The Gift Economy


In a minute, I am going to come over as if I’m all into economic catch-phrase-speak; I’m not.  But something has really caught my eye this morning.

In today’s Herald, there is an article about a guy called Adrian Nicholas who offers coffee to customers for whatever price they choose to pay.

What happens at this Auckland shop? The Herald article states that coffee is made, as normal but instead of the proprietor fixing the cost to what he thinks it is worth, he offers the consumer the chance to decide what they believe they should pay.  Depending on the economic wherewithal (or personality) of the consumer, they might pay say, $5.00 whereas they might normally pay $4.50 elsewhere.  Others might chance it in order to score a cheaper coffee. There is no obligation to pay at all, and although the article doesn’t clarify, I imagine there is no obligation to explain the rationale for the amount paid or not paid.

Thus the titles of each agent in this scenario change from “proprietor” to “creator” and from “customer” to “giftor”. All of a sudden, the capitalist dynamic of taxable commodity, taxable activity and even liability have changed dramatically.

This gift economy idea is nothing new, but in our modern era is an anomaly in Westernised commerce. Most people want a fixed income and  rely on the safety of predictable costs and the allocated subsets of estimated provisional taxation and regular outgoings. They want to know where their next meal is coming from.

What the concept seems to eliminate, for a while anyway, is the needs and wants of central government, which is largely taxable revenue, although that could still occur in this less rigid model.

In a gift economy, if you, the consumer/giftor is positioned as the more powerful of the two in a commercial exchange, how do the rules that are valued in a traditional Western economy fit?

I think the short answer is that they don’t.

I also think there is an element of intrinsic motivation at play here which is often drowned by the extrinsic desire for economic stability supposed to offer freedom to the individual.

Something about this appeals to me probably because there is an inner hippy raging inside who wants to give the middle finger to the man all the time.  Secretly, mind.

I love this idea. I love that the proprietor is freed up from the tension of having to be nice on the one hand and trying to extract money out of people so he can make a living out of the other. It’s a tense and artificial relationship, especially when you consider how much it really costs to make coffee.

I love that the dynamic has to change with these consumer interactions. But I can also see that this model simply cannot work without a seismic change to our thinking.

Further into the article, Dr David Mason delivers the realities of this kind of commerce.  In a gift economy, who is liable?  If it’s a brief exchange resulting in a quickly consumed item like a coffee there is little scope for error or injury.  Ha.  I did laugh at that.  Seriously?  Are we in a world where blame needs to be assigned at every turn?  Mason uses the example of someone burning themselves with the coffee and feeling more aggrieved because they paid more for it.  Who is liable?   Is there some inbuilt, unseen cost for liability?  It’s unbelievable to think that we have to factor in these concepts that negate the positives of such an experimental exchange.

A few years back, New Zealand artist Eve Armstrong displayed her wares in a similar way.  I’d say ‘set up an exhibition’ but there wasn’t one as such.  She established what she called ‘trading tables’ where punters could approach and sit with others and trade goods, information, services.  One person might trade a shoulder massage for an item of clothing.  What it highlighted was a more collaborative approach to commerce, apart from synthesizing her ideas about the ‘value’ of art works and the need to recycle, reuse and so forth.  You couldn’t buy this piece of art anyway, it wasn’t for sale nor was it able to be sold. Though no money was used in the trades, the dynamic of commerce was changed from an aggressive “I’ve got something, you pay for it” model to one which opened up dialogue about the actual values of goods and services.


Back to our coffee man, I’ll be interested to watch how it pans out.  I love the idea.  I’d love to go in and pay him $5 or $6 for a silly cup of coffee just for being so damn interesting.

What’s a cup of coffee worth?

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