Conversation 11: French Perspectives on the Origin and Logic of the "Philanthropic Order": A Critical Account 
—Laurent Dobuzinskis
Individuals act more or less simultaneously as economic agents, citizens, and participants in civil society. Their interactions and their ways of fulfilling these roles take many forms. Not all of them can be said to be self-organizing, yet in several instances patterns of organization emerge spontaneously without being deliberately designed. Of course, the market economy—or “catallaxy,” as F. A. Hayek called it—remains the best example of such “spontaneous orders.” But there are others. Gus diZerega (2000), for example, has identified science and democracy as being similarly constituted by self-referential, self-organizing (some authors prefer the termautopoietic) processes. In this paper I focus on what I call the philanthropic order. By this I intend to refer not only to the activities of philanthropic foundations and of individual donors but also more broadly to a whole range of processes that allocate material and symbolic resources through nonmarket mechanisms fuelled by more or less explicitly altruistic motivations. Various phrases or terms have been used to describe part of this, or something similar to what I have in mind: the voluntary or nonprofit sector, “social capital,” and civil society more generally.
The philanthropic order complements the catallaxy by creating and reproducing the social capital that is essential to the market process. Without trust, for example, economic agents incur high transaction costs and entrepreneurial initiative is thwarted by lack of funding and other obstacles. But in other ways the philanthropic order rests on relationships and produces values that are desired in and by themselves. Economic gains and, more broadly, prudential goals rank high on most peoples' agendas, but they certainly do not exclude others that are often even more compelling, such as seeking affection or self-regard, meeting ethical obligations, etc. Within the nebulous noneconomic sphere, the giving and receiving of gifts creates networks that enable individuals to interact in meaningful ways with friends and neighbors, but also—and this is a rather recent development—with strangers.1 These ties give rise to a “civil society” which exists more or less precariously between the commercial sphere and the state.
How such networks, linking individuals, groups, and organizations by means of diffuse cultural norms, emerge and compete with or complement the market order is a question that looms large in French social and economic thought. In fact, it would hardly be an exaggeration to claim that while the Scottish Enlightenment invented the paradigm of the market as a spontaneous order and Austrian economics perfected it, the French—or, at any rate, a certain current of progressive liberalism distinct from the more constructivist tradition that Hayek so relentlessly criticized, from Montesquieu, Emile Durkheim, and Marcel Mauss to Serge-Christophe Kolm (to mention only a few standard-bearers within that current2)—have deepened the idea of civil society as a spontaneous order emerging from nonmarket interactions involving honor (“noblesse oblige”), gift-giving, solidarity, and, generally, nonutilitarian values and standards of judgment. This paradigm is not radically anti-statist, but it treats the state in an instrumentalist or pragmatic manner, granting it no more powers or responsibilities than are needed to resolve vexing collective action problems such as alleviating poverty and remedying severe economic inequalities, provided that these goals are subject to philosophical and constitutional constraints intended to preserve liberty and private property.
The exploration of all the origins and ramifications of this admittedly rather nebulous vision (which probably does not qualify as a fully developed “paradigm”) is too vast a topic to be dealt with exhaustively here. My goal is more limited: to critically analyze contributions made by two French theorists to the discussion of gift-giving and altruism. They are, respectively, the early twentieth-century social theorist Marcel Mauss and the contemporary economist and philosopher Serge Kolm. References to other (mostly French or francophone) authors are unavoidable, but there are good reasons to focus on these two thinkers. A reading of Mauss's writings on gifts and their social significance is a sine qua non first step in any investigation of the philanthropic order. As Philip Mirowski (2001, 438) put it, “[i]n economic anthropology, all roads to the gift lead back to Marcel Mauss.” But precisely because Mauss’s seminal The Gift has been so often quoted and put to all kinds of uses, it is necessary to try to recover some of the subtleties of his thought that are frequently ignored. (There is a tendency to summarize his thesis as simply being that the gift economy is the functional equivalent of the market economy for premodern societies.) Kolm's rather prolific reflections on altruism and reciprocity offer very valuable insights from an economic perspective on the philanthropic order (1982; 1996; 2000a; 2000b; 2005; 2006). Economics is admittedly not the only nor perhaps even the most relevant perspective on the philanthropic order, since phenomena such as gift-giving entail a broad range of motivations and effects, many of which have little to do with rational calculations. Nevertheless, in addition to the economics of gift-giving being a crucial dimension of this process, Kolm's original and profound vision—normatively guided by Buddhist ethics—provides one of the best examples of recent efforts on the part of many economists to move beyond conventional models.
While in broad terms these authors work within a spontaneous order paradigm, their interpretation of what that means differs significantly from the more libertarian overtones of the Hayekian version. In fact they occasionally deviate from the values that inform the latter at some critical junctures. Some of these deviations are open to criticism, while others may be worth looking into in order to reach a less reductionist understanding of spontaneous orders in all their forms. In Mauss's case an analysis of gift-giving in “archaic societies” which strongly evokes the notion of an invisible hand producing societal peace out of the gift-giving initiatives undertaken by individuals on their own is followed by an exaggeratedly and somewhat naive “constructivist” proposal for adapting such practices to modern conditions. As for Kolm's outlook, it can be described as offering a left-libertarian perspective, albeit a quite idiosyncratic and original one. He starts from an axiomatic acceptance of the primacy of liberty, but his unrelenting quest for ways of correcting what he regards as unjustifiable inequalities3 leads him to advocate critical positions that deserve to be carefully examined.
The Maussian Gift: A Societal Archetype
It would be difficult to overemphasize the importance of Mauss's ([1925] 1966) essay on gift-giving. While not based on his own field research, this curious work provides a wealth of information, most of which is scientifically sound even by today's standards, on practices ranging from those of the Haida and Kwakiult peoples in the American Northwest to those of the inhabitants of Polynesian islands, as well as social and legal norms in the Indo-European world, including India, ancient Rome, and modern Europe. Mauss never provided a formal definition of gifts, but one gets the impression from the opening pages that he was concerned with services rendered through acts of reciprocal generosity. To describe these transactions—which take the form of gifts but serve more important functions than what modern individuals understand by that term—Mauss used the French word prestations. This term is difficult to translate. The first published English translation of The Gift reused “prestation,” which not only is rarely used in English but, when it is, evokes a monetary exchange, which is not necessarily the case in French. A more recent translation redefines these interactions as “total services,” in light of their functionality in the context of the “total social phenomena” or “total social facts” Mauss claimed he was uncovering. (This phrase, incidentally, should not be read as a claim that he had constructed an all-encompassing theory of a preordained totality called society that would stand above individuals and determine their behavior; instead it should be read as an allusion to the multidimensional character of social interactions4 and the need to remain attentive to the contexts within which they take place. See Gofman 1998.) These “total services” appear to be strangely paradoxical: “Among all these very complex themes and this multiplicity of social ‘things’ that are in a state of flux, we seek here to study only one characteristic—one that goes deep but is isolated: the so to speak voluntary character of these total services, apparently free and disinterested but nevertheless constrained and self-interested” (Mauss [1925] 1990, 4).
More specifically, at the core of Mauss's theory of the gift is a triangular relationship constituting three interdependent “obligations”5: to give, to receive, and to reciprocate. Many people in North America are familiar with the “potlatch” ritual practiced by the aboriginal people of the northern Pacific coast, in which vast amounts of food and other goods are periodically given away by families to other families within the “tribe” or beyond. This is one of the examples to which Mauss comes back repeatedly to illustrate this triple obligation. “One has no right to refuse a gift, or to refuse to attend the potlatch” (52), he writes, and the obligation to repay lies at the very core of this institution, although that obligation is veiled behind the delay before the repayment is enacted.
In contrast to the potlatch, we tend to think of gifts today as being typically disinterested acts. To give in such a way that we make it known that we expect something in return spoils the act of giving and is regarded as hypocritical. This is true not only in our relationships with our family and friends but also regarding contributions to philanthropic causes. It is not uncommon for donors to request anonymity, and when this is done it is generally considered to be a highly moral act. (However, as Lior Jacob Strahilevitz points out (2007), anonymous gifts are more likely to be offered when there is “excess capacity”; donors are more likely to want recognition when giving is very onerous.)
A reading of Mauss's take on this question that has immediate appeal but which is actually somewhat simplistic (more about this below) is to conclude that he showed that “archaic” societies differ fundamentally from modern ones in that the former practice reciprocal gift-giving while in the latter gifts have become disinterested; in other words, the paradox cited above is a paradox only for modern observers. Or to sharpen this contrast, one could say that now that commercial exchanges have become the most common form of allocating goods and services, gifts exist only at the margin of the market economy and derive their significance precisely from the fact that they are disinterested, in contrast to premodern societies in which the “gift economy” prevailed. Thus some “interests” have to be accommodated by the gift economy because they cannot be accommodated outside of it.
There are two ways in which this somewhat facile interpretation of the Maussian gift needs to be qualified. They both point toward a deep connection between the rituals that surround gift-giving, on the one hand, and the very idea of spontaneous order. The first is that Mauss showed that the “prestations” or services exchanged were “total” in the sense that they were not strictly economic but also had a symbolic and spiritual significance. The second, and related, qualification, which has been highlighted by Jonathan Parry (1986), invokes religion, and more specifically the unique character of religions that promise salvation in an afterlife. In societies where such religious beliefs prevail, “pure” gifts are valued as means of ensuring salvation (for example, Jesus's saying about giving alms, “let not thy left hand know about what thy right hand doeth” in Matthew 6:3); by “pure” gifts I mean those that do not require reciprocation, at least not in this world. Some indirect benefits, however, are promised to righteous donors, for instance through the law of danadharma (the Hindu law of religious gifts) or in Christianity, especially in Calvinism, where the benefactor's disposition to give generously is a confirmation to him- or herself of having received the gift of grace.
Mauss was aware of the difference between animist premodern societies and either premodern or modern societies that have a belief in salvation through good deeds. He was alerted to it by his erudite knowledge of Hinduism, where it is seen as dangerous for Brahmans to receive gifts because giving to them is a way to cast away the donor's sins (Mauss [1925] 1990, 70-77; Parry 1986, 459-463). However, this poses a problem for him (albeit one that he did not fully realize, at least according to Parry) insofar as his explanation of the deeper structure of gift-giving grants a good deal of importance to the Maori notion of the hau, the “spirit” of the object being given, which must return in the form of a counter-gift. Parry (1986, 463) notes the contrast between religions in which the divine is immanent in nature or human experience and those where the divine assumes a transcendent character: “[w]here we have the 'spirit', reciprocity is denied; where there is reciprocity there is not much evidence of 'spirit'.” Thus it may well be that we ought to reverse our commonsense view of the causal link between the commercial and noncommercial spheres. Instead of the latter being a residue left when the former has overtaken the social space, Parry claims that Christian civilization, where “the ideology of the pure gift” arguably took the most universalistic expression, has tended to “promote and entrench the ideological elaboration of a domain in which self-interest is supreme.” In other words, the commercial and noncommercial spheres of social life are tied in a close dialectical relationship which does indeed survive even in our more secular times. At least conceptually, at the level of collective representations, the commercial and the philanthropic order are mirror images that serve to define each other.
An exegesis of the preceding remarks applied to spontaneous order could be developed along two lines. The first, with respect to Parry's thesis, explicitly refers to divine providence: it is divine providence that guides the invisible hand taking from believers in this world and giving them back their due not only in eternal life but also in this world in the benefits of a clear conscience and so on. On the other hand, in the premodern cultures upon which Mauss focused most of his efforts, the invisible hand is moved by the “spirit” of the gift, which makes it circulate among the members of the group. It was especially in these cultures that the gift economy was most developed, because in premodern societies where there existed a polar opposition between pure gifts and commercial transactions the exchange of reciprocal gifts was not coterminous with the economic sphere as a whole. Even in these societies, however, the categories had a tendency to overlap, and in any event reciprocity played a larger part than it does today because many markets (e.g., markets for services) did not exist. In all these cases, however, more or less “pure” gifts were not only a way of allocating economic resources but also were parts of religious rituals and duties as well as political relationships. In other words, gifts had a foundational role: they helped to cement sociopolitical networks that sustained more or less sizable or extended communities. As Mary Douglas notes, Mauss's genius was to recognize that in the “archaic” societies he studied the gift economy was both the product of spontaneous collaboration and something more than a merely economic process:
He also discovered a mechanism by which individual interests combine to make a social system, without engaging in market exchange. This is an enormous development beyond Durkheim's idea of solidarity based on collective representations. The gift cycle echoes Adam Smith's invisible hand: gift complements market as far as it operates where the latter is absent. Like the market it supplies each individual with personal incentives for collaborating in the pattern of exchanges. Gifts are given in a context of public drama, with nothing secret about them. . . . In operating a gift system a people are more aware of what they are doing, as shown by the sacralization of their institutions of giving (1990, xviii).
One of the reasons exchanging gifts can become a sacred moment is that gift-giving brings peace, both within the community or association of clans (“the tribe”) and among tribes, for example when chiefs meet and when tribal feasts take place among rival groups (Mauss [1925] 1990, 37, 104-107). In Jacques Godbout's words, the Maussian gift is “a mode of transforming conflict into alliance” (1998, ix). This is obviously a vitally important political dimension of the act of gift-giving, which brings to light why Mauss considers it to be a “total prestation.” Nonetheless, Mauss is not talking about the social “totality” acting as a transcendent unity but about the acts of identifiable individuals (chiefs, clan patriarchs, and so on). In sum, there are interesting parallels between Mauss's paradigm and Hayek's idea of spontaneous order as originally defined by Adam Ferguson as something that is the outcome of human action but not of human design.
The Continued Relevance of the Maussian Paradigm
In the final and arguably rather confusing chapter of his essay, Mauss attempts to show that gift-giving remains an important facet of modern societies.6 He begins by alluding to a few customs he observed in rural France, which he offers as evidence that reciprocal gift-giving involving a whole village continued to be a way of life, and he notes that in his lifetime there were still customs indicating the belief that things have personalities (as seen, for example, in rituals performed in Lorraine when cattle was sold). He then moves on to argue that modern societies must find ways to “return” to the habit of noblesse oblige: “As is happening in English-speaking countries and so many other contemporary societies . . . the rich must come back to considering themselves—freely and also by obligation—as the financial guardians of their fellow citizens. . . . [T]here must be more care for the individual, his health, his education (which is moreover a profitable investment), his family and their future” (1990, 88).
The way to implement these goals, in his view, was through social legislation. He believed that the responsibility for the circulation of wealth in society had fallen on the state. In fairness, Mauss showed a marked preference for “various systems of financial sharing within the framework of workers' unions or professional associations” (Silber 1998, 136), and he mentioned approvingly the rather paternalistic practice of “family funds” set up by employers. Nonetheless, he was clearly under the impression that centralized state provision of social services was the most plausible way of bringing back the ethics of the gift. On closer examination, neither his idea that an emphasis on gift-giving implies a “return” to a long-gone past nor his views on how the circulation of wealth is or ought to be carried out in modern societies stand up to critical scrutiny, as explained below.
Gifts Everywhere . . .
Some analysts insist that the gift continues to have a haunting presence in today's consumer society. While not at the forefront of socioeconomic discourse or always very evident in institutional rules and practices, the “ghost of the gift” stirs powerful emotions and makes us realize that something is missing in our everyday lives, they argue (Callari 2002; Derrida 1992; Kenway et al. 2006). The gift haunts us, as it were, because we sense that in at least some cases it could still be an alternative to market exchanges but is often unspoken, unacknowledged, and confined to the domestic sphere. The gift is perplexing because we do not always know how to assess its value: it is located partly within the market economy, where gifts are purchased and their price is sometimes all that matters to the receiver, but also outside of it insofar as they are meant to cement relationships that are not commercial by definition. Market prices are often a poor indication of the true meaning of a gift, and its “use value” is frequently negligible (gifts offered or received with much joy may in practice be redundant or possibly even something of a nuisance). Philip Mirowski (2001) in fact argues that the gift hints at what is deficient in the prevalent value regime, using an analogy with Gödel's paradox: something that can be stated within the system (in this case, the market-based value principle) cannot be computed or proven within it; thus gifts which are free (something for nothing) can be thought of outside the system but “cannot be adequately encompassed within it” (455).
These are intriguing perspectives on what is admittedly something of a mystery: the obvious anomaly of gift-giving in a world where market transactions are more efficient. But it would be a mistake to think of the gift only as a paradox or a ghost, let alone “an impossibility” (Derrida 1992). There are two ways of undermining the thesis that we can only perceive the shadows of an ancient tradition of gift-giving and sharing. The first relies on a descriptive account of contemporary socioeconomic practices and emerging trends. This is the path I follow next. The second consists of a more abstract discussion of theoretical innovations that are bringing concepts such as altruism, reciprocity, and fairness back into the discourse of economics. This is the path I follow later, in the section titled “Serge Kolm on the Mechanisms Sustaining the Philanthropic Order.”
Casting a more prosaic look at social realities in contemporary developed societies, Godbout (1998, 6) brings up a myriad of anecdotal but telling examples that lead him to declare “the gift is everywhere.” Much of what is given in the form of personal gifts, hospitality, time commitments, and so on has a more symbolic value than a monetary one, and what is measurable in theory is not necessarily recorded in official statistics. Nevertheless, even if it only represents the proverbial “tip of the iceberg,” what is known about charitable contributions shows that the phenomenon is far from negligible. For example (see Schuyt 2008), in ten European countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Spain, and the UK), charitable donations by households, foundations, and corporations amounted to about 0.88 percent of GDP between 1995 and 2005 (and rose at a very slow pace during that period). That percentage is higher—about double—in the United States. Donations to charities in the United States increased significantly in recent years, from 1.5 percent of personal income in 1995 to 2.1 percent in 2001 (Andreoni 2006, 1207), and already more than ten years ago the voluntary sector accounted for 4 percent of employment in Great Britain and 7 percent in the United States (Offner 1997, 450). In Canada alone the voluntary sector employed about 900,000 people at the turn of the millennium, equivalent to the total employment in the provinces of Newfoundland, Nova Scotia, and New Brunswick, and more than in construction and mining combined (McMullen and Schellenberg 2002). Paralleling these trends, the growth of the scholarly literature on philanthropy, altruism, “social capital,” and related topics in economics, sociology, and other social scientific disciplines has been quite impressive. New journals have appeared (such as Conversations on Philanthropy and Chronicle of Philanthropy), and new programs have been created (such as the University of Bologna's Master’s Degree in International Studies in Philanthropy and Social Entrepreneurship).
The most intriguing and portentous trend at work today, however, stems from the technological revolution in communications. The so-called Digital Age opens opportunities for a wide range of new nonmarket exchanges. Already a vast array of goods (such as software, music, newspapers, and magazines) is offered for free on the Internet. It is not just the fact that more products are made freely available that deserves attention; equally interesting is the emergence of new social behaviors and motivations. As Jane Kenway et al. (2006, 72) remark, “The notion of Open Access, particularly the push toward OA research literature, demonstrates key features of a gift economy. In this system, if knowledge is used then its use must also be repaid, or returned to the site of circulation (i.e. go back into e-print repository and open access journals).”
Yochai Benkler (2006) picks up on similar observations to propose a bold and arguably slightly too optimistic vision of a future transformed by new modes of “social production.” By that he means dispersed production activities largely under the control of individuals, as opposed to centralized organizations, taking place outside of conventional markets or state institutions. To some extent these activities already have displaced current economic structures, and Benkler strongly argues that they will continue to do so. They also promise to increase individual freedom and opportunities for meaningful social and political engagement while opening up new avenues for alleviating some of the disparities that plague relations between the developing and the developed worlds.
Benkler's comprehensive and thorough analysis of the “New Information Economy” bears not only on the economics of social production but also on the attitudinal and behavioral factors undergirding it. These are already having a profound impact on culture and politics. Clearly, as Benkler notes, “the relative economic role of sharing changes with technology” (2006, 121).7 The old industrial structure built on centralized commercial organizations “shunted sharing” (2006, 121), he observes. However, now that many of the barriers have been removed, sharing can be expected to flourish if Benkler is correct in believing that sharing expresses an irrepressible aspect of human nature. (It is important to acknowledge, however, that people are more likely to share or donate time than money. See Liu and Aaker 2008.) This trend is facilitated by the fact that the capital costs faced by individuals who wish to produce and exchange knowledge or cultural artifacts on their own or in cooperation with others have decreased significantly, to the point of becoming negligible. (This may not be true in the poorest regions of the world, however.) This trend will not cause the market economy to collapse, but incumbent market-based firms now face unprecedented challenges. Transaction cost theory, however, suggests that new strategies of symbiotic coexistence between social production and the most innovative firms will arise. Because information is simultaneously both an output and an input that can be reused by others for their own purposes, some firms already anchored in the information economy could benefit from using free inputs of superior quality applicable to new business operations.8 IBM, for example, uses the open source Linux operating system for its servers and has refocused its entire business plan on serving these machines.
The new push to broaden the protection of intellectual property is clearly Benkler's bête noire.9Information, he insists, is not like other goods. The more freely it flows, the better off we all are, and technological developments make it increasingly possible for it to flow freely. Thus he sees the development of a new information economy as being dependent in large measure on a revisiting of the old concept of the “commons” (2006, 63). This context would allow cooperation to flourish among individuals seeking goals other than monetary rewards, freely producing information and using it to innovate. In the political realm, the emergence of a networked public sphere has already enhanced the freedom of individuals to participate in the political process, which became very apparent in the recent presidential campaign in the United States and also elsewhere.10 Benkler fervently hopes that the new technologies will continue to strengthen civil society, and that the state, while still indispensable in some respects, will become less and less relevant to citizens freely cooperating on a range of civic and political projects. The liberal “public sphere” he describes is a forum for free discussion in which yesterday's mass media will be less and less able to set the agenda.
This is an appealing vision, and Benkler rather convincingly refutes some of the earlier criticisms provoked by more utopian accounts of the digital future. For instance, he argues that the specter of a new Tower of Babel can be avoided by establishing accreditation filters, as several popular websites have done already. His optimism, however, obscures some of the obvious problems that may arise when vested interests and political groups find it necessary to launch a counterattack. Repressive regimes such as the government of China seem to have been more successful at that than was expected at the dawn of the Digital Age. It is not entirely clear, either, that the public at large, as distinct from highly motivated activists, will take ownership of this networked public sphere in their everyday lives. Nonetheless, Benkler has shown that in addition to the continued presence of a philanthropic impulse, new and powerful technological developments give us reasons to doubt that Mauss correctly diagnosed the passing of the world of the gift. I now turn to a critique of Mauss's insistence that state-centered social policy was the only way to reinvent it.
But No Gifts from the State
Mauss's idea that giving has been transmogrified into the institution of the welfare state in modern times must be taken with a huge grain of salt. While strict libertarians no doubt disagree with the following, there are good reasons to believe that the state has a responsibility to ensure that no one falls below a certain level of income, and that the remedial measures can take the form of universal grants (a basic income scheme). It is probably also true that for some forms of insurance, in particular health insurance, state funding (albeit not necessarily management and delivery) yields efficiencies of scale. In these instances, state intervention provides viable solutions to collective action problems (inherent in the free rider's tendency to give only if everyone else does so too, which might actually be motivated by an evolutionary sense of fairness). I will return to this point in the next section. To posit, however, as Mauss did, that the only way for modern people to recover the social bonds he observed in archaic societies is to entrust the state with the responsibility of coordinating gift-giving is a very different and unwarranted assertion.
As Godbout (1998, ch. 3) remarks, welfare state programs designed to meet a seemingly never-ending stream of demands, and the way in which they are implemented, differ from the Maussian gift in two important respects. First, they never encompass the whole gift-giving cycle of giving, receiving, and reciprocating. In a few rather exceptional instances, such as blood and organ donations, the interrupted cycle begins with a genuine gift, but because donors and recipients are kept apart by strict rules (at least in the case of blood donations), there is no possibility of reciprocation. As for Titmuss's much-discussed argument that blood donations are not only more efficient than commercial alternatives but also serve as a reinforcing mechanism upholding feelings of solidarity upon which the welfare state is based, Godbout provides rather convincing counterarguments. The blood scandals that rocked the medical community in France and Canada in the early 1990s show that state administrators sometimes pursue objectives that run counter to the interests of the patients. And regarding the solidarity argument, Godbout notes that the Swedes' strong social democratic traditions have not prevented them from developing a commercial blood distribution system. Nonetheless, if blood donations provide an example of a truncated cycle that begins with a gift, the more common pattern is that of a truncated cycle that ends with a gift (a service of payment) but begins with the exact opposite, namely, taxes.
This point is well taken, since by definition taxes are not voluntary contributions. It could be argued, however, that although taxes are paid reluctantly and tax evasion can never be ruled out, there is quasi-unanimity about the need to contribute some resources to collective action. In fact, outside of the United States political parties gain little electoral advantage from promising tax cuts even if it is easy to argue that the growth of the welfare state has led to increases in taxes that go well beyond the hypothetical level that practically all citizens would consider to be the minimum contribution they are prepared to make to ensure that all their fellow citizens are guaranteed some degree of protection against poverty, poor health, and so on. All the same, taxes are not equivalent to gifts.
The other line of cleavage between the world of the gift and the welfare state becomes clear when one compares the way in which charitable organizations and state agencies deliver services to their clients. At the individual level, relationships between volunteers and the people they help are more personal and are experienced usually as expressions of gifts, whereas the professionalism of state agents precludes this sort of closeness. (This is not to say that professional standards are not desirable, for they often guarantee a higher level of service, but there is a qualitative tradeoff nevertheless.) And at the systemic level, Godbout (1998, 60) aptly notes that the state is rarely “content just to transfer money” and that when it assumes the role of dispensing services, it “often seeks either to supplant the primary networks or to make use of them in order to achieve its objectives. Let us not forget that, unlike the marketplace, the state may legitimately define collective needs, but it is much more difficult for it to recognize individual preferences. It therefore has a doubly ‘good’ reason to constantly strive to define people's ‘real’ needs in their stead.”
The discussion so far has hinted at the existence of a self-organizing philanthropic order emerging from a myriad of personal gift-giving initiatives and a sense of indebtedness to others, be they close family members or strangers. But it is somewhat difficult to make sense of the relation that these formal and informal networks of communication, production, and distribution might have with either the market economy or the state. One sometimes gets the impression that the philanthropic order provides a foundation for these other systems, while at other times it appears to exist in an antagonistic relation with them. It is also sometimes presented as if it were permeating the social fabric and helping individuals give meaning to their lives, and yet is somehow ignored or downplayed. Sociological analysis is both illuminating and limiting in this regard; it offers a panoply of interpretations that open up intriguing perspectives, but it cannot provide causal models that help to explain the mechanisms that sustain and reproduce the voluntary sector and the concrete effects of individuals' decisions to give time or money in trying to help others. That kind of analysis would be useful to policymakers who have to decide how they could or should support the growth of that sector either directly or indirectly (such as by removing barriers to the operations of philanthropic institutions).
Toward that end I now turn to the pioneering work of the French economist Serge Kolm, whose investigations of the economics of giving and altruism have cleared a field that is now being explored by many others. Although Kolm and the economists who have taken up his challenge (see, for example, Gérard-Varet et al. 2000; Kolm et al. 2006) of considering gift-giving a worthy subject of economic analysis often end up revisiting and commenting on the more sociological and philosophical themes briefly sketched out above, their contributions bring to light parallels between the mechanisms at work in premodern societies and processes constitutive of modern market economies. At the same time they underline the limitations of conventional economic models. These limitations and biases must be overcome in order to better reflect the complex reality of the choices made by economic actors. New directions in economic research (including behavioral economics and even more recently, “neuroeconomics”11) have brought attention to the need for a serious rethinking of economic rationality, and Kolm's pioneering work adds much depth to these explorations.
Serge Kolm on the Mechanisms Sustaining the Philanthropic Order
Seeking to combine and harmonize many of the insights Adam Smith treated separately in The Theory of Moral Sentiments and The Wealth of Nations, Serge Kolm recently embarked on a twofold research project after many years of writing on inequality and economic justice (see Kolm 2005).12 On the one hand, using the formal language of mathematics and neoclassical microeconomics he has labored to stress the relevance of the economists' toolkit for the analysis of the world of the gift, which so far has been mostly the province of sociologists and anthropologists. (Kolm is obviously aware of Mauss's work but only occasionally cites it.) On the other hand, in part because of an abiding interest in and deep commitment to Buddhist psychology and ethics (see Kolm 1982), he has tirelessly argued for a need to “introduce many new and crucial aspects” into economics in order to balance the unwarranted emphasis on “self-interested market exchanges.” He argues that the “motivations considered will have to be much more varied, complex and subtle (and interesting) than only strict self-interest” (2000a, 3). More specifically, he writes, one of the consequences of reciprocity “is that both the structure of preferences and the concepts of solutions of interaction (in the sense of game theory) will have to be more complex and richer. Reciprocitarian interaction elicits new concepts of solutions and new meanings for old ones, as it entails sentiments of fairness, equity, balance, respect for others, moral indebtedness, ‘proper’ behavior, duty, norm following, care for image building, benevolence, altruism and so on, along with self-interest” (4).13
In the previous section I showed that even if it sometimes makes sense to speak of a “gift economy,” what Godbout calls “the world of the gift” encompasses a far broader range of phenomena and follows its own logic, one that conventional economic models fail to accommodate. However, Mauss and many of his followers err in their belief that these differences support the thesis that markets and the world of the gift have always been—or should be reinvented as—antagonistic paradigms, and that the gift economy is preferable because it operates on the basis of more humane and morally defensible principles. (The same error has also been committed by Karl Polanyi and those who have uncritically adopted his hypothesis of the “embedded economy”; even if one were to concede that anthropology provides examples of economic phenomena that were over-determined by cultural and other societal factors, this status quo ante is hardly something that can be recreated at will.) Although distinct and autonomous, these two forms of spontaneous order communicate with each other and even overlap in ways it is crucial to understand. To put it differently, there are mechanisms that are common to both and operate in comparable ways, even if they do not produce the same effects.
This is something that Serge Kolm has analyzed in a rigorous and perceptive manner. His writings on gift-giving illuminate these mechanisms without attempting to reduce one domain to the other. Kolm manages to bring to light both the economic dimension of the world of the gift and the extent to which economic exchanges are themselves dependent on altruism. His works underline the complexity of these paradoxical relationships of codetermination. It would be futile to deny that giving is often inspired by genuine generosity, but Kolm points out that the variety of forms of gift-giving is “bewildering” and that often gifts are provided with very different aims, and sometimes strictly opposite ones. They range from the most generous sacrifice to being the instrument of social sentiments and relations among the most odious, in passing by the plain service of the giver's self-interest. They also range from the most spontaneous . . . to resulting from the most elaborate pondering and strategies. They are both the proof of sincerity and the classical vector of hypocrisy and treacherous lies (2006, 19).
It is not surprising that the experience of living in societies where gift-giving is not the dominant norm conditions many people to be selfishly generous, as it were. As an economist, Kolm has no difficulty tracking relevant instances. These include gifts offered in such a manner that (a) their effects overcompensate for the cost of the gift itself, (b) the gift conveys information that the receiver can use to benefit the giver, (c) the gift is meant to trick a generous person into reciprocating, or (d) the social effects of the gift (for example, in imparting a reputation for generosity) are its primary motivation (Kolm 2000a, 11; see also Kaufman 1991; Offner 1997). But even gifts offered for self-centered reasons can generate a sequence of reciprocal interactions that evolve into deeper interpersonal or social relationships. Trust is usually built in that way, for example.
This does not mean, however, that we should hold a Hobbesian view of human nature. Although individuals are autonomous agents who should be guaranteed the freedom to choose how to use the resources at their disposal—Kolm call this “process freedom” (2005)—their freedom is conditional on many tacit social skills. As Kolm puts it, “The most important effect of altruism is probably the respect of other persons and their rights and properties, which could not sufficiently and well be secured only by self-defense and the police. This permits peace, social freedom defined by this respect—it is the basic social ethics of our societies. . . . This respect is in particular a condition of a working market system” (2006, 6). Thus he stresses that “economics, markets and exchange, when carefully analyzed reveal the essential role of motives that are not self-interested” (19). As a result, “many relations of market, exchange, agreement, and cooperation thrive in spite of the presence of classical causes of market failures which should have inhibited them, thanks to the role of various moral conducts such as honesty, truth telling, promise keeping, fairness, reciprocity, trust and trustworthiness, respect and benevolence” (20).
Where does this altruistic disposition come from, and how is it manifested? There are several answers that yield somewhat different formal representations.14 Individuals may feel happier as the happiness of others increases or the welfare of others improves, or as a certain level of income redistribution is achieved such that no one is completely left out, as it were. These dispositions may be hedonistic in reflecting feelings of empathy, or morally based in resting on a certain conception of one's duty to others. In practice these two distinct strands are often intermingled. Kolm's ethical outlook is more consequentialist than deontological, since it clearly emphasizes the importance of happiness and enlightened self-interest. (One’s concern for the welfare of others is less an “imperative” than an integral part of one’s own happiness.) Nevertheless, Kolm acknowledges and approves of the pervasive influence of everyday Kantianism in the culture of contemporary liberal societies: although people rarely act only out of duty, deontological norms almost always enter into their decisions (Kolm 2000a, 3).
These altruistic dispositions are instrumental in several ways. For example, Kolm echoes Benkler's comments on the advantages of freely circulating information in dealing with transaction costs. Moral imperatives and social norms lead to “truth-telling, sincerity, and voluntary disclosure” (2006, 41). More generally, enlightened self-interest (and, of course, the rarer manifestations of “pure” altruism) helps to prevent or mitigate what would otherwise be constantly recurring “market failures.” Echoing Smith but in reverse, he concludes, “In improving social efficiency, these various non-strictly self-interested conducts and motives often end up favoring the strict self-interest of these actors. Then, disinterested conduct favors one's strict interest in the end, as if by a kind of immanent justice” (41).
Kolm diverges most significantly from the paradigm of an entirely spontaneous (and private) philanthropic order; however, he stresses that state is the best means of achieving income redistribution in favor of the most disadvantaged members of society—something that he presumes everyone agrees with, up to a point anyway. That is, he argues that for the purpose of “altruistic joint giving,” which he treats as a public good, individuals can enter into an implicit social contract involving a system of redistributive taxes.15 He maintains that such a system “can be unanimously preferred to its absence” (16). In addition, he argues, “a democratic political system normally secures Pareto efficiency” in the sense that any program that is not efficient can be defeated by a more efficient one; thus “efficiency and democracy require public aid” (17).
It is important, however, to remember that Kolm is concerned here only with income redistribution. He offers no defense of the broader, more qualitative, and more debatable programs that contemporary welfare states have embarked upon in recent decades (such as employment equity, subsidized child care, multiculturalism, and the provision of an ever-increasing list of questionably termed “public goods”). Kolm is actually defending a point that Milton Friedman and F. A. Hayek advanced in their advocacy of a minimum income guaranteed by the state—an idea that had been recently reanimated in some of Charles Murray’s work. As a left libertarian, Kolm is in favor of a more generous redistribution than either Friedman or Hayek contemplated, and he has provided a very sophisticated and elaborate scheme which he calls Equal Labor Income Equalization (ELIE), which seeks to compensate individuals for lack of access to the resources they need to exercise the right to full self-ownership. The essential point of this scheme (see Kolm 2005) is that there are efficiency gains to be made from public implementation (such as through the tax system). After that, what individuals decide to do with their income is up to them, and if that income is high enough, the state can dispense with most of its other administratively cumbersome programs.16
This being said, Kolm acknowledges that the philanthropic order extends far beyond the simple goal of income distribution. He makes it quite clear that since giving is a voluntary act and gifts, by definition, cannot be imposed, good social relations based on gift-giving and reciprocity cannot be planned or enforced by state action (2000c, 175).17Moreover, he also acknowledges that even with respect to income distribution there are reasons to be satisfied with private charitable organizations or favor them, if one is motivated by goals other than efficiency (such as demonstration effect, self-esteem, putative reciprocity, and a belief in the Kantian imperative of universalization—“what if no one contributed?”; see 2006, 106).
What is arguably missing from Kolm's analysis is an account of the institutional context within which good social relations based on altruism or enlightened self-interest can flourish, and of the processes that give rise to such institutions. This is perhaps why he tends to assume that the state is often the best means of solving collective action problems even though technology and Benkler's “social production” could provide viable solutions either now or in the near future. The question of how institutions emerge and the self-organizing logic that best explains their evolution is a domain that, as I have shown, Mauss explored very perceptively in the context of premodern societies. Hayek, for his part, explored at length the same problem in the modern world; unfortunately, he downplayed the importance of the altruistic feelings he described—mistakenly, I believe—as a dispensable relic from a bygone era, a necessary step in social evolution but one that is counterproductive in the “extended order” in which the citizens of liberal democratic societies committed to free markets happen to live (Hayek 1988, 19-21). While it is most certainly true that a preference for fairness and conditional altruism evolved in the very early stages of human development, I hope to have shown that Kolm's propositions about their continued importance in economic life are more convincing.
Conclusion
French—or, perhaps more appropriately in today's globalized world, francophone—scholarship has made extraordinary contributions to the analysis of a broad set of psychological and sociological phenomena which terms such as altruism, reciprocity, gift-giving, and philanthropic institutions serve to describe without fully evoking their richness and complexity. The strong anti-utilitarian bias that runs through the French intellectual academic world accounts in large measure for this fascination.
In focusing on Mauss and Kolm, I have dealt with arguably two of the most prominent thinkers within that tradition, but it would be wrong to conclude that they represent the sum total of what this tradition has to offer. Nonetheless, both thinkers typify in their own ways the limitations of their respective disciplines and the difficulties that even scholars who share certain values and common interests face in trying to move beyond these limitations. Anthropologists may dabble at times in discussing what they identified as the “gift economies” of nonwestern, premodern societies, but on the whole their economic commentaries are rather amateurish, and when it comes to the analysis of contemporary phenomena their prejudices against market processes prevent them from understanding the many ways in which the world of the gift and the Hayekian catallaxy potentially complement each other. And although that sort of complementarity has been lucidly analyzed by Kolm and the economists he has influenced in France and elsewhere, their microeconomic methodology prevents them from dealing adequately with the relevance of their subject matter to the construction of a macro-theory of the philanthropic order in all its dimensions, including the historical and cultural aspects.
NOTES
1The contrast between communitarian and cosmopolitan sympathy can be traced back to the eighteenth century, with Jean-Jacques Rousseau upholding the former and Immanuel Kant the latter, but the acceptance of the ideology of universal human rights is a late twentieth-century development.
²One would also have to include the philosopher Alfred Fouillée (who was a contemporary of Durkheim) and, in today's context, the economist Alain Caillé, the founder of the Mouvement Anti-Utilitariste dans les Sciences Sociales (MAUSS).
3His neglected article “The Optimal Production of Social Justice” (1969) proposed several key concepts that were later picked up by other authors to whom they are often erroneously attributed and which triggered the “considerable wave of inequality research that began in the 1970s” (Lambert 2007, 213).
4For example, Mauss asserts that the potlatch is simultaneously a religious and an economic phenomenon that also touches on “social morphology and has some of the attributes of a contract.”
5Whether the gift creates “obligations” in the strict sense of something one is literally obliged to do is challenged by Alain Testart (1998), who argues that Mauss's theory is like a Procrustean bed that ignores important differences between very dissimilar forms of exchange. However, see note 5 above.
6Mauss was writing in the early 1920s, so the term “modern” still applies, although “contemporary” would be a stretch.
7The meaning of “sharing” can probably be stretched to include the Maussian pattern of giving, receiving, and reciprocating.
8The constant improvement of open source software is due to the fact that it is developed by a large community of programmers motivated by the recognition they get from their peers. These programs are often as good as proprietary ones or better.
9He raises many valuable objections to policies currently pursued by Western governments which already have had a significant impact on property regimes; patents on a multitude of genomic discoveries are a case in point. I agree with Strahilevitz (2007) that he sometimes overstates his case. If the alternative to patents is a strategy of keeping trade secrets, a movement away from intellectual property protection may not bring a strong new flow of innovative applications.
10In the 2004 Democratic primaries, Governor Howard Dean surprised the political establishment with his skilful use of the Internet to mobilize supporters in ways that also empowered them. This strategy was replicated with even more success by Senator Barak Obama in 2008. In the 2007 presidential election in France, the socialist candidate Ségolène Royal used similar tactics.
11The website of the Center for the Study of Neuroeconomics at George Mason University describes neuroeconomics as follows:
Neuroeconomics is an interdisciplinary research program with the goal of building a biological model of decision making in economic environments. Neuroeconomists ask, how does the embodied brain enable the mind (or groups of minds) to make economic decisions? By combining techniques from cognitive neuroscience and experimental economics we can now watch neural activity in real time, observe how this activity depends on the economic environment, and test hypotheses about how the emergent mind makes economic decisions. Neuroeconomics allows us to better understand both the wide range of heterogeneity in human behavior, and the role of institutions as ordered extensions of our minds. (http://neuroeconomics.typepad.com/neuroeconomics/2003/09/neuroeconomics_.html)
12For an introduction to Kolm's political economy, see Dobuzinskis (2000).
13For a technical example of the application of these recommendations applied to an analysis of the “return-gift game,” see Kolm (2000b).
14Kolm revisits Vilfredo Pareto's forgotten distinction between utilities and “ophelimities” (Kolm 2000a, 16-23; 2006). The latter are estimations of individuals' material welfare, whereas the former take into account mutual interactions: my utility is a function at the very least of your welfare, if not in a more complex (reflexive) manner of your other-regarding utility. Depending on whether individual i is interested in either the happiness or welfare of others, his or her utility function can be written as ui=ui(u, x) or ui=ui(w), where u stands for the happiness of all individuals, x represents other relevant factors (which could include the welfare of others), and w={wj} denotes the welfare of all individuals (and j≠i). It is then possible to continue with utility maximization, but on the basis of more plausible assumptions.
15Kolm does not appeal to self-interest in trying to justify the plausibility of such a contract but instead appeals to (a) a commonly shared sense of fairness, (b) our capacity for impartiality, and (c) the effectiveness of dialogue in reaching agreement over fundamental social choices (see Kolm 2005, 299-300).
16Although with respect to “fundamental insurance” schemes (such as health insurance) that protect people against the occurrence of differences they unanimously consider unfair, Kolm argues that “questions of information and practicability lead to public implementation” (2006, 71), he remains agnostic regarding what sort of insurance scheme individuals may choose to bargain for. He implies that other than sickness and lack of basic education there are few differences which individuals will unanimously agree to be insured against (Kolm 2005, 446).
17Assuming, however, that a common arrangement of preferences is one in which the preferred state of affairs consists of conditional gifts (that is, gifts offered when others give too), legislation imposing a reciprocal contribution (albeit not strictly speaking a gift, since gifts have to be spontaneous) might bring about a Pareto optimum (Kolm 2000c, 180). A possible example would be tax credits for donations to charitable organizations, insofar as they force nondonors to compensate through their taxes for the loss of revenue to the government.
REFERENCES
Andreoni, James. 2006. “Philanthropy.” S.C. Kolm and J. Mercier Ythier, eds. Handbook of Giving, Reciprocity and Altruism. Vol. 2. Amsterdam: North Holland.
Benkler, Yochai. 2006. The Wealth of Networks: How Social Production Transforms Markets and Freedoms. New Haven: Yale University Press.
Callari, Antonio. 2002. “The Ghost of the Gift:The Unlikelihood of Economics.” Mark Osteen, ed.The Question of the Gift: Essays Across Disciplines. London: Routledge.
Derrida, Jacques. 1992. Given Time: I, Counterfeit Money. P. Kamuf, trans. Chicago: University of Chicago Press.
DiZerega, Gus. 2000. Persuasion, Power and Polity: A Theory of Democratic Self- Organization. Cresskill, NJ: Hampton Press.
Dobuzinskis, Laurent. 2000. “Serge Kolm on Social Justice and the Social Contract: A Contextual Analysis and a Critique.” The European Legacy 5, no. 5: 687-702.
Douglas, Mary. 1990. “Foreword: No Free Gifts.” In Marcel Mauss. The Gift: The Form and Reason for Exchange in Archaic Societies. London: Routledge.
Gérard-Varet, L. A., S. C. Kolm, and J. Mercier Ythier, eds. 2000. The Economics of Reciprocity, Giving and Altruism. London: Macmillan.
Godbout, Jacques and Alain Caillé. 1998. The World of the Gift. D. Winkler, trans. Montreal: McGill-Queens University Press.
Gofman, Alexander. 1998. “A Vague but Suggestive Concept: The ‘Total Social Fact’.” Wendy James and N.J. Allen, eds. Marcel Mauss: A Centenary Tribute. New York: Berghahn Books.
Hayek, Friedrich A. 1988. The Fatal Conceit: The Errors of Socialism. Chicago: University of Chicago Press.
Kaufman, Dennis A. 1991. “Self-Serving Philanthropy and Pareto Optimality.” Annals of Public and Cooperative Economics 64(4): 573-590.
Kenway, Jane et al. 2006. Haunting the Knowledge Economy. London: Routledge.
Kolm, Serge-Christophe. 1969. “The Optimal Production of Social Justice.”
J. Margolis and H. Guitton, eds. Public Economics: An Analysis of Public Production and Consumption and Their Relations to the Private Sectors. London: Macmillan.
——. 1982. Le bonheur-liberté: Bouddhisme profond et modernité. Paris: Presses Universitaires de France.
——. 1996. Modern Theories of Justice. Cambridge, MA: MIT Press.
——. 2000a. “Introduction: The Economics of Reciprocity, Giving and Altruism.” L. A. Gérard-Varet, Serge-Christophe Kolm, and Jean Mercier Ythier, eds. The Economics of Giving, Altruism, and Reciprocity. London: Macmillan.
——. 2000b. “The Theory of Reciprocity.” L. A. Gérard-Varet, Serge-Christophe Kolm, and Jean Mercier Ythier, eds. The Economics of Giving, Altruism, and Reciprocity. London: Macmillan.
——. 2000c. “The Logic of Good Social Relations.” Annals of Public and Cooperative Economics 71(2): 171-189.
——. 2005. Macrojustice: The Political Economy of Fairness. Cambridge: Cambridge University Press.
——. 2006. “Introduction to the Economics of Giving, Altruism, and Reciprocity.” Serge-Christophe Kolm and Jean Mercier Ythier, eds. Handbook of the Economics of Giving, Altruism, and Reciprocity. Vol. 1. Amsterdam: North-Holland.
Lambert, Peter. 2007. “Serge Kolm's 'The Optimal Production of Social Justice'.” Journal of Economic Inequality 5: 213-234.
Liu, Wendy and Jennifer Aaker. 2008. “The Happiness of Giving: The Time-Ask Effect.” Journal of Consumer Research 35 (October): 543-557.
Mauss, Marcel. [1925] 1990. The Gift: The Form and Reason for Exchange in Archaic Societies. W. D. Halls, trans. London: Routledge.
———. [1925] 1966. The Gift: Forms and Functions of Exchange in Archaic Societies. I. Cunnison, trans. London: Cohen & West.
McCloskey, Deirdre. 2006. The Bourgeois Virtues: Ethics for an Age of Commerce. Chicago: University of Chicago Press.
McMullen, Kathryn and Grant Schellenberg. 2002. Mapping the Non-Profit Sector in Canada.Ottawa: Canadian Policy Research Networks.
Mercier Ythier, Jean. 2006. “Introduction: The Economics of Gift-Giving: Perfect Substitutability of Transfers and Redistribution of Wealth.” Serge-Christophe Kolm and Jean Mercier Ythier, eds. Handbook of the Economics of Giving, Altruism, and Reciprocity. Vol. 1. Amsterdam: North-Holland.
Mirowski, Philip. 2001. “Refusing the Gift.” S. Cullenberg, J. Amariglio, and D. Ruccio, eds. Postmodernism, Economics and Knowledge. London: Routledge.
Offner, Avner. 1997. “Between the Gift and the Market: The Economy of Regard.” Economic History Review L(3): 450-476.
Parry, Jonathan. 1986. “The Gift, the Indian Gift and the 'Indian Gift'.” Man 21(3): 453-473.
Schuyt, Theo. 2008. “Philanthropy for Politics, Policy, Polity and the Financial World.” Lecture at MISP, Bologna May 12, 2008.
http://www.misp.it/2008/images/stories/documen/2008_05_12_Schuyt.pdf
Silber, Ilana. 1998. “Modern Philanthropy: Reassessing the Viability of a Maussian Perspective.” In Wendy James and N. J. Allen, eds. Marcel Mauss: A Centenary Tribute. New York: Berghahn Books.
Strahilevitz, Lior Jacob. 2007. “Review: The Wealth of Networks.” Yale Law Journal 116: 1472-1516.
Testart, Alain. 1998. “Uncertainties of the 'Obligation to Reciprocate': A Critique of Mauss.” Wendy James and N. J. Allen, eds. Marcel Mauss: A Centenary Tribute. New York: Berghahn Books.
Titmuss, Richard M. 1972. The Gift Relationship: From Human Blood to Social Policy. New York: Vintage Books.
