With new ‘economies’ becoming mainstream each year, there is a bit of confusion around the differences between them. Despite some similarities, there are distinct characteristics between these economies. The gift economy is one such industry and has a focus more on relationships than things such as labour and services.

The gift economy can be defined as an economy that relies on relationships, giving something, whether it be goods or services, in the name of these relationships rather than for profit or personal gain. This doesn’t mean that monetary transactions such as loans are excluded from the gift economy. There is an implied ongoing transaction in the future from businesses and individuals who are involved in partnerships. It can be said that these types of relationships can serve to strengthen communities, as well as having the power to sever them.

The transaction involves the transfer of property rights over a certain object (or objects) to another party. Another way of looking at this is as a relationship between people who barter. The object in question can be owned by a person, however whoever owns the rights to that particular object can create rules about how it’s used or specific requirements for its condition.

Charity and community services are looked upon as being a significant part of this gift economy culture, since the whole premise of what they do is to give to their community without expecting anything in exchange. The community will often return the favour though, with things such as donations and event participation. However, each community sees this process in a different light. In the country of Papua New Guinea for example, the people who give gifts to others are considered to be ‘big men’ and the ones who cannot return this gift, along with interest, are seen as lesser people.

The gift economy thrives on this reciprocity and the goal is usually to have a lasting relationship between parties. A lot of cultural practices thrive on this act of giving more back to the lender than was given in the first place, so that there is a constant back-and-forth of gifts. This is shown in the Moka exchange between citizens of Papua New Guinea. It’s not so much about repaying the debt in full and stopping there, it’s about adding that little bit more in order to increase one’s prestige and class. Some have argued that this isn’t a true gift economy exchange, however it is nevertheless an ongoing relationship that thrives on the continuous exchange of goods and services.

Blood banks are also a part of the gift economy, especially if it is given willingly and altruistically. The giving of blood has long been commodified and people are paying a significant amount of money in order to gain these transfusions, which benefits only a small portion of the population who can afford these luxuries. For people in the US, donations of blood and organs are seen as the best form of treatment and as a result have the highest market value. As it is illegal to sell these commodities, donations are the only way to help people in need. Since they are sold for a very high price, the people who can afford it are given the ‘gift of life’ while the donator feels a sense of achievement they have at potentially saving a life.

It can be said that a business within the sharing economy can also be a part of the gift economy, as relationships between these businesses are usually ongoing and based off of mutual respect and usefulness. The Sharing Hub is one such organisation that combines the minds of 4 startups who cooperate and bounce ideas off each other in order to further themselves in their respective industries. Rather than a traditional accelerator program where funding is exchanged, we share knowledge in areas such as operations and marketing.

While the sharing economy and other economies are intrinsically linked to the gift economy, there are characteristics that define them into their respective fields. The gift economy thrives on its relationships with other parties and works towards further strengthening them with gestures of trust and goodwill. The gift economy is not limited to just businesses but it is also inextricably linked to cultural practices such as the Moka exchange in Papua New Guinea. Although sometimes the goals of the parties involved may shift from being about the relationship to more personal and financial gain, the gift economy has and will always thrive on these ongoing giving of goods and services to parties involved.