More Than One Needs to Know :)
[An FAQ from 6 years ago, but nonetheless, it has lot of commonly asked questions.]
What is Gift Economy?
In a gift economy, goods and services are given without any strings attached; it is an economic system where it is the circulation of the gifts within the community that leads to increase -- increase in connections, increase in relationship strength; in this context, hoarding actually decreases wealth. At its core, gift-economy is a shift from consumption to contribution, transaction to trust, scarcity to abundance, and isolation to community.
How is that different from just philanthropy?
Gift economy is a ecosystem of sustenance where you are taken care, not by earning your keep, but by doing small acts of kindness and trusting that what goes around will eventually come around. Philanthropy, kindness and compassion are some of the values of that ecosystem.
How does it actually work?
Imagine a restaurant where there are no prices on the menu and where the check reads $0.00 with only this footnote: "Your meal was a gift from someone who came before you. We hope you will pay-it-forward however you wish." That's gift economy. Our initial response might be, "Wait, that can't work. People will just take and not give anything." In practice, though, it's quite the opposite -- such restaurants actually work. If you have the commitment to give long enough, inevitably there's comes a point in time when the recipient's cup of gratitude overflows and a pay-it-forward spirit arises naturally.
You can also look at this from a pricing perspective. Decades ago, businesses used cost-based pricing: it costs me a buck to make this sandwich and I have a 50% markup and I'll sell it to you for $1.50. Now-a-days, they use value-based pricing: I'm delivering $5 of value by delivering you this sandwich at the airport, so it's going to cost you $6. Some of that pricing is driven by markets, but often it is driven by greed of profit and ignorance of externalities. So gift-economy turns that around and ask the "customers" to figure out the value.
Is this is a new idea?
Not at all. In fact, it's an ancient idea. Native Americans in the West, Bushmen tribes of the Kalahari dessert in Africa, monastic traditions of the East, and perhaps all indigenous cultures around the world were rooted in the gift-economy. In 1950, Marcel Mauss first reflected on this in short French essay called the "Gift" in 1970, Richard Tittmus in the UK published 'Gift Relationship' that explored why gifting blood was more effective than paying people for it; Genevieve Vaughan traced the history of women and gift-economy; and about about 25 years ago, Lewis Hyde perhaps wrote the most popular book to date, also called The Gift; and there have been many fringe thoughts, reflections and conferences about it. But until the advent of the Internet, it didn't have any practical applications to go mainstream.
Why is it relevant now?
In one word -- Internet. People have always put together birthday parties, just for the love of it. But now, people are writing entire encyclopedias in that spirit! Throw in some collaboration tools, and unpaid engineers are producing an operating system to rival a $400 billion company. Add the power of self-publishing, and volunteer-citizens are able to topple lobbyists and bring radical policy changes. With trillion web pages online, and 5 billion anticipated mobile phones by 2011, we live in different times. In the past, we could do little things as gifts, but big things required money, power and influence. Not anymore. The web is increasingly becoming a land of the free. Now, the Internet is able to aggregate non-financial motivations of "amateurs" to organize into significant social movements, purely for the sake of goodness. That's what the gift-economy is all about.
What is the scope of this kind of organizing?
Instead of one person giving a million dollars, what if we had a million people donating a dollar? Internet practically eliminates the transaction cost of coordinating, allows us to tap into the wisdom of collective intelligence, and there's a different kind of capital that is created -- that energy of a million people giving, that can't be captured so neatly into a spreadsheet. It's now possible. Obama's campaign in 2008 understood this fully and that's why they had 3 million online donors who gave small amounts, more than 6.5 million times ... which is all unprecedented. What we have on our hands is a movement machine. Everyone really can be a change-maker now. The question is what values will guide our change? That's really upto us. I, for one, want to see more trust and abundance in the world, so I'm standing up for the gift-economy.
Volunteerism has existed forever. Is Internet creating new
possibilities or shining the light on what's already there?
First, the Internet allows us to share -- and we are seeing that people love to share, whether it is photos on Flickr or billions of blog entries or 6 billion videos that YouTube serves up every month. Most of this starts with shining the light on what already exists, but when everyone is empowered to be a producer, we see a whole lot more of what already exists. It's no longer just the news that a few "experts" in power think is worthy of making prime-time news; it's the birth of amateurs who are publishing and consuming 24/7.
Second, the Internet allows us to cooperate and collaborate such that we can create synergistic value, where 1 plus 1 is more than 2. This starts to create new value, exciting projects, and radical innovations. The entire crowd-sourcing phenomena is rooted in that. A new effort, for example, is now saying that if we had applications where people could volunteer from their mobile phones during their 2-3 minutes of spare time on the Bart station, and if millions of people started doing that, we could start solving some very significant problems.
Isn't internet-driven gifting more impersonal?
In a small scale network, like a family or a local community, there is higher trust and giving flows much more easily. In older times of such decentralized communities, gift-economies flourished; however, as we lost that infrastructure, we lost the gift culture too. As the Internet came along, though, we started to see a rebirth of the gift culture, because it re-created small-scale online communities. But then the question arises: how much of the offline gifting experience is lost online? I don't know if we have an definite answer to that yet.
What we do know is that if they're used in conjuction, the outcome is much more effective; that is, when people follow ServiceSpace on Twitter and then eat at Karma Kitchen, it's certainly adds more context and people have a deeper experience in giving. But what is the experience of sending a virtual gift to someone whom I've only known on Facebook? I think there is a real experience there, for an increasing number of people who are able to embrace that platform. And yet, I think there is a more powerful, synergistic response to an in-person exchange of gifts -- there is information there that can't be reduced to 1-and-0 bits in a computer. Most of our physical interactions don't go all that deep, so we often tend to be seduced by effectiveness of online interactions; but what we lose out on is the potential to go deeper.
So ultimately, we need a balance that recognizes the deep upswing of offline gifting and marries it with the effectiveness of online connecting.
Can a gift-economy replace the current economy?
We don't know. Gift-economies are predicated on a certain systemic infrastructure and set of cultural values. We're so far away from it, that's it's hard to imagine what a full out gift-economy looks like. And to start debating on such topic is a fruitless exercise. Instead, we should just use the flash light principle -- take the next most obvious step, from point A to point B, and allow new possibilities to emerge. Far too often, we shine the light from point A to point Z, and we even lose sight of B and become arm-chair explorers! The folly of our arrogance is that we tend to think we're in control when we really don't know much; if Microsoft would've been able to predict its nemesis in Google, they would've crushed it when it was small. And in fact, in his best selling book, Black Swan, Nassim Taleb points out that human beings have never been able to predict anything of significant social impact!
At this point in our history, the "Can a gift economy replace market economy?" question should be replaced with "How can we practice more gifting?" Gift culture is rooted in trust, abundance and contribution; as we talk about how we can encourage more of that, I have no doubt that newer, previously "impossible" possibilities will start to emerge.
What is your personal background?
I'm from the software world, originally. I graduated from UC Berkeley in Computer Science ... and Philosophy. I grew up with the technology of the Silicon Valley, but my heart longed to be with the ancient values of the Himalayas. :) So my experiment was to combine the two. In April 1999, four of us helped a homeless shelter build a website; in that context of dot-com greed, giving with "no strings attached" seemed like a radical idea. Much to our surprise, dozens of people joined in and we called ourselves ServiceSpace. Being technically savvy, we organized efficiently and didn't have much operational overhead. We stayed volunteer run, decided not to fundraise, and worked without any expecations or agendas. Today, we've got 295 thousand members, we send out 50 million emails per year, and we've got a vast online presence -- but we still stick to those three principles of no staff, no fundraising, and no expectations. For me, those principles are the definition of true gift-economy work.
Tell us about the projects of ServiceSpace.
We started with building websites for nonprofits and grew into creating more complex web solutions. Along the side, we had started bunch of small efforts to keep ourselves (as volunteers) motivated -- stuff like DailyGood, an email with a little bit of good news everyday. Then, at one point, we took on a web portal called PledgePage that allowed individuals to raise money for their favorite causes and a NGO portal for SouthAsia called ProPoor that networked 13,000 NGOs in the region. And all of sudden, it dawned on us that we didn't just have to limit ourselves to volunteering at other organizations, that even without the usual structures or resources, ServiceSpace was actually an organization! So we started launching our own projects, and in the process, engaged in a new paradigm of "organizing without organizations" and mid-wifed the rebirth of the gift-economy revolution. None of this was planned; it has all emerged.
What is the signifance of your three guiding principles?
We started with the idea of "giving without any strings attached", and have never compromised our three simple guiding principles. Courtesy of the Internet era, these principles ended up empowering us in unexpected ways.
- Be volunteer run.
that the more you pay people, the harder they
work; however, the hardest work is done by
those who weren't paid at all. Furthermore, as Edward Deci's
research points out, mixing up different types of incentives can
actually negate all productivity. So our idea to operate solely
on non-financial incentives. Interestingly, the Internet was
dis-intermediating everything, so we wondered if we could do
that with volunteering? If CD's were turning into iTunes
songs, billboards were turning into Google Adwords, could
volunteering at a beach clean-up turn into editing a page
on Wikipedia? It turns out that volunteers gave 100 million
hours on Wikipedia alone last. In a world where we spend 9
billion hours playing solitaire each year, we certainly have ample
time to give but could we creatively balance incentives,
freedom and constraints to create an organization based on that?
That was our challenge. Instead of 100 staff working 40 hours a
week, we were going to operate on 400 volunteers giving 10 hrs/week.
Through that infrastructure, today we are able to sustain an
ecosystem of 285 thousand members, send 50 million emails annually,
and operate more than a dozen portals with 18 million lines of code.
[More: networks, communities of practice, organization -- but now platforms like YouTube, Flickr, Meetup. Organizing without organizations. Clay Shirky.]
- Don't fundraise.
All fundraisers and philanthropists agree that current mode of
operation is manipulative and inefficient; it lacks trust and
authenticity. So we just ignored "best practices" and figured
we'll deal with the "money thing" when we absolutely needed to.
And we never got there. We didn't boast any plans for
the future and yet had tons of projects; we never pitched ourselves
to the media, and yet we've been covered everywhere from CNN to
Wall Street Journal; we didn't have any staff and yet we had tons
of energy. Curiously, we discovered that instead of a supply-push
model, we were engaged in a demand-pull cycle. We deliver value to
our constituents, and if they were sufficiently moved, they would
carry forth our work in a word-of-mouth sort of way; except that
Internet once again, accelerated this serendipity by "word of mouse".
Like a tree, if you are delivering value, the community will take
Notice and water your roots. And that's been the case for ServiceSpace.
[More: generative nature of gifting, vibe at KK, synergistic value, Gandhi's soul force, Fukuoka do-nothing farming: no plowing, fertilizer, pesticides, weeding.]
- Think small.
We focus on doing those small, invisible things that may not get
public recognition, but which create a ripple in the world and shift
the "seventh generation" cultural ethos of a community. Because we
were doing small things, we did lots of experiments -- and with a
rocket model of go-steady-go. In the Internet paradigm, the
cost of failure was so low that we can try umpteen experiments and
move from plan-and-execute model to search-and-amplify patterns of
positive deviance. None of these experiments had a threshold
for success; the base case, the smallest step had value embedded
in it. If it was just one DailyGood email, or one website built
for a nonprofit, or one Smile Card, that could've been enough.
And because we were doing small things, it was "too expensive
to charge" for it -- so we just gifted it away. Once again, the
Internet allowed us to create "social capital" around those small
gifts, and that social capital turned into an auto-catalytic engine
that organically scaled up those small acts into "gift economy"
[More: Black Swan, Tipping Point and related books show that we don't know what tiny thing will spark a revolution, just as a butterfly flapping its wing in Brazil might create a toranado.]
What are some of the gift-economy projects of
ServiceSpace itself is gift-economy, and all our projects are gift-economy. Our good-news portal, DailyGood.org, sends out a quote, a good news story from around the world, and a small be-the-change action; started more than 10 years ago, it now goes out to more than 100 thousand people everyday and yet, we have never solicited anything nor hosted any ads. Just pure giving. Like that, we started with gifting information, which organically built up some social capital and allowed us to venture into offline domains too. Today, ServiceSpace has grown into an incubator of "gift-economy" projects ranging from web services to a film production company to a print magazine to a restaurant. In a way, all these projects are strands of an invisible quilt, that provides a resilient warmth when our dominant paradigm runs amock.
How do you sustain yourself?
That's a loaded question, because in it are embedded many presumptions. Most people's curiosity only extend as far as "How do you pay your electricity bill?" Sure, we need material capital, but that's not enough to sustain ourselves. We also need social capital and even more importantly, spiritual capital. If you want the honest answer to this question, it is this: giving sustains me. For those focused so singularly on material capital, I often feel like asking them the counter question -- how do YOU sustain yourself? Money and things are not enough. So yes, according to the IRS, I'm definitely poor, but anyone who knows me will tell you that I live like a king. :)
But how do you pay your electricity bill?
Think of it like a tree. If a tree produces wholesome fruits, provides shade, adds unconditional value to the passerbys, then surely the community will take care of it. Similarly, when you serve others sincerely, you create a certain affinity and over time, those affinities sustain you. In a very real way, my material capital exists because of the kindness of others -- my family, friends, well wishers. It is service, social capital and surrender that sustains my simple lifestyle. It seems like a novel idea in our current paradigm, but this is how people lived in indigenous times. On some days, I will wake up from meditation and start tearing up with immense gratitude at the realization that my whole life is a gift! And ultimately, isn't that true for all of us?
What does it mean to live gift-economy?
All of us, ultimately, are living off the kindness of others -- starting from the gift of life that our mothers gave us. Living gift-economy is to first become aware of that kindness we're constantly receiving, then to hold gratitude for those gifts, and finally to pay it forward by opening each door with the humble question, "How can I contribute?"
Should I quit my job and trust that the gift
economy will meet my needs if I am generous to others?
If you're asking the question of "Should I quit my job?", you aren't ready to quit. When the internal commitment to service becomes choiceless, there will be no question.
To survive in a gift-economy, you need three things: (a) service -- you have to be useful and deliver value that people care to receive; (b) social capital -- the services you offer will create affinities with people and as those people get connected to each other, that cocoon of social capital will sustain you; (c) surrender -- conditions take their own time to ripen, so you have to cultivate a strong sense of equanimity to accept all that manifests along your giving journey.
The ever-so-often asked "How will I have pay my bills?" question should really be replaced with "How can I practice more generosity?" Lynne Twist, who has raised close to 900 million dollars, shares a story of how a homeless man gave her spare change once to feed the hungry in a developing country. No matter what position we're in, we have the capacity to be kind, caring and compassionate. And so the real question is, "How can I practice more generosity, right here and right now?" Once we make that shift from consumption to contribution, we will inevitably generate social capital of people whose cup of gratitude will overflow sooner or later and whose ripple will flow back to sustain you. But by that time, you will no longer have the question of your sustenance; the overwhelming joy of giving is in itself such a reward that everything else pales in comparison. The key is to experience that joy of giving.
Do you think everyone can live in this "gift economy"
I definitely think it's possible, but it takes work. This is not something you see on TV, buy it the next day and start using in the third day. It takes time to create deep affinities, to develop equanimity for enduring the trying episodes, to generate love from a deep place within. I am myself still just learning, but if you ask me, it's a worthy endeavor. All this, though, starts with a simple thing -- be kind today. Even if it is just for a moment, that's how the whole pattern emerges, and then one fine day, you wake up and realize that you're swimming in the spirit of gift-economy. The path is unpredictable, but beautiful.
If I gave money to the needy, is that considered a part of
the "gift economy"?
Absolutely. Whenever someone taps into the mindset of giving, it supports the birth, rebirth and/or possibility of a gift-economy. Like I did once in New York, I often use money to get the homeless to give.
Who inspires you?
I tend to believe that we're all disciples of our experience. Many larger-than-life inspirations from Gandhi to Krishnamurti to Vivekananda to Goenka have impacted my thinking, but on a regular basis, it is my brother and my wife who always hold up a higher road for me. In terms of life experiences, perhaps my walking pilgrimage in 2005, where my wife and I walked 1000 kilometres while eating whatever food was offered and sleeping wherever place was offered, was truly paradigm bending. Our soundbyte was that we used our hands to do small acts of kindness, our heads to write stories of everyday heroes, and our hearts to cultivate truth. But really it was a process of renunciation through the deep abyss of our minds, and a process that is still in progress, without an end in sight. :)
What is your favorite project?
It's hard to pick one project but I love the Smile Card project on KindSpring.org. It's the simplest thing -- do a kind act for someone and leave a Smile Card behind that instructs them to pay it forward. It could be anything from a conversation with a homeless person to paying for the person behind you in line to trading your first-class seat in an airplane with a stranger in economy-class to thanking the local janitor to even just listening to a friend or calling up your elders. In search of the big ideas that will change the world, we often forget the small, invisible acts that are the backbone of humanity. Anyone can get these cards online, as a gift that they pay forward with a random act of kindness. And then, you can share stories online, see what other people are doing, or engage in all kinds of other activities. We started by printing 100 cards, without the foggiest idea of how we'd sustain ourselves and today, there are close to a million smile cards in distribution and the website is full of ideas, inspiration and stories that keep this pay-it-forward ripple going. It's such a small thing, but it never fails to reinvigorate my faith in humanity.
What would like the readers to do?
I would suggest three things: subscribe to DailyGood.org so you can be soaked with inspiration, get a Smile Card and start a ripple of kindness with a kind act, and spend some time in silence to deepen your awareness. Oh, and smile. As Thich Nhat Hanh once said, "Sometimes your joy is the source of your smile, but sometimes your smile can be the source of your joy."