System Change Made Simple

Prefiguring the Gift Economy - Part One

July 21, 2022 Terry Leahy Season 1 Episode 7
System Change Made Simple
Prefiguring the Gift Economy - Part One
Show Notes Transcript

Prefiguring a post-capitalist system through ‘hybrids of the gift economy and capitalism’. Hybrids embody some aspects of the gift economy that ‘prefigure’ a post capitalist system. For example, some control of production by workers or the community. Or some distribution to benefit particular people or the natural environment. This is combined with aspects of a current market-dominated economy. For example, wage labour, selling goods or services as commodities. This episode focuses on a community supported agriculture collective in Wales and on the Mondragon cooperatives in Spain.

8: Explaining hybrids of the gift economy and capitalism

Terry Leahy 2023


What I intend in this chapter is to flesh out some ideas about a particular kind of institution that we might create now, that prefigures a gift economy. What I call hybrids of the gift economy and capitalism. These hybrids are not a new invention — but it is new to think of them as part of a strategy of transition to the gift economy. So, I will begin with a summary of the way I have explained and defined capitalism and the gift economy in previous chapters. 

In a capitalist mode of production, the means of production, like factories or land, are owned by members of the capitalist class. These owners of the means of production pay their workers in money and the workers use that money to access goods and services. So, most people must work for a wage to live. What defines capitalism and is completely different from other class societies in history is that the means of production are themselves commodities, meaning that they can be bought and sold on the market. So a farm is something that you can sell, not like in feudal society. These means of production that are owned as commodities, are used to make money by producing goods for sale. The capitalist invests a certain amount of money and then employees work and produce things and then the capitalist sells these products. Capitalists compete to make a profit. If they fall behind their competitors, they are likely to lose market share and investor support. What consumers do is that they buy the cheapest available product to satisfy their needs and desires. 

So, this is the outline, the rules of the game, if you like, of the capitalist mode of production. 

Now let's look at the gift economy. The gift economy is an envisaged mode of production. There is no money so there's no payment of wages for work. People work as volunteers. There is no state organizing everything and paying an armed body of enforcers. People provide for themselves. For example, like a community garden providing food for the gardeners. Or they distribute their products as gifts. My favourite example is producing a train service that serves a whole lot of different people. But the people making the trains and producing the rails and running the train service, driving the trains and so on are producing their train service as a gift. 

In a gift economy, ‘compacts’, formal written agreements are promises to provide goods and services. People make a promise to produce a certain amount of goods or services and deliver them to particular people at a certain time. These can be exchanges, or just as likely they are one way ‘donations’. For example, the people who operate the railways are making a compact with the community at large to provide a train service. Ultimately all gifts are returned in some form — people are receiving gifts as well as providing gifts. But there is no expectation of equivalence or reciprocity in relation to any particular gift.

The gift economy is run according to a set of ethics or cultural presumptions. It takes care of people by making sure everyone has meaningful work. Compacts make decisions about who gets goods and services from a production group. So, workers directly express their care for other people by providing them with their needs. An ethic of care animates these decisions. The gift economy allows people to care for other species, too. Partly out of self-interest. We don't want to live on a destroyed planet. But also, out of love and aesthetic appreciation of the living world. The gift economy allows people to be involved in a productive task that looks after the global commons. So, people gain status by looking after the natural world in their work. 

We can think of capitalism as a set of legal rules, and structures, like ownership. If you take something that someone else owns, that's ‘theft’ and you get into trouble with the police. These are structures. But also, capitalism operates according to a set of cultural presumptions, which make the market economy work. Capitalism is not just a set of laws or regulations but it's also about predictable market behaviour. 

Let us describe two key aspects of this behaviour. 

Consumers maximize private satisfactions for the least cost. You're being paid in wages. You go out to buy something. The aim of the transaction is to buy what you want. That's useful to you for the least cost. If some other identically useful thing comes along at a lower cost, then you'll buy that. That's the bare bones, the minimum assumption that makes the market economy work. The second key behavioural assumption is that capitalists maximize profits. Their aim is to make the most money out of selling stuff. They'll sell things at the highest price that the market will bear or drop prices to increase their market and get more profits that way. So, these are some of the assumptions about behaviour that make a market economy work. 

Hybrids of the gift economy play on this line. On the one hand, what they are doing is not illegal, it does not defy the formal structures of the market economy. On the other hand, what they are doing breaks with the typical assumptions about market behaviour. A hybrid uses some typical aspects of market practice and at the same time operates to implement some of the ethical assumptions of the gift economy — or to embody some of the practices that will animate a gift economy. 

For example, control of production by the producers. Like a cooperative in which workers together decide how to produce stuff. Unlike in a typical capitalist firm or government department where the workers are told what to do. Or there may be some control by the community at large. For example, the customers themselves have some input into what's happening in the production process. It could be like community supported agriculture, where customers make a choice to spend money on that farming product — to have an influence on the way agriculture is being done. Unlike a typical supermarket purchase, where customers just look at the product and choose the cheapest food that looks ok. Or there may be some element of the distribution that does not follow the normal market practice of making the highest possible profit. Or purchases that for one reason or another do not buy the cheapest product. And these forms of distribution are aimed at benefiting particular people, animals, or plants. Like charging a low price for people who are unemployed. Or buying timber that is forest stewardship certified — certified to be from a sustainable timber operation. So that is an example of a gift to the natural world. 

These alternative gift economy practices are combined with some aspects of the capitalist market economy, like wage labour. So, for example, the people working in a hybrid may be working for a wage, producing goods, and selling them on the market, just like in any normal capitalist firm. 

Now, why do hybrids work politically to start to bring about the gift economy? Well, they operate by undermining the cultural pre-suppositions of the capitalist economy. People are not behaving according to the cultural assumptions that make the market work. That make money work. Like the presumption of buying cheap and selling dear. They are undermining this even if only to a slight extent — while also making use of capitalist economic forms, like wage labour, private ownership of the means of production, money.

If a hybrid is going to work and continue and sustain itself, then the people involved must pay attention to their gift economy goals and practices as well as paying attention to their capitalist context. They would regard their project as a failure if they were unable to implement some of their gift economy goals. For example, let us take a community supported agriculture farm as an example of a hybrid. If they did not look after nature better than the ordinary, commercial farm, what would be the point? So, they must look at their non-market non-capitalist gift economy side, but also at the same time, they must work in the market. What they're doing is producing a market product. People have to buy it. They have to pay adequate wages. And so on.

My view is that this combination can work, but it's also a situation that creates tensions and difficulties. The hybrid almost always pays a price for defying the logic of the market. There are market sanctions against that kind of behaviour. Those sanctions do not come out of a top-down conspiracy. They operate through the structures of the market economy to make this kind of thing difficult. You cannot expect it to be easy to establish a hybrid in the context of the capitalist economy. And I'll explain that by talking about examples.

I will begin by just listing some hybrids. To give a sense of what I'm about to be talking about. 

Margaretta's belly dancing school in Newcastle, in Eastern Australia. A business for Margaretta but one that donates services to the community and relies heavily on the voluntary work of its students. 

Purple Pear. A CSA (community supported agriculture) in Newcastle, Australia. 

Oxfam as a donor organization. It donates free of charge to clients but also pays staff wages and solicits money from middle class donors who have earned their income in paying jobs. 

Fair trade coffee. The aim is to benefit impoverished farmers from the global South by charging a premium price to consumers from the global North. 

Government subsidies for solar panels. The aim of voters is to help to save the environment by tweaking market prices for energy services. 

Government labour legislation — like the 8-hour day. Such legislation undermines the presuppositions of the capitalist economy and puts a brake on capitalist firms. To secure the real needs of people, rather than to allow capitalists to extract the maximum exchange value. 

Wind power collectives in Denmark. People get together and put in their money to create wind power to move away from fossil fuels. 

Agricultural co-ops in the Philippines, run by small farmers to market their produce. A partial collectivisation of privately owned farms. 

Community gardens. Often the land is lent by the council. Sometimes there's a paid coordinator. So that is a market aspect of some community gardens.  Goods and services must be bought to make the community garden run. People are buying seeds to start their plots or buying fencing material and tools. 

The Mondragon collectives. A set of workers’ cooperatives in Spain. Selling white goods while ensuring that profits go the workers themselves. 

Ethical investment. People aim to make money by investing. But only in certain things. What comes first is to make sure that the money's invested in ethical projects.

What we can see from this is that there is a multiplicity of hybrids. This is not a new development. It’s not owned by the left or environmentalists. Hybrids are not necessarily driven by ideology. But nevertheless, there are various ways in which the capitalist market economy — taken as a structural force — is undermined. I do not imagine that hybrids are an equal player in the current economy. Capitalist firms and ownership by the wealthy, the market as the structuring principle of economic life. This is what is dominant, as previous chapters indicate. Nevertheless, hybrids exist, are important and are significant in terms of a transition out of capitalism. 

In writings that are quite popular in sociology and human geography, organisations of this kind are theorized quite differently from my analysis. Let us mention the work of Gibson-Graham from geography and Olin Wright from sociology. These authors envisage a transition out of capitalism in which ‘alternative market’ institutions or ‘real utopias’ come to dominate economic life. What these authors think of as the ‘standard capitalist firm’ is a firm run by owners and investors to make the most profit regardless of human or environmental considerations. Ethically guided alternative market institutions depart from that model. After a transition, these alternative market institutions, that are already present today, come to dominate the economy. There is still a market, and the state exercises a role of benign supervision, funding state-owned alternatives and regulating where necessary. My analysis differs on the following key points.

·      If these hybrid organisations came to dominate the economy, the market and money would be untenable. 

·      Hybrids undermine a market economy rather than constituting a new kind of benign market economy. 

·      These organisational forms are not easy to introduce into a market economy. They struggle to operate within the market. 

Let's start looking at some examples in more detail to explain what I mean by this. I will start off with an example from my recent research into permaculture as a social movement. Part of what I did for that was to interview permaculture activists involved in projects inspired by permaculture.

A CSA farming cooperative in Wales

One of these was Alice. Alice was a member of a community supported agriculture cooperative in Wales, an organic vegetable farm. They had 31 acres of land and 10 of these under cultivation. There were eight members in their cooperative. Most of the work was being done by these eight cooperative members — who were also living at the farm. As a community supported agriculture project, the farm organised a system in which members of the community signed up for a month of vegetables. Every week they would drive or ride a bike to go and collect their box of vegetables. They would pay in advance, for a whole year or a whole month. When they came to collect, they would get a box of assorted vegetables depending on what was in season and being grown on the farm. The farm would also sell some of their produce to restaurants. 

Let's go through the various market aspects of this project. First, they're selling vegetables. So that instantly implies that they're in market competition with other vegetable sellers, certainly other farmers selling organic vegetables. Clearly, they are also in a competitive market with vegetables that are non-organic. If their vegetables were eight times as expensive as non-organic vegetables, that would limit their customers. This market in vegetables is the sea that they swim in. The second aspect of the market economy is that the land that they they're doing this on is privately owned land. It's not owned by the government or by the local community. It's not even owned by their cooperative. It's owned by the parents of one of their members. The eight members of the cooperative could not afford to buy a farm like this. So close to a town where they can sell their vegetables. If the parents die, then the land goes to their estate. That might include another sibling who says, ‘Well, I'd like to sell this farm and take half the money’.

Another market aspect is that they are joint owners of that business. They own it together. It's a private business. No one else can come along and say, ‘Well, you know, I wouldn't mind some of the money that you're making from these vegetables. Give it to me’. 

In many ways, even though they run the farm as a cooperative, they're typical wage labourers. They exist in a market economy where they must earn an income to access the goods and services that they need in their life. What they're doing in the co-op must compare with other kind of jobs that they might have. The competitive market economy. If they're not paid enough and other jobs are much more lucrative, they won’t stay in this CSA. 

Now for the non-market aspects. The co-op members control their own work. It is not your typical example of alienated labour in a capitalist economy. They decide together as a cooperative what work they're going to do. And how what they're doing is ethical work. They get a benefit that they would not get by taking any random job, a job which makes market sense because it is the highest paying job available. Instead, they're involved in a job which they feel is ethical — because it's organic agriculture, because it's taking community control of land and because of the cooperative work process.

So, as distinct from a typical capitalist firm, run by a boss and, making the most money possible, here decisions are made by consensus — by the eight members getting together and having a meeting. They rotate leadership roles. Like accounting or running the poly tunnels. Everybody has a leadership role so nobody's the boss of this project. Volunteers do some of the work, so they are giving their work completely for free. Which may be seen as exploitation from the perspective of the market. But can also be seen as a gift to support an enterprise that might struggle otherwise. The motive of the volunteers is partly to learn about community supported agriculture and agricultural techniques. To that extent, it's an apprenticeship. But also, for ethical reasons, they want to involve themselves in organic agriculture and producing food through that. That is a gift.

Customers are getting some control of the means of production. They're saying, ‘I'm not going down to the local supermarket. That's unethical. The supermarket chains exploit workers in Poland and then bring the carrots from Poland to the UK using fossil fuels. And then they put the carrots into plastic bags and store them with refrigeration powered by fossil fuels. So instead of that, I am going out to the co-op to get my cardboard box. I am sourcing local vegetables produced without long term toxic impacts on the environment’. 

These customers are using their vegetable shopping money to support this ethical project — despite what it is costing them in time and organisation. A gift of time and convenience. In that way, they are not following the market norm of buying the most useful product at the cheapest price. They’re getting an assorted box of vegetables, rather than being able to look through a recipe list and go, ‘I'm doing this on Monday and this on Tuesday and going to the supermarket and buying what I require for that’. So that means more housework. It also means more housework going out to the farm to collect the vegetable box, rather than just dropping down to the local supermarket. 

So, what these customers are doing is partly a market transaction and partly a gift transaction. They're making an ethical consumer choice to get local produce, to get produce that's grown sustainably. Their gift is also enabling some workers to have control over daily production decisions. Taken as a whole, the arrangement creates a social link between customers and producers that is absent in the typical market context. Customers and farmers are associates who work together to produce and consume food. 

This is all very encouraging and a good example of a hybrid. It has worked for seven years now so even if it failed next week, it is still an important intervention. But what are the limitations of their practice? What market sanctions make an ethical practice of this kind difficult? 

The first one is that the eight members of the co-op are not paid well for their work. The cooperative is getting an average of £7,000 per week for their produce. They must pay for inputs out of that income. The remainder must be divided between eight people. They are charging £40 to £60 for a box of veggies every week. That is cheap compared to typical supermarket prices for organic vegetables. Presumably, they are keeping their prices low to compensate customers for the inconvenience of their product. If their prices were higher, they would lose some of their 120 customers. Supermarket prices set the upper limit of their own pricing. The supermarket prices rely on exploitation of labour from the global South, along with the cheap price of farming land in the global South. So how is the cooperative dealing with that in terms of wages? They're paying their workers £20 for a six-hour day of work. To supplement these low wages, the government gives each of their workers a £50 per week subsidy. A subsidy designed to prop up low wage work and keep people off welfare. The co-op members also get bed and board free of charge. Adding it up, they are typically ending up with about £150 pounds in money plus bed and board. The median wage in the UK now is £584 pounds a week. 

On the one hand, this wage arrangement reveals the extent of their departure from normal market practice. They are giving away some of their capacity to earn income. But what it also means is that participation in the cooperative is tenuous and comes with certain costs. Some members of the co-op cannot get by on their co-op income and are supplementing that income with other work. For example, one member is doing three days of building work per week. We can think of a hybrid as a prefiguring strategy, which is intended to undermine and replace capitalism. The low wage consequence of this departure from market practice reduces the number of people in the UK who would be willing to do this. A market sanction. Low wages are a consequence of market competition with supermarkets — that are behaving perfectly rationally as market actors.

Obviously, you will get a small minority of people who are prepared to take these low wages because they're ethically committed to doing this. But it is unlikely that this kind of intervention will take over 90% of the UK food industry. The middle class are the people most psychologically equipped to take a risk with money like this. The options they close off through a long-term commitment to low wages are — for example — buying a house, sending their children to university, owning a car.  

I asked Alice about these issues. I suggested they were charging a low price for their vegetables. 

Probably, yeah, probably it depends. Like now some of the industrial organic farm movement is like ruining this shit. Same as they have in the states. So now Aldi have gone organic. All their vegetables are ‘organic’. They're not local. Who knows really, how they're farmed.  ‘Organic’ doesn't mean anything anymore. We need to relabel like ‘fresh’, ‘local’. 


What she acknowledges is that their low prices are forced upon them — because they're competing with Aldi, that has declared all their vegetables ‘organic’. In fact, those Aldi organic vegetables are being grown on massive farms, in a low wage country, exploiting local people at dirt cheap wages, and then trucked all the way to UK. Followed by refrigeration for months. 

The next market sanction to consider is land ownership. Their land ownership is very insecure, as I have explained. They are in an extremely lucky position, having a parental loan of land. Their aim is to get crowd funding. To buy the farm from the parents. But it's now seven years into the co-op and they have not yet been able to do that. Zooming out to look at the prospects for this kind of intervention in the UK in general. Farming land in the UK is owned by a wealthy elite with a price well above its value for commercial farming.  The cost of land is a barrier to small scale cooperative farms making an income from selling organic food locally — the most ethical form of food provision for the UK. This elite ownership acts to prevent people setting up small farms run on cooperative lines, doing organic agriculture and marketing produce locally. As Alice explained, to make a farm commercially viable in competition with the supermarkets:

Land workers and the products of the land have got to be ludicrously cheap. Land is so expensive. We need to get that land. They need to look at government programs for helping people to become tenant farmers, like the ecological land trust to set up farming situations for people. So, you don't have to have like a half a million quid to become a peasant. And they need to look at the price of food. They need to look at the way they subsidize farmers for doing environmental goods. 


In other words, the only way to make an ethical intervention like this more common is to take strong state action and make more radical inroads into the capitalist economy. The government should buy land and give it to farmers at a subsidized rate — so that we can diversify ownership and allow more community control of food provision. While this (or something similar) might well happen in the context of system change, it's not likely in the immediate future.

The Mondragon collectives in Spain

I will consider the Mondragon collectives next because they're iconic. People often refer to them as an example of an alternative that prefigures the ‘solidarity economy’. A post-capitalist society in which the dominant economic form is collectives of workers operating in a market economy. I will use the Mondragon collectives as an example through which to consider some of the problems with that scenario. 

The Mondragon collectives are situated in the north of Spain. They were set up by Catholic priests in the fifties when Franco was in power in Spain. They manufacture white goods, like washing machines, fridges, ovens. The Mondragon workers’ cooperative owns the factories, plant and equipment. Initially, all workers in their plants were members of the cooperative and had voting rights to make decisions about how the cooperative would be run. So, this is a paradigm of the ideal leftist cooperative that people envisage. It's still operating today so it has been around for more than 70 years. Apparently showing that a workers’ cooperative can be sustainable in a market economy. I will review this as a hybrid of the gift economy and capitalist market economy. The market aspects, the non-market aspects, the limitations of their practice.

The market aspects are as follows. They are selling white goods on an international market for white goods. People are buying whitegoods made by the collective in countries around the world. There is private ownership of the means of production — their firm is owned privately by the collective. People who are not members of the collective have no ownership rights in it. As with any market business in a market economy, the workers are wage earners. They have become members of this organization because they want to make a reliable wage. They are depending on the market success of their enterprise for their income. For example, if their washing machines are not attractive in the market, they just won't sell, and they won't get any wages. Their income is proportional to the market power of their organization and the success of their market endeavour. 

Now let's look at some of the aspects of their practice that nominate the cooperative as a hybrid of the gift economy and capitalism.

The factories are not owned by an individual capitalist or a suite of shareholders who are sitting back and receiving interest from their loans, or profits from their shares. It is owned by the workers themselves. The money goes back to them or goes back into increasing the value of their plant. It does not go to a separate exploiting group. They are making democratic decisions about the use of their profits. There is at least an analogy to a gift economy in so far as a collective of workers has ownership of their own means of production and has the option to make decisions about distribution. An example that shows this power to be quite real is their decision to cap wages as profits increase. Instead, they have decided to allocate some of their earnings to community services such as buses and childcare centres. Another allocation is to the promotion of cooperatives – to the cooperative movement. These allocations are clearly gifts. They are making a partial gift of their profits to the community, not expecting any monetary return, a completely non-market practice. 

Let's look now at the limitations of their intervention. The level of wages is constrained by the labour market. They cannot pay substantially less than the going rate without endangering the cooperative. One effect of these market pressures is that the cooperatives had to decide to pay a higher rate to professionals, such as engineers and accountants. The ordinary industrial workers are working just as hard and yet they're not being paid as much. This goes against the norms of a gift economy — in which distribution is allocated in relation to need. This unequal pay scale is surely an outcome of market pressures. They would find it hard to recruit the professionals they need if pay was drastically different to that typical of the labour market. At the same time, there is some difference – professionals in the collectives are being paid slightly less than the going rate. A gift to the cooperative. But a gift limited by market constraint.

There is perhaps a more profound determination by the market economy here. Saito makes the point that capitalism as a system invades every detail of the production process, to set it up to make the highest possible profit. A pressure which is certainly applied to the Mondragon collectives, selling their whitegoods on the international market. One aspect of this is the separation between intellectual and manual work that is such a feature of capitalist production. Braverman explains how this operates to remove daily control over production from the hands of ordinary workers and vest it in a ‘paper’ (now digital) determination of the production process set up by engineers. As Saito points out, to overthrow this capitalist technology, it would be necessary to demolish this hierarchical arrangement. 

The Mondragon collectives have not been able to do this in the context of market pressure. Instead, their production process mirrors that of more clearly capitalist firms. Let me put it like this. The collective has set up production to achieve ‘efficiency’ measured in relation to monetary income. That is what the market requires. However, this ‘efficiency’ is not necessarily what would make sense in a gift economy. If we were trying to maximize enjoyment of work and to ensure sustainability — as well as produce a useful product. 

‘Efficiency’ in creating monetary value is also inevitably a political project. The separation of planning and execution. The monetary structures of reward accompanying this. These are designed to control ordinary workers who are alienated. Bored, not paying attention, not invested in the outcomes. In actual resistance, as in sabotage, going slow, stealing. The professional class are paid for their loyalty as much as for the fact that their skills command a higher price on the labour market. How much this all applies in Mondragon is hard to determine. On the one hand, as a collective, one would expect all the workers to want to increase value, measured in money. That is where they get their income. On the other hand, as individual workers, they are caught up in a system of production that is alienating in its subordination to market demands. The structures of command that accompany the division between planning and execution must exacerbate this.

There's a second thing, which is so obvious it feels strange to talk about it. Every worker in the collective is being paid in money and needs that money to live their life. They are doing that by buying goods and services produced by people around the world who are part of the market economy. Those people around the world are doing what makes market sense, often the opposite of what they themselves think would be enjoyable and useful work. They're most likely being ordered around by a boss — making decisions purely on a profit basis. Who does not care at all how unpleasant the work is. In very many cases, these workers feel humiliated, that they are being ordered around, that they are bored beyond belief. Every time the workers of Mondragon spend their money to live their own lives, they are complicit in the market economy taken as a whole.

An aspect of their location in the market economy is that the company needs income from sales. They cannot give what they produce free of charge. They may be aware that they are selling their white goods to relatively affluent workers in the rich countries. They could come to understand that people in rural villages in the global South may not have access to fresh water. Such villages could benefit from a pump to access water from an aquifer, from tanks and guttering to harvest water from roofs, from concrete and poly-pipe to construct small dams and bring water to the village. They may know all this in the Mondragon collectives, but their hands are tied in terms of what they can do about it. They cannot abandon the market in white goods that guarantees their incomes. They cannot start producing the prerequisites for village water systems and donating them. 

This discussion is leading to a telling example of the way their operations are confined by market processes. As readers of this book know, the capitalist class in the 1970s and 1980s worked out how to offshore production from the global North to the global South — where wages were much lower — producing the same manufactured goods at much reduced prices. And incidentally destroying the political power of the working class in the global North. As you can imagine, the Mondragon cooperatives were staring down the barrel of annihilation at this point. They could not reduce wages for their workers in Spain — without losing their workforce. They had to reduce the price of their white goods to compete on the new post globalisation marketplace. They made a fateful decision. They would supplement their cooperative workforce with cheaper labour. They started employing people who were not members of their cooperatives and paying them 20% less. So that's what they did in Spain. They also started setting up plants to make components for their production in the global South — in Thailand, Brazil, India and China, to name only some of the countries involved. Now, nine per cent of what they sell is made in those overseas plants. These new workers from the global South were not offered membership in the cooperative. It is currently estimated that of every ten employees working directly for the Mondragon cooperative, only four are members of the cooperative[1]. The collectives have created their original members as a labour aristocracy within their firm. Their other workers were disenfranchised within the power structure of the cooperative. My point is not to blame them for these decisions. Compromises of this kind are inevitable in hybrids of capitalism and the gift economy. What they have accomplished, both now and in the past has been a serious improvement on stock standard capitalism. On the other hand, what these compromises bring to attention is the difficulty of running a gift economy ethics in the context of a market economy.  


What lessons can we draw from this discussion of hybrids? To begin, that there are barriers in the way of gift economy practices. These are not barriers set up by a conspiracy of capitalist elites — they're barriers that are implicit in the market economy as a social game. They come about through those structures that everybody implements, in their daily life, without even thinking about it. Structures which make money and the market work as social institutions. My conclusion, as explained in other chapters, is that we need to get rid of the market and money. On the one hand, I think that hybrids are a good strategy and a step in this direction. But I don't think they go far enough in the long term. We need to abolish the market altogether.

Now from a more optimistic point of view, one of the things you could say is that if these hybrids became a dominant form of economic unit, they would cease to be hybrids of the gift economy and capitalism. Their market aspects would fall by the wayside. Let's look at the example I gave of the Mondragon collectives. Let us assume that they decided that they were going to continue to market some of their produce to rich people at higher than standard prices. Other parts of their produce would be donated free of charge to African villages. Clearly a financially disastrous decision. But let us add another assumption. While their work force was being funded in part by their wages, they were also receiving multiple useful gifts from other generous ethical cooperative firms. These would be based on agreements to provide the Mondragon workers with all the thing that they might need, such as trips to take holidays on a sailing ship around the Mediterranean, buses and bikes for their transport needs, free steel for their production. Clearly what such a situation would mean is that the market, monetary aspects of their cooperative would have less and less relevance to how they operated in practice. They could afford generous donations to an African village. 

In other words, an avalanche of hybrids could bring about the gift economy. All hybrids reduce the power of the market to determine production and distribution outcomes. If you have a huge wave of hybrids that start to take over the economy, the power of the market would rapidly fade to nothing. Clearly this is carrying things to extremes. A thought experiment. The more likely scenario is that such hybrids start to take up more and more economic space and lead people to question the market economy. A prefiguring leading on to a revolutionary installation of the gift economy.

I want to conclude this chapter by saying what I think are the practical perils of seeing hybrids as ‘alternative market’ forms — that will come to dominate and eventually achieve a market-based post capitalism. This analysis is not just social theory. For example, in the permaculture movement many people will say, ‘markets are not the problem’, ‘societies always have markets’, what we need is a cultural shift in which ordinary people come to see the error of capitalist assumptions, find ‘right livelihoods’ and use their power over money ethically. There are practical problems associated with this viewpoint. The market and its assumptions act as a social force to sanction conduct that goes against market principles. If you believe that there is no problem with the market it is easy to think that an ‘ethical business’ is no more difficult to set up and maintain than any other stock standard business. This can lead to terrible burnout and depression when the reality of market sanctions starts to bite. When it is actually very difficult to live a reasonable life (however spartan) and access the money you need. To avoid this, it is better to begin by realizing that what you are doing goes against the grain of market practice and will accordingly be difficult. That is not a reason to abandon the attempt to set up an ethical business, but it can help to engender a more realistic and pragmatic approach to the difficulties you will face. 

This optimistic ‘alternative market’ theory of hybrids can also lead to an implicit judgementalism where most people’s choices are concerned. If this is so easy, why are only a few die-hard permaculture people doing it? Answer. Most people have not seen the light and are seduced by capitalist culture. They are taking the easy way out — not realizing the desperate plight we are all in. The necessity to behave ethically where money is concerned. 

Of course, this moral and judgemental account of things is not entirely wrong in some cases. On the other hand, what it tends to forget is the class distribution of economic opportunities and cultural backgrounds. I am reminded of the ‘Global Gardener’ video in which Bill Mollison, one of the founders of permaculture stands on his verandah, looking over his lush food forest and intones. ‘If people only realized that everything they needed is right outside their door. All you really need is sun, plants, and keep your eye on the soil’. The ‘we’ of this proclamation are members of the Australian middle class — backed up by the wealth of their parents, heirs to the cultural capital implied in property ownership and permaculture farming, taking advantage of cheap land that can be accessed in remoter parts of rural Australia. What we need to always remember is that the existing capitalist marketplace provides the economic context for hybrids of capitalism and the gift economy. Ethics cannot make this context go away.


Errasti, Anjel Mari; Heras, Inaki; Bakaikoa, Baleren; Elgoibar, Pilar 2003, “The Internationalisation of Cooperatives: The case of the Mondragon Cooperative Corporation”, Annals of Public and Cooperative Economics, 74:4, pp. 553-684.


Gibson-Graham, J.K. 2006a, The end of capitalism (as we knew it). Minneapolis: University of Minnesota Press.


Gibson-Graham, J.K. 2006b. Post-capitalist politics, Minnesota: University of Minneapolis Press.


Leahy, Terry 2022, The Politics of Permaculture, Pluto, London.


Mollison, Bill 1988, Permaculture: A Designers’ Manual. Tyalgum, Australia: Tagari Publications,


Olin Wright 2010, Envisioning Real Utopias, Verso, London.


Romeo, Nick 2022, “How Mondragon Became the World’s Largest Co-op”, New Yorker, August 27, 2022.


Russell, Julian and Tony Galley 1991, Global Gardener: Permaculture with Bill Mollison, Oley, Philadelphia: Bullfrog Films.


Weiss, Lynne 2022, “The Mondragon Cooperatives”,, accessed July 6th 2023.



[1] Errasti, Anjel Mari; Heras, Inaki; Bakaikoa, Baleren; Elgoibar, Pilar 2003, “The Internationalisation of Cooperatives: The case of the Mondragon Cooperative Corporation”, Annals of Public and Cooperative Economics, 74:4, pp. 553-684.