Financial Risk Manager

In a 'market' economy, the highest status belongs to those who have acquired the most. In a Gift Economy, the highest status belongs to those who have given the most. But important is that the gift must always move. This idea was recently popularized by the terrific little movie called Pay it Forward. Every gift is its own reward, but that reward is multiplied, without limit, when the gift, or any gift, is passed along to others. A story is a gift. Blogs are gifts. Ideas and insights and teaching and counsel are gifts. Conversations are gifts, Hugh MacLeod.

The concept of a giving and receiving gifts is as old as society itself. It has always been there in one form or the other. People in all civilizations have been has the pleasure of exchanging gifts in order to establish social relationships and strengthen existing ones or rulers would give away large amounts of goods to their followers (still do in some monarchies) or rich people give away things of value for the collective benefit of the public. Only the forms have kept changing over time.

When people give to one another, freely and without conditions, sharing their blessings with others and bearing each other's burdens, the giving multiplies and we receive far more than what was given. Even when there is no immediate prospect of return, Allah Almighty keeps accounts of all the giving, and in the end blessing will return to the giver, multiplied manifold. All religions advocate that humans should participate and give (back) some of what Allah the exalted has bestowed upon them, in what ever way possible. Have you heard the famous proverb, "Give till it hurts."

Another reason perpetuating giving is that human beings have an instinctive drive to vie for social status; it is wired in by our evolutionary history. For the major part of the history that ran before the invention of agriculture, our ancestors lived in small nomadic hunting-gathering communities. High status individuals, those who were more assertive and could persuade others to follow them, got the best of every thing, and provided more for the followers.

The drive for status expresses itself in different ways, depending largely on the degree of scarcity of goods. "Defining success by what one gives rather than what one has" is neither a new practice nor an overly idealistic view. It is rooted deep in history and human nature, and is more basic than wealth or money. Remember, in hunting societies of the past, the hunter's status was not determined by how much he killed or how much of that he consumed, but rather by what he brought back for others. Lewis Hyde in his book 'The Erotic Life of Property,' writes, "In a gift economy, status is accorded to those who vie and give the most to others."

This phenomena gives rise to a discipline called Gift Economy. As per the definition, "Gift economy is an economic system in which participants give away things of value to the shared benefit of the community." In the present era, the scientific research, intellectual and creative work and the Internet are practical forms of gift economy. A scientist produces research papers and gives them away to other scientists, through research journals and conferences. The other scientists freely refer to the earlier scientists' research findings. The more citations the scientist has, the more standing and respect he has. All of the scientists benefit from an accumulation in the body of knowledge anywhere in the world. Although research is being increasingly commercialised these days, giving away of findings still remains the most efficient method of solving common problems within a particular scientific discipline.

Similarly, intellectuals, philosophers, creative writers and artists spread their work across the world. Despite the obscurity of the modern version of the gift economy, every one benefits from the original work and the creators earn credence in return.

Coming onto the Internet, the open source software is best example of a gift economy in this cyber age; with information being one of a major resource. Programmers make their software as well as source code available to the end users and programming community and anyone can use it as well as modify and or improve the code. Individual programmers gain prestige and respect, and the community as a whole benefits from better software. The open source has been one important factor for the Internet to grow over about three decades. Now what millions of Internet users are doing? They are giving each other information and that is the nature of transaction on the Internet. The Internet is moving towards more than a new kind of marketplace and a new medium for exchanging money. The medium may lead to a radical change in the nature of money itself one day. Many researchers and economists have already predicted that money as we know today is due for a sweeping change. Concepts like alternative currencies and local money are being researched and propagated. Though some of these efforts predate the Internet, but modern Internet aficionados see the Internet as a vehicle for accelerating the changes that earlier have only been predicted as a fancy idea.

Gift economies co-exist with command economies, market economies and barter economies. Given the practices, next may be the move toward sustainable business and to make the business itself a gift to society. The first step toward a sustainable sense of success is taking pride in the value of contributions to others rather than taking pride in the value of personal possessions. This means striving for quality in the use of whatever power we have rather than working to get more power over others as an end in itself. In this view, economic profit and affluence may help us to contribute, but they do not themselves amount to be business success.

While the exchange economy may have been appropriate for the industrial and post industrial age, the gift economy is coming back as we proceed through the information age.