Reciprocity and Gratuitousness in the Market:
A Challenge for the Economic Theory
Luigino Bruni
Introduction
The most relevant novelty that Caritas in Veritate presents for contemporary economic
theory and praxis is the affirmation (in chapters 3 and 4 in particular) that reciprocity and
gratuitousness are founding principles, even for the ordinary economy and market - and not
only the non-profit market, volunteering or social economy, but for all ordinary economic
life, from banks to multi-national businesses.
The thesis may sound revolutionary, and one could legitimately question whether or not it has
theoretical legitimacy. To be able to respond affirmatively to this question, it would be
necessary to remove the theoretical field of incorrect interpretations, or partial ones, about the
concepts of reciprocity and gratuitousness – that can be considered the main contribution and
ambition of this paper. In fact, the current use of these terms in economics, is certainly
different than that which we find in Caritas in Veritate. Only after having critically discussed
these categories will it be possible to understand in what sense and for what reasons these can
find a significant role in today´s market economy.
1. Reciprocity
Reciprocity is an old issue in economics. Dealing with human interactions, economics may
also even be defined as a study of relations of reciprocity. But such a thesis is however would
be true only if we understand understood reciprocity in the old Latin and Greek original
meaning. The world reciprocity, in fact, comes from reciprocus or reciprocitate, that which
means "returning the same way, alternating": reci-procus, where reci is from recus (from re"back" + -cus, adjective formation), and procus (from pro- "forward" + -cus, adjective
formation). The verb reciprocate means "to return, requite". Etymological dictionaries
translate reciprocity as “retrogression, alternation, ebb”, or "move back and forth". Aristotle,
for example, uses the expression antipeponthos in order to express both commercial relations
and civil ones, because an idea of proportionality and mutuality exists in all relations of
within the polis. The idea of reciprocity present in contemporary economics is rather
different, being much more limited than reci-pro-city. In economic theory, reciprocity is
normally associated with other-regarding preferences, which have most commonly been
represented by the assumption of altruism – that is, a positive concern of one person for
another person's welfare or utility. A few marginalist economists (from Edgeworth to
Pantaleoni) at the end of the XIX century had in fact hypothesized, without departing from
the homo oeconomicus paradigm, that agents might undertake actions not motivated by selfinterest. Such behaviour, though, was not considered as especially significant in accounting
for economic interaction, which, in turn, was conveniently restrained limited to the simpler
but realistic assumption that agents, when operating in the market, do not take into account
other agents’ well-being - or, at least, not in a noteworthy degree.
To clear up the current way of treating reciprocity in contemporary economics, let´s begin
from an article that has caused a stir and which was published a few years ago in one of the
most notable journals of economic theory1.
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The authors, two well-respected economists, presented a theory of reciprocity maintaining
that an altruistic person should choose himself an indifferent or less altruistic partner. These
were their reasons: an altruist would be saddened by the low level of happiness of his or her
partner. But, if the second partner also worried about the first, then he or she, too, would be
pained for having made the first partner sad2. In other words, according to this theory on
reciprocity, if the well-being of one person (A) also depends on the well-being of another (B),
and if the well-being of B depends on that of A, when A is not well then B suffers because of
it, and this fact makes A even worse because B is suffering because of him, and so on, in a
growing spiral of suffering. The strategic indication contained in this theory is that if one
wants to avoid suffering too much in difficult moments, it is necessary to choose a partner
who does not worry too much about it, so that these mechanisms are not triggered. The
critique that British economist Robert Sugden gives that article is interesting: “this hypothesis
is contrary to the facts of experience. When we are unhappy, we want sympathy; other
people’s sympathy makes us feel less unhappy, not more. We want partners who will
sympathize with our pleasure and our pains”3.
What is it about the way Bernheim and Stark´s theory treats reciprocity that does not work?
And, in general, that is it that does not work in the majority of today´s theoretical models
dealing with reciprocity in social sciences and which are substantially based on the same
hypothesis? In my opinion, the weak point of the whole structure is treating reciprocity as a
question of individual preference4, when in reality it is primarily a relationship and not a sum
of individual preferences. To correctly study reciprocity, there would be need of a language,
even a mathematical language, that is capable of describing relationships and not only
preferences and individual choices. If reciprocity is second, relationship will be always more
instrumental. In fact, the kind of paradoxes underlined highlighted by Sugden is the
consequence of a key methodological issue, namely the idea that a relationship, such as
reciprocity, can be described and analyzed in terms of individual preferences and beliefs.
From this perspective, neoclassical or mainstream theory of reciprocity is perfectly consistent
with the so-called theory of social preferences, which considers phenomena that are
essentially relationships as a matter of individual preferences. In the last few years, in fact, in
economics moreseveral context-specific theories of „social preferences‟ have been developed
in economics, along with the rise of experimental economics and behavioural economics.
Matthew Rabin, for example, has proposed that people have preferences for benefiting those
who benefit them and for harming those who harm them. According to this theory, which has
greatly influenced the whole social preferences theory, agents are not generous or nongenerous indistinctively towards everyone, but show a certain degree of conditionality and
selectivity in their reciprocating action. It is common to all these theories that the authentic
social element of a person‟s preferences is revealed in her willingness to sacrifice her own
interests in order to benefit or harm others. In the so-called trust game or ultimatum game,
this nexus between social preferences and sacrifice of individual pay-off is particular
evident.5
The theory of social preferences therefore restates an old and deep-rooted idea that is at the
core of modern economics, namely the opposition between genuine social behavior and
ordinary market interaction: if one wants to be authentically social, she has to renounce, or to
be ready to renounce, to individual payoffs. Interactions are represented as a sort of game in
which gains in genuine relational terms correspond to losses in strict economic terms. From
this point of view, there is no true genuine novelty in social preference theory, because it is
fully consistent with this old assumption of economics economic theory: market interactions
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are based on self-interest, ad opposed to relations of gift and reciprocity – exactly the vision
critised by the Caritas in Veritate.
It cannot be enough from an anthropological point of view to measure genuine sociality
present in reciprocal behavior simply through the sacrifice of "material" benefits, to award or
punish the other at one´s own expense. This is not to say that self-sacrifice to punish or award
others does not have a civil function - thinking of someone who risks himself in order to
reproach another who throws paper onto the street. But even in this case, the attention is
focused on individual behavior, losing sight of the fact that reciprocity is a relationship.
These theories of reciprocity remain substantially individualistic, although containing
individual altruistic or pro-social actions.
As a logical consequence of such a dycothomic vision, reciprocity is only understood, by
economists as an "exchange of gifts", totally separated from the logic of the market. Only
reciprocity as reciprocal-gifts is considered as true and authentic reciprocity, while other
forms of exchange of contracts and markets of the so-called "normal" economy are defined as
"bad” or false reciprocity, because they are not disinterested, gratuitous and not altruistic. A
good part of the communitarian thought of today6 moves along this path, remaking itself
according to the Aristotelian tradition´s progenitor, Aristotle7. It is a shame that Aristotle did
not actually think like this. For him, reciprocity (Nicomachean Ethics (1132 b 21) was, as
mentioned, the "social bond" which held the life of the polis together. His was a vision of
reciprocity that ranged from market relationships to virtuous friendship (philia). Even the
Latin word reciprocus etymologically derives from recus (backwards) + procus (forwards):
that which comes and which goes, which leaves and which returns to one another. Therefore,
reciprocity is much more than just an exchange of gifts – that is certainly a kind of reciprocity
but not the only one.
Above all, gift ought not to be considered as something in contrast to contract (where one
gives and receives) and to the various forms of economic reciprocity which are lived in
businesses, in contracts, in markets. If it were like this, we would be incapable of
understanding most of the more relevant civil phenomena of our days, like Fair trade8,
Microfinance9, the Economy of communion10, Social enterprises, whose citations in the
encyclical are not by chance, because show that gift and market can reinforce one another.
And the history of Christianity has shown, in its shining moments, saints and merchants
contribute together to the spread of the civilisation -- let think at the age of the Italian Civil
Humanism, to the economic role of the monastic abbeys, to the Franciscans who invented the
first popular bank in the XV century, and to the many social charisms that from XVI to now
show that economic activities such as banks or cooperatives, are loci of evangelization and
good life11. History, recent history in particular, shows that people truly free themselves from
the traps of poverty and exclusion often more often with contracts than with gifts12.
To see the reciprocity of gift as opposed to the reciprocity of the market would limit good and
civilising relationships to a too narrow an environment for that social animals called men and
women.
From this perspective, it is possible to find that in Caritas in Veritate Benedict XVI is deeply
coherent to what he wrote in his first encyclical, Deus Caritas Est (2005), where he
underlined the strong unity of human love, being both one and many at the same time. Love
has various forms - eros, friendship, agape, in line with the classical tradition - but the Pope
reaffirmed in his first Encyclical that rather than opposition between these forms there is
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harmony, reciprocity. They are different loves, but each of the three forms responds to a
certain call to love. The gift of agape, in fact, is sustainable and fully human love if is has the
passion and desire of eros and the freedom of philia. Only a kind of love with various
dimensions is true Christian love, and is therefore truly human. For that reason, it is possible
to grasp the full meaning of the vision of gift and reciprocity present in the Caritas in
Veritate only seeing this third encyclical together with the first one.
This very necessity for coherence and non-dichotomic thought is therefore one key
methodological element of Caritas in Veritate. A gift is not a contract, eros is not agape:
both, however, can be good and positive forms of reciprocity. Likewise, they can both be bad
forms of reciprocity, as when contract hides exploitation of the weak and when gift hides
relationships of power and dependence13.
2. Gratuitousness and the logic of the gift
Caritas in Veritate speaks about gratuitousness and gift, and it speaks about them as words
that deal with the market, the regular happenings of economy: "also ... in mercantile
relationships, the principle of gratuitousness and the logic of gift as expression of fraternity
can and should find room among normal economic activity" (n.36).
Benedict XVI uses the expressions "gift" and "gratuitousness" as synonyms, showing himself
to be an innovator with respect to the economic science that associates gift to altruistic or
philanthropic behaviour, and in general in regards to contents (a “something") of human
action. The gift that we find again in the encyclical, instead, is mostly a "giving of oneself", a
"self-dedication" of the person, which is applied first in one´s being and then in his acting. It
is an action that can take on various forms. Therefore, it is a way of acting, a modality of any
action - a transcendental, as Medieval philosophers would say - a "how" one acts before than
a “what” one does. This is the more real and deep meaning of gratuitousness-gift, and we can
and should find gratuitousness in the unfolding of every kind of action, even in our duties,
contracts, the market and in business.
Therefore, the gift of gratuitousness is not a promotional free-bee, a discount, a present,
points that show loyalty - as the traditional market normally considers gifts and which
contains nothing of gratuitousness or its deeper and demanding nature. True gratuitousness
places one in front of the other without mediators; it makes one vulnerable, as it goes beyond
the calculation of equivalence and guarantees. It is always a potential wound, a tragic risk
that modernity has expunged from markets and economy, contenting itself to more innocuous
and negotiable categories.
This authentic gratuitousness can be found, for example, in the writings of two authors who
are very different from each other but joined by a significant painful experience. The Italian
writer Primo Levi wrote: "But at Auschwitz, I often noticed a curious phenomenon: the need
to do one´s work "well" is so rooted that one will even complete slave work well, even
though it is imposed on him by another. The Italian wall-builder who saved my life, bringing
me hidden food for six months, hated the Germans, their food, their language, their war. But
when they put him to making walls, he built them straight and solid, not out of obedience but
out of dignity"14. Building a "straight wall" out of dignity is an expression of gratuitousness,
as it says that there exists in others, in oneself, and even in "walls", a vocation that must be
respected and served, and never enslaved by our interests.
4
Another expression of the "art of gratuitousness" is explained by the great Russian theologian
and scientist Pavel A. Florenskij. In the gulag (Russian concentration camp) of the Slovak
islands, just a few months before being shot to death, he wrote, "In my life, things have
always gone like this. In the very moment that I was able to dominate a certain subject, I was
forced to abandon it for motives independent from my will, and I had to begin to face a new
problem, always starting from its foundation, to roll out a road that I myself would not walk.
Maybe there is a deeper meaning hidden in this, as this situation always repeats itself through
the course of life: the art of gratuitousness"15.
To lay out roads that one will not be able to take, or to live one´s work with detachment and
liberty: this is a splendid definition of the art of gratuitousness. It is the most difficult art to
learn, but on it depends a good part or all of full personal fulfillment, which using the classic
image, we can call the flowering of human existence.
This gratuitousness is already present in the title of the encyclical. In the times of the early
Christians, caritas was written as charitas, remembering the Latin term that refers to the
Greek translation of agape (love), but it also includes a reference to another Greek work,
charis (thanks, gratuitousness). And so, seeing that charitas is agape, the love typical of
Christianity, then in the title we implicitly find the concept of reciprocity, as Christian love is
always a "love one another" (Jn 13:34), Jesus´ new commandment, expression of a new
fraternity (another term that recurs in the encyclical).
The economic experiences imprinted with this type of gratuitousness - and, as we have seen,
the encyclical mentions a few examples - are important attempts at valuing the civilizing and
liberating function of the market, without abdicating gratuitousness and its most authentic
nature. In such experiences, the aim is building communitas (cum-munus) without taking
refuge in the immunization guaranteed by the organizational hierarchy or letters of contract.
3. Conclusion
Within this vision of reciprocity and gratuitousness can the idea of economic activity and
economy present in Caritas in Veritatis. be gathered. In the first place, if gratuitousness and
gift are what we have tried to lay out until now, when these enter into the scene, it is not
necessary to leave the economic sphere and enter into the social one, as some critical reviews
of the encyclical have sustained16. These critics are anchored to a dichotomic vision of gift
and market. In fact, if the typical dimension of man is his openness to gift-gratuitousness, and
if the economy is human activity, then an authentically human economy cannot set aside
gratuitousness.
Besides, with this lens, one understands why the encyclical makes the invitation to overcome
the non-profit/for-profit dichotomy in favor of an idea of "civil economy" - that tradition of
thought and practice that envisions the entire market and every form of enterprise as allaccomplished human reality. As such, these are called to be open to gift-gratuitousness within
themselves, if it is true that contract and gift can be forms of reciprocity united for a more
civil society and not in conflict with one another.
If economy is human activity, it is never ethically and anthropologically neutral. Either it
builds relationships of justice and charity, or it destroys them. Another alternative does not
exist. From this perspective, the market is then called back to its original vocation (although
often betrayed) to social inclusion, even present in the reflection of Adam Smith and other
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classic economists, where contract is subsidiary to authentic human promotion and to the
common good. When the economy and society lose their relationship with gratuitousness,
they end up losing touch with what is entirely human, and vocations are lost - as every
vocation is an experience of gratuitousness - including artistic, scientific and enterpreneurial
vocations.
And we will once again find ourselves in a job in which, paraphrasing Oscar Wilde, we will
know always more precisely the price of everything but the value of nothing.
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Notes
1
Bernheim D. – Stark O., «Altruism Within the Family Reconsidered: Do Nice Guys Finish Last?», in
American Economic Review, 5, 1988, 1034-1045.
2
Ivi, p. 1035-1036.
3
Sugden R., «Correspondence of Sentiments: An Explanation of the Pleasure of Social Interaction», in Bruni L.
– Porta P. (ed.), Economics & Happiness. Framing the Analysis, Oxford University Press, Oxford 2005, 97.
4
See Kolm S.-C., Reciprocity. An Economics of Social Relations, Oxford University Press, Oxford 2008.
5
For a review and a critical analysis of social preferences theory see Bruni L. e R. Sugden, “Fraternity. Why the
market need no to be a morally free zone”, Economics and Philosophy, 26, 2008, pp. 16-38.
6
For example, philosophers Elizabeth S. Anderson and Amitai Etzioni.
7
See Bruni L., L’ethos del mercato. Una introduzione ai fondamenti antropologici e relazionali dell’economia,
Bruno Mondandori, Milano 2010.
8
The term «fair and supportive commerce» defines a new model of business relationships between producers in
the Southern hemisphere and consumers in the Northern hemisphere, compared to the traditional model. This
new model gives room to the consideration not only to how the nature of the product effects the social fabric
and the safeguard of the environment, but also the effects from the productive and distributive process,
particularly with respect to human rights and the dignity of workers.
9
This refers to initiatives aimed a making credit accessible to people are usually excluded because they cannot
offer patrimonial guarantees, but who, receiving trust, show themselves to be capable of giving life to economic
activities sufficiently stable enough to pay back the loan and allow an improvement in their quality of life.
10
This deals with a particular entrepreneurial experience inspired by Chiara Lubich and linked to the Focolare
Movement: the businesses involved, which have strong links between each other, work on the market but, unlike
"normal" businesses, they do not destine their profits to pay back capital. Rather, they allocate them to three
goals: helping people in difficulty (creating new jobs and helping with basic needs), spreading the "culture of
giving" and of love, and developing the business. See www.edc-online.org.
11
On this historical account see L. Bruni and S. Zamagni, Civil Economy, Peter Lang, Oxford, 2007.
12
Cfr Bruni L., Reciprocity altruism and civil society, Routledge, London, 2008.
13
The polysemy and possible ambiguity of the category of gift (poison and gift) has been the object of study for
sometime in the field of anthropological and social sciences, thanks to the theories of great authors such as M.
Mauss, K. Polany, Derrida, and more recently Marion, Caillé, Goodbout, Boltansky, Alter: the French
philosophical tradition has a primacy in the studies of gift. I have dedicated to this issue some works, in
particular the book Wounded by the other, New city press, New York, 2011.
14
Levi P., «L‟uomo salvato dal suo mestiere. Intervista di Philip Roth a Primo Levi», in Belpoliti M. (ed.),
Primo Levi: conversazioni e interviste, 1963-1987, Einaudi, Turin 1997, 85.
15
From a letter of 11 May 1937, in Florenskij P. A., Non dimenticatemi. Le lettere dal gulag del grande
matematico, filosofo e sacerdote russo, Mondadori, Milan 2006, 397-398.
16
Cfr ad es. Weigel G., Caritas in Veritate in Gold and Red, 7 July 2009, in www.nationalreview.com.
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