Entrepreneurs

How Burning Man's founders created a commerce-free economy for 70,000 people

The Man burns during the Burning Man 2013 arts and music festival in Black Rock Desert, Nevada.
Jim Urquhart | Reuters
The Man burns during the Burning Man 2013 arts and music festival in Black Rock Desert, Nevada.

Thousands of so-called "burners" are already in the midst of the eight-day party that is Burning Man 2018, where they'll see dust-caked revelers in eye-popping costumes, experimental art installations, an "orgy dome," and a 75-foot-tall sculpture set aflame in the middle of the desert.

What they won't see very much of, though, is money changing hands. That's because Burning Man is a "commerce-free event," according to the Burning Man Project, the non-profit organization that hosts the annual event.

Through the end of Labor Day weekend, more than 70,000 people will make the trek roughly 120 miles north of Reno, Nevada to the middle of the Black Rock Desert for Burning Man 2018, the annual event that's part arts festival and part experiment in communal living. But, despite the large number of people setting up camp in a remote location, Burning Man organizers say that attendees need to bring all of their supplies because only two items are sold on-site: coffee and ice.

"[B]ring all supplies, food, water and tools you will need for survival in a harsh environment. No food or sundry items are sold anywhere in Black Rock City," says the Burning Man website's FAQ section. "If you forget something vital, your best bet is to make friends with your neighbors."

With none of the myriad drink tents, food trucks, or gift shops that typically populate festivals, anyone who forgets essential items (at Burning Man that can be everything from food to toilet paper to bicycles for transportation to goggles for sandstorms, plus recreational drugs and maybe a glow stick or two) could find themselves out of luck. The closest general store is over 15 miles away.

Burning Man organizers have also completely shunned corporate sponsors (that means no Google Pixel photo-booths or American Express Club like at Coachella.)

Burning Man 2013
Jennifer Morrow | Flickr Creative Commons
Burning Man 2013

The reason for the strict rules forbidding nearly all commerce is simple: "Burning Man is like a big family picnic," Larry Harvey, an artist and landscaper who co-founded the event, Harvey told The Atlantic in 2014. "Would you sell things to one another at a family picnic? No, you'd share things."

The idea is roughly codified in "The 10 Principles of Burning Man," penned in 2004 by Harvey, which are meant to reflect the overall culture of the event

The principle of "decommodification," says: "In order to preserve the spirit of gifting, our community seeks to create social environments that are unmediated by commercial sponsorships, transactions, or advertising," Harvey wrote. "We stand ready to protect our culture from such exploitation. We resist the substitution of consumption for participatory experience."

Instead, there is "gifting," another principle: "Burning Man is devoted to acts of gift giving. The value of a gift is unconditional. Gifting does not contemplate a return or an exchange for something of equal value."

The so-called "burners" take this idea very seriously, as attendees are known to set up operations handing out everything from free food and alcohol to massages, yoga lessons and concerts as part of Burning Man's "gifting" spirit.

Burning Man attendees in 2012.
Jon Collier | Flickr Creative Commons
Burning Man attendees in 2012.

When Harvey wrote the 10 principles for Burning Man, he made it clear that they are not intended to "dictate" how attendees behave (that would be so anti-Burning Man's "radical self-expression" principle) but they do reflect the traditions and culture of Burning Man that "organically developed since the event's inception," according to the Burning Man website. For instance, Harvey told The Atlantic that gifting became commonplace simply because "participants were unwilling to distance themselves from others through economic transactions."

Harvey (who died in April) and his friend Jerry James, a carpenter, held the first Burning Man in San Francisco in 1986. The two men built an eight-foot wooden figure of a man out of scrap lumber and then lit it on fire on San Francisco's Baker Beach in front of a small group of friends and a few dozen intrigued bystanders. The event doubled as a celebration of the summer solstice and as a cathartic release for Harvey, who had recently ended a romantic relationship. "I had a heartbreak, I had a mid-life crisis," Harvey said in a 1997 speech.

"When [the wooden structure] flamed up, it was like a second sun brought down to this earth, it was just… it transfixed us," Harvey said in 1997. People from all over the beach ran toward the fire and the size of the crowd "tripled," he said. "What we had instantly created was a community."

The event continued in subsequent years, growing from dozens of attendees to hundreds, with the size of the event, along with the potential fire hazard, forcing Harvey and James to move Burning Man from the Bay Area beach to the middle of the desert in Nevada, starting in 1990.

From there, Burning Man continued to grow (literally, with the main structure itself topping 40 feet by the early 1990s, later peaking at over 100 feet tall in 2014) and thousands of attendees swarmed the Black Rock Desert summer after summer.

But, Burning Man wasn't always a commerce-free zone. Before Harvey officially defined the community-centric ethos of Burning Man by writing down the principles in 2004, there were some transactions allowed at the festival. In the mid-1990s, some attendees took the opportunity to sell goods such as t-shirts, postcards and other merchandise at Burning Man. It wasn't until the early 2000s that nearly all commercial transactions (except for coffee and ice) were banned, though Harvey and the Burning Man organizers had always seemed to frown on the practice.

Today, attendees of Burning Man span the economic spectrum (the median income of attendees was around $60,000 in 2017), from college students to celebrities like Paris Hilton or Katy Perry. In recent years, Burning Man has even become a hotbed for tech CEOs like Google co-founder Larry Page, Amazon billionaire Jeff Bezos, and Facebook co-founder Mark Zuckerberg.

And, no matter your income level, you will have to open your wallet to attend Burning Man. Tickets cost $425 per person this year, and 68 percent of attendees said they spent between $1,000 and $5,000 in total on tickets, supplies, travel and other costs last year, according to a census from the Burning Man Project. (Nearly 8 percent of attendees spend more than $5,000 on the event.)

Burning Man attendees in 1999.
Hector Mata | AFP | Getty Images
Burning Man attendees in 1999.

Of course, some people spend more than others, as wealthier attendees have been known to show up in luxurious, air-conditioned RVs and some even pay others to set up and clean their campsites for them. In fact, while Tesla CEO Elon Musk is reportedly skipping Burning Man this year, the billionaire was reported in 2011 to have set up his own "compound" at the event with "eight recreational vehicles and trailers stocked with food, linens, groceries and other essentials for himself and his friends and family," according to The Wall Street Journal.

What's more, brands do still find a way to insert themselves into the Burning Man experience, including fashion companies like Revolve and Urban Outfitters selling Burning Man-themed products. In 2011, LVMH-owned champagne brand Krug hosted a dinner at Burning Man that garnered media coverage and publicity for the company. Other fashion brands can benefit from the celebrities and social media influencers who tag their products in posts from Burning Man on platforms like Instagram and Snapchat.

Yes, even with Burning Man's anti-commercialization push, it's impossible to deny that it has become a big-money event. In 2015, Burning Man took in $36.9 million in revenue, nearly all of it from ticket sales, while the non-profit spent $35.8 million to host the event, according to tax documents.

Don't Miss:

How these billion-dollar businesses started as happy accidents and side gigs

Elon Musk: Starting SpaceX and Tesla were 'the dumbest things to do'

Like this story? Subscribe to CNBC Make It on YouTube!