Markets and Personal Relationships

Some opponents of free markets, or even markets in general, say that part of their problem with market economies is the impersonal nature of the interactions between people within them. I want to share some thoughts on this idea.

I want to start by quoting two passages that detail the arguments I want to try and address. First, the following is a passage from an article by anthropologist David Graeber:

Marx was already noting in the passage cited above that commercial relations, in which wealth was the main aim of human activity, appears “in the pores of the ancient world”, among those who carry out the trade between societies. This is an insight developed in world-systems theory, where capitalism is often seen as having developed first in long-distance trading and then gradually wormed its way into ever-more-intimate aspects of communities’ daily life. I would suggest we are dealing here with a much more general principle. One could name a whole series of highly schematic, simplified forms of action, that might be inevitable in dealings between people who don’t understand each other very well, that become introjected in a similar way. The first is probably violence. Violence is veritably unique among forms of action because it is pretty much the only way one can have relatively predictable effects on others’ actions without understanding anything about them. Any other way one might wish to influence others, once has to at least know or figure out who they think they are, what they want, find objectionable, etc… Hit them over the head hard enough, it all becomes irrelevant. Hence it is common to relations between societies, even those not marked by elaborate structural violence within. However, the existence of structural violence—social hierarchies backed up by a systematic threat of force—almost invariably creates forms of ignorance internally: it is no longer necessary to carry out this sort of interpretive work and generally speaking, those on the top know remarkably little about what those on the bottom think is going on. Here again, gender relations are probably the most revealing example: with remarkable consistency, across a very wide range of societies, men tend to know almost nothing about women’s lives, work, or perspectives, while women tend to know a great deal about men’s—in fact, they are expected to, since a large share of that interpretive labor(if one may call of that) always seems to fall to women, which in turn helps explain why this is not generally considered “labor” at all. And the same tends to apply to relations of caste, class,and other forms of social inequality.


Market exchange is another case in point. It’s enough to take a glance at the rich anthropological literature on ‘gift exchange’, or even considers the way objects move within families or circles of friends, to realize how incredibly stripped-down and simplified is a standard commodity transaction in comparison. One need know almost nothing about the other party; all one needs to know is a single thing they want to acquire: gold, or fish, or calicoes. Hence the popularity, in early Greek or Arab travelers’ accounts, of the idea of the “the silent trade”: in theory, it would be possible to engage in commercial exchange with people about whom one knew nothing at all, who one never even met, by alternately leaving goods on a beach. The point is again that commercial relations were in many societies typical of relations with foreigners, since it required minimal interpretive work; in dealing with those one knew better, other, more complex forms of exchange usually applied; however, here too, the introjection of commercial relations into dealings with one’s neighbors made it possible to treat them, effectively, like foreigners. Marx’s analysis of capitalism actually gives a central role to this phenomenon: it is a peculiar effect of the market to erase the memory of previous transactions and create, effectively a veil of ignorance between sellers and buyers, producers and consumers. Those who purchase a commodity usually have no idea who made it and under what conditions it was made; this is of course what results in “commodity fetishism”.

Graeber infers here that interacting with people through violence, and through market exchange, are similar in that both forms of interaction enable one to get something one wants from other people without needing to know much about them, and without needing to have a personal relationship or friendship with them.

A post on Reddit by u/hamjam5 makes a related point, and connects the critique of markets to a critique of authority.

The issue is having people’s interpersonal relationships managed by impersonal systems. Markets inherently turn human actions, relations and resources from things managed by personal relationship based around the desires of a community or a group of individuals, and into impersonal and anonymous things that can be commodified and monetized. And, while I would agree that this is neutral in a sense, the issue is it creates a handle (if you will) by which authoritarianism can much more easily grab a hold of the population by.

See, if interrelations, resources, activities etc are managed around personal relationships of a community of individuals, the result is it is very difficult to rule over this community or to exploit their labor and take control of their resources. Money isn’t useful to them, since they don’t use it in the satisfaction of their desires. They rely on their relations with others in the community to satisfy those desires. The only way to really gain control of them is outright violence. But, if they have markets, if their resources are for sale, if some of them are desperate for money, or if money is a means by which you can satisfy your desires without having to depend on your personal and community relationship with other individuals — then it is much easier for authority to gain control of the population and the resources they depend on.

So, the issue with markets, and with any other system of impersonal management of a population, is that it makes a community more amenable and adaptable to the existence of authority.

I certainly find these points interesting, but I find them unconvincing. I’d like to share why. Briefly:

  1. Personal relationships, built on in-depth knowledge of another’s needs, desires, personality, values, and temperament, are not always possible. It is beneficial to have an ability to cooperate with people even when one can not build such a relationship with them.
  2. Impersonal relationships and interactions are not always authoritarian, and thus need not come with the dangers of authoritarian relationships.
  3. Market exchange does not have to be completely impersonal.
  4. Personal relationships can sometimes be just as authoritarian, and just as damaging to the people involved, as impersonal ones, and knowledge about a person can give one power over them. Thus, systems that enable people to work together to mutual benefit without having to know much about each other can in fact help liberate the people operating within them.

* * * * *

1) Personal relationships are not always possible, and being able to cooperate despite this is beneficial.

David Graeber points out that impersonal commercial interactions probably took place more between groups of people than within them, throughout early human history. In one’s own community or circles of friends, more personal interaction is possible.

Graeber sees trade between strangers as problematic because of its impersonal nature. I see it as something to celebrate because of its cooperative nature. It is perfectly possible for people who know each other very little or not at all to fail to cooperate altogether. That people can manage to cooperate in spite of social distance is something I am glad for.

The difference in perspective seems to come from different expectations regarding the most likely possible alternatives. If one thinks of the possible alternatives as cooperating with someone without knowing much about them, or getting to know them more in order to facilitate cooperation, the latter may seem preferable.

In contrast, I worry that people may fail to work together at all, possibly even ending up in violent conflict with each other. The palpable alternative, in my mind, is between cooperating with people one can know little about, and not cooperating with them.

Of course, in many circumstances, people can establish personal relationships with others, and these relationships can be mutually beneficial. In these cases, I acknowledge the benefits that people can gain through such relationships, and I acknowledge that personal relationships can benefit us in ways that less personal ones cannot.

I think there is a limit to an individual’s ability to create, and maintain, such relationships, however. One can not personally get to know every other individual on earth, or maintain close friendships with hundreds, much less thousands or millions or billions, of people at once. Anthropologist Robin Dunbar discusses this issue in his book Grooming, Gossip, and the Evolution of Language, but the basic point does not strike me as controversial.

Personal relationships may help people use reputation and the discipline of repeated dealings to maintain social order, encouraging people to cooperate with each other rather than attempting to harm others for personal gain. However, these are not the only tools people can use to maintain social order without authority. Another method, for instance, is costly signalling, which research by Emily Skarbek and Peter Leeson shows can help people scale up cooperation without authority far beyond the limit of 150 people which Dunbar hypothesized to be, roughly, the scale at which people could use gossip and reputation to maintain social order effectively.

Like costly signalling, the various tools people create and use in many market systems, including money, banking, credit scores, and so forth, help people cooperate at scales that would otherwise be prohibitively costly. Securing the gains of such cooperation seems like a good reason to adopt these tools. Certainly these things are not panaceas, and there is much people usually want in life that they must gain through friendships rather than impersonal, even nameless commerce, but having friends and engaging in commerce are not mutually exclusive, people can do both, and just as friendship can enable people to meet needs they can not meet through commerce, commerce can enable them to cooperate with people they could not form personal relationships with and thus could not cooperate with purely through close friendship.

2) Impersonal relationships, and commerce with strangers, need not be harmful or hierarchical.

But this brings us back to the concern raised by critics of markets, that using these tools may give seekers of power “a handle … by which [they] can much more easily grab a hold of the population…”

I am unconvinced of this, because, while I agree that authoritarian social relationships are prevalent in our society, I am not persuaded that these sorts of relationships are the product, primarily, of markets, rather than of actions taken by people in power, (primarily through government,) which shape markets in ways they need not be shaped.

Consider various relationships between people in markets today, buyers and sellers, employers and employees, creditors and debtors, etc. Critics of markets point out that in many of these relationships, one party may have power over another, and may be able to take advantage of the party in the worse position. I agree with their observation, but I attribute these imbalances to the circumstances in which the exchanges take place, and I don’t think changing the circumstances to eliminate the imbalances would require abandoning market exchange, (even exchange using money,) as a form of interaction.

An essay by Charles Johnson titled “Libertarian Anticapitalism” lays out the fundamentals of this debate quite excellently. He distinguishes four different senses of the word “capitalism,” (by no means the only four out there,)

  1. Free Enterprise
  2. Pro-Business Political Economy (essentially what many anarcho-capitalists call “corporatism”)
  3. The Wage-Labor System
  4. Profit-Dominated Society. (or ” the commercialization of everyday life”)

Johnson argues that, whereas both opponents and defenders of “capitalism” often conflate all these senses, (despite the first two being mutually exclusive,) and often argue that the social conditions of 3 and 4 necessarily arise from 1, “freed market anti-capitalists” argue that 3 and 4 actually arise from 2, and that if 1 were achieved 3 and 4 would both dissolve. Quoting his essay:

I think that the features conventionally associated with American capitalism — large-scale, top-down firms, the predominance of wage labor, corporate domination of economic and social life, the commercialization of social space etc. — are as often as not the products of state intervention, not of market dynamics. And, further, that a genuinely and consistently freed market would tend to undermine the prevalence and significance of these features in everyday life.

As an aside, this characterization of capitalism is different from that which Hogeye, a member of our own Ozark Voluntaryist Network, believes C4SS style “left market anarchists” like Roderick Long and Charles Johnson employ in discussions of “capitalism.” In a post in our facebook group, Hogeye says:

Left libertarians are anarcho-capitalists who say “capitalism” when they really mean “corporatism.” And call themselves “socialist,” even though they favor free markets and private property.

In contrast, Roderick Long states in one attempt to clarify his own position:

Both Caps (like Daniel Sanchez) and Socks (like Magpie Killjoy) – aligned, as so often, in a common conflationism – have accused Macks of trying to pull a bait-and-switch by redefining “capitalism” to mean “corporatism.”

But if you look at what the Macks actually say, the accusation won’t fly. Macks have distinguished a variety of different meanings of the term “capitalism” in contemporary use – and our chief preference has been to use “capitalism” not to mean “corporatism,” but rather to mean a social condition which Macks believe is caused by corporatism, but which Socks (and some Caps) believe is caused by free markets. See, for example, Gary here and Charles here. (And of course this is essentially the way that individualist anarchists have been using the term for the past two centuries.)

Of course, returning to the main discussion of this post, communists can argue that market anarchists are incorrect in expecting the destruction of corporatism and the freeing of trade to lead to a society predominated by artisan labor, mutual aid, cooperative businesses, and local community building, while decreasing the prevalence of wage-labor, (and the need to work for a boss,) bulk production of unneeded commodities to be sold through mass psychological manipulation, (the advertising industry,) and the various hierarchical relationships which communists perceive as part and parcel of “capitalism.”

It is difficult to decide who is right without extensive historical study, and even then the question would probably remain open. A large-scale society, (with millions of people,) with a completely free market has, to my knowledge, never existed, and so such research would have to look at the specific actions taken by government in various cases and try to compare them to other cases where government did not take those actions. I hope that those interested in reviewing this and other evidence for Johnson and Long’s thesis will look into the following books: Gabriel Kolko’s Triumph of Conservatism, (a book I have reviewed before on this blog,) Kevin Carson’s Studies in Mutualist Political Economy, Gary Chartier’s Conscience of an Anarchist, and the book Markets Not Capitalism edited by Gary Chartier and Charles Johnson.

For those who have no time for reading such works, I will simply say that, in thinking about my own life, there are plenty of cases where I engage in trade without any perception that the other party has oppressed me, at least through the specific interaction. I share with communists a distaste for wage labor and the concentration of economic power in the hands of a minority of the populace, yet almost all the complaints I have, (and I have many,) can be traced back to the State. Labor mobility, and the ability of the poor to make a living at all, is hindered through licensing and zoning laws, workers are handicapped in their ability to bargain with their employers through Taft-Hartley and Right-to-Work laws, (see Chapter 26 of Markets Not Capitalism, Labor Struggle in a Free Market by Kevin Carson,) prices are kept high through artificial scarcity, and all throughout the State continues taking a part of the fruit of our daily labor for their wars and prisons, against our will. Surly communists can at least understand why we market anarchists expect our proposed form of society to look alien compared to today’s world, and to enable people to achieve far more independence, and even more of a sense of community, than in today’s surrealistic “corporate capitalist” nightmare.

3) Market exchange does not have to be completely impersonal.

Much of trade in the real world involves personal relationships, even if one can’t have a personal relationship with everyone else in an economy. Working in retail, I have noticed that my customers often remember my name and face, even recognizing me on the street. They often engage in small talk with my coworkers and I, both when they see us on the job and when they spot us outside of work. My coworkers and I are able to build friendships and personal relationships amongst ourselves, (including to an extent members of management, at least those present in our workplace on a daily basis.) And I trade fairly often with friends I have met outside of my day job, either through barter or exchange of currency for goods or services.

Certainly there are many cases where people with personal relationships can cooperate without the strictness communists take to be characteristic of markets. Communists sometimes paint the difference between their preferred system and a market system as one of formality or the specificity of one’s demands. Thus, for example, asking $5 specifically for a widget, and refusing to give another person the widget for anything less, is painted as an unhealthy sort of relationship by critics of “markets.” Relationships where the specifics of what each party wants are more open-ended, such as a friendship where friends will buy one another lunch without keeping track of the specific amount of money they pay out, or where they will loan each other tools or even share resources without ever demanding them back, are cast in a more positive light.

Yet the difference is a matter of degree, and the boundary between these sorts of relationships is blurry and fluid. Friendships certainly still involve a give and take, if any party stops reciprocating the kindness of the other(s) then the friendship comes to an end. To invoke a cliché, friendship is a two (or more) way street. The fact that friends may only demand specific things, threatening to end the relationship lest their demands are met, on the rarest of occasions, and even conceding that a coability to give without always demanding any quantifiable value in return may be characteristic of friendship, it is still the case that friends engage in give and take, in exchange, and that their friendship consists of a sort of mutual exchange. People who come to firmly believe they have ceased to benefit from a personal relationship, and who believe they can not heal the personal connection, may very well end the relationship. That the criteria people use to decide whether or not to continue pursuing a personal relationship are different from those they use to determine whether or not to buy an apple, and that the criteria used in the first case may be more forgiving, or far less strict, clear-cut, or consciously articulated than the criteria used in the second case does not show that the situations do not share a common character of mutuality, reciprocity, and voluntariness.

Importantly, the boundary can be blurred coming from the other direction as well. Customers shopping in a store can ask the management to negotiate regarding the price of an item, and sometimes management can, and will, make a concession and cut the specific customer a deal. Whether they do so may depend in part on what they know of the customer. If the customer has displayed animosity towards the store’s staff in the past, the staff may remember this and refuse to negotiate. The same principle applies to other aspects of a service besides price. (Will a manager accept a return? Will the staff of a store go out of their way to ensure a customer gets the best help they can be given?) The principle also goes the opposite direction. (Customers who like the staff of a given establishment may reward the business with more patronage, or by recommending the business to others, or even by being willing to pay higher prices at a store whose staff they subjectively regard as friendlier, and so on.) Similar negotiations take place between employers and employees, between stores and vendors, between firms and their suppliers, and so on. The relationships between these economic actors can be quite personal and friendly.

The impression of strict demands existing within a market, then, is flawed. Buyers and sellers are still people, and their prices and quality of goods and services are the product of negotiations. Personal relationships can play a role in the decisions those people make. The specific criteria used in any particular interaction to determine whether to continue associating or leave are open-ended and malleable. Critics of markets exaggerate the rigidity and impersonality of prices.

A final note on this point before moving on, an economy of artisans, small cooperatives, and local communities trading with each other would probably be more personal than the present society. When a specific individual or small number of individuals produces goods or services, these individuals and groups can build reputations with their customers and others. If micro-manufacturing technology, (e.g. 3d printing,) and other technologies, (computers, hydroponics, solar power,) can enable people to more easily make a living through artisan labor or meet their needs through small-scale collective enterprises then it seems likely that they would be better able to create personal relationships with those they trade with. Thus, if market anarchists could achieve a decentralized economy, trade would likely take on a more personal character, and reputation may be even more important for businesses and entrepreneurs than today.

4) Personal relationships can sometimes be just as authoritarian, and just as damaging to the people involved, as impersonal ones, and knowledge about a person can give one power over them. Thus, systems that enable people to work together to mutual benefit without having to know much about each other can in fact help liberate the people operating within them.

This, probably, is the point where I disagree most strongly with the criticism that markets are too impersonal, and thus are harmful to participants.

Some of the most terrifying, most draconian, most psychologically damaging authoritarian relationships can be perfectly personal ones. The relationships between parents and children, siblings, romantic partners, and “friends,” (or people who call their relation a “friendship,” even when it becomes unhealthy,) can be, and often are, the most extremely personal relationships people can enter into. Of course these relationships can be vitally beneficial, but, under many circumstances, they can also be abusive, harmful, and difficult to escape from, and I don’t think it will be difficult for my readers to think of examples illustrating this.

People in personal relationships are vulnerable to each other, and have power over one another, in ways that people in impersonal relationships generally do not. Certainly, as David Graeber points out in the quote above, violence can be used to manipulate the behavior of people one knows precious little about. But violence, and emotional abuse that is not in and of itself violent, absolutely occurs between people who personally know one another.

Statistics on various violent crimes are difficult to gauge the accuracy of, for various reasons, including the possibility that victims may simply not report abuse to the State. Never-the-less:

According to RAINN, 25% of rapes “are committed by a current or former spouse, boyfriend, or girlfriend.” If one adds in rapes committed by “acquaintances,” the percentage of rapes perpetrated by someone known to the victim increases to 70%, according to the same source. Regarding children, quote:

  • Of sexual abuse cases reported to law enforcement, 93% of juvenile victims knew the perpetrator:2
    • 59% were acquaintances
    • 34% were family members
    • 7%  were strangers to the victim

Another source states:

About 85 to 90 percent of sexual assaults reported by college women are perpetrated by someone known to the victim; about half occur on a date. The most common locations are the man’s or woman’s home in the context of a party or a date. The perpetrators may range from classmates to neighbors.

Half of all student victims do not define the incident as “rape.” This is especially true when no weapon was used, there is no obvious physical injury, and alcohol was involved — factors commonly associated with campus acquaintance rape. This is one reason rape and other sexual assaults on campus are not well reported.

Fewer than 5 percent of completed and attempted rapes of college students are reported to campus administrators or law enforcement, according to one study. Failure to recognize and report the crime to law enforcement officials may contribute to underestimating the extent of the problem and may affect whether victims seek medical care. However, those who report in other contexts, such as through a confidential reporting system, are more likely to seek medical or counseling services.

Even if some readers want to claim that the instances which the victims themselves did not count as “rape” were, in fact, consensual, (a claim I am deeply skeptical of, given the propensity of human beings to try and protect their own abusers under many circumstances, evidence for which can be found in Michael Huemer’s book The Problem of Political Authority, (specifically the chapter on the Psychology of Authority,) and Denise Winn’s book The Manipulated Mind,) this would not show that rapists are not, most often, people known to the victim, even people with deeply personal relationships to the victims, such as romantic partners or family members.

What about homicide? According to Citizens Report UK, in the UK in 2012:

  • Female victims were most likely to be killed by someone they knew (approx 78%), with around 47% of female victims being killed by a partner or ex-partner, male victims knew their assailant around 57% of the time, being killed by a partner or ex-partner 5% of the time.
  • Victims under 16 were likely to know their assailant (around 70%), when the assailant was known this was regularly the parent of the victim (50%).

Skimming through search results, statistics from the U.S. and other areas look similar, with the trend being that most homicide victims knew their killers, at least according to the sources I have seen. For example, an article from CBS New York states:

Of the 334 murders in New York City in 2013, it appears only 29 victims did not know their killer.

…According to the Post, 62 of last year’s murder victims were killed by a family member, 53 were killed by a friend or acquaintance, which could mean a rival gang member.

Some other sources for readers to glance through on the U.S. and other areas include the Violence Policy Center, The Age, (a news source on Australia,) and Independent Online, (based in South Africa.)

Rape and murder are extreme examples, but think of domestic abuse that does not involve either of these.

Not only can personal relationships harm participants, but knowing more about a person can give one power over them. A man who knows intimate, personal details about their girlfriend or wife’s life experiences and personality can use this knowledge to help them manipulate their partner and abuse them emotionally, if they so choose.

A similar point, anonymity and pseudonymity can, sometimes, help liberate people from oppression, and keep them safe from harm. On the internet, no one knows you’re a dog. When one interacts with others anonymously or pseudonymously, online or elsewhere, the people one interacts with need not know one’s age, gender, race, ethnicity, sexuality, income level, life experiences, disability status, and on and on. This can enable people to live part of their lives free, or relatively free, from the power structures built on these aspects of identity. One can not discriminate against another if one does not know who they are. Online communities have an immense potential to enable people to cooperate with others respectfully and without hierarchy precisely because of this new ability to cooperate with others while carefully controlling what they know about one, and limiting what they know as much, (or as little,) as one may wish. If an online community adopts social norms that encourage this kind of interaction, encouraging people to work together on a project but to not reveal their gender, race, age, or other personal details that are not deemed relevant by community members, then they can liberate people to interact as peers without worrying about all that other nonsense.

And, of course, whistle-blowers benefit from anonymity as well. One can, today, take a video of workplace practices in an industry and release it to the world in order to expose corporations for actions they could otherwise hide from the public. If one publishes the evidence in the right way, the corporation could be incapable of catching the whistle-blower.

Critics of markets could respond that while these are examples of the benefits of anonymity, they are not necessarily examples of people trading through currency or barter. But it is easy to find examples of people trading online while knowing almost nothing about those they trade with, (similar to Graeber’s hypothetical about alternately leaving goods on a beach,) other than a brief profile description, (easily controllable by the owner of the profile,) and probably what reputation they have gained from trading in the past, (how long has their profile existed, what sort of reviews have they had?) Such pseudonymized systems can also help people escape the power structures built on identity, such as discrimination based on race or gender.

It seems to me that the ability to cooperate with others even in the absence of personal relationships and without detailed knowledge about them can be liberating and beneficial, it is not merely a source of hierarchy or harm.

* * * * *

The supposedly impersonal nature of markets, and the supposedly harmful, hierarchical nature of impersonal, anonymous relationships, and the supposedly healthy, anarchic, (non-hierarchical,) nature of close personal relationships and friendships, all of this is only a part of why opponents of markets oppose them.

Yet, it is a part I think proponents of freed markets need to address, and I hope I have given the critics some food for thought.

One thought on “Markets and Personal Relationships

  • I would point out a kind of converse to #2: Personal relationships may make a society or group easier to capture by authoritarian means. All the statist has to do is “turn” some respected social elites. The Vichy France idea. Or, in US history, the backstabbing of the Cherokee tribe leading to the trail of tears. The US ruler Jackson got the influential Major Ridge to sign the infamous Treaty of Echota. The whole notion of a free market aiding and abetting authoritarianism seems dubious to me.

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