It's that time of year again, when we buy gifts for family and friends. But what is a gift, exactly? Most of us define "gift" as something given freely that the intended receives without cost. So it can be frustrating around the holidays, knowing that our gift-giving often seems to imply or even demand reciprocity: if I give you a gift, I expect one in return. Once that expectation is there, it's no longer a gift.
Right?
Well, maybe not. While this mentality can be off-putting, it's not all that unnatural or immoral to see our own gifts as forms of investment. Remember, investments aren't one-sided; they're mutually beneficial, just like any transaction in a voluntary economy. A good investment will provide two returns: one to the giver and one to the receiver. When you invest in others, you help them grow.
Researchers in the 1930s documented this type of investment mentality in the exchange system of the Siuai, a primitive tribe in New Guinea. Tribe members would make gifts to one another with the assumption that a future gift would be given in return. And the Siuai expected not only basic reciprocity -- they expected a bigger gift back.
These gifts were investments and the Siuai were investing in each other. The transactions, themselves, functioned to bring the Siuai together, and the wealth imparted from one gift would fuel the ability to give a larger gift in return.
As George Gilder said, capitalism begins with giving. But, as I like to add, it doesn't end there.
Gilder spoke of the Siuai's gift-giving practice in a presentation for the Ludwig von Mises Lecture Series: “These competitions in giving are contests of altruism. A gift will only elicit a greater response if it is based on an understanding of the needs of others. In the most successful and catalytic gifts, the giver fulfills an unknown need or desire in a surprising way. The recipient is startled and gratified by the inspired and unexpected sympathy of the giver and is eager to repay him. In order to repay him, however, the receiver must come to understand the giver. Thus the contest of gifts leads to an expansion of human sympathies. The circle of giving (the profits of the economy) will grow as long as the gifts are consistently valued more by the receivers than by the givers.”
Giving is beautiful when nothing is expected in return. But giving can also be beautiful when something is expected. In his speech, Gilder quoted the Bible, which seems appropriate at this time of year: "Give and you will be given unto, search and you shall find… Cast your bread upon the waters and it will return to you many fold." Just another perspective, but maybe it can help de-stress the gift-giving season that is upon us.