16 Comment: Exploring the liminal spaces between commerce and community
The three essays by Colin Danby, Dave Elder-Vass, and David Ellerman raise varied and interesting perspectives on interrelationships between commerce and community, both as they are represented in economic thought and as they manifest themselves in the real world. “Commerce” is the market economy, where firms compete in pursuit of profits, and all relationships between people – in their roles as business owners, managers, employees, shareholders, consumers, inventors, traders, borrowers, lenders, and so forth – are driven by commercial logic. These kinds of relationships are of course what economists have traditionally been trained to study; they represent only a subset of activities of production, consumption, investment, and exchange, which also take place in the home, in community groups, in private charitable and nonprofit organizations, and in public institutions, otherwise known as “community.” As much as hardline neoclassical economists (like Gary Becker) sought to explain all economic activity – in or out of the business sector – as reflecting similar processes of individuals maximizing utility, it is obvious that relationships within families, social networks, community groups, private voluntary associations, and other types of organizations and entities, have logics to them that are not satisfyingly described as outgrowths of self-interested optimization. These three essays ask whether we can or should draw bright lines between “commerce” and “community,” and whether they should be understood as operating according to distinct or overlapping types of logic.
Colin Danby rejects the idea of a dichotomy between commerce and community, arguing instead that we “inhabit a single, mixed, underdetermined, and often confusing world in which people and institutions attempt to structure an uncertain future in overlapping and sometimes contradictory ways.” In Danby’s view, we should resist the temptation to split the world into a business sector coldly focused on profits and a community sector that warmly revolves around caring and giving, as one finds both pro-sociality in the business sector and ruthless self-interested behaviors in the community (think the Ku Klux Klan). In the absence of a natural divide between commerce and community, Danby calls for a “robustly subjective social ontology” that takes into account the dynamic, overlapping, contradictory forms of entanglements between people and aggregations of people, where their own understandings of how these work both shape the characteristics of the communities in which they participate and are shaped by them. This strikes me as a promising approach, especially for studying entities like social enterprises and social businesses that operate in the borders between commerce and community (see, for example, Borgaza and Defourny 2001). Practically speaking, I worry that it is difficult to study people’s self-understandings (what they are, where they came from, how they matter, how they change over time) in ways that are rigorous and yield insights of broad-based interest; grounded theory may provide a good approach. Nevertheless, the idea of examining how people themselves understand similarities and differences between commerce and community seems a highly worthwhile project.
Turning to questions about how and why people relate to each other in spheres seemingly outside of market relations, Dave Elder-Vass’s essay analyses the “digital gift”: all the things people produce and contribute to each other via the internet, ranging from advice, humor and recipes, to Wikipedia entries, free apps, and open-source software. It is hard to understand this outpouring of activity via traditional economic theory, except for the observation that digital “givers” must get intrinsic satisfaction from giving, as they often have no idea to whom their gift may go. More richly, Elder-Vass points to Benkler’s “pleasure of creation” (or one could also reference Veblen’s “instinct of workmanship”) as providing wells of motivation and interest for people’s digital gifts. As Elder-Vass explains, digital communities have features that make them unusual compared to normal ones, as relationships in digital communities are typically contingent, anonymous (or based on a digital identity), and activity-specific, rather than repeated, personal, and spanning multiple social spheres. More broadly, digital gift-giving also challenges the simple dichotomy between commerce and community because these are private voluntary exchanges of ideas and work products, but are also arms-length.
I think Elder-Vass is spot-on in asking us to look closely at the emergence of digital communities and at patterns of activity and interaction among people within them. Particularly interesting may be communities that sprout up to create and maintain innovative voluntary, distributed-computing projects, such as the widely dispersed group that collectively runs the crypto-currency Bitcoin (see Brito and Castillo 2013). The rules and procedures governing Bitcoin rest on familiar business logics of optimization and incentives. But they also incorporate principles of autonomy, self-governance, open participation, transparency, and power that is broadly distributed across the network. As such, they contrast with – and aim to contest – traditional monetary institutions premised on opposite values. This echoes Danby’s point that people’s subjective understandings of where their activities fit within the spectrum of commerce and community relations have an importance of their own.
Finally, David Ellerman focuses on questions of commerce and community as they relate to the firm. He argues that both new institutional and Austrian economics have blind spots when it comes to analyzing modern firms, both because they overemphasize the role of market logic in explaining firms’ behavior and because they pay no attention to the unacceptable ethics of that logic. In theorizing the various facets of business life, both approaches focus on the extrinsic motivations of business owners, managers, workers, shareholders, suppliers, etc. – that is, what they do to best extract gains from the opportunities present in their environment. Here Ellerman refers to the logic of exit: If workers are not well paid relative to other jobs they can take, they will quit; if owners can boost their wealth by shutting down the business and selling off its assets, they will; if an incumbent supplier renegotiating a contract demands a large price increase, the firm can opt not to renew; if customers of a local business have found the quality of its products to have fallen, they can go elsewhere. If abilities to exit provide constant pressures that firms must always navigate, then properly conceptualizing how they operate, survive, and thrive in view of these pressures must rest on understanding the exit logic.
However, an alternative would be to understand firms to be communities of workers, suppliers, managers, and customers driven by a logic of commitment, where they are not constantly looking at the exit to see whether they can do better elsewhere, but rather are engaged in sustained processes of learning, feedback, and cooperation within contexts of enduring organizations that fight to do well with what they have. This sort of model describes corporations in Germany and Japan, but not so much in the USA, where the exit logic dominates. But we should challenge the exit logic, Ellerman argues, because employment relationships based upon it are ethically unacceptable: they reduce people to the labor they sell and make it impossible for them to take full responsibility for the positive and negative outcomes of their actions. In this sense, full realization of the idea of the corporation as community would require the emergence of firms in which workers have full voice and a share in ownership.
While the three papers provide rich and interesting perspectives on commerce and community, one longs a bit for the firm foundations of old modernist approaches, where businesses were single-mindedly profit oriented; people were rich in their motivations and cared for their families, friends, co-workers, and communities; and government either propped up businesses or supported people, depending on your view. Admittedly, these sorts of simplifications are caricatures and leave too much room for vilifying businesses and romanticizing people. But I worry that, in acknowledging how much more complex the realities of commerce and community are, we may turn our attention away from the larger unfolding scene. The contemporary trend among corporations and other larger-scale entities is in fact towards prioritizing logics of optimization and exit, on the grounds that competition, uncertainties, scarcities of resources, etc., force organizations to continually track how they are doing relative to their objectives and to exercise exit options when performance falls short. To be sure, their objectives vary across sectors: maximizing profits in the private firm, maintaining balance between revenues and costs in the private nonprofit organization, or maximizing outcomes for “stakeholders” from available resources in the public domain. But in broad-based ways, cheap computing and big data have increasingly fostered real-time monitoring of employees, divisions, programs, products, ad campaigns, etc., and enabled constant discourse about what business units to launch or fold, which employees to promote or fire, what product lines to redesign or discontinue, etc. (see, for example, Economist Intelligence Unit 2012, Lohr 2013, or Mathews 2013). As Ellerman outlines, progression of this sort of logic inexorably crowds out possibilities of alternatives, like the cooperative ones he has worked to advance. In this sense, it is a source of concern that, if we fail to acknowledge how different core commercial values and rationales are from the alternatives, we miss opportunities to contest logics that run against social and individual goods.
References
Borgaza, Carlo and Jacques Defourny, eds. 2001. The Emergence of Social Enterprise. London: Routledge.
Brito, Jerry and Andrea Castillo. 2013. “Bitcoin: A Primer for Policy Makers.” Mercatus Center.
Economist Intelligence Unit. 2012. “Big Data: Lessons from the Leaders.” London: The Economist.
Lohr, Steve. 2013. “Big Data, Trying to Build Better Workers.” New York Times (April 20).
Mathews, Amanda Wilde. 2013. “Hospitals Prescribe Big Data to Track Doctors at Work.” Wall Street Journal (July 11).