The Gift Economy and how it works in American politics

For about two years, I have been posting on I thought it was an interesting concept. Steemit was a place where you could earn money with your blog posts, your comments and your votes. Many people claimed it wasn’t fair by design, that it only favored a certain few who, early in the development of Steemit, amassed fortunes due to very large reward calculations. We now call them “Whales”.

One of the ideas of Steemit was that their environment and philosophy would promote quality content. But there was so much self-dealing and coordinated voting that there arose groups of people who would police all that. Still, the people who thrived the most on Steemit would often post very high quality content, and they interacted a great deal with their followers and the people who posted comments in response. Then when they felt they needed a break, they’d post a picture of their cat doing something funny, and still, they’d ring up a few hundred bucks just for that.

Was that fair? If we’re talking about a system based on merit, probably not. But if we’re talking about a gift economy, then perhaps so.

I had thought this was all very unusual, and that the gift economy didn’t promote blogging quality in the sense that the art of writing was to be rewarded on the merits alone. Yet there was one fellow who made sense of it if all, and he wrote a long and very interesting article to show that Steemit was fair, and that it was a gift economy.

He demonstrated what a gift economy was by telling a story about how he used gifts to build his business. He sold web hosting subscriptions for a business. To promote his business, he developed a series of videos, educational tools designed to help people learn how to build websites, and he offered them all for free (well, in exchange for an email address). He found that many people actually succeeded using what they learned from his videos, and since he was selling a web hosting service, they would often purchase a subscription from him.

I think that what he did was genius. I also know that by now, you’re wondering what this all has to do with politics.

Unsolicited gifts imply nothing but a gift. When we get a gift for Christmas or for our birthday, there is no implied obligation. Someone loves us and they want to give us a gift. End of story.

Politicians, on the other hand, spend a lot of time fundraising. We have fairly reliable estimates that most members of Congress spend up to 60% of their time on the phone asking for money from members of the donor class. We also know that better than 60% of the super PAC money spent in recent election cycles was donated from approximately 0.02% of our population. A fellow named Larry Lessig did that research and he has demonstrated these dynamics in numerous videos on YouTube.

Lessig has also followed a long line of court decisions that have brought the big money out for politics. Over the last 20 years or so, people in favor of “money as speech”, have been chipping away at election finance laws to make it easier to make large, anonymous donations to political campaigns. And their main argument is that there is no quid pro quo — there is no direct relationship between the money and the vote.

When we look through our mail and receive a pamphlet of coupons, we interpret them as discounts, but they really are gifts. When someone helps us, we feel obligated to help them back. And when someone sends money in support of our campaign, either directly or indirectly, we feel obligated to reciprocate in kind by casting a vote in alignment with the interests of our benefactors.

The problem is this: acceptance of a large donation from a small class of voters implies an obligation to reciprocate, irrespective of the merits of the requested action. This means that a small class of wealthy voters can influence legislation with money rather than merit. Those in the donor class have written custom legislation and made payments to get that legislation passed, and I’ve seen numerous examples of this as a political observer.

The funny (well, not so funny) thing about this, is that it doesn’t matter which party you’re in, or which side you’re on. If you take a large sum of money from a wealthy interest, you’re going to feel an obligation to vote their preference, not yours, and certainly not the preference of the majority of your constituents.

No matter how principled you think you are, if you take that large donation, there will always be a feeling of obligation. There will always be this unease that the donor could just put his money somewhere else, in opposition to you. The donor class is counting on this sense of obligation or they wouldn’t make the donation. And the empirical evidence bears this out.

To me, it makes perfect sense now. The income inequality we see in America today, is not how the economy works, its a result of a very long series of public policy decisions made for the benefit of the people who can afford to buy the votes. And it’s a positive feedback loop. So unless it’s arrested, most of the wealth will wind up in the hands of a very small few. That is what we’re seeing now where the 3 richest people in America own as much as the bottom 50%.

The polarization of our country is a direct result of income inequality. The gift economy is everywhere. And if most people are scrapping by, they don’t have money for gifts, and that makes people miserable. Who wants to go into hock just for Christmas? Now I remember that the idea of Secret Santa got started during a recession.

The gift economy in politics is great if you’re wealthy. If you’re not, you’re out of luck. This why there is genius in what Bernie Sanders and many of his followers are doing: they are only accepting small contributions and no PAC or super PAC money. They do not accept big money from corporations for a reason: not only do they not want that sense of obligation hanging over their heads, they don’t even want the appearance of a conflict of interest in taking that money. Small donations from a very large population says, “I work for all of you”.

Lessig has mentioned many times that, according to James Madison, one of The Framers of the Constitution, “the members of the House should be dependent on the people alone, neither the richer nor the poorer”. I find it interesting that Republicans who claim to be “Originalists”, people who care about the original intent of the people who wrote the Constitution, seem to have overlooked this important point about campaign financing. But it is clear, that despite the latitude now provided by the laws, that Sanders and his following, they get this. They have voluntarily made themselves dependent on the people alone.

This principled stand, to eschew big money in politics is something that I look for in people in office now, or people who are seeking office. I encourage you to do the same.

Write on.

Written by

Husband, father, worker, philosopher, and observer. Plumbing the depths of consciousness to find the spring of happiness. Write on.

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