Review of Lewis Hyde's book The Gift: Imagination and the Erotic Life of Property

(published in 1979)
reviewed by Peter McCluskey, 1999-04-05.

I read this book on gift economics because I hoped that gift economics would provide some insights into the Open Source model of software development. I can't really say the book satisfied that desire, but it did provide some intuition about why open source doesn't mix easily with money and the market economy.

The book is written by a poet who is more interested in emotions than in rational analysis. Nevertheless, most of it is worth reading (the main exceptions being the largely irrelevant chapters on Whitman and Ezra Pound).

Before reading this book, I had been aware that anthropologists has identified some alternatives to the standard capitalist attitude toward exchange of property, such as gift-exchange economies, as natural (innate?) modes for social interaction. But when thinking about the concept that goes by the name value, I ignored alternatives to market economies and accepted the definition propounded by economists I respect that says the only sensible concept of value of a good is the quantity of some other goods which someone is willing to exchange for it. Given a market approach to the exchange of goods, it still seems clear to me that it makes no sense to say (as some people do) that the value of a good is purely a function of the effort that went into producing a good. The importance to people of batteries jumps the day after a major earthquake for reasons unrelated to the cost of producing the batteries that are available, and the word "value" ought to reflect that importance.

However, Hyde's book has caused me to question whether that market oriented concept of value is the only one that we should use. In market economies, the characteristics of the goods being exchanged are normally the only considerations that are relevant to an economic transaction. But gift-exchange economies seem to work on different principles, and seem to make market economies unnecessary in some small societies and in some domains within market economies (i.e. organ donations, Christmas presents or open source software). Gift-exchange economies work (if they work at all, and ignoring domains where the cost of producing goods is insignificant) by motivating people (mainly via reputations) to spend effort at helping other members of society, with a deliberate refusal to quantify individual transactions (if you attach a specific monetary value to a gift, you've abandoned the gift-exchange paradigm and have no reason to avoid adopting the market paradigm). A "labor theory of value" approach seems coherent within this paradigm, at least if it acknowlodges that a battery given away shortly after an earthquake represents more "labor" (i.e. inconvenience to the donor) than under normal circumstances.

I'm still looking for some clear ideas about whether gift-exchange economies will play important roles in future societies. It seems likely to continue in some areas where the costs of producing goods is low (some software development, usenet, most web pages) and it seems conceivable (although I won't predict it is likely) that improved technology to track reputations will enable it to scale up to large systems involving scarce resources.