Building an economy on gift and generosity

Building an economy on gift and generosity
by Jonathan Dawson
September 2013

This post is part of a blog-series called Hunting Dancing Bears: The search for hope and innovation in a time of crisis

I often start the economics courses that I teach with a quote from the English playwright, Tom Stoppard: ‘A door like this has opened five or six times since we got up on our hind legs. It is the best possible time to be alive, when almost everything you thought you knew is wrong.’ This feels an entirely appropriate place to begin exploring the world of economics, where long-accepted ‘truths’ are today tumbling like dominoes. This truly is an exciting time in the remaking of a more sane and liberating form of economics.

As a story-teller, I instinctively seek out the archetype – what is the creation myth of economics as we know it – and can we find one that is more useful……and true? The creation myth-maker-in-chief of the form of economics that we have all grown up with is Adam Smith. At the heart of the tale he told is the introduction of money as an elegant upgrade on the clunky and impractical barter systems that preceded it. Humans, he asserted, are natural exchangers of goods, always looking to gain maximum personal advantage from trading with each other. Given this, once the primitive economy develops in complexity beyond, say, clubs and bearskins, money and markets are needed to facilitate these exchanges.

Cute story, say the anthropologists who have studied indigenous cultures. Just one snag – no example from any culture anywhere conforms to it. (In fact, anthropologists having been saying this for over 100 years, to which the response of the economics profession has been to look the other way – to ignore rather than engage with the evidence.)

And the story that the anthropologists tell? The evidence, they make clear, is that goods and services in pre-market-based societies tend to be distributed on the basis of gift-giving and reciprocity, often including extravagant rituals where the different parties compete with each other in the magnificence of their gifts. In truth, one does not need to be a starry-eyed idealist to see the obvious truth in this story. The most obvious strategy for security in an age without bank accounts and insurance policies is to develop a reputation for generosity and sharing.

And so, an alternative economic creation myth presents itself – moreover, one that appears to be much more firmly grounded in the human condition as anthropologists report it. Better still, the cutting edges of the current information technology revolution we are surfing play to the strengths of just such a story, make it much easier for it to move into the ascendant.

Consider the open source phenomenon – Wikipedia, freely developed and downloadable software and the like. The collaborative generosity entailed in such projects makes no sense in the context of the Adam Smith myth. In fact, web-based platforms that enable cooperation and sharing constitute among the most vibrant areas of innovation in today’s social economy, ushering in the potential for a most agreeable revolution in how we live our lives as citizens and consumers.

Crowdsourcing is enabling people to collaborate in a host of innovative and enjoyable ways. The Icelandic constitution is currently being developed along these lines, (Meetings of the council responsible for developing the constitution are open to the public and streamed live on to the website and Facebook page. The latter has more than 1,300 likes in a country of 320,000 people.) Meanwhile, great public works projects such as that involving 50,000 volunteers in the recent Estonian national clean-up are made possible by clever use of information technology.


Meanwhile, peer-to-peer financing platforms such as Kiva, ZOPA and various other crowdfunding sites are allowing people to cut the banks out of the action and invest directly in initiatives in alignment with their values, often creating friendships in the process. Work hubs are emerging as exciting centres of innovation and collaboration between social entrepreneurs.

Sites such as The Hire Hub and Zipcar are providing access without the burden and financial cost of ownership. eBay, and are three among a huge and expanding range of sites that enable the sharing of used goods.

As in more traditional societies, in this online domain reputation is currency – as a seller on eBay, a host or guest on Couchsurfing (the world’s largest travel community’), a collaborator in social innovation camps (‘that bring together ideas, people and digital tools to build web-based solutions to social problems – all in just 48 hours’)

I see this Internet-based fecundity as part of a much larger wave of social innovation rippling through society – involving our production systems, the delivery of public services and a growth in community ownership as the state and private sector contract – trends that have the potential to see the emergence of a significantly more participatory, decentralised and truly democratic society. These are ideas that I develop in a recent evening talk I gave at Schumacher College. As I scan the horizon, asking myself where the College can position itself so as to be of greatest service to the new economy in gestation, this looks like pivotal territory.


Beyond the specific innovations and Internet platforms lies the primacy of story. The crisis in capitalism affords us the opportunity to recognise markets and money as but a thin veneer recently overlaid onto the much older and sturdier bedrock of gift and reciprocity. Generosity may just be coming back into fashion.