Market Economy vs. Market Society







What do you think?


Blessed Economist said...

I dont chop life in the same way as Gideon Strauss. The same principles apply in business and education and health care. They also apply in the family, just the balance is different.

First, cost/benefit permeates the whole of life I go to a prayer meeting rather than stay in bed, because the benefits outweight the cost. If the prayer meeting loses the plot, I will stop going.



A good teacher will put efforts into activities that will benefit learning. He will have to decide whether how the costs/benefits of shakespeare compare with those for trigonometry.



On the other hand,cost/benefit must not dominate any area of life, including business. Economic considerations should never totally dictate decision-making even in business. Responsibility to God trumps cost/benefit in every area of life, including business.

A businessperson may not steal, even if the benefits outweight the costs. They cannot use violence or threats agaist their staff, even if the benefits outweight the costs. They cannot use sexual favours to get ahead. A manager is still required to care for his/her family.



The same applies in families. Parents will do most of what they do for their families expecting nothing in return, but sometimes a father will say, I will take you to the game, if you wash the car. A parent must nevver treat their children as slaves. Parents are accountable to God as parents.

The businessperson has a duty to care for the poor, even if, like the good samatitan, he uses his own money to pay someone else to provide care for the needy person. He must not take other people's money to care for the poor, because that would be stealing.

A manager should sometime give an employ a hand up that he cannot repay and does not deserve.

(The maculine pronouns are due to my being tired at the end of the day.)

Bob Robinson said...

Point well taken. We are constantly making cost/benefit analyses.

But many of these "costs" are not monetary in nature. I fear that we are so steeped in a Capitalistic mindset that we are in danger of making all of our decisions based on monetary cost and benefit.

I think that if we allow everything we do to be determined through the monetary grid then everything begins to be seen as a commodity, thus stripping us of making decisions, as Gideon says, from the standpoint of "love, learning, and care."

Capitalism is fine for buying and selling, but should we make all our decisions through a capitalistic framework?

Not all spheres of life should be commodified and seen through a strict monetary grid.

Michael Kruse said...

I think Strauss makes some good observations. When some folks say the society ought to do such-and-such, what the mean is government out to do it. That is a false equation of government, an institution within society, for society itself. The same error can be made for the economic system. Everything is economics but economics isn’t everything.

Like Ron, I do take some exception to the suggestion that business is only about money while families, schools and hospitals, have a measure beyond money. As human beings, we must eat and drink to live, but we don’t live to eat and drink. If a for-profit business has money as its only goal, it will fail. Money and profit are the means toward accomplishing whatever mission the business has with regard to its customers. The distinction between for-profit and not-for-profit lies elsewhere.

For-profit businesses have a direct feedback loop. Customers purchase goods and services for their own use. Sales and profits are direct indicators of how well the firm is meeting customer needs. Owners/shareholders of the business get rewarded based on how well the meet customer needs.

Not-for-profits do not have a direct feedback loop and most have two customers groups. They have donors who contribute funds and they have recipients of services. Since the ones giving the money are usually a different population from those receiving the services, money doesn’t tell you about the effectiveness of service and other measurement criteria are needed to assess outcomes. From a legal standpoint, not-for-profits don’t have shareholders among whom profits are distributed but, like for-profit firms, they must still make a profit.

All that said economics is largely about transforming matter, energy, and information from less useful states into more useful states. It is central to our co-creative dominion call. But many people like children, the elderly, and those who are mentally or physically without economic capacity (temporarily or permanently) are part of our communities. So are the caregivers who tend to these folks. Production and exchange can’t meet every need.

In families and in some small settings it is possible to live a communal or semi-communal lifestyle. But successful communes require folks with a high degree of affinity for each other, with constant routine interaction, and the ability to restrict the size of the community, and thus the access to communal property. Sociologists tell us that we can’t maintain an ongoing social network with more than about 150 people (at the extreme limit.) When a group begins to approach this size, affinity and familiarity with at least some folks dissolves; that is to say they become strangers. This is where government refereed market transactions become so critical in coordinating life beyond the immediate community.

There are a myriad of ways we can organize our interactions with each other at the micro level but the market economy is essential for society. Just as trying to conceive of society as a family writ large, so is it inappropriate to see a family or small community as market economy writ small.

Blessed Economist said...

The price/cost/benefit grid is useful in every area life, but it should never dictate our decision in any area of life.



The same is true in business. A person will not buy a new business just because the benefits outweigh the costs. They will need to have an affinity for it. It will need to fit in with what they think is an important. Very people will devote their life energy to something they do not think is important. Many factors other than cost benefit will affect the decision to buy a business. Other values may be important in most buysiness decisions that are made. Price/cost is just one factor to that will feed into a decision making process.

Business people should not become cost benefit machines, and I doubt that there are many that are. Certainly, they are not portrayed that way in business biographies that I have read. The cost/benefit driven business person is mostly a straw man set up by envious Christians. People in business know that life is much more complicated than that.(Of couse there are some crooked people in business, but there are also a few devious pastors around.)

As I said, we must not segment life. The price/money grid is useful for all of life, but it is just a tool. It must not be our supreme guide. Only God can take that role, whether we are a pastor or a plumber.

None of our decisions should be made solely on the basis of the price money/grid. That would be foolish. On the other hand saying that there are areas of life where it is irrelevant is equally foolish.


Bob Robinson said...

I don't think that Gideon Strauss would deny that every kind of human relationship has an economic aspect, and that economic considerations are part of the decisions that we all must make in those relationships. The point is more about how economic considerations should not be the leading considerations in relationships outside the market proper. So, a family must steward its household economy very carefully, but economic considerations follow the lead of parental love and filial piety. Whereas, in a business, the proper leading questions include, "Can I produce a good product or service and sell it at a profit?" "Can I make enough of a profit to (appropriately) innovate my product or service and/or (if appropriate) grow my share in the market for this kind of product or service?"

Eugenio Rodríguez said...

If we accept Max Weber's thesis on the origin of capitalism in this country, then we must recognize that world of the Protestant Ethic belongs to an unretreviable past.

Predestination, a precursor of the profit motive, belongs to what now seems the Dark Ages on this side of the Atlantic Ocean.

We now live in a perversion of this nation's original conception of work and profit.

In his new book,"A Capitalism for the People," University of Chicago professor Luigi Zingales argues that we must curtail the present American capitalism immorality not with government regulations but with social condemnation. Make the excesses socially sanctioned just as we now do with smoking, for example.

Who would argue otherwise. But how can we create such awareness? Even religion has been penetrated by the market-society mentality.

Take this past election: 78% of white Evangelicals voted for Romney, who made his money not the old-fashioned way --working very hard until finally succeeding in making a small business into a success-- but the new Wall Street way.

This is a very long stretch from the Protestants who initiated what's been called the ongoing American story.

So, what do I propose? Salvage Protestantism in this country first. Cleanse it of any market society contamination. That's a good way to start creating moral awareness.