Tuesday, October 25, 2011

The gift economy

There's a gift economy and a market economy.

In the gift economy, goods and services are given without condition of reciprocation.  This is what you see in families and friendships.  Parents do not expect payment for the food they serve their children at the dinner table.  Friends don't charge a fee for advice or company.  Goods and services are given and given and given.  They may be returned or they may not.

On a balance sheet of tangibles there may not be a profit.  But on both sides of the transaction, invaluable intangibles grow with compound interest.

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