Mormons and Markets, III: Strangers and Neighbors

In my last post on this subject, I argued that one of things that markets do well is coordinate dispersed information. Another thing that markets do fairly well is facilitate cooperation among strangers. This is worth thinking about.

One of the wonderful things about a market is that it provides a way for me to peacefully make a deal with someone that I do not know and with whom I may have very fundamental disagreements. Markets do not require that contracting parties be friends or share the same world view. As one legal philosopher put it:

Markets are most attractive where individuals have broadly divergent conceptions of the good, where the relationships among individuals tend to be one-dimensional, discrete, nonrepeating, and where the benefits and burdens of cooperation are spread over persons, time, and geography. They are least necessary where interaction is repeated, were relationships are multidimensional and direct, and where there are shared conceptions of the good. (Jules Coleman, Risks and Wrongs, Oxford, UP 1992, pg 5)

This suggests that markets are more than merely economic institutions. They are not simply about the allocation of resources. Rather, they are also political institutions that manage pluralism and alienation. (The ability to interact with strangers also, of course, has purely economic benefits. One of the problems that faces the desperately poor in the developing world is that they do not have access to markets that allow them to deal with strangers. The resulting constriction of their economic world to their friends and families is one of the causes of their poverty.)

Consider my law firm. By and large, I like the people I work with. They are intelligent, friendly, and generally pleasant. On the other hand, I have very fundamental disagreements with many of them. On a host of social, political, religious, aesthetic, and sexual issues, I am sure that we have very different beliefs, some of which are passionately held. Yet we are not at one another’s throats, and indeed we cooperate together quite well. To put the point in geographic terms, the true site of bi-partisan cooperation in the nation’s capital is not the office of this or that moderate senator, but K Street. My firm comfortably houses refugees from Democratic and GOP administrations, people who are ideologically motivated and very aggressive. Yet they peacefully co-exist and co-operate within the marketplace of the firm.

This political dimension of markets should simultaneously attract and repel Mormons. It should attract us because we are a minority and are unlikely to be anything but a minority for the foreseeable future. Hence, we will always find ourselves in societies in which we will have deep disagreements with our fellows. Hence, we are likely to benefit from a social context that manages disagreement without violence or coercion, and which facilitates cooperation among the unlike minded. At the same time, however, Christ teaches us that we should love our neighbors and Joseph Smith proclaimed that friendship is the fundamental principle of Mormonism. In short our aim is a society without strangers but where we are “fellow citizens with the Saints.” In contrast, the market is a system that encourages us to treat others as strangers. Furthermore, by giving us tools with which to manage our relationships with strangers better, it no doubt reduces our immediate need to act as a neighbor to all, for the simple reason that one can function fairly well in a market without neighbors. Hence, the market is, in a sense, an institution that both allows Zion to develop in a sea of scoffers and skeptics, and at the same time presupposes the failure to achieve precisely what Zion seeks.

8 comments for “Mormons and Markets, III: Strangers and Neighbors

  1. Nate: If markets “are least necessary where interaction is repeated, were relationships are multidimensional and direct, and where there are shared conceptions of the good,” does that suggest that Zion has no need of markets; or just a lesser need? A people of one heart and one mind would presumably have the qualities Coleman mentions.

  2. Internally, with ourselves, we don’t need a market. Within our imediate families we may be able to do without markets, but even then the concept of an allowance or seperate money can be an easy way to deal with differing financial priorities. As the circle expands to include more people, the transaction costs and information problems grow pretty fast. Gods who know everything and are perfectly trustworthy have no need of markets.

    But to do without markets and get a good allocation essentially requires us to know a great deal about every other person in the system. We, in fact, need to know as much about them as they know about themselves. And to do without binding contracts is similarly a pretty hard thing.

    Presumably, to take the idea to a more extreme level, we could get by fine without spoken or written language too, if we all understood each other perfectly well or were telepaths. But I don’t see that happening either.

    But Nate is right that markets let us, if we desire, avoid certain costly investments in getting to know and trust each other, which investments can have eternal payoffs when successful. But they do not require that we give up getting to know others. They just allow us to.

  3. Shakespeare’s Merchant of Venice provides an important literary exploration of how markets bring together “strangers.” In renaisance Venice (the play’s setting), people of many nationalities, races, and religions did live and trade together—a unique set of circumstances that has obviously become a dominant pattern in recent history. Early on in the play, Shakespeare notes the difference between doing business and sitting down to eat together (Shylock’s observance of dietary laws is a symbol of his unwillingness to compromise his beliefs or religious identity). The drama’s larger conflict—and the way it goes unresolved in a satisfactory way—seems to indicate serious concern that perpetual conflicts will characterize the encounter between different peoples as long as minorities resist assimilation. Allen Bloom (I know, he’s not the Bloom one usually reads on Shakespeare) has an essay on this in his Shakespeare’s Politics, if you can find it.

    To me an interesting question (both in terms of history and current international politics) is the link between religious tolerance/religious liberty and market economics. It seems likely that in the history of the western world, religious tolerance has been conducive to liberalization of market structures—and that liberalization of market structures has been conducive to religious tolerance. Thus, it may be good news when countries with poor religious freedom records abandon communism, sign regional trade agreements, or agree to reduce trade barriers in the WTO process.

  4. “In contrast, the market is a system that encourages us to treat others as strangers”

    To me, those words don’t fit. It ALMOST as saying a gun encourages us to kill people. (No I don’t mean to start a pro/anti gun thread). Perhaps I’d state this as:

    “The market system allows us to interact peacefully with others”.

    In fact I’d go so far as to state that the market encourages us to be treat others with respect and fairness. In a free (non government controlled) market those that don’t ‘play well with others’ are shunned/avoided and eventually either have to clean up their act or close shop.

  5. Shawn: Wow. Nice insight re: market/religious liberalization. Yours…or is there already a published article on it?

  6. Lyle: while I don’t have a single article as a source, I doubt that my insight is super original. I know there are law professors specializing in human rights who study the link between trade and human rights. (Consider, for example, U.S. attempts to use trade opportunities as an incentive to improve human rights practices—or in the case of China, trading despite profound differences with the hope that economic liberalization will lead to liberalization in general.) I will do a westlaw search on it next time I have a chance.

    As far as religious human rights in particular are concerned, the idea occurred to me reading things such as Barzun’s From Dawn to Decadence and Zagorin’s How the Idea of Religious Toleration Came to the West, histories of western civilization and culture that (at least in part) portray a link between the development of religious freedom and the rise of capitalism (among many other things—I think religious conflicts are sort of the engine that drives western civilization).

    To me, an interesting figure in this history is John Locke. Although his thought regarding toleration was not particularly original, he was a beneficiary and effective publicizer and defender of ideas formed that he inherited. His Letter Concerning Toleration is more prominent than the much more original writings of the levellers that he relied upon because he restated their arguments in terms of philosophical, instead of religious, discourse. Of course, Locke’s ideas about property and limited government are important in the history of classical liberalism. If it hasn’t been done, I wonder if a philosopher or intellectual historian couldn’t write something exploring the relationship in Locke’s thought between religious liberty and market liberalization.

  7. On the one hand, I’m intrigued by this whole thread. For example, the idea that religious toleration = economic success provides an alternative explanation for the decline of the House of Islam. When Islam was more tolerant than the West, it was economically dominant, as the west became more tolerant – say in the 18th century – it began to pass the House of Islam in terms of economic productivity and religious tolerance. However, China, which was not particularly tolerant (or tolerant up to a point) was the dominant economic power during most of the period prior to 1900 and the period when it was most toelrant (under the Mongols) was one of its less prosperous periods.

    But the idea that market always manage alienation and difference peacefully seems to me to be completely ahistorical. Becasue markets are always enmeshed in cultural assumptions, they are never value free. A few violent market related episodes ranging from slavery (and the ensuing wars in Africa that supported it), the Dutch take over in Indonesia, the Pullman strike, the Lowell massacre etc. all suggest that markets can lead to violent outcomes as well as peaceful ones. The World that Trade Created by Pomeranz and Topik is an extremely entertaining collection of essays that explore the intersection of markets and cultures with some interesting and surprising results.

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