Trendspotting: "Buy Nothing" Boosts the Gift Economy

NewsWire: 12/1/21

• Buy Nothing groups are growing in popularity. Many members say their motivation is to cut spending as prices rise, while others see it as a way to get to know their neighbors. (The Wall Street Journal)
• NH: In our recent pieces about declining labor force participation, we have mentioned the concurrent growth of the “household economy”: the shift from market to non-market activity. Americans are looking beyond market solutions to fulfill their daily needs. This means, for example, cooking instead of dining out or asking grandparents to babysit instead of hiring someone.
• Soaring inflation and supply chain delays are giving people even more reasons to cut their spending or find the products and services they want another way. Enter Buy Nothing groups.
• In these groups, which are mostly hosted on Facebook, members give things away for free. They range from small (snacks, office supplies, socks) to big (furniture, electronics, appliances, even cars). Though informal gifting groups have long existed online and off, the Buy Nothing Project has created a centralized network that spans nearly 7,000 locations in 44 countries.
• People join the group that’s closest to where they live, so they get to know their neighbors. That’s also part of the appeal. (See "The New Localism.") Many have “traveling totes” filled with items--apparel, children’s toys, books, etc--that get passed around from person to person, who take what they like and put in anything they want to donate. In all, Buy Nothing groups have some 4.27 million members, around two million of whom joined between March 2020 and October 2021. Freecycle, a similar organization that launched in 2003, has 9.5 million members in more than 5,000 towns.
• Let's assume, given that the membership of these groups overlaps somewhat, around 10 million total members. If each of these people saves $1,000, that's $10 billion. Given that U.S. GDP is around $23 trillion, the economic impact is negligible. But the mentality shift behind it, which enables people to increasingly opt out of the market, is significant. Every free refrigerator and stroller mean that many fewer hours spent working to buy those things.
• When economists insist that LFP will rise again, one of the assumptions they’re making is that it has to in order to maintain typical levels of consumption. But if people don’t have to buy anything, they can stay out of the workforce for as long as they want.