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From my reading (Sapiens by Harari, Debt by Graeber, various other research including Wikipedia) and general understanding of how gift/reputation economies work, they rely on relatively close relationships between individuals to function. Once you get a few steps removed and people start becoming true "strangers" it does not work so well. I am aware that empires have managed gift economies at a regional scale such as the Inca, but I fear that this example is a bit removed from the context of this setting.

In the setting I am trying to build, one of the cultures has dominated trade, particularly long distance trade, across the region. This indicates to me that they would have some sort of commodity as a standard to help facilitate this. That being said, individual cities and even groups within the dominating culture would probably still be working mostly under a gift economy. I am roughly working with a pre-historic/ early "cradle of civilization" timeframe.

My question stems from a struggle to combine a gift and a commodity economy. Would it be reasonable for the larger (10,000-15,000 people) cities to maintain their gift economies? How would that interact with the commodity economy the traders use across far distances?

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    $\begingroup$ If you have a dozen widgets to sell, it's time to learn the local medium of exchange. If you have ten thousand widgets, it's time to find a guy who can move ten thousand widgets and come up with something that you want more than ten thousand widgets; local medium of exchange doesn't matter much. $\endgroup$ Commented yesterday
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    $\begingroup$ The Inca empire is most usually described as having a centralized tributary economy with a little bit of plain ordinary money-based market exchange for use when extracting tribute did not work. I am quite sure that the empire did not survive on gifts given by the subjects out of the kindness of their hearts. $\endgroup$ Commented yesterday
  • $\begingroup$ @AlexP Do you have a good source to read about the Inca economy? I’d like to do more research on it $\endgroup$ Commented yesterday
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    $\begingroup$ @amadshade: "Directions in Ethnohistorical Research on the Inca State and Economy" by Chris Beyers is freely available. John Murra's book Economic Organization of the Inka State can be read online at the Internet Archive. Other sources are cited by the Wikipedia article. In my sort-of-Marxist world view it was a pretty much ordinary example of the Oriental mode of production. $\endgroup$ Commented yesterday

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For gift economy to reliably sustain a group in a long term you need a group, that have a capacity to fulfill all its needs inside the group. You also need this group to be small enough for you to remember who you owe and who owes you.

This works to this day if the in-group is small enough (i.e. I'm getting free eggs and cabbage if neighbors produces too much. With the expectation I will drive old lady to a church on rainy Sundays.) Individual small villages worked on gift economies until relatively recently. Really only the need of individuals to have money to acquire the goods coming from OUTSIDE of the group that put a peg in it. But here we are quite beyond even the barter economy.

In the context of 10 000 head city you need to somehow conserve these multi specialization in-groups. In our world (in context of old world at least) we see a trend for these groups to specialize in specific trade. But imagine if all the workshops are organized by the city and only way how to get some goods inside the group is to have a member working there. Or diversification is driven by some cultural incentive. Inside such group (clan) individual households could keep their gift economy going.

Interesting thing can occur when you realize that heads of these 'clans' within the city are their own in-group, that can wield overproduce of their groups as gifts. Ruler of the city and chiefs of nearby villages may be their own in-group who has gift economy going. Same goes for rulers of cities in the wider area.

That said, outside of the most personal, the most basic in-group, gift economy is very fragile. If 'gifts' are expected on regular basis you are coming into an are of tribute or redistributive economy (like what Sumerians had) especially if you put enough bureaucracy into it (like Sumerians did). If expectation of returning the 'gift' becomes explicit you are coming into territory of barter economy (especially if you don't agree how many fish the other guy owes you for your 'gift' of fifty pots).

Long range trade is interesting phenomenon in context of gift as prevalent economic system. We know that such trade existed in Europe long before 10 000 - 15 000 inhabitant cities were a thing there - good quality flint and even fancier stuff like amber was traded all over the place. But it is also not idea that much removed from gift economy. Imagine a guy, who is not a part of any group you know of, coming to your village, who is wiling to give you a 'gift' of fancy flint, but only after you come up with 'gift' some old dusty furs you don't need anyway. After all he don't know when and if he will be come back. This is clearly barter, but looking enough like gift to not freak out cultural sensibilities.

So! How to intersect gift and commodity economies in ancient civilizations?

Have reasonably sized in-groups who retains gift economy within, but engage in commodity based trade without. The more the in-groups interest is distanced from basic individual-to-individual interaction, the more likely it is for the economic relation to evolve into adjacent system (barter, tribute, redistributive) which is more robust in the face of scarcity (in context of bigger populations).

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    $\begingroup$ TLDR; If you expect something in exchange for your gift then in was not a gift. $\endgroup$ Commented yesterday
  • $\begingroup$ What you describe for traders in tribes isn't gift economy anymore in any sense and is far removed from it. YOu somehow seem to think that people can always only exercise one economic model which is just plainly wrong. People in their in-group participate in the gift economy while happily bartering with people outside of it. If the others "gift" needs to be directly connected, it's not a gift (as AlexP said) and it's not a gift economy. $\endgroup$ Commented yesterday
  • $\begingroup$ @QuestionablePresence The trader coming to tribe is example of barter economy and is explicitly identified as such in text. The whole answer is about how different models coexists on different levels of one society and how line between them is fussy, pointing out how they could naturally transcend from one to another. You seems to agree and disagree with the answer at once which makes me think I used confusing language? It's possible English not being my first. $\endgroup$ Commented yesterday
  • $\begingroup$ Do you have any specific sources on Sumerian economy so I can read more about it? From what I already know, it was tied to the temple structure and it was commodity based. (Barley collected in warehouses and people had claim to measures of barley with accounting) $\endgroup$ Commented yesterday
  • $\begingroup$ @QuestionablePresence from the Answer: "This is clearly barter, but looking enough like gift to not freak out cultural sensibilities." That's the key. People are pretty flexible at the edges of cultural sensibilities when a deviation benefits us. $\endgroup$ Commented yesterday
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In-Group And Out-Group

Gift economies are for those who are in your group. Commodity exchanges happen outside the group.

This is not only simple, it is easier. Travelers are outside your group, and you may never see them again. Neither of you care about a relationship. An exchange is one and done.

It is your neighbors whose relationships you care about. You will support each other in hard times. Hence, those are people you want be on good terms with.

This can supported by various customs and trading policies.

For instance, no trading posts. Or, if there are trading posts, no one stays there for more than a few years, while earning the money to go home. Perhaps they even hire a local to manage the trading post. Consequently, long-term outsiders at the trading post do not chip away at the distinction.

Merchants (or peddlers) with fixed routes would also chip away at it. So the people sent should differ.

Strict endogamy rules would help. The man who stayed at the trading post for a long time because of a feud back home can never ever marry your daughter.

Ancestral religion might be a back-up. Outsiders must worship their own gods, not only so you don't get caught in the backlash when their gods are angry, but because they could offend your gods if they did the ceremonies wrong.

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Lindsay Davis' Roman whodunnit 'Death of a Banker' has a nice introduction to the Greek 'trapeza' banking system. This does not claim to be a historically accurate source, and the same system must have been re-invented many times in history. But it will do for a start.

Suppose you have arrived in your ship with goods to sell. You may not be well-known in this community, so the local people won't say 'I will let him have my surplus product, and he can pay me back next time he is passing', but they may barter with you.

Suppose you arrive with a hold of grain and find the local glassware is really good. You want to fill your hold with it because you can sell it with profit when you get home, but you have not got enough money from the sale of a hold full of grain to buy a hold full of glassware. You may find a local banker, and hand him a letter of introduction from your banker. This may say 'I know this person and his family for so-many years. He has been on a number of successful voyages and has no recent shipwrecks, and I believe him to be reliable'. If his banker knows your banker, then this may be enough. If not, he may try and get a reference for you or your family from some other banker or shipper. He provides a loan, or invests in your next trade, so this transaction is not a gift economy, but his effective gift is his trust in you provided he can establish an extended family or community that you both share.

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Maybe I am missing some more in depth knowledge, but isn't gift economy also what the European did with the populations of Oceania when they started exploring it?

They brought something valuable to the eyes of the indigenous people but not exactly a trade commodity in their own country (glass beads, iron nails, etc.) in exchange for what they wanted (property rights, food, sex, etc.).

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    $\begingroup$ Just looked up the history of handmade Wampum. Fascinating. Naturally, the colonists made good use of machine-tools to up their position. $\endgroup$ Commented yesterday
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    $\begingroup$ Even to this day if you travel to in land Papua you are better to bring a pack of coffee, sugar or cigarettes. $\endgroup$ Commented yesterday
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    $\begingroup$ A gift economy is when people rely on their neighbors or give services/goods (usually surplus) without the expectation that there is a direct 1:1 trade. At some point in the future, the other person will probably do you a favor in return but it’s more about building relationships than “equal exchange.” If you need help moving, your buddies might come help without the expectation that they be paid but you’re likely to go help them next time they need help. You’re describing the barter relationship (but not a full economy) that Europeans frequently had with indigenous people. $\endgroup$ Commented yesterday

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