Modes of Exchange: Gift and Commodity

In order to understand the differences between gift exchange and commodity exchange, it is useful to consider gift exchange in a formal analytical fashion that permits immediate comparison with the standard formal model of commodity exchange. However, this cannot be done without serious distortion if the neoclassical model of commodity exchange is imposed on the analysis of gifts. Rather, one requires a model of gift exchange to which the specific characteristics of commodity exchange can be appended. Our first task is to disprove the age-old conception that mutually satisfactory (equilibrium) gift exchange relations arise from a balancing of "benefits" between parties; and then we prove that altruism cannot be distinguished from self-interest in an equilibrium exchange relation. We show that if one applies the two forms of exchange, gift and commodity, to a specific exchange process, the resulting exchange ratios may appear to be similar. However, gift exchange differs quite fundamentally from commodity exchange in terms of the rules that characterize equilibrium relations and in terms of the methods by which persons seek to increase their relative gains from trade.