Music and the "Gift Economy" 7: Alternative Economies

Previous posts in this series:
Music and the "Gift Economy" 1: An Introduction
Music and the "Gift Economy" 2: Examples
Music and the "Gift Economy" 3: Commons, Copyright, and Radical Politics
Music and the "Gift Economy" 4: Personal Versus Impersonal Transactions
Music and the "Gift Economy" 5: Supporting Artists
Music and the "Gift Economy" 6: Problems with Free Art

Over the course of this series, I've explored the concept of a gift economy and haven't found any indication that it presents a way to support the arts any differently than we have done for hundreds of years.

However, some people have suggested some new ways of remaking local, national, and international economies which might include, as a side benefit, support of the arts.

Let me outline a few of the proposals, from least radical to most radical:

Art as a Form of Payment
Barter has a long tradition, so I won't detail it here. I'll just point to a couple of examples of programs where artists can give art as payment instead of money.

The [Brooklyn’s Woodhull Medical and Mental Health Center] Artist Access program, which launched in May, allows artists, through performances or interactive programs for patients, to exchange their art for health care credits. "Art for Health Care," New York Foundation for the Arts.

In Mexico, artists can pay their taxes with artwork, which has allowed the Mexican government to amass a collection of over 4000 pieces since the program started in 1957.

Expanded Use of Commons
In part 3 of my series I brought up the idea of commons. Some people feel we could do even more with the concept as a way to promote creativity and community. Sharing and collaboration are variations on this theme.

Some of the research on commons involves shared natural resources and community areas (e.g., pastures, fishing grounds, forests, parks). Here's what people have learned.

Certain attributes of the local community have been shown to positively affect the outcome; (U1) users are dependant on the resource system for a major portion of their livelihood, (U2) users have a common understanding of the resource and of how their actions affect each other and the resource, (U3) users’ relations are built on trust and reciprocity (direct communication), (U4) users have prior organisational experience and local leadership (Ostrom, 2000). Two more attributes are often discussed as well, but the results on their impact are ambiguous. These are group size and the extent of homogeneity in the community (ethnicity, gender and interests), related to the distribution of resources (Baland and Platteau, 1996; Bardhan and Dayton-Johnson, 2002; Ostrom, 2005).

... “Rules are shared understandings among those involved that refer to enforced prescriptions about what actions (or states of the world) are required, prohibited, or permitted”, according to Elinor Ostrom and Victor Ostrom (2004). "Commons protected for or from the people: Analysis of strategies to establish protected areas in the Swedish Mountain Region." Anna Zachrisson.

Some people are extending the commons concept to sharable items (e.g., equipment, cars). Yochai Benkler wrote a paper outlining the types of products which are especially suited for this, such as those that an individual or family may want and can afford to purchase, but they don't need to use all the time. He also writes:

Pooling large numbers of small-scale contributions to achieve effective functionality—where transaction costs would be high and per-contribution payments must be kept low—is likely to be achieved more efficiently through social sharing systems than through market-based systems. It is precisely this form of sharing—on a large scale, among weakly connected participants, in project-specific or even ad hoc contexts—that we are beginning to see more of on the Internet ... "Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production." Yochai Benkler. Yale Law Review. Vol. 114: 273. 2004.

The paper covers far more than I have excerpted. I recommend you read it if you are interested in the topic. His work is also cited here:

In his book, The Wealth of Networks, Professor Yochai Benkler has developed some brilliant theoretical insights into why online commons can be so generative. He has explained, for example, that peer production is best achieved if a particular task is modular (meaning a complex project can be broken into discrete parts), “granular” (meaning it doesn’t take much investment for an individual to participate), and does not cost a lot to integrate the results. "The Commons as a New Sector of Value-Creation." David Bollier. On the Commons. 4/22/08.

Here are more suggestions related to online commons.

For the whole structure to work without large-scale centralized coordination, the creation process has to be modular, with units of different sizes and complexities, each requiring slightly different expertise, all of which can be added together to make a grand whole. "Chapter 8: A Creative Commons." The Public Domain: Enclosing the Commons of the Mind. James Boyle.

In discussing commons, I have gone from commons as a physical location to commons as shared objects to commons as shared projects. Moving along that continuum, here's a list of factors that contribute to successful collaborations:

The following general, practical guidelines for collaboration resurface throughout much of the literature in the field of collaboration study:

Develop trust and mutual respect

Outline clear and attainable short and long-term goals

Define needs/self-interest well

Give reasons behind your thinking

Combine online collaboration with face-to-face meetings to speed up the process

Be concise, patient, and persistent

Get everybody involved in the process

Develop a clear process including self-reflexive loops

Stick to initially made commitments

Take a dose of humility

Develop good listening skills

Pay attention to scale in collaborative groups (production groups: 4-5 participants)

Put a stop to domineering interruptions and put-downs

Communicate frequently, clearly and openly

Acknowledge upcoming problems

Use facilitators for larger groups

Develop a long-term view

Learn when to let go

"The Participatory Challenge," Collectivate.net [from: Krysa, J., ed. (2006) DATA Browser 03. Curating immateriality. The work of the curator in the age of network systems. Autonomedia: New York.] Trebor Scholz 2006

What all this research on commons indicates is that people in a variety of disciplines are looking at alternative forms of property and work. And as ownership and sources of income blur, that filters down to those who make, or attempt to make, their living from the arts and other creative fields. The more that is shared, the less artists have to buy themselves, but also the less they might be able to sell.

Here are some resources:

On the Commons

What’s Mine is Yours: The Rise of Collaborative Consumption

Shareable: Is Social Media Catalyzing an Offline Sharing Economy?

Guaranteed Basic Income
A number of people have come to the conclusion that providing everyone a basic amount of money every year to cover necessities is a better system than either providing no help for the poor or coming up with a patchwork of social programs. This money would also serve as a subsidy to allow some people (including artists) to pursue important but low-paying activities.

Among those who support the concept is Peter Barnes. In his book Capitalism 3.0 he covers capitalism's strengths and weaknesses.

When capitalism started, nature was abundant and capital was scarce; it thus made sense to reward capital above all else. Today we’re awash in capital and literally running out of nature. We’re also losing many social arrangements that bind us together as communities and enrich our lives in nonmonetary ways. This doesn’t mean capitalism is doomed or useless, but it does mean we have to modify it. We have to adapt it to the twenty-first century rather than the eighteenth. And that can be done. Capitalism 3.0: Preface

Barnes feels there is historic precedent for providing people with an annual stipend.

[Thomas] Paine therefore proposed a “national fund” that would do two things:

[Pay] to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property: And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age.

A century and a half later, America created a national fund to do part of what Paine recommended—we call it Social Security. We’ve yet to adopt the other part, but its basic principle—that enclosure of a commons requires compensation—is as sound in our time as it was in Paine’s. Capitalism 3.0: Chapter 2

Barnes says that giving everyone a little bit of money will actually make a better economy. As an example, he discusses Monopoly.

... Monopoly has two features currently lacking in American capitalism: all players start with the same amount of capital, and all receive $200 each time they circle the board. Absent these features, the game would lack fairness and excitement, and few would choose to play it.

Imagine, for example, a twenty-player version of Monopoly in which one player starts with half the property. The player with half the property would win almost every time, and other players would fold almost immediately. Yet that, in a nutshell, is U.S. capitalism today: the top 5 percent of the population owns more property than the remaining 95 percent.

Now imagine, if you will, a set of rules for capitalism closer to the actual rules of Monopoly. In this version, every player receives, not an equal amount of start-up capital, but enough to choose among several decent careers. Every player also receives dividends once a year, and simple, affordable health insurance. This version of capitalism produces more happiness for more people than our current version, without ruining the game in any way. Indeed, by reducing lopsided starting conditions and relieving employers of health insurance costs, it makes our economy more competitive and productive. Capitalism 3.0: Chapter 7.

There is even conservative support for a basic guaranteed income:

Support has now come from what might seem a surprising source: the US policy analyst Charles Murray (In Our Hands, American Enterprise Institute). Mr Murray regards himself as a libertarian but of a socially conservative kind. ...

His starting point is that in spite of well over $1,000bn (€810bn) a year spent on welfare services of all kinds, poverty in the US is still rampant. He comes out for an unconditional basic income of $10,000 a year for every American over 21. I was originally attracted to basic income as a way of divorcing capitalism from the puritan ethic and allowing young people or creative artists to opt out from the rat race. Mr Murray on the other hand finds numerous, ingenious arguments whereby an unconditional payment of this kind might help restore the work ethic and traditional values. "Surprising case for basic income." Samuel Brittan. Financial Times 4/21/06.

Michel Bauwens, creator of The Foundation for P2P Alternatives, also supports the concept of a basic guaranteed income.

... clearly we need a more durable macro scale arrangement and, as I said, it is my belief that it will require the introduction of a universal basic income. This is a logical outcome, but it is surely several decades away. "P2P: The very core of the world to come," Open and Shut? 9/7/06.

Collective Ordering
As technology allows more people to connect and work together, this has given hope that at some point they will be able decide in advance what they need and then how to produce or acquire it. That will allow more efficiency than the current market system.

A key insight into the altruistic economic model is that a limit on the number of an individual's direct relationships need not limit the number of their indirect relationships, since computers can efficiently establish and use multi-step relationships such as friends of friends. "Altruistic Economics & The Internet Gift Economy." Robin Upton. Altruists International. 7/7/05.

Environmenalist Dave Pollard explains it this way:

Now, in a process called Peer Production, the local people interested in becoming suppliers, customers or investors of the offering that will fill the unmet need from step 1 above, self-organize and become partners in the enterprise, and co-design the offering to meet their specific needs. This is not rocket science; the reason it isn’t done in traditional economy companies is that it doesn’t scale well up to the multi-national level that traditional enterprises need to grow to to continue to exist.

The partners now decide which of them will work how many hours in the enterprise and what they will be paid (dependent on their time availability, personal income needs, and the needs of the enterprise — but with little differential between highest and lowest hourly rate, and with an appreciation that the enterprise is not for-profit and must manage its costs prudently). "How a Community-Based Co-op Economy Might Work." Dave Pollard. How to Save the World. 7/29/10.

The ideal is that if people have a guaranteed basic income, they won't have to work at jobs they hate and will be free to contribute in ways and to the extent that they wish. According to Bauwens:

In the context of P2P, equipotentiality is the assumption that the individual can self-select his contributions, which are then communally validated. "P2P: A blueprint for the future?" Open and Shut? 9/3/06.

Here are three other advocates of using networks to realign labor.

The essence of the long-term goal is to reduce the workweek to its minimum, so that the work we have to do to survive [pay rent, eat food etc] is no more and no less than what is needed for our survival. The remaining time is then freed up to pursue work that we want to do. It’s a shift from a must-work economy to a want-to-work economy.

Work that people want to do is inherently useful. It’s a gift economy. I want to teach: so I teach, I want to learn: so I go to school, I want to bake cookies, I want to help kangaroos who are being badly affected by our activities, or maybe I want to become a doctor and heal people. As the workweek gradually decreases, our time to do positive contributions increases, and the net-output of the human-system becomes ever more increasingly “positive”.

The beauty of such a system is that if someone is working 2 days a week, say: farming their own vegetables, and then they decide to do nothing for the remainder of their week, this is not only completely acceptable, it is preferred to them making something they didn’t actually want to do. "Gift economy: a viable economy," Sebastian Chedal. 3/12/09.

What about the jobs no one wants to do-like cleaning a public bathroom?
With the mentality encouraged by the gift economy, we would all understand what needs to be done and help where help is needed. Meanwhile, our sense of fairness would help balance the work that needs to be done on a case by case basis. If someone cleaned a public bathroom once a week, then because it is unpleasant work, perhaps they wouldn't be expected to do anything else all day. Or perhaps people would take turns doing easy-to-do yet unpleasant duties like cleaning public bathrooms. There wouldn't be any strict rules about it - people would just be held socially responsible for their role in maintaining a healthy and harmonious society.

What if people don't want to work at all? What if they just want to mooch?
If we lived in a society where people are looked down upon for not contributing their fair share to society, then no one would choose laziness and risk losing the respect and love of their community. And in the case that there are still people who don't contribute, community members could influence each other by refusing service to those who don't seem to be contributing. "Transition to the Gift Economy." Russell Jelter. March 2010

To escape from the fetters of competition, we need to develop an economy that is based on giving rather than trading: a gift economy, in place of this exchange economy. In such a system, each person could do what she wanted to with her life, and offer to others what she felt most qualified to offer, without fear of going hungry. The means to do things would be shared by everyone rather than hoarded up by the greediest individuals, so each person would have all the capabilities of society at her disposal. Those who wanted to paint could paint, those who enjoy building engines and machines could do that, those who love bicycles could make and repair them for others. The so-called “dirty work” would be spread around more fairly, and everyone would benefit from being able to do a variety of things rather ^J than being limited to one trade like a cog in a machine. "What's So Bad About Capitalism?" SF Bay Area Gift Economy - tribe.net, 12/17/05.

Douglas Rushkoff goes a step further and proposes that we take money away from those people/companies that don't do anything and give it to people who do something.

A majority of the money earned under our current currency system is earned by people who don't actually do anything. As such, all this speculation is a drag on the system. Speculators just bet on various companies' ability to pay back what they have borrowed. ...

The way out —— as I see it —— is to begin making our own money again. I'm not talking barter, but local currency. Money is just an agreement. And the more a community trusts one another, the more efficiently the moneys they develop can function. We can create units of currency based on anything; if we don't have grain, we can earn it into existence instead by babysitting, taking care of the elderly, or teaching in a charter school. Every hour worked is an "hour" of currency credited to your account. "Hacking the Economy." Douglas Rushkoff. h magazine. 3/19/09.

But we can take it one step further than creating local currency.

An Economy without Money
The most extreme reinvention of the economy is to eliminate money altogether.

Imagine a future in which millions of families live off the grid, powering their homes and vehicles with dirt-cheap portable fuel cells. As industrial agriculture sputters under the strain of the spiraling costs of water, gasoline and fertilizer, networks of farmers using sophisticated techniques that combine cutting-edge green technologies with ancient Mayan know-how build an alternative food-distribution system. Faced with the burden of financing the decades-long retirement of aging boomers, many of the young embrace a new underground economy, a largely untaxed archipelago of communes, co-ops, and kibbutzim that passively resist the power of the granny state while building their own little utopias. "The Dropout Economy - 10 Ideas for the Next 10 Years." Reihan Salam. Time. 3/11/10.

One reason people think a cashless economy is possible is that abundance will replace scarcity. It's just a matter of making sure it is distributed in an equitable manner.

The future will be shaped by three interlocking trends: imploding capital outlay requirements for production, reduced transaction costs of networked organization, and eroding enforceability of artificial property rights. Taken together, they will render the propertied classes' privileged access to large amounts of land and capital irrelevant, act as a force-multiplier for bootstrapping the alternative economy, drastically lower the revenue streams required both for households to subsist and microenterprises to stay in business, and shift a large portion of consumption needs into the category of Free or virtually Free as embedded rents on artificially property rights are washed out of the price of goods. "The Abolition of Scarcity." Kevin Carson. The Future We Deserve.

A group that is rapidly spreading around the world is The Zeitgeist Movement, based on the ideas of Jacque Fresco.

Simply stated, a resource-based economy utilizes existing resources rather than money, and provides an equitable method of distribution in the most humane and efficient manner for the entire population. It is a system in which all natural, man-made, machine-made, and synthetic resources would be available without the use of money, credits, barter, or any other form of symbolic exchange. ...

Cybernation, or the application of computers and automation to the social system, could be regarded as an emancipation proclamation for humankind if used humanely and intelligently. Its thorough application could eventually enable people to have the highest conceivable standard of living with practically no labor. "Resource-Based Economy." Jacque Fresco. The Venus Project.

Here's more: "What are some of the central characteristics of a 'Resource-Based Economy?'"

So now, we have finally reached a point where a gift economy makes sense. If there is abundance and if people trust that their needs will be met, they may feel free to give away what they want to give away and what they don't need.

In various ways Marcel Mauss, Georges Bataille, and Jean Baudrillard have all argued that societies are grouped around the notion of excess (and acts of generous gift giving) rather than resource scarcity (Coyne 2005: 99-150). "The Participatory Challenge," Collectivate.net [from: Krysa, J., ed. (2006) DATA Browser 03. Curating immateriality. The work of the curator in the age of network systems. Autonomedia: New York.] Trebor Scholz 2006

My personal opinion is that all the discussions about giving away music and then selling scarcities is way too limited. Most of the proposed ways for musicians to make money are based on consumerism. Should we be encouraging them to sell anything? Or should we find ways to help them, and others, survive in a new economic system? As we move more toward user-generated creativity and participatory society (in art, journalism, networking, and so on), finding ways for everyone to live fully and creatively rather than just finding ways for elite artists to sell their works seems to be a good goal.

Here are two extensive gift economy resources:

Regenerosity

Anarchism and Gift Economy

Suzanne Lainson
@slainson on Twitter

UPDATE 11/20/10
A recent article on the subject: "To end poverty, guarantee everyone in Canada $20,000 a year. But are you willing to trust the poor?"

Music and the "Gift Economy" 5: Supporting Artists

Previous posts in this series:
Music and the "Gift Economy" 1: An Introduction
Music and the "Gift Economy" 2: Examples
Music and the "Gift Economy" 3: Commons, Copyright, and Radical Politics
Music and the "Gift Economy" 4: Personal Versus Impersonal Transactions

Lewis Hyde is the person most closely associated with arts and gift economies. His book, The Gift, is considered a classic by many.

"In a society that mostly talks about money,” says Margaret Atwood, who keeps a half-dozen copies of “The Gift” on hand at all times to distribute to artists she thinks will benefit from it, “Lewis carved out a little island where you can say, ‘Life doesn’t always work that way.’” "What Is Art For? - Lewis Hyde - Profile," New York Times, 11/16/08.

To quote Hyde directly:

... there are categories of human enterprise that are not well organized or supported by market forces. Family life, religious life, public service, pure science, and of course much artistic practice: none of these operates very well when framed simply in terms of exchange value. The second assumption follows: any community that values these things will find non-market ways to organize them. It will develop gift-exchange institutions dedicated to their support. "Reflections of Arts Funding since World War II." The afterword of The Gift, printed in The Kenyon Review, Winter 2008.

Others share this viewpoint. For example, writer/environmentalist Dave Pollard:

Our society puts a value on human activities only when they can be monetized – when a transaction involving an exchange of money occurs. We tend to equate our time with money: If the "market value" of an hour of our time exceeds the cost of hiring someone else to mow our lawn or make a present for a loved one or look after our children or our home, we conclude that it makes sense to buy those services and to work longer hours to pay for them. ...

By contrast, the Gift Economy does not value monetized activity more highly than un-monetized activity. It suggests, on the contrary, that our time is invaluable and that therefore we should "spend" it, as much as possible, doing things we love and things that are our personal responsibility, and only buy goods and services we cannot possibly provide for ourselves. In doing these things ourselves, we learn to do them better, more efficiently, more effectively and more economically, saving the cost of outsourcing them to a third party. "The Virtuous Cycles of the Gift Economy," How to Save the World. 12/6/06.

Sharon Bolton warns that depending too heavily on a market economy mentality will strip us of traditional community values:

The market becomes disembedded, autonomous, self regulating and entirely economic in nature, purpose and outcome. For the moral economists, in modernity the market takes on a life of its own which is represented by the commodification of whole areas of social life. A process that eats into and, in some cases, consumes and overrides the values and norms of the non economic realm. Rather than society being integrated via non economic institutions of family, church and community; the market becomes the integrative mechanism pervading all aspects of the non economic. In other words the process of embeddedness is reversed; with modern society becoming embedded in the market, rather than the pre modern market being embedded in society, and "refashioning its ethos and relations after its own image" (Booth, 1994: 656). The tentacles of the "market society" extend to such an extent that the economic becomes the sole vehicle of analysis and all aspects of social life are objectified, quantified and couched in terms of maximising behaviour and efficiency – the human becomes understood only as homo economicus (Booth, 1994; Polyani, 1977). "The Idea of the Moral Economy."

Perhaps not surprising, many creative people don't want to have to think about using their art to make a living. Unfortunately, after giving us an entire book on gift economies, Hyde doesn't offer any new ideas on how artists can survive financially. He says they can get day jobs, find patrons, or sell their art.

Getting a day job is pretty self-evident and I have covered it in other blog posts.

The second job frees his art from the burden of financial responsibility so that when he is creating the work he may turn from questions of market value and labor in the protected gift-sphere. He earns a wage in the marketplace and gives it to his art.

... The artist who takes a second job becomes, in a sense, his own patron: he decides his work is worthy of support, just as the patron does, but then he himself must go out and raise the cash. "Lewis Hyde on Being an Artist in a Commercially Driven World." Excerpt from The Gift. In Saachi Online, 12/12/06.

Here's just one real world example of this:

Artists pay a significant economic penalty to pursue their practice, and are, through real monetary contributions, replacing potential income-earning employment with what amounts to free labour. In 2007, the average artist worked 26 hours per week on their studio practice, 14.5 hours on art-related employment, and 7.6 hours on non-art-related employment. In addition, they volunteered just over 3 hours a week to art-related activities. Those artists who spent a majority of their employment time in the studio earned significantly less total income, a median of $15,000, versus $28,994 for artists who spent most of their time in art-related employment, and $21,793 for those who spent most of their time in non-art-related employment. "Waging Culture: the socio-economic status of Canadian visual artists," Out There, 4/1/09.

Hyde includes grants as a form of patronage. I'll go step further than Hyde and suggest there is a continuum of financial support that includes patronage at one end and charity at the other, with nonprofit/government funding in the middle. All involve having a person or institution with greater resources giving to a creative person with lesser resources.

(However, some of what passes for patronage doesn't involve the rich supporting the poor. For example, there are middle class "patrons" who commission works of art from affluent artists. In other words, the "patron" may actually have less money than the artist. But I'll treat these as market transactions because in return for financial support, a creation of comparable value is delivered. Similarly, there are financial prizes given out to artists in recognition of work they have done, with no regard to their financial need. I won't include those as examples of grants.)

To put that financial support continuum into perspective, let me start by citing a paper discussing 19th century English writers and their search for funding. (It's a long paper, but worth reading. Since the online copy is broken down into pages, I have included separate links to each page containing each quote.)

How to get money or resources into the hands of the poor (which can include artists) is at the heart of most economic, religious, political, and societal concepts, so understanding the process is fundamental to understanding how a given community/society conducts itself. In Dickensian England, outright charity was considered demeaning, so paupers sold items that actually had little value. No one needed what they were selling, but these transactions allowed the paupers to save face when accepting money. It was a "sale" rather than a "handout."

It was that same mentality that made giving handouts to writers unpalatable.

Like Mr. Dorrit and the little girls with their bouquets of violets, proponents of nonmarket forms of authorial support strive to dignify the transfers of cash they advocate by characterizing them as offers of tribute rather than alms, or as loans or payments of some sort rather than gifts. "Literary Paupers and Professional Authors: The Guild of Literature and Art." Daniel Hack. Studies in English Literature, 1500-1900. Autumn 1999.

Although gifts and charity were frowned upon, the marketplace wasn't doing a good job of supporting writers either.

The disjunction between intellectual pursuits, on the one hand, and commerce and the provision of daily wants, on the other, explains why men of letters require extramarket support. "Literary Paupers and Professional Authors: The Guild of Literature and Art."

So a debate was going on as to whether government subsidies would be appropriate. The pro-subsidy writers felt the market wouldn't provide enough money, but on the other hand, they didn't want government funding to be seen as any sort of charity, which would demean them and devalue their writing. Therefore they said that the government should pay writers because writers contribute so much to society.

Services done to the State by distinguished efforts in art, literature, and science, are as unequivocal, and at the least as important as services done by professors of arms, law, divinity, and diplomacy. The claims of literature and science are for a due recognition and recompense of such valuable service rendered to the State. ... the state is indebted to these men, and therefore that any payment it makes to them constitutes repayment of that debt. Pensions and the like are not charity, nor even supererogatory tokens of gratitude or esteem ... but simply "due ... recompense." "Literary Paupers and Professional Authors: The Guild of Literature and Art."

Hack points out that justifications for having the government pay writers covered all bases (sometimes in a contradictory fashion):

They deserved it.

They needed the money to subsidize their creativity.

Their craft would suffer or not advance if all they did was to focus on what they could sell rather than taking time to pursue worthy, but not necessarily salable works.

Their writings were a gift to society, so no monetary price could be put on the creations and therefore the government would never be able to pay them enough, but it should give them something anyway.

The problem with giving writers money in recognition of something they had already written was that many of them were too poor to write without upfront funding to cover their living expenses while they wrote. In a nutshell, in Victorian England, like today, people were trying to decide whether or not to use government money to fund writers and if so, if it should come as an advance for future work, or as a reward for already completed work.

Another concept that was being promoted was a writers' guild.

In order to offer such tributes, the Guild proposes establishing an "Institute." This Institute, carefully designed in such a way as to distinguish its support from "the humiliating charity of an Asylum," will have a Warden, Members, and Associates, who are to receive "salaries" of £100 to £200 a year, some with housing on land donated by Bulwer Lytton. Individuals insured through the Guild, along with certain "exceptional cases," will be eligible to offer themselves as candidates for these positions, which are to be filled (again with certain exceptions) through a vote of the Guild's members. Institute Members will be elected for life from "Writers and Artists of established reputation, and generally of mature years (or, if young, in failing health), to whom the income attached to the appointment may be an object of honourable desire"; associates will be chosen either for life or a fixed term from among those who are "less known to the general public" and those "in earlier life, who give promise of future eminence, and to whom a temporary income of £100 a year may be of essential and permanent service". Applications are required for these positions, but there is no means testing; instead, "the application for the office should be held a sufficient presumption that the candidate does not disdain the modest salary attached to it". "Literary Paupers and Professional Authors: The Guild of Literature and Art."

But just as artists today run into problems trying to value what can't always be monetized, so too did this guild run into the same problems.

... to legitimize the Guild's supplementation of the marketplace, literary labor and its products must be shown to have a value the market does not always recognize or reward, but the best way to ensure this supplement's difference from charity is to represent it as a calculated, calibrated payment for goods and services. "Literary Paupers and Professional Authors: The Guild of Literature and Art."

Then there was the problem of how to raise funds for the guild. They didn't want to taint their image by hustling for money. Other options: Stage some plays and sell tickets? Sell annual subscriptions? (Not a whole lot different than ideas being tossed around today, is it?)

The guild organizers contacted a duke to sponsor a play to be attended by Queen Victoria and her court. But then they worried that the Duke might be offended by the play (a satire about a duke). (Sound familiar? Sponsors influencing art.) Luckily the Duke read the play, found it funny, and approved it.

... although the theatrical performances raise over £4000 by 1854, the Guild's Institute is variously derided as a "literary Soup-Kitchen" and "a system of outdoor relief," and the parliamentary bill incorporating the organization forbids it to fill its offices for seven years, after which time its structure proves largely unwieldy. "Literary Paupers and Professional Authors: The Guild of Literature and Art."

Fast forward to today. Not much has changed. People are still looking for funding models for artists, writers, and musicians. And even though there has been talk of gift economies, most of the proposed solutions still involve a world where a market economy is a necessity.

How, if art is essentially a gift, is the artist to survive in a society dominated by the market? Modern artists have resolved this dilemma in several different ways, each of which, it seems to me, has two essential features. First, the artist allows himself to step outside the gift economy that is the primary commerce of his art and make some peace with the market. ...

And then - the necessary second phase - if he is successful in the marketplace, he converts market wealth into gift wealth: he contributes his earnings to the support of his art.

To be more specific, there are three primary ways in which modern artists have resolved the problem of their livelihood: they have taken second jobs, they have found patrons to support them, or they have managed to place the work itself on the market and pay the rent with fees and royalties. The underlying structure that is common to all of these - a double economy and the conversion of market wealth to gift wealth ...

... When an artist takes a second job, a single person moves in both economies, but with patronage there is a division of labor - it is the patron who has entered the market and converted its wealth to gifts.

... Each of the paths I have described is most often a way of getting by, not a way of getting rich. No matter how the artist chooses, or is forced, to resolve the problem of his livelihood, he is likely to be poor. "Lewis Hyde on Being an Artist in a Commercially Driven World," Excerpt from The Gift. In Saachi Online, 12/12/06.

Even though Hyde says in the above piece that "our gifts are not fully ours until they have been given away," a profile of Hyde points out that:

Hyde is not a free-culture purist; he holds copyrights on his books, and those copyrights contribute to his income. "What Is Art For? - Lewis Hyde - Profile," New York Times, 11/16/08.

Artist/writer/curator Jon Ippolito also writes about art not being able to survive in a market economy, but at the same time needing help from it.

For property, intellectual or personal, is the enemy of art.

This essay offers neither a Marxist attack on personal property nor a rosy vision of George Bush writing artists a fat check every year. It is simply an acknowledgment of the fact that a gift culture dies if people stop giving. Making art into property helps plenty of folks--even a few artists. The problem is, it cripples artists more than it helps them, by covertly impeding their power to create, to get paid, even to give. ...

In principle, there is nothing wrong with wanting to make a living as an artist. What's wrong is the perception that our society's art market will ever make that possible for more than a token few.

... The plentiful supply of art in our culture is the product of the unrecompensed labor of countless artists working away in their studios.

... How would they pay the studio rent and DSL bill? The same way their parents' and grandparents' generation did, the same way the overwhelming majority of them do now: a day job. Day jobs suck, but they help reinforce the line between the choices artists make for commercial reasons and the choices they make for their art. ...

Artists aren't the only ones whose illusions would be shattered by taking away the false promise of commercial success through selling art. ... Without the pretense of market compensation, the wealthy and powerful might be under a little more pressure to sponsor free health care, grants, and other mechanisms to sustain this invaluable cultural production. "Why art should be free." Rhizome.org, April 2002.

Here's yet another acknowledgement that in today's world, we don't have a gift economy that exists without a market economy.

The economy of the public domain in fact is a form of gift exchange, involving gifts from the past (our natural and social inheritance), in the present (unpaid and underpaid work), and to the future (including our children as a future workforce). The economy of the real world is in fact a synergy between a market economy and a gift economy. Prosperity arises from the interaction of these two sides of the economy, and not from just the market side or just the gift side. In the market economy we work for a private wage or for profit. In the gift economy, we work on a voluntary basis for the benefit of family, community or society, in the general expectation that others make the same sorts of unpaid contributions. Socially responsible businesses (and their employees) pay income taxes for their use of the outputs of the gift economy, while themselves contributing "external" benefits to the gift economy. "Revisiting the UBI." Keith Rankin. New Zealand Political Review, July 1998.

Harvard law professor Lawrence Lessig, who has written extensively on copyright and founded Creative Commons, says something similar.

One of the most important conclusions that can be drawn from the work of Benkler, von Hippel, Weber ... and many others is that the Internet has reminded us that we live not just in one economy, but at least two. One economy is the traditional "commercial economy," an economy regulated by the quid pro quo: I'll do this (work, write, sing, etc.) in exchange for money. Another economy is (the names are many) the (a) amateur economy, (b) sharing economy, (c) social production economy, (d) noncommercial economy, or (e) p2p economy. This second economy (however you name it, I'm just going to call it the "second economy") is the economy of Wikipedia, most FLOSS development, the work of amateur astronomers, etc. It has a different, more complicated logic too it than the commercial economy. If you tried to translate all interactions in this second economy into the frame of the commercial economy, you'd kill it. "on the economies of culture," Lessig, 9/28/06.

And here is this from Michel Bauwens, the creator of the Foundation for P2P Alternatives, which advocates the peer-to-peer concept in as many aspects of life and economics as possible.

Participants cannot live from peer production, though they derive meaning and value from it, and though it may out-compete, in efficiency and productivity terms, the market-based for-profit alternatives. Thus peer production covers only a section of production, while the market provides for nearly all sections; peer producers are dependent on the income provided by the market. So far, peer production has been created through the interstices of the market. "The Political Economy of Peer Production," CTheory.net, 12/1/05.

Those who acknowledge that artists can't survive without either participating in or getting help from the market economy are at least being honest. In contrast, when it is suggested that artists, writers, and musicians should give away their works, but no provision has been made for them to receive life-sustaining gifts in return, this is inherently unfair.

We need to question naive campaigns that merely promote "free culture" without questioning the underlying parasitic economy and the "deprofessionalization" of cultural work. "The Digital Given–10 Web 2.0 Theses by Ippolita, Geert Lovink & Ned Rossiter," Network Cultures, 6/15/09.

Without an exchange of roughly equal value occurring, a marketplace becomes a cruel power game in which one party gets what he wants while offering nothing of equal value in return. Social damage is the inevitable long-term result. That freeloaders are generally unaware of this damage does not mean it is not real, that it is not in fact piling up even as we speak.

I find it interesting that those who take digital music for free that is not being offered for free are not generally attempting to make a grander statement about capitalist society. Few if any seem to be trying to undo marketplace protocol in general, although that would, at least, make some philosophical sense. No, it’s just the digital music they want for free (and okay, maybe movies too, as bandwidth increases). "Free is Not the End (a Fingertips Commentary)," Fingertips Music, 9/13/10.

...The Story of Stuff, seems to be a success. This is work that wants to be given away, distributed freely. We have the technology, a large and growing audience has access to it, but how can we arrive at schemes to fund the creation of this work? We need improved models of state support, new collective and entrepreneurial models and appropriate forms of sponsorship. "The value of didactic art and the gift economy—from object ownership to object affiliation." Adelheid Mers. Art21 Blog, 7/6/09.

So here we are. We still haven't found a way to support most writers, artists, and musicians other than the usual ways -- day jobs, grants/patrons, or selling the works -- all of which still depend on market economies to provide the money to buy the basic necessities of life. And it gets even more complicated when "free" changes people's perception of art and its value:
Music and the "Gift Economy" 6: Problems with Free Art

Suzanne Lainson
@slainson on Twitter

UPDATE 10/12/10
Erik Sherman writes about people who give their work away for free while companies profit from it:

I call it the New Feudalism. There is a dependent relationship uncomfortably reminiscent of the common political and social structures from just before the turn of the first century up until the dawn of the Renaissance. In theory, there was a hierarchy from royalty down to serfs, and people swapped military service to their immediate superiors for the use of land and their ability to make an agricultural living.

In the New Feudalism, workers are technically free, in that they aren’t property. If they receive money, it is a token amount. Instead of land, they receive “exposure” when their material is published. "Huffington Post Makes a Profit? All Hail the New Feudalism!" BNET 10/11/10.