How the gift economy pays off

Dave Pollard over at How to Save the World discusses the virtues of the gift economy. Let me snip his opening paras:

"Our society puts a value on human activities only when they can be monetized - when a transaction involving an exchange of money occurs. We tend to equate our time with money: If the 'market value' of an hour of our time exceeds the cost of hiring someone else to mow our lawn or make a present for a loved one or look after our children or our home, we conclude that it makes sense to buy those services and to work longer hours to pay for them.

"This false economy leads us to buy what we don't need, which requires us to work harder to pay for those unnecessary goods and services, leaving us even less time to look after ourselves and our own needs and forcing us, in a vicious cycle (cycle 1 in red on the chart [below]) to 'outsource' even more of the things we might be doing for ourselves....

"By contrast, the Gift Economy does not value monetized activity more highly than un-monetized activity. It suggests, on the contrary, that our time is invaluable and that therefore we should 'spend' it, as much as possible, doing things we love and things that are our personal responsibility, and only buy goods and services we cannot possibly provide for ourselves. In doing these things ourselves, we learn to do them better, more efficiently, more effectively and more economically, saving the cost of outsourcing them to a third party.

"Thanks to this cost saving, we then need to work less, which gives us more time to do the things we love, creating a virtuous cycle (cycle 2 in green on the chart [below]) instead of a vicious one."

For me, it is certainly true that the vicious circle is often tempting and the virtuous one is attractive. But how to get off the treadmill? Pollard offers only hints at answers, but the article (and those that spawned it) are good reads. Below is the diagram illustrating the idea.

Technorati : dave pollard, economics, gift economy

Posted by Allan Jenkins on December 7, 2006 at 07:32 PM in Economics, Society | Permalink

Comments

Allan: Love the idea. Thanks for both providing a link and including the illustration. Without that, I doubt I would have clicked through to the original post.

Posted by: Eric Eggertson | Dec 8, 2006 2:27:59 PM

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