Giftmoot

What is the economy? It isn't something you can pick up and hold - it's an idea, and an idea that we imagine a particular way. In the Western world we generally live in liberal market economies, based on trading things with each other. But this model has some problems, like entrenched poverty and regular crises. This site explores the idea of a "giftmoot" economy - an economy that isn't based on exchanging things, but on non-reciprocal gifting. The idea is that this type of economy has less poverty, less wealth inequality, greater sustainability, more moral business practices, more leisure time, and more.

In the articles on this site, I try to set out the following ideas:

• systems of exchange such as markets have some inherent problems, like poverty and crisis
• these problems are almost always solved by non-reciprocal gifting
• a non-reciprocal gifting economy would work without causing these problems
• a non-reciprocal gifting economy could be coordinated through a type of associative democracy, or "giftmoots"

I think a re-imagining of the economy doesn't just change the way we need to consider poverty, but also ideas such as work, fairness and justice.

How we imagine the economy

In 2008 there was a Global Financial Crisis.

People lost their homes, their jobs, and their savings. Unemployment rose dramatically, houses sat empty while tent cities formed, and poverty increased.

The cause of this wasn't material destruction or constraint. Houses weren't destroyed en masse by floods, fires, tornados or war. The materials to build houses were still available. There was still enough labour to build houses, there were still lots of people who wanted to live in houses. People still wanted jobs, and businesses still wanted to hire people and sell products. Over the course of the crisis, there was no loss of real, physical things that meant poverty was inevitable. We still lived in a world of plenty.

So what happened?

A simplified explanation is that banks and other financial institutions thought houses were very valuable, and would keep increasing in value. They gave out loans, borrowed money, made deals, and made bets with the value they thought they had by holding houses and mortgages. There was a lot of financial activity backed by this value, into the billions of dollars.

But just as people had imagined that houses were very valuable, they soon imagined that they were far less valuable. Banks had been loaning money for mortgages to people, and because they gave out lots of money for people to buy houses with, house prices went up. But not all of these people could pay those loans back reliably, and as more and more of them couldn't, there were suddenly lots of houses on the market and no one with enough money to buy them, and house prices began to go down.

Now banks and financial institutions were left with lots of loans, borrowed money, deals and bets that they couldn't pay for, because the value that had back them - houses and mortgages - had shrunk dramatically. Some banks collapsed and many more were about to, and the global financial crisis was in full swing.

The Global Financial Crisis wasn't a result of some real-world material conditions, such as a flood destroying food sources, a war constraining the supply of resources, or a disease that reduced the number of workers. Instead, the crisis was the result of how the economy is structured - a structure that is not material, but something that we as a society collectively imagine. Money isn't "real" - there are coins, and numbers in accounts and so on - but it works because the person paying and the person being paid both agree how an imagined system of money works.

The economy is something that we collectively imagine. And we've imagined it in such a way that it regularly causes crisis and poverty.

So if we can imagine an economy that makes problems for us, can we imagine a better one? Well, sometimes we do.

In 2020 Covid-19 spread across the world - a contagious virus that threatened to overwhelm hospitals. To prevent the spread, Australian governments implemented lockdowns, meaning that many people could not go to work, and many people could not enter or exit the country. Economic activity ground almost to a halt. There were less people working, less things being sold, less things being produced, less things being shipped into Australia. Overall, there was less stuff. Unlike the 2008 crisis, there were clear material conditions that caused this economic downturn.

In response, the Australian government doubled the amount of welfare for unemployed people, and relaxed the conditions for receiving unemployment payments. A few years later, various studies were conducted that reviewed the impacts of these payments, and the result was that a wide range of poverty indicators had been significantly reduced when people had access to these payments.

These two cases indicate something very important: when we had good material conditions, we imagined the economy in such a way that we caused poverty, and when we had worse material conditions, we imagined the economy differently and managed to reduce poverty. While material conditions are a big factor in overall economic health, the way we imagine the economy has an enormous, life-changing impact. We can imagine a better economy.

In the following few articles, I'm going to suggest that the problem comes from the very basic concept we use to organise the economy: the exchange. And I'm going to suggest that we already know a better organising principle, because we use it all the time: gift-giving. I want to imagine an economy built on gift-giving, and see what it would look like.