Personal favors have lasting impact on the relationship, and cannot be accounted perfectly so there’s always some residual debt (IMO, this is a feature).
First, have you read Graeber’s Debt: The First 5000 Years? It speaks to exactly this situation and makes points similar to the ones you’re making.
Second, the real advantage of money is that it scales. Exchanging favors is great when we’re all living in tribes or small towns. But if I, as many EAs believe, think that the real problem is not that my neighbor needs a new jacket but that a person 15,000 miles away needs a bednet to protect them from malaria, it’s not at all clear how I can donate that bednet by doing favors for people.
While favors might have a lasting effect on the relationship, the problem with favors is that they require the relationship to already exist. Historically, this wasn’t a problem because people lived in small, economically isolated communities, and didn’t move. You got a set of pre-existing relationships simply by virtue of being born into that community, and you were stuck with those, whether you liked it or not. In that environment, people could keep and settle tabs, often without resorting to any sort of physical currency at all. But now, thanks to globalized trade networks and the businesses that built them, we have the ability to make use of faraway resources (like products made in China) and help people all over the globe (by donating bednets in Africa). In addition, the fact that people have the ability to move means that there needs to be a way for people to transact with others impersonally. I can’t rely on trusting my IOUs when I’m new in town.
So while I do think that gift and favor based systems have some advantages, there is no way I’d trade our modern money-based financial system for a gift economy.
First, have you read Graeber’s Debt: The First 5000 Years? It speaks to exactly this situation and makes points similar to the ones you’re making.
Second, the real advantage of money is that it scales. Exchanging favors is great when we’re all living in tribes or small towns. But if I, as many EAs believe, think that the real problem is not that my neighbor needs a new jacket but that a person 15,000 miles away needs a bednet to protect them from malaria, it’s not at all clear how I can donate that bednet by doing favors for people.
While favors might have a lasting effect on the relationship, the problem with favors is that they require the relationship to already exist. Historically, this wasn’t a problem because people lived in small, economically isolated communities, and didn’t move. You got a set of pre-existing relationships simply by virtue of being born into that community, and you were stuck with those, whether you liked it or not. In that environment, people could keep and settle tabs, often without resorting to any sort of physical currency at all. But now, thanks to globalized trade networks and the businesses that built them, we have the ability to make use of faraway resources (like products made in China) and help people all over the globe (by donating bednets in Africa). In addition, the fact that people have the ability to move means that there needs to be a way for people to transact with others impersonally. I can’t rely on trusting my IOUs when I’m new in town.
So while I do think that gift and favor based systems have some advantages, there is no way I’d trade our modern money-based financial system for a gift economy.