Labor Relations in Changing Capitalist Economies: The Meaning of Gifts in Social Relations

By Dolfsma, Wilfred | Journal of Economic Issues, June 1998 | Go to article overview

Labor Relations in Changing Capitalist Economies: The Meaning of Gifts in Social Relations


Dolfsma, Wilfred, Journal of Economic Issues


Impurity and Social Order

Geoffrey Hodgson [1995] has proposed that capitalist economies can be distinguished by how the "impurity principle" works and by the extent to which a capitalist economic system is "impure." He argues that "every socioeconomic system must rely on at least one structurally dissimilar subsystem to function" [Hodgson 1995, 577]. I will discuss a concrete phenomenon of "impurity" - gifts - that plays a role in many different social settings. Gifts "contaminate" or "dilute" the pure, idealtype capitalism that many have in mind. The institutional forms that gift giving takes in a society, as well as their relative importance, can be used as a means to distinguish capitalist economies.

J. R. Stanfield and J. B. Stanfield [1997] take a similar position to Hodgson, arguing that "an orderly free society" needs to recognize and nurture "fundamental human needs." Complex selves are involved in "multifaceted social relations" where "alternative sources of satisfaction" are faced. In these relations, the self-interest of anonymous exchange relations exists along with the reciprocity of the social context. Stanfield and Stanfield see a growing nurturance gap in American society, especially as self-interest takes a more important place and reciprocal relations are hollowed out. Such a development has economic costs as well, they observe. Reciprocity, trust, and altruism can thus deteriorate, but nurturance and investment in human relations would allow it to grow.

The issue that Hodgson and Stanfield and Startfield, among many others, take a stand on is a central one in economics and the social sciences: How does social order exist? What does it take for an economy or a society to be sustainable? The classical and neoclassical economic position on this issue draws on, among others, Adam Smith and Bernard Mandeville. Smith's "invisible hand" is said to make sure that private vices turn into public benefits, creating the ideal-type of capitalism [Heilbroner 1987]. Both Smith's and Mandeville's analyses of social order have more nuance, however, than many scholars understand them to have.(1)

Ambiguity about people's motives surrounds gift giving [Dolfsma 1998; Komter 1996]. On the one hand, people often expect counter-gifts of equal worth, but the counter-gift should never be immediate or of exactly equal worth, which would make the exchange a quid pro quo, much like a market relation. What is considered of equal worth depends on the community within which gifts are exchanged. Notions of fairness are clearly important here, since they can prescribe when people are equals, obliging them to give equal counter-gifts. People develop institutional solutions to retain the idea that gifts are not the same as exchanges, thus retaining the ambiguity of people's motivation. Examples of how ambiguity is retained abound. Gifts, especially money, should be wrapped. Counter-gifts should not be given immediately. A counter-gift should not be of exactly equal worth, bringing the scales of debt in balance as is the case in market transaction. The ambiguity of gifts introduces (some of the) impurities into an economy that it needs to be sustainable. Gifts are one "impure" element in society, but gift giving can take different institutional forms.

G. A. Akerlof [1982] discusses gifts in the context of incomplete labor contracts. His point - and others have followed it - is that contracts can never be complete, and gifts play a role to bridge the gap. Akerlof is not clear as to whether or not he thinks such gifts are necessary for the community of a firm to persist: if people were omniscient, would people in firms still give gifts? It seems to me he would answer in the negative and is thus (merely) making an cognitive point. If he is, his representation of the literature on gifts is biased. There is an epistemological aspect to gift giving, of course, but it is only one aspect.

Purifying Capitalism

D. …

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