The Potlach as Memory: Ceremony and Gift-Giving along the Pacific Northwest

During the nineteenth and early twentieth centuries, government and church officials actively sought to suppress Indigenous potlatch ceremonies along the Pacific Northwest, dismissing them as wasteful, uneconomic, and irrational. We present a counternarrative by developing a decentralized exchange model inspired by the monetary search literature. In our framework, agents decide whether to invest in social memory through ceremony—song, dance, and storytelling that serve as informal recordkeeping. By helping to sustain gift-giving networks, social memory can facilitate the distribution of goods even in single-coincidence meetings, thus increasing the extent of the market and making specialization more attractive. Our findings, therefore, challenge historical Western perceptions by demonstrating that potlatch ceremonies can increase wealth and social welfare. Additionally, our model highlights how geographic and cultural proximity shape participation in gift-giving networks, with barter becoming more prevalent among distant communities. We support our theoretical results with qualitative evidence and analytic narrative.