philanthropy in traditional market economies prove that humans are willing to share and give freely without any expectations of reciprocity as long as their immediate needs have been secured.

Technology-based seeds


Technology offers potential gift economies with increased efficiencies, scalability and awareness.

The Buy Nothing Project has grown to over 100,000 members worldwide in just 18 months. It enables the creation of local gift economies where people join to de-clutter or save money, but quickly realize the value in the community-based support systems.

Shareneeds, a gift economy initiative in development by Digital Purpose, will focus on creating gift economies within ones established social circles. The core purpose behind the tool will be to create a heightened sense of ‘awareness’ of needs and desires within these networks.

Decentralization of industry


The modern farming industry was diverse and sustainable a few decades ago. Now it has become centralized and environmentally unsustainable. It is deeply integrated with the supply chain industries at the national and global levels. But how far should our food travel to get to our plates?

In this case, many will blame the market economy and its natural movement and biases towards 'perceived' increased efficiencies. But the gift economy is unlikely to be the solution. Instead, the farming industry needs to be decentralized and properly regulated within the current market economy.

A great example of offering decentralized options is the Open Source Ecology initiative: an open-source movement based on designing blueprints for open-source industrial machines which anyone may build for a fraction of the price of traditional commercial products. This will enable people to build businesses and become producers and exporters, instead of victims of rejected business loan applications.

It does not function as a gift economy in any regard. However, it offers individuals and communities with decentralized options to do business and even build local micro-economies.

Mainstream equilibrium


Some will argue that gift economies succeed as mere survival tactics among the world’s poorest and therefore are not a threat as an alternative to market economies. But why must we choose one over the other? Could they not both coexist in equilibrium?

If competitive market economies predominantly seek ever increasing efficiencies at the expense of the marginalized, could we not achieve balance with the infusion of gift economies into the mix?

Within a few short years, the sharing economy family of initiatives have begun to significantly disrupt traditional industries such as hospitality and transportation. Is the wide adoption of these tools among the general public the sole result of high income inequality?

These decentralized sharing-based movements do not strictly adhere to the definition of a gift economy, since the majority rely on monetary exchanges.

Gift economies may be too idealistic, while current market economies are challenging from a sustainability perspective. Then maybe the novel technology-driven sharing economy industries are the fusion of the two into a wide range. Each individual could be free to choose where to reside on the scale. The decision may be influenced by a simple question: “What is it to be human?”

Image credit: Stock image

Martin Dejnicki is the Co-founder & CEO of Digital Purpose, a digital marketing and technology company based in Toronto, Canada. The company focuses on minimizing its carbon footprint by encouraging remote work and harnessing its innovative culture to build disruptive technologies that make a difference.

3p Contributor

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