Elements of the economy of social relations

My reflection is born from the consideration that the market is not a datus of nature but, like all other institutions, it is an entity created by men who live in society and, therefore, it is the fruit of a long journey and of a precise cultural matrix. If we are convinced of this, we can also think of changing the market for the better. The market needs to be civil once again, a meeting place for the relation among people and not a place of only goods. To civilise the market means to understand that there isn't only an acquisitive dimension, but also an expressive dimension at the base of the human behaviour. We need to see that all the human dimensions, and therefore also the relational one, be recognised and opportunely valued. By speaking of a civil economy I do not mean to propose a logic against, but a logic of going beyond, of the necessity to accept the complexity and the challenges,  which the social-economic organisation of our advanced society present to us, and of starting possible processes of transformation also through the recuperation of principles, for instance that of reciprocity and that of the long forgotten, or at least neglected, gift of the economic theory but, luckily, not of the economic praxis.

Efficiency, equity and reciprocity

I start from a consideration of general nature: if we think of a social order, whatever it is- I use the expression social order to mean an organised society- we discover that every society, to go on supporting, must organise itself. Now, irrespective of the historical changing circumstances, if we ask ourselves about the regulating principles of any social order, with no fatigue we can individuate three of them.

The first is the principle of the exchange of the equivalent value, which says, "Whoever does or gives something to some other must receive its equivalent in value". The most common expression of the value equivalence is the market price; when we buy an object and pay its cost, even without being aware of it, we have a concrete actuation of the principle in question. Usually, we use to state that the classic place in which this principle finds its way of expression is the market. We say, in fact, that the market is the typical ideal place where the inter-subjective relations assume the form of the exchange of equivalent value. Effectively, there is something true in this statement,  though it is not correct to support that the market is the compatible institution only with this principle.

What is, ultimately, the use of this principle? It is used to make sure that an efficient result be obtained. I use the term "efficiency" to mean "absence of a wastage of resources". An allocation is said to be efficient when it does not waste the resources. We find here again the contribution of the economic theory and, in particular, of a very strong economic theory, which is that of the general economic balance under an ensemble of conditions (among which the one of perfect competition in all markets,  complete information, etc.),  an economic order based on the principle of exchange of equivalent goods obtains an efficient result. This is good, because nobody can think that a social order may last in time, unless it is efficient. Efficiency is a value, which cannot be snubbed, even if it is not the supreme value.

The second principle is that of the "re-distribution". This principle affirms substantially that, for a social order to last in the course of time, it is necessary that, not only the richness be efficiently produced, but also that it be equally re-distributed. If the re-distribution cannot take place, for a reason or the other, the system is destined to decline. The re-distribution has equity as its specific end, which does not mean equality at all. Rather, equity means to allow all the subjects to participate in the economic game. The re-distribution is the regulating principle of a social order which consents to achieve equitable results. This argument may be taken for granted, yet in reality it is not because, often, it tends to give an exclusively ethical justification of equity. I admit that ethics is to be taken as an antibiotic, namely at small doses and only when it is strictly needed. The paneticism , in fact, falls always on to moralism, which is  a very frequent temptation, especially today. Equity is demanded from the exigencies of supporting the economic process. It is not enough, therefore, to know how to produce richness, we need to know also how to distribute it with equity. An economic system might be as efficient as we want, but if the requisite of equity is not satisfied, it is destined to decline. Let us think of the present case in Argentina, one of the virtually richest countries of the world, where 40% of the population lives under the line of poverty, today.

There is, then, a third principle, that of reciprocity. Things get complicated on this front because, while efficiency and equity are words, which have entered the common dictionary besides entering the socio-economic theory, the principle of reciprocity keeps on sounding strange. Only in this latest years this word has started circulating again in the literature of economy, on behalf of the most informed scholars. The reality remains that the principle of reciprocity has always been marginalized. It has been considered as something which belongs to other disciplinary areas: to sociology, under certain aspects, to anthropology under other aspects, and to psychology under some more aspects.

It is the matter of a very serious gap, which is responsible for not a few inadequacies of the actual economic discourse. The principle of reciprocity in the history of the economic thought has been playing a fundamental role. It started disappearing from the scene -and therefore from the teaching and the research of the economist- with the advent of the revolution of marginalisation in the second half of '800. The word reciprocity was cancelled with the affirmation of the economic thought edified on the thesis of Bentham's utility ideology, and the English Philip Wicksteed  was the person who was responsible for this very subtle work. He is the author of a famous book, in which he proposes the term of "non tuismo". According to this scholar, the economic discourse ends the moment in which the economic agent recognises a "you" to the other. From here comes the conclusion according to which the economic relation is to be founded  on the "non-tuismo". What does it mean that the other is a "you"? It means that he is a subject in whom I acknowledge an identity and, symmetrically, the capacity of the other to recognise in me the bearer of an identity. If this happened  -Wicjsteed says- we would be out of the economic horizon: we would enter sociology or anthropology. To say all this in somehow brutal terms, "business is business", to do business we must not look at the face of anyone, because the moment I look at your face, I discover your face and can no longer make an economically profitable transaction. In synthesis: to realise a profit I must forget not only my identity, but also your identity.

This is the fundamental stand which supports most of the scientific production in the economic field. Yet all this has never been made explicit. We are surely free to believe in the non-tuismo, but it is necessary to declare it from the beginning of the discourse, if we want to be intellectually honest. Whatever it is, it is good to understand why the principle of reciprocity has been cancelled from the economic dictionary. We have said that the end of the principle of the exchange of the equivalents is efficiency; the end of re-distribution is equity. (It is irrelevant whether the re-distribution be made by the State with a progressing taxation or by other subjects with different instruments. The important thing is that it is there). What does the principle of reciprocity aim at? It aims at practising charity. Also this word, as the psychologists would say, has been removed. Yet it appears already in the triad Liberté, egalité, fraternité: the French Revolution was fought in the name of fraternity, besides freedom and equality, (that is equity). However, at the end of the Revolution, there was a precise decree to approve its revocation. We can easily understand its reason: fraternity frightens, annoys: there cannot be any fraternity in a society where a guillotine is at work. The law of Le Chapelier will thus establish that between the State and the citizen there must be a gap; in other words, the "intermediary bodies" in society - from the system of association to all the expressions of the organised civil society- must no longer be there. In the post Revolution France there is the space only for the individual (not for the person) and the State. The individual works in the private sphere and the State minds the public sphere. Whatever is in between the individual and the State -the so called intermediary bodies- is decreed as out-law. This, of course, approves the erasing of the word "fraternity".

State, market and the third sector

To make a synthesis and to exemplify, we can utilise this little scheme:  if we put at the peak of the three vertices of a hypothetical triangle the three principles, the exchange of equivalents, the re-distribution and the reciprocity, we can ask ourselves and analyse how things have go on historically in the society of the so called advanced West.

To answer this question, we start by proving and considering the model of the social order, which has appropriated the two principles of the exchange of the equivalents and the re-distribution. Which word expresses synthetically this model of social organisation? It is the welfare state, where the key-word is "State" and not "welfare". The well-fare state is that particular model of social order, whose pillars are the exchange of equivalents (identified as market) on one side, and the re-distribution (identified as State) on the other side.  The logic of the dichotomy type comes from here: State and market. The market minds the efficiency and nothing else; the State, instead, minds the equity to be obtained through the re-distribution.

The market is asked, as a unique metre of judgement, even moral, to be efficient. The economic acting of the market does not admit of any other evaluation canon, or it would lose its sense. This carries important implications with itself. If the owner of the enterprise can obtain efficient results by eluding the norms in vigour or by not respecting fully the fundamental human rights, no harm; the important thing is to be efficient. Here is the realistic affirmation of Milton Friedman, which is quoted today with reference to the Corporate social responsibility. According to it "the unique social responsibility of the enterprise is the standardisation of the profit". Friedman is surely very coherent with the premises of values of a dichotomy state-market model. It pertains to the State, which intervenes post factum, to correct the market failures.

The minimal State

Let us now consider the side of the triangle, which depicts the model of a social order whose basic principles are the exchange of equivalents and the principle of reciprocity. In it the State plays a minimal role, in the sense that it deals only with a few fundamental functions such as the administration of justice, the defence, the national security and something more. All the series of tasks, which, in the model of welfare state,  are carried on by the State, are now assumed by intermediate bodies, precisely by the organisations known as non profit …

This model has recently been defined as model of "compassionate conservatism". The basic idea of this model is the following: we must have regard for the needs of the least, the marginalized, the handicapped. Thus, what is often said is not true, namely that the new-.liberal model is supported only by people who are not scrupulous, insensitive to every situation of mercy. Rather, the fundamental idea is that the compassion of the citizens, more or less organised,  must be concerned with the destiny of the least. In other words, those who are unable to win in the market competition, must know that they cannot claim a precise right of citizenship  to see that their fundamental needs be satisfied, but only a legitimate expectation of attention on behalf of the lucky ones.  In this model, the State plays a residual role; in the welfare State model, instead, it is the civil society that plays a residual role, a society whose intermediate bodies carry on a role of replacement of the dependence on the State

The overcoming of the communitarian ideology

On the third side of the triangle - the side which joins the vertices indicating the principle of re-distribution, and the principle of reciprocity- we put the model known as community ideology.. This is the proposal of a current of some rather influent American thinkers -A.Etzioni, M. Walzer, M. Unger, R. Sandel - who, substantially, affirm the need of narrowing the sphere of market, because the market is at the origin of all evils.

The term "market", like those of "merchandise" and merchant, derives from the Latin "mereo", which means to prostitute oneself: the market is, therefore, a place of prostitution. It is a place where the personal relationships are commodified and, therefore, alienated; what is to be done, then, is to restrict the area of the market to exalt, instead, that of the intervention of the State and of the organised civil society.

Polanyi, in his book La grande trasformazione, writes that "the market advances on to the desertification of society". This is a very strong statement. What does this mean? This scholar -and partly also A. Hirschmann- affirms that where there is more market, there is less society and, therefore, less interpersonal relationships. The market "is, therefore, a necessary evil"; necessary, but equally an evil, something that is to be controlled by the State, under certain aspects, and by the civil society, under other aspects.

What type of social organisation --- ?

Well, the challenge, which we need to face, today, (and possibly to win), is exactly this: to prefigure a model of social order in which the three above illustrated principles may live together and re-enforce reciprocally. This has not yet been realised so far. The limit of the cultural debate in act is just this: that we may go on reasoning in terms of contra-position: more State and less market, or viceversa.

I think that now almost all are aware that the old model of welfare State is not longer to be proposed and needs to be changed, not however in the sense that we must embrace the neo-liberal model.

It is the matter of useless talks, because they do not take us far; they are talk which sin of ingenuity. The true problem is not that of preferring a model to the other, because the three of them are obsolete and no longer acceptable: the true challenge is to see how to find a social organisation  and an institutional asset in which the three principles may find a concrete expression. The good society in which we must live is the one in which there is efficiency and equity, but also the practice of fraternity.

The limits of the compassionate conservatism

I have insisted on the principle, which I have called principle of fraternity, to face the concept of "gift". There are two concepts of gift: the gift as "munus" and the gift as "reciprocity".

The gift as munus" (munus means gift) is the typical concept of the model, which we have called "compassionate conservatism". It is a model which entrusts to compassion, therefore to philanthropy, the solution of the problems, which an advanced society like ours creates. I have nothing to say against philanthropy, but it does not satisfies me, it does not re-assure me, because the gift as "munus" tends to break society, to decrease the social cohesion and, above all, the social capital. Why this? I have found the clearest explanation in a passage of Seneca, in the tenth letter to Lucille. There we read, "There is no more dangerous hatred as that of the one who, at a certain point, becomes aware of not being able to return, to reciprocate the gift or the received help.

We understand that, on the long run, he who receives something from the philanthropist, sooner of later will finish by hating him,  who has given gifts to him, because the gift as munus -with the exception of the emergency situations- if it becomes systematic, a basic principle of society, it tends to humiliate, that is, to take away what Adam Smith called "self esteem". When we take away the "self-esteem" from a man, we have taken away everything: what is left over of man once we have taken away his dignity, that is, the esteem he has of himself ? In fact, if I donate you something, without putting you on the condition of reciprocating, you finish by feeling to be an assisted person.  On the contrary, the gift as reciprocity has its own specific characteristic: a man gives, but enables the receiver to reciprocate. In the donation as a gift what counts is the given thing, while in the gift as reciprocity what counts is not the object, the value of the gift, but the relation which I establish with the other. The point is here. If I put a man in the condition of one who receives and never gives, I take away from him the noblest part of himself. Here is why we can never be surprised before certain forms of violence, or of certain protests.

Today, in our societies we need to recuperate the concept of reciprocity and to make out of it a regulating principle of the social order because, otherwise, one could die of efficiency alone, of equity alone.

The explosion of expressive needs and of identity

Till recent times, the horizon of the political action was that of solidarity. My thesis is that a society with solidarity is not enough. Though necessary, solidarity is not sufficient.  In fact, solidarity is the principle which tends to make the different persons equal, that is, to put the different ones in the condition of being equal before some dimension or some characterisation. (This is the meaning of the concept of equity). Fraternity, instead, is the principle, which allows the equals to be different. This means to allow subjects, substantially equal in what regards a possibility and fields of choice, to affirm their own specific individuality. The problem facing us today is that our societies do not pay an adequate attention to the identity dimensions, because the solidarity has been used, somehow, to flatten and to homologate the identity, to make all men, more or less, equal.  This does not want to be a criticism to solidarity, but a criticism to those who have stopped at this horizon.  We could imagine also a society in solidarity where all, more or less, live in the same condition, but a society of this kind, in which persons would not have the possibility of affirming their own identity (which could be religious, cultural, ethnic. of gender, etc.),  would be a society, which does not respond to our expectations.

The want of attention to the dimension of fraternity has caused, and is causing the explosion of conflicts of identity in our society. The identity conflict cannot be confused with the conflict of interests. The problem is that today, in our advanced societies, a new category of conflicts has come to emergence, conflicts which cannot be solved with the instruments with which we have faced the conflict of interest. This has declined on the axis of possessing. The conflict of interest is a conflict between he who has and he who has not; between he who is recognised and he who is not. We can't solve the conflict of identity,  which is bound to the being, that is to the existential dimension, by using the typical instruments with which they have solved the conflicts of interest. We can, then, start to understand the reason why the exchange of the equivalents is no longer enough. By joining  efficiency and equity, we can solve, the conflicts of interest, even if not all of them. The great historical merit of the welfare state has been just this, but the newness in this epoch of ours is that the conflict of identity is at premium on the conflict of interest. This is why we need it to be declined in the practice of the principle of fraternity.

The fresh balance of consumptions between utility and happiness

We can now ask ourselves: what is the characteristic of the traditional way of thinking the activity of whatever consumption? The utility, which a man thinks of drawing from the object he buys, often is considered as the unique element of the motivational system of the act of consumption. We tend to confuse the concept of happiness with that of utility, yet the difference is noteworthy. Utility is the characteristic of the relation among the human being, the person and the thing. The things are useful, but happiness is the characteristic of the relation between person and person. This is a point on which we need to reflect: during the long season of the  society of ford, it has happened that utility and happiness, somehow, overlapped each other. In other words, the consumption of objects, in giving me utility allowed me also to expand the spaces of happiness. It is not difficult to understand it: if I am hungry and you give me bread, bread gives me utility (this is obvious), but it makes me even happier because it is certain that a hungry man cannot be happy.

The newness of this historical phase is that we go on thinking -erring- that utility can go along together with happiness, while it is no longer so. I can bring utility to its utmost height, but can also be more and more unhappy. This happens because, while utility is linked to things. which I consume, happiness, instead, is linked with my interpersonal relations. However, we need to be attentive, because the interpersonal relationships give me happiness only if they are not utilised in an instrumental key: happiness is given by relation as such. Today we live in a society in which the possibilities of increasing our utilities tend to reduce the occasions of happiness. To be cultivated, the relations are in trade off, in alternative, to the capacity of obtaining more income with which we can buy more goods. Yesterday we had no trade off, because we worked more, we earned more, we bought more goods, which gave us more utility and made us happier. Today, to give the maximum value to utility, I am told to earn more. Only like this my power of acquisition increases and I can buy more goods. However, they never say that, by acting in this way, I am compelled to reduce the time, which I am expected to dedicate to my interpersonal relations, and that happiness depends essentially on these relations.

The problem is not so much to decrease the level of consumption -the consumption must absolutely not be diminished but increased- but to change the composition of the same. The point is that we are consuming too many goods "of utility" and too few goods of "happiness; this means that we consume too many things which give utility and not, instead, those goods capable of handing over happiness, the goods of relation. The good of relations has the characteristic of being a good with the quality of anti-rivalry; the public goods have the characteristic of the non-rivalry . "Anti-rivalry" means that the satisfaction of each subject increases with the increasing of the subjects with whom the subject enters the relation: the more I can relate with others, the happier I feel.

In other words, there are two ways in which we can affirm our need of identity and the need of "expressive consumption". There is the way of the position reality and that of the relation reality. The first is the one which destroys. The positional goods are those goods for which "if I consume them, I must consume them in the same amount preceded by the sign of minus and their algebra sum is equal to zero". A typical positional good is power; this reduces to nothing (another example is represented by the status symbol). The characteristic of the positional good is, therefore, that of answering the exigency of being expressed, but this happens in a negative form, that is with the diminution or, the extreme limit, the destruction of the other. War is nothing but the most ferocious form of the fight  for the positional goods. In fact, with them, we reach the total submission or destruction of the other. The true problem is to see that the power of expression -an unalienable need in all of us- instead of taking the positional way,  takes the relational way and this, as I said above, is also the way to civilise the market, which can help us understand that  "the more I stay with you, the more I improve my well-being and, therefore, your well-being also is part of my well-being".

It is not the matter of a false morality, but of understanding -as Aristotle taught- that "man is born fo happiness". We shall never find a human being who says that he does not want to be happy; we may find persons who say of wanting to renounce utility -and there are- but nobody renounces to happiness. The problem has become serious because we have reached a phase of the human development, in which, somehow, the fundamental, primary needs have been satisfied or can be satisfied, but we cannot succeed in giving an answer to the fundamental need, namely the need of happiness. All this it is because the need of inter-subjectivity, which at times we go on pursuing in a myopic way, also at institutional level, postulates or makes a reference to a historical phase of development, which is that of the ford society, while we are already in a post-modern, post-industrial epoch,  where the forceful need is that of the expressive capacity. We surely have -and shall have always- acquisitive needs, that is, needs which satisfy by acquiring and consuming (in the literal sense of the term, because etymologically, the verb "to consume" means "to destroy").

The interpersonal relations, in a form that goes from context to context, translate what is called "the principle of fraternity", which means to discover the face of the other, to discover that the other is a "you" and not another "ego". The utilitarian is one who sees in the other an "alter ego", that is, another "I": I mirror myself, because I want to see my face in yours. He who does this is a "rational fool", as Amartya Sen wrote a few years ago. The rational fool is this: a person who neglects happiness to raise to the maximum the value of utility. Can one be more foolish than this?

Civil humanism versus non-civil humanism

The need of happiness is a need, which cannot be compressed. To re-discover this category may allows us to re-think the so called "model of development but, above all, to have the mariner's compasses on whose base we may re-orient our conducts.

Humanism has known two versions: "the civil humanism" and "the non-civil humanism"; the civil one finds its origins in the thought of Aristotle, while the non-civil one in Plato. The non-civil humanism will lead to Macchiavelli , from Macchiavelli to Hobbes, from this to Bernard de Mandeville and then to Bentham, who closes the cycle. In other words, an anthropology of man according to which the human being is only a bearer of material needs; a "seeker of utility", we would say in modern terms.

The anthropology of the homo economicus, or if you like it, of the ontological individualism, has the limit of neglecting another line of thought: at the beginning, economy, market were born as "civil economy", that is, as a tentative of putting together the above mentioned three principles. The market, for a given period, was born on the basis of this intuition, as an instrument of civilisation and humanisation of the relations. It was Max Weber who, following Hobbes, in his famous essay, The protestant ethics and the spirit of capitalism, made the birth of the market to coincide with the non-civil humanism.  Against this interpretation is the fact that the market was born on the basis of an idea of civilisation of the interpersonal relations. Let us think of the mechanism which is born with the civil humanism, which is today confused with philanthropy, even if it has nothing to do with this.  The market is a place where persons meet, not only a place where goods are bought. Today's challenge, to me, is the recuperation of the reasons of the origins, even if, obviously, only in completely renewed. forms. To go back to the market, as to a meeting place, means also that the fraternity cannot be confined to a niche, as the  supporters of the third sector theory pretend: we cannot accept a market ruled by the unique logic of profit, of exploitation, by withdrawing into the niche of the good ones, or of the buonisti , who ransom themselves with beautiful gestures. The principle of fraternity must enter the market to wed the efficiency.

To know that today we are in the historical conditions in which such a challenge -which is cultural an political at the same time-  can be picked up and defeated, it must fill us with the hope which allows us to understand that, as Musil said,  "the future is to cultivate the sense of the possibility", that is, it is possible to change. It is not true that we are prisoners of determinism, which forbids us to advance . To cultivate the sense of possibility is equal to learn that in the phase of crisis - and crisis means "transition"- we need to learn from nature and to throw the seeds of hope full-handed: some will go lost, but the few which will germinate will bear plenty of fruit.