Charles Eistenstein discusses the practice of gift circles:

“Given the cir­cu­lar na­ture of gift flow, I was ex­cited to learn that one of the most promis­ing so­cial in­ven­tions that I’ve come across for build­ing com­mu­nity is called the Gift Cir­cle. De­vel­oped by Alpha Lo, co-au­thor of The Open Col­lab­o­ra­tion En­cy­clo­pe­dia, and his friends in Marin County, Cal­i­for­nia, it ex­em­pli­fies the dy­nam­ics of gift sys­tems and il­lu­mi­nates the broad ram­i­fi­ca­tions that gift economies por­tend for our econ­omy, psy­chol­ogy, and civ­i­liza­tion.

The ideal num­ber of par­tic­i­pants in a gift cir­cle is 10-20. Every­one sits in a cir­cle, and takes turns say­ing one or two needs they have. In the last cir­cle I fa­cil­i­tated, some of the needs shared were: “a ride to the air­port next week,” “some­one to help re­move a fence,” “used lum­ber to build a gar­den,” “a lad­der to clean my gut­ter,” “a bike,” and “of­fice fur­ni­ture for a com­mu­nity cen­ter.” As each per­son shares, oth­ers in the cir­cle can break in to offer to meet the stated need, or with sug­ges­tions of how to meet it.

When every­one has had their turn, we go around the cir­cle again, each per­son stat­ing some­thing he or she would like to give. Some ex­am­ples last week were “Graphic de­sign skills,” “the use of my power tools,” “con­tacts in local gov­ern­ment to get things done,” and “a bike,” but it could be any­thing: time, skills, ma­te­r­ial things; the gift of some­thing out­right, or the gift of the use of some­thing (bor­row­ing). Again, as each per­son shares, any­one can speak up and say, “I’d like that,” or “I know some­one who could use one of those.

Dur­ing both these rounds, it is use­ful to have some­one write every­thing down and send the notes out the next day to every­one via email, or on a web page, blog, etc. Oth­er­wise it is quite easy to for­get who needs and of­fers what. Also, I sug­gest writ­ing down, on the spot, the name and phone num­ber of some­one who wants to give or re­ceive some­thing to/from you. It is es­sen­tial to fol­low up, or the gift cir­cle will end up feed­ing cyn­i­cism rather than com­mu­nity.

Fi­nally, the cir­cle can do a third round in which peo­ple ex­press grat­i­tude for the things they re­ceived since the last meet­ing. This round is ex­tremely im­por­tant be­cause in com­mu­nity, the wit­ness­ing of oth­ers’ gen­eros­ity in­spires gen­eros­ity in those who wit­ness it. It con­firms that this group is giv­ing to each other, that gifts are rec­og­nized, and that my own gifts will be rec­og­nized, ap­pre­ci­ated, and rec­i­p­ro­cated as well.

It is just that sim­ple: needs, gifts, and grat­i­tude. But the ef­fects can be pro­found.

First, gift cir­cles (and any gift econ­omy, in fact) can re­duce our de­pen­dence on the tra­di­tional mar­ket. If peo­ple give us things we need, then we needn’t buy them. I won’t need to take a taxi to the air­port to­mor­row, and Rachel won’t have to buy lum­ber for her gar­den. The less we use money, the less time we need to spend earn­ing it, and the more time we have to con­tribute to the gift econ­omy, and then re­ceive from it. It is a vir­tu­ous cir­cle.

Sec­ondly, a gift cir­cle re­duces our pro­duc­tion of waste. It is ridicu­lous to pump oil, mine metal, man­u­fac­ture a table and ship it across the ocean when half the peo­ple in town have old ta­bles in their base­ments. It is ridicu­lous as well for each house­hold on my block to own a lawn­mower, which they use two hours a month, a leaf blower they use twice a year, power tools they use for an oc­ca­sional pro­ject, and so on. If we shared these things, we would suf­fer no loss of qual­ity of life. Our ma­te­r­ial lives would be just as rich, yet would re­quire less money and less waste.

In eco­nomic terms, a gift cir­cle re­duces gross do­mes­tic prod­uct, de­fined as the sum total of all goods and ser­vices ex­changed for money. By get­ting a gift ride from some­one in­stead of pay­ing a taxi, I am re­duc­ing GDP by $20. When my friend drops off her son at my house in­stead of pay­ing for day care, GDP falls by an­other $30. The same is true when some­one bor­rows a bike from an­other per­son’s base­ment in­stead of buy­ing a new one. (Of course, GDP won’t fall if the money saved is then spent on some­thing else. Stan­dard eco­nom­ics, draw­ing on a deep as­sump­tion about the in­fi­nite up­ward elas­tic­ity of human wants, as­sumes this is nearly al­ways the case. A cri­tique of this deeply flawed as­sump­tion is be­yond the scope of the pre­sent essay.)”

Does the Gift Economy undermine economic growth?

“Why don’t we need each other? It is be­cause all the gift re­la­tion­ships upon which we once de­pended are now paid ser­vices. They have been con­verted into ser­vice work which the mar­ket con­verts into cash. What is there left to con­vert? Whether fos­sil fuels, top­soil, aquifers, the at­mos­phere’s ca­pac­ity to ab­sorb waste; whether it is food, cloth­ing, shel­ter, med­i­cine, music, or our col­lec­tive cul­tural be­quest of sto­ries and ideas, nearly all have be­come com­modi­ties. Un­less we can find yet new realms of na­ture to con­vert into good, un­less we can find even more func­tions of human life to com­modi­tize, our days of eco­nomic growth are num­bered. What room for growth re­mains—for ex­am­ple in today’s ane­mic eco­nomic re­cov­ery— comes only at an in­creas­ing cost to na­ture and so­ci­ety.

From this per­spec­tive, a third con­se­quence of the gift cir­cle and other forms of gift econ­omy be­comes ap­par­ent. Not only does gift-based cir­cu­la­tion sub­tract from GDP, it also has­tens the demise of the pre­sent eco­nomic sys­tem. Any bit of na­ture or human re­la­tion­ship that we pre­serve or re­claim from the com­mod­ity world is one bit less that is avail­able to sell, or to use as the basis for new in­ter­est-bear­ing loans. With­out con­stant cre­ation of new debt, ex­ist­ing debt can­not be re­paid. Lend­ing op­por­tu­ni­ties only occur in a con­text of eco­nomic growth, in which the mar­ginal re­turn on cap­i­tal in­vest­ment ex­ceeds the in­ter­est rate. To sim­plify: no growth, less lend­ing; less lend­ing, more trans­fer of as­sets to cred­i­tors; more trans­fer of as­sets, more con­cen­tra­tion of wealth; more con­cen­tra­tion of wealth, less con­sumer spend­ing; less con­sumer spend­ing, less growth. This is the vi­cious cir­cle de­scribed by econ­o­mists going back to Karl Marx. It has been de­ferred for two cen­turies by the cease­less open­ing up, through tech­nol­ogy and col­o­niza­tion, of new realms of na­ture and re­la­tion­ship to the mar­ket. Today, not only are these realms nearly ex­hausted, but a shift of con­scious­ness mo­ti­vates grow­ing ef­forts to re­claim them for the com­mons and for the gift. Today, we di­rect huge ef­forts to­ward pro­tect­ing the forests, whereas the most bril­liant minds of two gen­er­a­tions ago de­voted them­selves to their more ef­fi­cient clearcut­ting. Sim­i­larly, so many of us today seek to limit pol­lu­tion not ex­pand pro­duc­tion, to pro­tect the wa­ters not in­crease the fish catch, to pre­serve the wet­lands—not build larger hous­ing de­vel­op­ments. These ef­forts, while not al­ways suc­cess­ful, put a brake on eco­nomic growth be­yond the nat­ural limit the en­vi­ron­ment poses. From the gift per­spec­tive, what is hap­pen­ing is that we no longer seek merely to take from the planet, but to give back as well. This cor­re­sponds to the com­ing of age of hu­man­ity, tran­si­tion­ing from a mother-child re­la­tion­ship to earth, to a co-cre­ative part­ner­ship in which giv­ing and re­ceiv­ing find bal­ance.

The same tran­si­tion to the gift is un­der­way in the so­cial realm. Many of us no longer as­pire to fi­nan­cial in­de­pen­dence, the state in which we have so much money we needn’t de­pend on any­one for any­thing. Today, in­creas­ingly, we yearn in­stead for com­mu­nity. We don’t want to live in a com­mod­ity world, where every­thing we have ex­ists for the pri­mary goal of profit. We want things cre­ated for love and beauty, things that con­nect us more deeply to the peo­ple around us. We de­sire to be in­ter­de­pen­dent, not in­de­pen­dent. The gift cir­cle, and the many new forms of gift econ­omy that are emerg­ing on the In­ter­net, are ways of re­claim­ing human re­la­tion­ships from the mar­ket.

Whether nat­ural or so­cial, the recla­ma­tion of the gift-based com­mon­wealth not only has­tens the col­lapse of a growth-de­pen­dent money sys­tem, it also mit­i­gates its sever­ity. At the pre­sent mo­ment, the mar­ket faces a cri­sis, merely one of a mul­ti­plic­ity of crises (eco­log­i­cal, so­cial) that are con­verg­ing upon us. Through the tur­bu­lent time that is upon us, the sur­vival of hu­man­ity, and our ca­pac­ity to build a new kind of civ­i­liza­tion em­body­ing a new re­la­tion­ship to earth and a new, more con­nected, human iden­tity, de­pends on these scraps of the com­mon­wealth that we are able to pre­serve or re­claim. Al­though we have done griev­ous dam­age to earth, vast wealth still re­mains. There is still rich­ness in the soil, water, cul­tures and bio­mes of this planet. The longer we per­sist under the sta­tus quo, the less of that rich­ness will re­main and the more calami­tous the tran­si­tion will be.

On a less tan­gi­ble level, any gifts we give con­tribute to an­other kind of com­mon wealth – a reser­voir of grat­i­tude that will see us through times of tur­moil, when the con­ven­tions and sto­ries that hold civic so­ci­ety to­gether fall apart. Gifts in­spire grat­i­tude, and gen­eros­ity is in­fec­tious. In­creas­ingly, I read and hear sto­ries of gen­eros­ity, self­less­ness, even mag­na­nim­ity that take my breath away. When I wit­ness gen­eros­ity, I want to be gen­er­ous too. In the com­ing times, we will need the gen­eros­ity, the self­less­ness, and the mag­na­nim­ity of many peo­ple. If every­one seeks merely their own sur­vival, then there is no hope for a new kind of civ­i­liza­tion. We need each oth­ers’ gifts as we need each oth­ers’ gen­eros­ity to in­vite us into the realm of the gift our­selves. In con­trast to the age of money where we can pay for any­thing and need no gifts, soon it will be abun­dantly clear: we need each other.”