Before markets existed, people used gifts to save and invest, to exchange goods and services, and to pool risk.
Lark Rise to Candleford, Flora Thompson's portrait of 19th century British village life, describes a gift exchange - and its underlying logic - in detail.
Each year every family in the village bought and raised a piglet. The family pig was fed on scraps, acorns, leaves - anything the family could get their hands on - as well as purchased grain. Once fattened up, the pig was slaughtered. But with no refrigeration, how could the meat be kept?
Smoking and salting preserves meat - at a cost.
Since every family had a pig, and pigs reached maturity at different times, there was a simple way of solving the meat preservation problem: gifts. As Flora Thompson describes it:
...when the carcass had been cut up, joints of pork were distributed to those neighbours who had sent similar ones at their own pig-killing. Small plates of fry and other oddments were sent to others as a pure compliment, and no one who happened to be ill or down on his luck at these occasions was ever forgotten.
By sharing, everyone was able to eat fresh meat more often. Gifts to those who were down on their luck had a further economic function: a type of social insurance, protection against fluctuations in income.
Because gift giving has played such a crucial economic role throughout human history, it is enforced by social norms. "Give, and it shall be given unto you." Giving is good. Gifts should be reciprocated.
The unwanted gift is a consequence of these social norms.
One form of unwanted gift is the disguised solicitation. Greeting cards, calendars, note pads, address labels - "Our Gifts to You!" And, inside, a letter requesting a generous gift in return, to meet the urgent needs of the sick, the ill, the vulnerable.
I don't want them. Right now I have address labels from Imagine Canada, the MS Society, Save the Children, the Nature Conservancy of Canada, the Ottawa Humane Society, CUSO-VSO, the Canadian Hearing Society, Canadian National Institute for the Blind, and something called Development and Peace - enough for years of mailings. Sending me more is just a waste.
Plus whenever I use a sticker, I attach my name to the cause it represents. These so-called "gifts" are a way for charitable organizations to generate publicity, to market themselves.
Can't you just leave me alone? I'm an o.k. person, I do give, but I want to give to the cause that needs the money the most, not the one that spends the most on marketing.
These unwanted gifts eat away at the norm of reciprocity. People become accustomed to receiving without reciprocating - keeping the address labels for future use, tossing the request for funds in the recycling. Exploiting the power of the gift diminishes it.
The other form of unwanted gift is the polar opposite of useless address labels. It's the gift so wonderful, so perfect, so generous that you cannot possibly reciprocate.
The movie Bridesmaids explores this idea - the dilemma of the nouvelle pauvre who can never reciprocate the generosity of her nouveau riche friends.
It doesn't have to be a gift of money. It could be a gift of time - the friend who fixes your car for you, or looks after your dog for weeks on end while you're out of town. Somehow "here's my spare Canadian Tire money, I know you always use it" doesn't quite cut it.
Reciprocity is delicate. It does not have to take the form of a direct quid pro quo. The success of Girl Guide cookies, for example, rests in part on diffuse reciprocity - I buy cookies from neighbourhood children as a way of saying thank you to people who bought cookies from me years ago. What goes around, comes around. Much more quickly than you might think.
But unbalanced reciprocity -- the prospect of endless commitment, infinite need - makes people deeply uncomfortable. They get out. That's why people who need the most help from friends and neighbours sometimes get the least - it's just too great a burden.
The need for reciprocity must be understood by anyone who hopes that private charity can play a major role in providing for the vulnerable or caring for those in need. As the social, economic and physical distance between rich and poor widens, the possibility of any kind of reciprocity - direct, diffuse, whatever - diminishes. Pure altruism, or a warm glow, might still motivate the wealthy to give - but I'm not counting on it.
With all of these unwanted gifts, is gift-giving dead, an ancient ritual entirely superfluous in market economies? Joel Waldfogel famously estimated the dead weight loss of Christmas, asking if we'd be better off without all of this getting and spending.
I don't think so. Gift exchange has many advantages over market exchange. It provides, for example, a way to save which is (relatively) immune from inflation or financial market volatility. After all, which is a riskier proposition: giving a PS3 to your son, in the hopes that in 40 years time he'll drop by and help you out with grocery shopping occasionally, or giving the same amount of money to a financial adviser?
Any institution that has survived for millennia must have something going for it.