Work With Jeremy David Evans

2015 / 16 November

Alternate Economies: The Gift Economy

Kula bracelet

Peace, Love, and Understanding?

Superficially, the idea of a “gift economy” may strike you as fanciful or inconceivable. How could people get by simply by giving away what they have to others? What market forces would conspire to feed the nation: simply goodwill and peace on Earth? Where are the real incentives? 

Fortunately, it is rather straightforward to translate the gift economy theory into our occidental predispositions regarding psychology and capitalism. That is the main agenda of this article, indeed, yet our journey will first take us through historical precedents, theoretical premises, and then actionable implications for modern business.

Our own economy is resembling a gift economy more so today than at any other time in history!

Have Gift Economies Ever Existed?

Yes. We will examine one historical example that I believe to be the best known. It is known as the Kula Ring of the Trobriand Islands (now a part of Papua New Guinea).

The Kula Ring

The indigenous folk of this island chain comes to our attention because of the studies of a Western anthropologist named Bronislaw Malinowski, using this case study to be amongst the first to argue that rationality was universal to humankind. In other words, upon confronting the perfunctory paradox of the Kula gift economy, he detailed the practice and then extolled its logical merits.

The premises are simple: luxury items (red necklaces or white armbands) are traded between authoritative individuals during the exchange of capital goods, the “gifts” serving to sweeten the deal. As these decorative items are to be worn and are always identified with the giver (even returned, if asked for), the gift exchange creates a visible relationship between both parties.

The giver is always in a position of more power. He implicitly expects hospitality (having traveled hundreds of miles by canoe) as well as reciprocal gifts. As this gift economy was invented before telecommunications (yet persisting thereafter), these accessories were expected to be circulated as proof of ongoing relationships.

Do Gift Economies Exist Now?

First, let us consider gift-giving examples in our own lives.

  1. Our parents give us life, love, and sustenance. While they may not be completely without expectations, it is safe to say that many never reciprocate the the time, money, and care devoted to them as children.
  2. Donors of all sorts contribute time and money by definition. While altruistic theories vary, the common firmament is the difficulty in justifying these actions with a purely rational framework.
  3. Businesses contribute information, samples, and services as marketing materials. Given increasing competition with a growing emphasis on inbound marketing, we are living in an era in which we are seeing a meteoric rise in gifts.

See the Parallel?

In the same way that the Kula participants used visible displays of their relationships to leverage authority, we exhibit our connections on social networks. While this is not a perfect comparison (you probably can’t wear as many bracelets as you have LinkedIn connections), it fulfills the same fundamental function.

There is an important underlying truth here: Relationships are power.

How to flaunt this power is a question for the ages. Some might find it gaudy to be so decked out with jewelry, yet few complain about their about their ability to instantly broadcast to 10,000 people on their Twitter account. As communications have become simpler, it is similarly transforming how we barter, befriend, and boast.

What Does This Mean for Me?

As an individual, you are concerned with social connections. We already know that quality relationships always trump quantity, yet the shallow sycophants on the Internet sing a siren song, asking us to scuttle our marketing efforts in a wading pool.

Foremost, I will submit to you that the real value comes not from numbers but from advocates. This is accomplished, as it was in the Kula ring, by offering real value to your connections. For an individual or business, this simply means looking through your followers’ eyes as they scour the web for the prize.

Authority = (# of Followers) * (Advocacy)

Gift-Giving as an Authority Strategy

This deserves a longer post (pending on my company blog), yet let’s talk about the premises here.

  • Gifts must be genuine. Anything that the consumer would call “marketing” is not a gift at all. If you follow my reporting, ask yourself: how many times have I read about “real value”?
  • Enthusiastically step outside your brand. Be bold: give to your competitors. By endorsing other key players in your field, you exude stability and confidence.
  • Be honest. For yourself and your customers, identify the best options in your field. If business is anything like nature (and it is), each business has a unique offering or it is stagnating. A great start is to assess the market (you have already, right?) and then offer that information to your consumers.
  • Deliver with Precision. Read up on reputation monitoring, trends, and your customer feedback. Then, find the perfect offering for your perfect client, even if it seems like it won’t scale. Exceeding expectations is the only way to create advocacy and advocacy is the best value in marketing. So, go ahead: attempt some mind-reading.


I hope our journey through time and space got your gears turning. Thanks for reading!

As you know, this is part of an ongoing series on Alternate Economies and how they impact our modern business world. My thesis, simply put, is that communication barriers are decreasing and that we are moving from a value-based economy back to an exchange-based market.

In plain English? Reputation is harder to monopolize, resulting in a marketplace where consumers have more power. Manufacturing is becoming increasingly inexpensive, meaning that smaller businesses can enter into the fray. Information is more fluid, so inefficiencies are revealed quickly and adjusted.

In short, where some see the writing on the wall, I would like to talk about the Invisible Hand. Link up so that you catch the next installment: the Attention Economy.

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