Sunday, June 17, 2012

Four Interactive Relationships in Action

Following up on my previous post on the four types of interactive relationships, author Gabriel Rossman suggests that a lot of social conflicts and scandals are the result of confusing which type of relationship applies.  He focuses on inappropriately applying market pricing.

Taking an extreme example:  Suppose a man and woman have a one-night stand.  It would be utterly unacceptable for him to pay her $100, but perfectly acceptable for him to give her flowers and other gifts worth $100.  The cash inappropriately labels their encounter in the market pricing realm.  The gifts -- well Rossman doesn't explore what the gifts would mean, although they seem to suggest authority ranking -- the woman's power at dispenser of sex places her on a rank above the man.

He recounts two stories both involving Mitt Romney, one seen as admiring and one as critical.  In the admiring story, Romney showed up with other church members to help a fellow Mormon load up and move, even though he had a broken clavicle and was thus of limited use.  Romney was rich.  Why not just hire a substitute who could certainly have worked more effectively?  Because to do so would inappropriately move into the realm of market pricing and activity properly belonging communal sharing, and weakened the ties that Mormons cherish.

On the critical side, a police officer interrupted Romney while launching a boat and told him the license number was not properly displayed, and that there was a $50 fine for launching it.  Romney launched the boat anyhow, so the officer then arrested him for disobeying.  Romney interpreted the encounter in the realm of market pricing -- $50 was a price worth paying to avoid delaying the launch.  The officer saw it as one of authoritarian ranking -- he, speaking for the law, had given an order that he expected to be obeyed.

Rossman also argues that this is why our various forms of in-kind assistance for the poor (Food Stamps, rent assistance, Medicaid, etc) will never be replaced with pure cash transfers.  Cash transfers assume that such assistance is in the realm of market pricing -- whatever the poor choose to spend the money on is, from their own perspective, ideal.  But most people want to assure that it is put to "good" use and therefore insist on an authority ranking relationship.

This analysis helped me understand a lot of things.  It made sense out of people who fear government taking over their Medicare.  Medicare is a matter of authority ranking in the sense that paying a Medicare tax is mandatory, but once people qualify, their healthcare is paid for on a market pricing basis.  What they are saying is that they fear their relationship with Medicare being turned into one of authority ranking.  Indeed, much of the fear of Obamacare has taken the form of fears that government will extend its roll in authority ranking over any activity that might affect people's health.  And, not coincidentally, many of the people who most fear such an outcome are also the people who wish assistance to the poor to take the most authority-ranking form possible.*

It also explains why libertarians dismiss as absurd the possibility that any sort of oppression could take place through employment.  Employment is a market pricing arrangement when people take or leave a job, but an authority ranking one on the job.  Libertarians have great difficulty understanding anything other than market pricing relationships, and thus don't see any potential for abuse in the context of authority ranking.

It also explains what bothered me during the Asian crisis of 1997.  People blamed the crisis on "crony capitalism," defined broadly as basing economic decisions on any sort of human relationship, rather than purely on the bottom line.  My reaction was then and remains that making such a demand is absurd. It is expecting people to behave in ways that go completely against human nature.  I now have a better label to put on it.  What commentators saw as an inappropriate intrusion of authority ranking and equality marking (and perhaps even communal sharing?) into the realm of market pricing I saw as an inhuman demand that market pricing be the sole mode of people's business relations.

It also explains a lot about a short but fascinating book I read about life in a Medieval English village.  It focused on the 13th Century, as the earliest time that had enough written records to document what the village was like.  Most village inhabitants, at least most who appeared in the manorial court, were serfs.  They held their land from their lord and paid for it in labor performed on their lord's land.  The system was highly inequitable and served the participants badly.  The amount of labor a serf owed his lord was proportional to his land holding.  Serfs with a larger holding owed their lord (as I recall) 117 days labor a year, while poorer ones holding only half as much owed 58 days.  It will not escape the reader's attention that the larger the holding, the greater the demands it made on the holders' time to cultivate their own land.  The extra days they owed their lord must have been a crushing burden.  In the meantime, the poorest serfs had so little land they owed very little labor to their lord, but their holdings were not enough to support them.

Cash came to the rescue.  By the 13th Century, England was very much on a cash basis.** Time and time again, one of the wealthier serfs would be charged in manorial court with neglecting his duty to work on his lord's land and fined for it.  Time and time again, they would pay, and the lord would use to proceeds to hire the poorer tenants to do work they were not under obligation to do.  The book commented that failure to show up happened too commonly and systematically to be an accident.  Presumably the wealthier serfs grew enough surplus for sale that they made the conscious decision they would rather pay the fine than do the work.  The fact that the fine did not go up for even the most habitual and flagrant offender indicated that their lord considered the fine an acceptable alternative.  A system of payment by services was giving way to a system of payment in cash.  At the time, what struck me most was that it did not pass through the seemingly obvious intermediate step of payment in kind.  But what not appears to have been happening was that a system of authority ranking was giving way to a system of market pricing.

No doubt there are may other examples if one starts looking.

PS:  I neglected another example.  That one came from a child rearing book I found particularly annoying.  The book purported to advocate "democratic" parenting, which gave children a choice.  The choice consisted of "You can [do whatever the parent wants] OR [punishment]."  In other words, it was an attempt to disguise a relationship of authority ranking for one of market pricing.  The assumption was that children would not always obey, that they might "choose" punishment a few times, but that after a few times they would learn their lesson and choose obedience.  The book generally disapproved of corporal punishment.  But it also warned against too-mild punishment, especially of a pecuniary nature.  If parents tell their children, "You can do your chores OR you can lose your allowance," children might decide that losing their allowance was worth avoiding chores.  Like serfs cheerfully paying their fine rather than working on their lord's land, or Mitt Romney taking out the boat with defective licensing, planning to pay the fine later, such children are attempting to turn a relationship of authority ranking into one of market pricing.  The book's advice was to change to rules at this point and tell the children you didn't actually mean it to be a choice.  I was outraged.  Unfair!

Yes, I know, parental discipline really is properly a relationship of authority ranking and not one of market pricing.  But in that case parents should come right out and admit that they are engaged in authority ranking and not try to disguise the relationship as one that allows real choice.  Children will resent parent less who openly stand on their authority than parents who pretend to offer a choice, only to pull it back if they don't like what their children pick.

*To be quite fair to such people, Obamacare is moving Medicare more in the direction of authority ranking between Medicare and the doctor, that is, putting various types of pressure on medical providers to diminish costs.  Of course, private insurance companies have been doing the same thing for some time.  But free market theory says that our relationship with the insurance company is one of market pricing -- that we can quit and get a new insurance company any time we don't like the old one.  That strikes me as seriously ignoring the reality of unequal power between market players, but that is nothing new for libertarians.

**And another source I read pointed out that this should not be surprising.  Literacy and written records correlate closely with commercialization.

No comments:

Post a Comment