Let's lay this out on the table as simply and clearly as possible (continuing Alan's theme about Quid Pro Quo).
1. You hand me $1,200.
2. I hand you a beautiful bicycle.
That's not how I interact with my closest family and friends. We share things freely. You don't need to pay me for meals or for using my car, my camper or my bike. We don't really keep track of things like who bought the movie tickets or paid more than their share at the restaurant.
Of course, we don't have to keep track of those things because we trust each other. We know that we all chip in to take care of each other. This is the way clans and tribes have worked for millions of years of human history. We're deeply steeped in this type of sharing and it comes completely naturally to us.
However, it hasn't scaled well.
As soon as you pass a certain threshold (probably around Dunbar's number of about 150 in your small village) it becomes very difficult to ensure that everyone is a responsible player and upholding their part of the social contract of mutual responsibility.
I live in a wee hamlet called Denver, Colorado with a mere 2.5 million people in the Metro area. It's very difficult to know if this fellow, Roger, responding to my Craigslist ad is as generous as I am. So I take the tried and true path of mediating my risk in giving Roger this bicycle by demanding that he hand me $1,200 of symbolic value because I believe others who don't trust me will accept those symbols (dollars) for the stuff of value that they offer.
Through a strange sleight-of-hand, I have transformed my risk from a single individual, to a shared agreement which honors these symbolic units to exchange value. I don't have to know or trust Roger, instead I'm gambling that most people in my community will honor dollars for a quid pro quo exchange.
Essentially, money is mediating my risk in two primary ways:
- I don't release any value without receiving an offsetting symbolic value
- The value-stability of those money-symbols is distributed across a large group of people
In other words, money lets us transact value even though we don't trust each other.
Guess what... transacting through money doesn't build trust either. By it's very nature, every transaction is based on distrust. It's really quite simple, heaping up piles of distrust does not create trust.
What? What about my brand? My demonstrated reliability? The proven quality of my product?
Exactly... If you bought a car and are happy with it's reliability, that trust was earned by the direct experience of the performance of the vehicle over time. It has nothing to do with the transaction in dollars which simply showed you got to drive away with the car you bought. Trust is earned through building relationship, demonstrating performance and showing goodwill, not by exchanging dollars.
Creating a World of Trust
Money does not require deeper relationship nor build deeper relationship. Commercial economies grew to large scale by using money, but that just allows more of us to interact with each other in the absence of trust. What if we want our interactions to build on each other and create stronger community, greater value and build more trust? How can we make that happen?
That's right, gifts.
Gifts foster trust, build new relationships and are central to our experience of community. If you think of your best experiences of tight, trusting, strong community, I'd wager that at the center of that community is something freely given, freely shared. Whether it's organized around enjoyment of music together, passion for food or commitment to an ideology. a large part of how you experienced belonging in that community, is because you had access to the shared gift.
A monetary transaction is designed to be balanced, and for both parties to be "made whole" by the end of the transaction -- to leave no loose ends. Gift transactions are all about the loose ends. They are rooted in the understanding that the giving party is already whole and not damaged (made unwhole) by the giving. The transaction is imbalanced. And the loose ends left hanging are called relationship, friendship, partnership, goodwill and trust.
We need an economic system with more loose ends like that.
(I'll make another post distinguishing the precise differences between commercial transactions and gift transactions. Juicy stuff.)