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The radio show we have done for the past year (Financial Impact Factor with Paul Petillo, Dave Kittredge and Dave Ng) has offered a lot of information about investing, how we approach it and how we do it while ignoring the gorilla in the room, our debt. But here we are, nearing Christmas and entertaining quite openly, the implications of debt and gift giving.
Gift giving was often ignored by most social scientists before Marcel Mauss looked at something that exemplifies the season we are in when he wrote his short book form essay “The Gift” in 1924. In it, Mauss argued that gifts are never free. When he did that, he jumped a boundary of sorts by looking at sociology as having an economic element to it.
What if Mauss was right when he argued that gifts are never “free”. In this noted work, he suggested that throughout human history gifts have always given rise to reciprocal exchange. The famous question that drove his inquiry into the anthropology of the gift was: “What power resides in the object given that causes its recipient to pay it back?” Christmas puts us a sort of disadvantage of sorts: we give gifts and we expect them in return, but are we happy when the gift isn’t of equal value or doesn’t seem to reflect the value of the gift we gave? And what do we do when we get a gift that is far more valuable than the one we gave?
“The objects are never completely separated from the men who exchange them” simply stated by Mauss and it was noted that history is full of examples of gifts being strategic. A gift essentially creates a bond between giver and the gift. The act, it could be suggested, of giving creates a social bond with an obligation to reciprocate on part of the recipient. I give you something and yo must, according to the social development of tribes, give you something of equal or greater value. Some ancient peoples actually believed that to not reciprocate meant that they would lose honor and status. Worse than that, these people entertained that there were spiritual aspects to the exchange and when the gods enter the picture, the implications could be even worse.
For example, in Polynesia, failure to reciprocate means to lose mana, one’s spiritual source of authority and wealth.
But we have our own conundrum at play that argues with this thinking, the giving of gifts to strangers. The transaction does not establish a relationship between the two, much less a mutual interdependence. That also suggests that there are different kinds of obligations. A short list might include the feelings of obligation such as having been invited for dinner, being served a fine fast and realizing with every bite that there is no way we could cook like this – so how are we to reciprocate?
And then there is the social obligations, meaning that the social context obliges one to reciprocate, and that a failure to do so would not only affect one’s relationship with the giver but also affect one’s reputation in general. This is found in situations such as offices, among neighbors or even family members once or twice removed. Of course there are obligations that hold a legal context that are established through a legal contract.
Basically, Mauss argues that there is a social element to debt that moves us forward. To be without debt would be to entertain the idea that we hold our own self-interest above the interest of those around us. In other words, indebtedness can be societal bind. If we give, we belong. If we don’t give, we face a certain social isolation. But should we embrace debt to increase our social standing?
Once money became the marker, indebtedness took on new forms. The first interest bearing loans developed in Mesopotamia and do you know what quickly followed: declarations of debt freedom. In Biblical times, it was called the Law of Jubilee. And many of us still live with the thought that our lives are the real principal in the debt equation. being free of debt would in many instances be a relief or would it push us to a point where we feel superior to the rest of the “tribe”?
Marshall Sahlins, wrote an essay, “The Original Affluent Society,” which maintained that the hunters and gatherers of the Paleolithic period rejected the “Neolithic Great Leap Forward” because they correctly saw that the advancements it promised in tool-making and agriculture would reduce their leisure time. This would create a two fold event: one we would not have the where with all to become indebted other than our obvious obligations to the tribe’s well-being and two, that obligation would be free of the guilt usually associated with giving to someone who has less.
So we put on our philosophy hats today at the Financial Impact Factor and discussed the season of gifts and the debt it often creates.
Thomas Meany recently wrote about the nature of debt when he discussed David Graeber, an anthropologist’s new book DEBT: The First 5,000 Years (Melville House, $32). “[It] reads like a lengthy field report on the state of our economic and moral disrepair. In the best tradition of anthropology, Graeber treats debt ceilings, subprime mortgages and credit default swaps as if they were the exotic practices of some self-destructive tribe.” And often we are.
Personal Finance: The Logic of Gifts
The radio show we have done for the past year (Financial Impact Factor with Paul Petillo, Dave Kittredge and Dave Ng) has offered a lot of information about investing, how we approach it and how we do it while ignoring the gorilla in the room, our debt. But here we are, nearing Christmas and entertaining quite openly, the implications of debt and gift giving.
Gift giving was often ignored by most social scientists before Marcel Mauss looked at something that exemplifies the season we are in when he wrote his short book form essay “The Gift” in 1924. In it, Mauss argued that gifts are never free. When he did that, he jumped a boundary of sorts by looking at sociology as having an economic element to it.
What if Mauss was right when he argued that gifts are never “free”. In this noted work, he suggested that throughout human history gifts have always given rise to reciprocal exchange. The famous question that drove his inquiry into the anthropology of the gift was: “What power resides in the object given that causes its recipient to pay it back?” Christmas puts us a sort of disadvantage of sorts: we give gifts and we expect them in return, but are we happy when the gift isn’t of equal value or doesn’t seem to reflect the value of the gift we gave? And what do we do when we get a gift that is far more valuable than the one we gave?
“The objects are never completely separated from the men who exchange them” simply stated by Mauss and it was noted that history is full of examples of gifts being strategic. A gift essentially creates a bond between giver and the gift. The act, it could be suggested, of giving creates a social bond with an obligation to reciprocate on part of the recipient. I give you something and yo must, according to the social development of tribes, give you something of equal or greater value. Some ancient peoples actually believed that to not reciprocate meant that they would lose honor and status. Worse than that, these people entertained that there were spiritual aspects to the exchange and when the gods enter the picture, the implications could be even worse.
For example, in Polynesia, failure to reciprocate means to lose mana, one’s spiritual source of authority and wealth.
But we have our own conundrum at play that argues with this thinking, the giving of gifts to strangers. The transaction does not establish a relationship between the two, much less a mutual interdependence. That also suggests that there are different kinds of obligations. A short list might include the feelings of obligation such as having been invited for dinner, being served a fine fast and realizing with every bite that there is no way we could cook like this – so how are we to reciprocate?
And then there is the social obligations, meaning that the social context obliges one to reciprocate, and that a failure to do so would not only affect one’s relationship with the giver but also affect one’s reputation in general. This is found in situations such as offices, among neighbors or even family members once or twice removed. Of course there are obligations that hold a legal context that are established through a legal contract.
Basically, Mauss argues that there is a social element to debt that moves us forward. To be without debt would be to entertain the idea that we hold our own self-interest above the interest of those around us. In other words, indebtedness can be societal bind. If we give, we belong. If we don’t give, we face a certain social isolation. But should we embrace debt to increase our social standing?
Once money became the marker, indebtedness took on new forms. The first interest bearing loans developed in Mesopotamia and do you know what quickly followed: declarations of debt freedom. In Biblical times, it was called the Law of Jubilee. And many of us still live with the thought that our lives are the real principal in the debt equation. being free of debt would in many instances be a relief or would it push us to a point where we feel superior to the rest of the “tribe”?
Marshall Sahlins, wrote an essay, “The Original Affluent Society,” which maintained that the hunters and gatherers of the Paleolithic period rejected the “Neolithic Great Leap Forward” because they correctly saw that the advancements it promised in tool-making and agriculture would reduce their leisure time. This would create a two fold event: one we would not have the where with all to become indebted other than our obvious obligations to the tribe’s well-being and two, that obligation would be free of the guilt usually associated with giving to someone who has less.
So we put on our philosophy hats today at the Financial Impact Factor and discussed the season of gifts and the debt it often creates.
Thomas Meany recently wrote about the nature of debt when he discussed David Graeber, an anthropologist’s new book DEBT: The First 5,000 Years (Melville House, $32). “[It] reads like a lengthy field report on the state of our economic and moral disrepair. In the best tradition of anthropology, Graeber treats debt ceilings, subprime mortgages and credit default swaps as if they were the exotic practices of some self-destructive tribe.” And often we are.
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