Giftmoot Economy

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A Critique of the Exchange

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The Exchange Economy

Liberal market economies What do exchange economies motivate? What do exchange economies require? What is a healthy economy?

Problems with the Exchange

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Solutions in the Exchange Economy

How a pure exchange economy works Gifting in an exchange economy Economic calculation

History of the exchange

Origins of the exchange Why the exchange has endured Has the exchange been successful?

A Non-reciprocal Gifting Economy

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The Basics

What is a non-reciprocal gifting economy? What is a non-reciprocal gift? What's different about a non-reciprocal gifting economy? Why gifting? The concept of wealth The paradox of efficiency

Why and How People Would Work

Rational motivation to work Variations on rational motivation Personal motivations to work What about free riders? Equilibrium and free riders Comparison with the exchange economy What is work? Summary

Economic calculation and work

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Giftmoots

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Demotherapeia

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Democracy

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Discourses and power

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The model of demotherapeia

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g13work.txt

What is work?

I've spent a lot of time reasoning that a sufficient number of people will work, and that there can be a healthy economy even if there are some free riders. I've also suggested that the line between "free rider" and "not free rider" can be ambiguous, because we cannot always reasonably (and perhaps read: fairly) discern who is and who isn't unable to work as compared to someone who is instead capable of work but deciding not to (and the line tends to move as we discover more about humans and human psychology).

But the question is not just "Who is capable of work?" but also "What is work?" Answering that question will also draw a line that will place free riders on one side and not free riders on the other. And, just as drawing that line as ambiguous for who is capable of work, it is also ambiguous about what constitutes work. This means that any concerns we have about free riders will also have to grapple with this ambiguity as well.

So here I want to set out a brief review of what might constitute work and how that might relate to the issue of free riders. The short version is that there are probably fewer free riders than we might expect, and it might not be a good idea to try and motivate free riders into further work.

Remunerated work

The most obviously recognised type of work in an exchange economy is remunerated work, where a person is paid for their services. In liberal market economies this has not just been the most commonly recognised type of work, but also sometimes the only recognised type of work, where this type of work is considered "real" or "productive" or "economic". Payment is the biggest part of the recognition, as well as the employer-employee relationship, the locus of work outside the home and in a formal arrangement, has had laws regulating its conditions and payment, has union action directed to it, and so on. All other work - according to a traditional paradigm - is lesser in some capacity, or not counted as work at all.

This has obviously not been good for women as the traditional carers of the home and children, who in many cases need to receive resources from the men who go out and perform work. And while they have often received resources through gifting (such as an allowance or house finances), the primacy of the "real" external work remunerated by exchanges has meant that men have seen their work as legitimising their control over the household and its finances, and allowances have been used punitively.

How is work remunerated? Largely not by effort, time, suffering, productivity, or benefit to society, because there are certainly higher paid people who put in less effort, time and suffering, and result in less productivity and benefit to society than some lower paid people. Supply and demand - the need for and scarcity of workers who can fill the role - is the major factor, as well as personal relationships.

In this type of work is also investing, which some may call work, and others may call an assumption of risk but which is not work. Someone with money can invest and be remunerated for it, but although it is sometimes said that the money has been "put to work" it is not always agreed that the person is actually working. I'm not going to make a claim that it is or isn't working, because I don't think that such a distinction is clear-cut or makes a difference.

Obviously, remunerated work would not exist in a non-reciprocal gifting economy, because remuneration is part of an exchange. All work in a non-reciprocal gifting economy would be volunteering instead.

Volunteer work

In an exchange economy, volunteer work is regularly considered work. There are more professionally organised volunteers and more spontaneous community volunteers, but as a lot of volunteer work requires organisation and training, occurs outside of the home, and takes effort, the classification as work is relatively agreed upon. That said, there are many occasions where people propose that volunteer work is "lesser" work in some manner, because of some general belief in a principle that remuneration is the indicator of productive work, and also because of a belief in the "creative destruction" of a capital-driven system - that is, that some things deserve to fail to make room for better things, and volunteer work is propping up the wrong way of doing things. There is also the sentiment that volunteer work has an opportunity cost where that person could otherwise be earning, and thus should be less significant. Obviously not everyone agrees with these sentiments, because there is a large cohort of volunteer workers.

Volunteer work is normally providing a good or service to people who cannot pay, such as the unemployed, the unwell, children, the elderly, and so on. Given that these people cannot pay, the only way for them to receive care and resources is through the non-reciprocal gifting.

In a non-reciprocal gifting economy, volunteer work would be the normal manner in which work is done. How that affects businesses, employer-employee relations, and economic calculation I will come to in some later articles. People would work because they are motivated to, for free, and this work would be the backbone of productivity.

Unpaid time

In between remunerated work and volunteer work is unpaid time. This is work done by employees or potential employees for their employer, but which is not remunerated. This comes in the form of unpaid overtime or unpaid internships, and is often motivated by loyalty to the business, a way to demonstrate capability and dedication in order to gain a higher position, or out of fear that they will be fired. Unpaid work is usually considered work, and often is the subject of critique because it is for companies that pay their employees but who are not paying them in this circumstance. The amount of unpaid overtime is generally quite high (by some estimates it constitutes an equivalent to 5% to 7% of GDP, more than charity (about 1%) and less than welfare (about 9% to 15%).

Unpaid work often illustrates the tension in an exchange economy - some people think it is remunerated because it is an investment in future employment and pay (and thus repaid), while others suggest that it is exploitative, and, in some sense, the line between the two is blurry. It is a type of thing that is not quite a gift and not quite an exchange, which doesn't involve money but is constructed completely by the system of money, which is often normalised but also regulated against. And it is not always clear when it is happening, because there can be ambiguity about when work starts and finishes, what work is within someone's employment and what is not, and whether the work is valued at the appropriate rate or not.

A non-reciprocal gifting economy (of course!) does not have paid work, but this means that there is less pressure for extra time to be worked, because it will not as significantly (if at all) affect someone's livelihood (as they get resources from elsewhere) or opportunities (because there is no hierarchy of pay to move up). People will work the amount that they find reasonable to work, and resist pressure to work more if they find it unreasonable.

Caring and domestic work

Caring and domestic work are also unpaid labour, and often for people who are unable to remunerate the labourer, such as children. This includes raising children, cooking, cleaning, responding to medical issues, as well as caring for people who cannot care for themselves. This work often takes place inside the house and between family members, and as such it does not have the same recognition as volunteering and as unpaid time at a place of employment. But this is work that is usually essential, such as supporting workers and raising the next generation of labour, as well as caring the unwell, the injured and the elderly.

Some estimates are that unpaid work has a value equivalent to 40% to 60% of GDP - though it is notoriously hard to calculate because doing so involves making some assumptions that translate this work into a currency, when it involves no currency exchange at all. This means that it could account for a quarter to a third of all work done in the economy. But for a long time this type of work has been invisible, and the people who carry it out - traditionally women - have been undervalued and exploited. It's for this reason that some feminist economists have argued that domestic work should be paid by the government.

In a non-reciprocal gifting economy, the division between what is currently professional paid work, overtime, volunteering and domestic work is dissolved. All types of work are the same, because each type of work is treated the same way: as a gift of labour. There might be a tendency to assume that this would mean what is currently paid professional work would be devalued, but a different way of thinking about it is that unpaid domestic work will be more highly valued. The idea that caring for a child is somehow less important than advertising a soft drink or cleaning an office - the logic of the market that is only corrected by subsidised childcare and generous parental leave - would lose its primary rationale.

Personal projects

Where the current system is perhaps most conflicted is in the context of personal projects. These are projects that people pursue in their own time, with their own resources and for their own reasons. Many of them are artistic, though there are many, many types of personal projects, from innovation in medical devices to creating computer operating systems.

On one had, these projects often have only a personal purpose and not ambition for market engagement and profit, and can be seen as unproductive work, while on the other hand there are some serious innovations (Linux, the first web browser, 3d-printed prosthetics) that have transformed people's lives and society in a beneficial and productive fashion. It is not always clear which projects will end up as which, and the nature of innovation means that experimentation and the unknown are critical aspects.

Many other personal projects are artistic and satisfy just the artist themselves, though some also entertain a wider circle, and some take off and inspire millions of others, and maybe become commercialised (though inspirational and much-loved online fiction is available for free).

The question is less whether this type of effort constitutes work, but whether people consider it to be productive work, upon which people are split. Art is important, and commercialised art is often criticised, but non-commercial art needs to be self or community funded, and many artists exist in a space where their work is valued but that value is not translated into exchange capacity.

Personal and emotional support

One type of work that is valued in an exchange society is therapy, and there are a variety of therapies that people regularly rely on. Yet another proposal in exchange economies is that people should move in order to find work or find better paying work. These, however, are in contrast with each other, because moving can remove a person from their social and familial networks that provide this type of support.

Personal and emotional support are critical parts of health, and a healthy population will make for a healthy economy (as well as other moral benefits). The long-standing relationships where people genuinely know and love each other are fundamental to high-quality support, and, as a consequence, fundamental to high-quality productivity.

Conversations and time with friends and family, having a meal or a tradition together, playing games, watching entertainment, playing sports - all of these are not just potentially enjoyable, but also a kind of healthcare for mental and emotional support. But none of these things are generally considered work - perhaps because the benefits and effort are invisible, and especially their impact on productivity, and perhaps because they are done mutually (though that is the basis of the exchange), and perhaps because they occur within the domestic sphere.

In a non-reciprocal gifting economy, I see no reason why these types of activities would not be considered a type of work - or, rather, that because work isn't related to remuneration there isn't a need to make a line of division between things that are work and things that are not work, and instead focus on the positive personal and social benefits.

This has an implication for the idea about free riders. If someone is providing emotional and personal support to a friend, I would suggest that it wouldn't be appropriate to label them a free rider. In short, being a good friend could be considered a job. Obviously a variety of jobs are needed in any society - society wouldn't function well if everyone were solely doing the job of being a best friend rather than growing food, but society also wouldn't function well if everyone were growing food and no one was building houses or making electricity. The point here is not that we should be investing in full-time best friends (though I am not opposed to it), but that what constitutes work can be ambiguous, which means that determining who is a free rider and who is not - especially if we are to make some judgement about them - is also not an easy thing to do, and trying to make a clear distinction is potentially problematic.

Non-work, rest and busy work

But let's imagine now someone who is capable of work (everyone, including themselves, agrees), and performing no productive work whatsoever (and everyone, including themselves, agrees). Let's call this person a free rider, and imagine that there is no ambiguity about it. Is this a bad thing?

First, if society is going along merrily and productively, while it may be possible that an extra worker would improve society somewhat, it may also be unnecessary - society is going along merrily and productively, after all.

Second, what would it take for that worker to get working? If they are reluctant to work, there would have to be something that motivates them. In an exchange economy, that's access to goods, which are restricted unless someone earns money to pay for them. But implementing those restrictions, or any other thing to coerce the free rider into work is actually an additional effort on the part of society. The cost of that implementation, and the potentially unproductive nature of the reluctant worker, would likely be an increase in busy jobs rather than an increase in genuine productivity.

And, finally, perhaps considering a non-worker as a free rider is actually an incorrect framing. Instead of being a free rider, this person is part of a pool of potential and rested labour, a pool of quiet innovation, and a space of social reflection. That is: if we forced all free riders to work, would we be missing out on a reserve of potential spontaneous innovation? All individuals need rest in order to become healthy, to reset, to have their minds wander, to have space to reflect, to be bored, and all these things generally improve rather than prevent productivity. Is it a problem if, as a society, a portion of the population consistently occupies this space?

I am not here trying to make a particular claim that without free riders society will be missing some great reservoir of inspiration, but I am suggesting that the question is not so clearly answered that we should definitively class free riders as a problem that needs targeted attention.