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Gift Markets

Those of you who came to libertarianism like I did, through economics, probably have a special fondness for the idea of transactions. Transactions are the great equalizer and maker of friends. Any two people who trade are acting as partners and both benefit or they wouldn't participate. The objectivists especially emphasize the difference between transaction and theft as a conceptual tool for illustrating the difference between market and government.

It may come as a surprise therefore, when I say that transactions are not the atom of economics, gifts are. Transactions are just gifts bound together in pairs like the atoms of nitrogen in the air. Just as nitrogen is inert when the atoms are paired, transactions are tremendously useful compared to other gift giving customs. We give away our money to strangers because we have the expectation that these strangers will then give us merchandise. Without this pairing we would have to individually know and trust everyone we dealt with. Only in small groups like families and tribes can this be the case.

Gifts also provide a way to extend the idea of a free market to primitive cultures. Sometimes these societies don't have anything we could really call a market economy but are instead permeated with elaborate gift giving rituals. A citizen's status and whole life may be determined by the gifts they give.

Where gift giving exists in any culture personal property exists there also. Only what is owned can be given, only by the owner, and the receiver becomes the new owner. Many view ownership as evil and greedy, but who abolishes ownership also abolishes gift giving.

The idea of gifts extends to the emotional and psychological realm. We give our attention, our time, to those around us. You give to others by talking, listening, making love, playing chess, rescuing from drowning, etc., it is a benevolent expression of personal power. It might seem that we have power over others by threatening withdrawal, but if the gift is withdrawn the power vanishes.

Gift giving can be extended to include all the things we do for others and all they do for us. We all know people who seem to do well in life without working. They have found other ways, such as charm, to cause people to give them what they need. We give labor to our children, parents, and lovers because we want them to be happy. We give labor to our bosses because they give us money. We give money to merchants because when we do they give us the things we want.

Gift giving puts a whole different perspective on theft. Suppose someone breaks into my house and steals something. I can take the attitude that I have accidentally made them a gift, and take care not to have such accidents in the future. I may find myself in a dark alley giving my wallet to a stranger with a knife. The gift isn't an accident but the situation is. This shifts my perspective from right vs wrong to caution vs carelessness. This attitude toward robbery can now be applied to taxes without any moral confusion. Instead of wasting time on anger you can immediately look for ways to improve the situation.

Even violence and aggression are describable in terms of gifts. Everything from a neighbor's dog barking to a bullet wound can be considered unwanted gifts. You may think of new ways to deal with aggression by looking at it this way.

What does the government give us? Let's ignore those cases where it provides money to a specific person like a welfare recipient. Whatever it gives must first have been given to it by taxpayers, usually many times over. Perhaps what government gives is law, order, authority. The need for authority is strong in many people. They are getting value for value, a feeling of being in the right in return for some of their income and autonomy. The problem of government doesn't lie with them, for them it is a solution, albeit a bad one, to a significant need. The punch line is that these needs can be easily met without government. The world is full of churches and businesses telling their members and employees just how to behave. Businesses pay well for obedience and a church will assure you that you are superior in the eyes of the Lord as long as you do as they say.

This essay is my gift to you. Look at your personal, economic, and political behavior in terms of gift giving and see what happens.