Thursday, January 22, 2015

Human Economics

In America, we are used to speaking about "the economy" as if Commerce is the one and only type of economy that exists. In our minds, the free exchange of goods and services, regulated by government authority, is the one and only way that property and wealth are managed.

In reality, though, there are four different types of economies in which human beings operate: Family, Friendship, Commerce, and War.

On the inside, we have Family. In the economy of the Family, you don't track ownership or debt or obligations. You are loyal to your family, full stop. While you may not own things in common, your property and your time effectively belong to your family, and vice versa. The main economic activity of the Family is Selfless Giving.

A Friendship economy is built on bonds of obligation. The main economic activity between friends is Trading Favors. You can ask each other favors, and do each other favors, but they are not quite as freely given as in a Family economy. An unequal friendship, in which one friend does most of the favors for another and these favors are not reciprocated, is a friendship that will sour. The way a Friendship stays healthy is by keeping a rough balance of favors between friends, but friends are never crass enough to measure these favors by any objective standards.

Objective measurement of debt and obligation, buying, selling, and trading are the proper domain of a Commercial economy. In Commerce, the main economic activity is Trade, and peers trade goods and services with each other, agreeing to contracts and prices with one another, and honoring those agreements. Commerce is the natural state of casual acquaintances and friendly strangers.

Outside the bonds of cordiality is the state of War. In an economy of War, goods and services are not traded - they are taken by main force. In War, you don't abide by rules agreed to by all participants in the economy - you use whatever leverage you can to compete with your adversaries to take what you want. Raids, slavery, and theft are all examples of Coercion, the main economic activity of War.

Sometimes the lines between these economies get blurred. A distant or out-of-favor family member may be treated more like a friend than family, and conversely you may have a few friends who are "like family" and who you would do anything for without counting the cost, even subconsciously.

The lines between Friendship and Commerce can also get blurred. A Facebook friend might offer you his old TV for $50, and a regular customer in your store may become such a part of your life that you stop charging him for coffee, and have him over to your house on Saturdays, where he helps you debug your computer.

Blurred lines between War and Commerce occur when a business associate rips you off, or when enemy nations agree to a hostage exchange.

As you travel inward on the chart, intimacy and trust increase; as you travel outward, hostility and wariness increase. The types of economic activity typical of each economy are also tied to a certain position on the intimacy-hostility spectrum, and you can frequently encourage a different type of economic activity in a relationship by moving the trust level along this spectrum. The reverse is also true: you can increase the amount of intimacy or hostility in a relationship by engaging in economic activities that belong to the type of economy that corresponds to the desired position on the spectrum.

For instance:
  • To create distance between family members, keep track of favors done. Family bonds can be dissolved by keeping track of unreciprocated favors and grievances.
  • Conversely, to bring a friend into the family circle, remove all traces of obligation from the relationship, and make them fully welcome in your house and your life, with no strings or expectations attached.
  • To ruin a friendship, bring business into the equation: loan or borrow money, sign a contract with each other, or become business partners.
  • To turn a business associate into a friend, remove formal accounting from the relationship: you may still be keeping track of favors done and trying to ensure there's a rough balance, but this balance will be more a feeling than entries in an actual ledger. Do things for one another that don't get tracked as business transactions.
  • To make an enemy of a friendly stranger, commit an act of war against him: steal from or defraud him.
  • To turn enmity to wary cordiality, begin making deals: exchange prisoners, buy and sell goods, or hire them to perform a service for you.
I have a few observations about these different types of economies:

First, I observe that most human relations worldwide seem to fall somewhere in between War and Commerce. Truly cordial Commerce is a blessing, genuine Friendship even more so, and Family is (literally) priceless. As relationships degenerate toward the outside of the circle, quality of life goes down. The Ruler of this world, the Evil One, is constantly trying to push relationships outward, while the Living God is constantly encouraging us to move them inward. Remember Jesus' command to turn the other cheek, to give our cloaks and tunics, and to go the extra mile when pressed for one? This is all about moving human hearts and lives toward the center, however minutely or imperceptibly.

Second, I observe that our modern business/political system seems to be designed to keep us all hovering between War and Commerce. We are kept isolated from our neighbors, we lock our doors to make sure they won't break in an steal our stuff, and we are ready to call the cops and shoot intruders. This may all be prudent, but a better place for neighbors is on the line between Friendship and Commerce. Get to know them.

In our corporate business culture, we're kept from true intimacy with our colleagues by HR regulations, anti-fraternization policies, layoffs, reorganizations, and constant staff turnover, If you can't know your colleagues long enough or well enough to form real bonds of friendship, you'll never be tempted to put those relationships above the company's bottom line. In smaller businesses, ubiquitous petty laws and economic pressures make it difficult to make friends with business associates of any kind. If I can't give away my business' services to a friend without raising red flags with the IRS and prompting discrimination investigations, chances are I won't treat that person as a friend and our relationship will get pushed into the Commercial zone.

Business relationships are also marked less by genuine justice than by leverage. Sure, maybe the work you do for me is immensely valuable, but if I can get away with paying you a pittance for it, well, that's just business. Sure, the phone service I'm selling you costs me a tiny fraction of the price to deliver, but if you don't have any other local options, you should thank your lucky stars I'm not charging even more. In a meeting between equal parties of good will, free unfettered trade can happen, to the enrichment of both parties. But when negotiations are all about leverage and getting the best deal you possibly can, the landscape begins to look less like cordial and just Commerce, and more like a War where the stronger party does as he wishes and the weaker party suffers what he must. Most employer-employee relationships have taken on an adversarial character (although on occasion, the employee has more leverage than the employer.)

Pop culture constantly encourages us to keep track of gifts and favors. Did I get you a more expensive Christmas present than you got me? Does Steve not buy rounds at the bar as often as the rest of us do? Are you always meeting up with Sally at times that are convenient for her, but she never seems willing to meet you halfway? The more consciously and concretely you measure these things, the more your Friendship starts to slip into the realm of Commerce.

Pop culture assaults on the family are vicious. We are encouraged to think of our family members as exploitive and obnoxious, to count grievances against them, and to guard our time and our hearts from incursion by ungrateful family members. It's gotten so bad that many Americans have never known what it's like to live in an actual selfless, loving family that doesn't play guilt games or demand reciprocity.

Third, it occurs to me that this state of affairs has been made possible in part by our wealth and prosperity. Family bonds can only be broken when the family members in question do not rely on one another for daily survival. A wealthy family can afford to be isolated from one another - the poor do not have that "luxury," In this way, the poor really are blessed, and it can be easier to fit a camel through the eye of a needle than for a rich man to find his way into the heaven of true familiar love.


  1. The best description of why distributism might work that I've ever seen.

    1. Thanks, Theodore Seeber! That's high praise indeed.