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Peng '26: Why most gift economies fail

On Aug. 28, the Burning Man Festival returned to its home in Black Rock City after the event had moved online during the COVID-19 pandemic. In northwestern Nevada, artists gathered to craft creative pieces and build sculptures based on an annual theme. It’s a week-long, communal space that operates on the tenets of radical inclusion and self-reliance. Commerce is strictly forbidden throughout the week, so participants must share resources and work together. Starting with only 20 members in 1986, the Burning Man Festival has grown to support nearly 80,000 attendees in 2022.

Burning Man is an illustration of the gift economy, a system of exchange in which goods are not sold, but rather given without an explicit precondition. Participants trade supplies and expertise not as a means to obtain wealth, but instead to collaboratively transform Black Rock City into a “temporary metropolis dedicated to community, art, self-expression and self-reliance.” While advocates of this system preach benefits such as increased interconnectedness, I would argue that aimlessly establishing gift economies could actually backfire in large, diffuse communities.

The gift economy reflects an optimistic perspective in which the more you give, the richer you become. Within this system, gifts are given without an explicit agreement for immediate or future rewards: offering water to a thirsty traveler, donating food to a homeless shelter and sending holiday cookies to your neighbor for Christmas. In these examples, the giver is not necessarily expecting something in return — the gifts themselves are unconditional. Instead, the recipients are expected to voluntarily pay it forward. In other words, they are obligated to return the favor based on a social norm of reciprocity. That traveler could show up next week with free souvenirs, underprivileged kids from the shelter could mail back thank-you postcards and your neighbor could help babysit your dog while you are on vacation. The unwritten rules for how and when to repay these gifts vary between cultures, and they may be returned in many forms. 

The gift economy is not a novel concept. Its first studies came from anthropologists Bronislaw Malionwski and Marcel Mauss who recorded the “imponderabilia of everyday life” in the Trobriand Islands. There, tribesmen living on the islands took dangerous canoe journeys across miles of ocean to participate in the kula, a ceremonial exchange of shell necklaces and arm bracelets. These items were received as friendship tokens and carried with them an obligation to continue the exchange. Through circling these ceremonial mementos, tribesmen were able to gain social credit and cement bonds between families and clans. 

Compared to the market economy in which people build a relationship based on the items traded, the gift economy focuses on building a relationship between the people trading. In fact, repaying a gift, immediately or with something of exactly equal value, may be read as ending the social relationship. Rather than accumulating material wealth, participants in a gift economy grow richer through obtaining social capital. The affluent give away what they don’t need to increase their status. As people take care of other members in their community, the community will take care of them.

This idea works, in theory.

While gift economy advocates have made various attempts to put this altruistic model into practice, most of these experiments have ended in failure. In 2010, Panera’s founder Ron Shaich opened the first Panera Cares Community Cafe in St. Louis, Missouri. Patrons were given the option to “pay what they can” for their meal, with recommended donation options for each menu item. Customers who could not afford to pay were given the opportunity to volunteer at the store as payment. Initially, this model proved to be a success: Shaich said that, “20% would leave more than the suggested donation, 60% would leave the suggested amount and 20% would leave less.” Pretty soon, Shaich had opened five Panera Cares locations in the United States.

However, this innovative idea soon began to cause problems for Panera Cares. Some patrons repeatedly ordered meals at a reduced price — despite having the means to comfortably afford them in full — and the restaurant chain grew wary of these incidents. According to Yelp reviews for the Boston location, security guards regularly “roamed around the lobby glaring at customers” and managers accused patrons of lying about when they last paid for a meal, warning them to not “abuse the system.” Unlike in a true gift economy, participants were morally shamed for not paying the full, recommended price. Despite other positive reviews that praised Panera’s generosity, the restaurants soon ran out of money to cover operating costs. On Feb. 15, 2019, Panera Cares closed its last location, ending this decade-long experiment.

Panera’s experiment revealed one main, underlying issue: Gift economies are not sustainable on a large scale since there is no guarantee of continued reciprocity. Since a large community is so diffuse, it would be difficult to police against free riders, people who benefit from the system without giving back to continue the cycle. It would seem that gift economies work when they are applied on a smaller scale, such as in the Trobriand Islands, where communities are governed by strict honor codes and a social norm of reciprocity. There, neighbors can keep each other accountable. Givers are happy to give, and people on the receiving end are comfortable with returning the favor.

Think back to the Burning Man Festival. While its growing popularity has attracted some of the most talented artisans and craftsmen around the world, it has also attracted free riders who attend the festival without an intent to contribute. Recently, an influx of celebrities and tech executives such as Heidi Klum, Katy Perry and Paris Hilton have flocked to Black Rock City, towing luxurious campsites and private chefs into the desert. These well-heeled travelers have upset the Burning Man community by building extravagant turnkey camps and lavishly partying on “Billionaires’ row.” With tens of thousands of participants in a space where each person is given the ability to freely self-express, it became undeniably difficult for the Burning Man team to manage. Unsurprisingly, the festival soon lost its free-spirited, counter-culture touch and devolved into a capitalist corporate retreat for Silicon Valley tech elites. Rather than participating in the community-building project of Burning Man, these ultra-wealthy individuals placed equipment in other camps and refused to engage with other campers. 

It is not a coincidence that most modern gift economies fail. While healthy gift economies can theoretically produce a more collaborative society, their nature to place absolute faith in the community means they can be easily exploited. Additionally, it can be discouraging to givers if free riders keep taking advantage of their kindness and others fail to participate in the concept’s focus on reciprocity. For more gift economies to succeed and remain successful, all members of the community must be committed to continuing the cycle of giving. 

Christina Peng ’26 can be reached at christina_peng@brown.edu. Please send responses to this opinion to letters@browndailyherald.com and other op-eds to opinions@browndailyherald.com.

Clarification: A previous version of this story contained an incomplete pull quote. This opinion has been updated with the full pull quote.



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