On the Different Kinds of Human Interactions and the Economies to Which They Give Rise

In “Creating a Culture of Gift” in Conversations on Philanthropy, vol. II, Frederick Turner argues that there are four basic kinds of human economies: market, gift, political, and divine. Each of these has evolved over time, with the market economy evolving through various kinds of systems up through varieties of serfdom to mercantilism to capitalism, the political economy evolving from tribal structures to empires to monarchies to democratic republics, the divine economy evolving from polytheism to monotheism (and for some, to deism and atheism), and the gift economy evolving from intertribal giving to potlatch to alms-giving to philanthropy to the welfare state. That there is an evolution is no indication that the last thing to evolve is the best thing to evolve. Rather, the different stages reflect the different stages of psychosocial development discovered by Clare Graves (and whose research was pursued by Don Beck and Christopher Cowan in their book Spiral Dynamics).

Each of these economies also reflects a different kind of human interactions –with themselves, with others, and with things. Love for the gift economy; sacrifice for the divine economy; master-slave for the political economy; economic exchange for the market economy. The first three have historically been vertical in nature, but each of these three has become increasingly horizontal due, in no small part, to the inherently horizontal nature of economic exchange.

Take the gift economy, for example. In the gift economy, one pursues the true, the good, and/or the beautiful. One does so out of love. There can be love of oneself, love of another, or love of some object or process. Love makes you want to dedicate yourself to the object of one’s love. Of course, in an economy, what is at issue is exchange, meaning there needs to be another involved. There cannot be an economy of oneself. But I love my wife, and I love writing poetry and plays – thus is there an economy set up between my wife and I and between my creative writing and I. In the latter case, part of the purpose of creating art is to share it with others. The artist is bestowing a gift on humanity. So, too, the scientist who, out of love of knowledge, bestows a gift of knowledge on humanity through his discoveries. So, too, the ethicist who, out of love of virtue, bestows a gift of clarifying or expanding ethical principles on humanity. Each is a kind of philanthropist. And the philanthropist commonly understood too is doing what he does out of love of humanities – philanthropy literally means “love of man.”

The love one feels for one’s wife, parents, children, family and friends are all a sort of horizontal exchange – the love flows bidirectionally. Philanthropy, though, is typically unidirectional. There is the giver and the recipient. This creates a vertical exchange. With horizontal love, the point of love given is love received. With vertical love, however, the point is to develop a reputation. The scientist, to continue to work as a scientist, has to have a good reputation as a scientist. The same, too, for an artist. And would you donate to any philanthropic organization that did not have a good reputation? Of course not. Reputation is central to the gift economy. However, this is also its danger. Reputation-seeking can get out of control, as it did in the potlatches held by the Native Americans in the Northwest. In the potlatches, the more one gave, the stronger one’s reputation, and the more status one had. Indeed, one can see each of these economies as different kinds of status-seeking behavior. A result, though, was that chiefs would give away so much they would impoverish themselves just to have higher status. This of course was harmful to both themselves and their tribes’ well-being.

In the divine economy, the form of interaction is sacrifice. This is how we trade with the divine. Almost by definition, this is a vertical exchange. Most religious traditions, though, do see this as a mutual kind of exchange. We sacrifice to the divine in order to receive gifts from the divine. If you want God’s blessings, you have to tithe. The kinds of sacrifice have evolved over time, from human sacrifice to animal sacrifice to other kinds of property, including money. The story of Abraham being asked to sacrifice Isaac is a story of the replacement of human sacrifice with a combination of animal sacrifice and circumcision. The story of Jesus on the cross is a story of a one-time return to human sacrifice (or, technically, divine sacrifice) in order to replace animal sacrifice and circumcision with the sacrifice of nonliving material goods. Sacrifices are done to things one considers to be “higher” than oneself. Thus people sacrifice themselves to ideals, such as liberty or nationalism. Of course, those who sacrifice the most end up having the highest status. Thus the high status of Abraham and Jesus, or of people like Mother Theresa, Martin Luther King, Jr., etc. In the last two, their high status is also due to their participation in the gift economy, in their pursuit of the good.

In the political economy, the form of interaction is master-slave. Even elected officials have power positions over those who elected them (in many ways, the bureaucrats even more so), and that is a master-slave relationship. In Western Culture at the American Crossroads (2011), Pontynen and Miller summarize Hegel’s (Phenomenology of Mind, 1807) master and slave mentalities as “The master lives off the slave’s labor, but it is the slave who transforms reality vial labor. The master, who consumes, destroys, whereas the slave, in working, creates. He slave fears death at the hands of the master, and that fear of death results in creative production, which constitutes civilization” (197). This sums up the political economy quite well, no matter what form it takes. This also sums up the postmodernist view of all human interactions as power relations. If you have a power relation, you have a master-slave interaction. This is why everything in our postmodern age is politicized. For the postmodernist, everything is politics. This is also what drives the increasing centralization and government takeover of every aspect of life. If you believe everything is power relations, meaning every interaction is master-slave, then everything is always already politicized.

Finally, there is the market economy, in which economic exchange is how humans interact. All economic interactions are mutual, or else both parties would not agree to the exchange. As such, economic exchanges (facilitated by money), are the most radically egalitarian of any of these forms of interaction. There are scale free network effects in market exchange, though, such that those who engage in these forms of exchange the most accumulate the most money, in a rich-get-richer effect. However, just because the rich get richer, that does not mean the poor get poorer. Quite the contrary. Both parties in an economic exchange are better off, meaning the poor get richer too. The difference between a rich and a poor person in the market economy is the number of economic exchanges one has participated in. But money is always circulating, and both parties are better off for having engaged in economic exchange. The same cannot be said of other forms of exchange. One hopes the divine reciprocates; one has to be wealthy to give; in the master-slave relationship, money moves one way only, meaning the rich get richer while the poor get poorer.

It is important to understand these differences and distinctions, because muddling them has caused a lot of terrible problems in our world.

Marx (and other postmodernists) mistakenly believed the master-slave interaction to represent the market economy as well as the political economy, which is one reason Marx rejected the market as well as the political economy (he does call for political anarchy, after all), thinking both could be turned into some sort of rationally constructed gift economy. However, it is the market economy in which egalitarian relationships truly exist, not the gift economy. More, the “anarchy of production” Marx so hated was and is anything but – complex self-organization is the rule in/of the market. So it is not surprising Hegel’s dialectic results in the state as its endpoint – which is also why Nietzsche rejected Hegel’s teleology and argued the tensions never disappeared, as those tensions are what drives processes.

The politician asks us to sacrifice (divine economy) to help others (gift economy). But they never outright ask you to give them power over you (political economy), even though that is really what they want. At the same time, businesses and the rich (market economy) are often vilified by both left and right. As pointed out above, the divine, political, and gift economies are typically vertical relationships, while the market economy is a horizontal relationship. A politician wants to hide the power/master-slave interaction they desire to have behind the rhetoric and masks of the non-power-based vertical divine and gift economies. The gift economy is vertical to the extent that there is a giver and a recipient – the exchange is not mutually beneficent in the same way as is an economic exchange. However, gifts can be exchanged, so the giver-recipient hierarchy is reversible in a way divine and political exchange cannot be. I will note, though, that with increasing democratization, political exchange becomes increasingly horizontal.

Let us next look at some of the implications of these divisions.

We have divided human interactions into love, sacrifice, master-slave, and economic exchanges. Sex plus love is romance; sex plus sacrifice can still be found in various cults (in ancient times, the temple prostitutes); sex plus slavery to one’s desires is promiscuity (sex plus slavery is, well, sex slavery); sex plus economic exchange is prostitution. With love one aims to benefit the other; with economic exchange one benefits the other as one benefits oneself; with sacrifice one trades with the divine; with slavery, one benefits oneself at the expense of another.

Philanthropy is done out of love. Alms are given in divine sacrifice to help the poor. In government welfare programs, you have a combination of economic exchange (bureaucrats) and slavery (taxpayers), facilitated by legislators (masters) using the language of sacrifice. Elected officials do what they do to maintain power, and a power-relationship (vs. a love of economic relationship) is essentially a master-slave relationship.

If one paints out of love, one is an artist. Medieval churches are full of art made as sacrifice by the artists; the ancient Greek idea of being visited by the Muses makes artistic creation a divine exchange. Is one an artist if one paints due to compulsive behavior (to which one is a slave), or if one is forced by a government to include certain content and censor other content? Is one an artist if one paints only for money, but would immediately stop painting if the money stopped rolling in? We should not be surprised if the last two are so rare as to sound absurd. They indeed sound perverse to us. Why is this? It is because the arts are naturally part of the gift economy, perhaps even of the divine economy, and do not belong in the political or market economies (in regards to the latter, why then sell your paintings? – the patron pays to show appreciation, while the artist sells because, after all, one does have to have a place to live and to eat and to have the supplies to make more art!). The artist creates out of love of beauty; the scientist works out of love of truth; the ethicist works out of love of the good; the philanthropist works out of a love of any of these, or some combination of all three. To politicize these things is to pervert them. To turn them into economic changes is to (ironically) devalue them. But we can turn this around, too, as what ought to be part of the market economy is destroyed or devalued by politicization and/or trying to make it a part of the gift economy.

Each of these economies are based on different kinds of human interactions. These different economies – which can and do have different kinds of spontaneous orders within them – have different roles, different purposes. They are not entirely separable at times, but when we confuse them, or try to make everything part of one kind of economy, we create problems. It may be that we want to combine the gift economy with the political economy for certain things, such as in the creation of the welfare state. Or perhaps, doing so was a mistake. I think the arguments will be improved if we understand, in any case, these different kinds of human interactions, and the implications behind them and the consequences of them.