Community, Association and Markets

Ever since Blackadder turned me on to them, I've been listening to the weekly EconTalk podcasts. A couple weeks ago, the guest was Stephen Marglin of Harvard, author of the recent book The Dismal Science: How Thinking Like an Economist Undermines Community There are some very interesting things about this interview, though other aspects of it left me deeply unsatisfied.

Marglin's basic thesis is, as his title indicates, that "thinking like an economist" (specifically, making decisions based on an analysis that almost exclusively considers factors of measurable loss and gain) undermines human community. More broadly speaking, Marglin sees personal choice and mobility as detrimental to traditional elements of community.

Now, this is a line of thinking that I'm not generally sympathetic to. However, some of Marglin's distinctions and arguments had enough appeal to me that I keep coming back to them in mental argument.

One of the things I found most interesting about Marglin's analysis was his distinction between "community" and "association". By his definition, community is not merely a place where one finds companionship, society and mutual aid, but also a group which one cannot leave without fairly serious cost. According to the old adage that you can chose your friends but you can't choose your family, community is much more along the lines of family than friends.

An association may seem to have nearly all the same benefits as community: companionship, society and mutual aid. But an association is a group which one joins based on some sort of identified commonality and which one may leave at any time with fairly little cost.

Marglin argues that many structures which used to be communities in the past have become associations. While people used to experience serious costs if they left their occupations or neighborhoods, society and societal expectations have changed to make these relatively painless moves. Similarly, people now church shop with relative ease, while in the past leaving a church was a nearly unthinkable move.

While we naturally find our ability to choose our company to be a good thing, Marglin argues that by making "community" an optional rather than necessary part of our lives, we have fundamentally changed the nature of the relationship we have with others in our lives.

Now, I'm profoundly grateful to have been able to choose to leave the inland valleys of the Los Angeles area where I was raised and move my family to a region with values more in tune with our own, and housing values that are within our income -- not to mention a much better company that I now work for than my employer in California.

At the same time, however, I have a certain sense of the value of community of the sort one is born into and has little choice about membership in. I was born into such a community, though of a somewhat quirky variety, via my parents close set of friends, and though I now live far from these people, I still find myself very much in touch with the same set of people and their children. Perhaps not constantly, but with more regularity and permanence even than my extended family.

Still, what was once a fairly geographically close community (nearly everyone living within a 10 mile radius) has become a group of people who keep track of each other on the internet and meet only at funerals and such. By Prof. Marglin's measure, it seems fairly clear that freedom and markets have taken a serious tole on that community.

Now, Marglin doesn't have a clear answer on how much one should restrict people's ability to make free gain/loss decisions about what to do with their lives. He's sure that we need to give more regard to communities, a good which he believes economics is fundamentally incapable of measuring, but he's not really sure how much we need to pull back on freedom of career, movement, trade, etc.

This stating of a problem without much of a hint of a solution was one of the things which I found very frustrating about his argument. And yet there were other elements which rang surprisingly true to me.

For instance, all to often, when people announce that they are suspicious of markets, they come out instead in favor of some sort of centralization and distribution. Many today announce that they believe markets are bad for society in regards to health care, and that instead the federal government should provide us all with a single payer health plan. Similarly, a fair number of people believe that the centralized state should provide a comprehensive "safety net" against unemployment and poverty, rather than requiring that people rely upon their own work and resources (and the charity of others) to provide for all their needs.

Marglin, however, takes things in a very different direction. He makes the following example: He's looking out the window at his barn. Now, if his barn burned down, he would call his insurance company, they would send out an adjuster, the adjuster would certify that the barn had burned down, the insurance company would issue a check, he would hire a contractor, and eventually the barn would be rebuilt. However, if this were two hundred years ago, if his barn burned down, he would need to rely on his neighbors to rally round him and help him rebuild his barn. He would rely on them because it was more work than he could perform or pay for himself, and they would rely on him in their turn.

In other words, insurance helps people avoid the need of relying on their neighbors. Insurance frees you from needing to have a strong, mutual aid relationship with your community. He points to the modern Amish, who refuse to use insurance, as an example of a group of people who have chosen to avoid individual goods such as insurance, have done so because they believe that the reliance upon each other which is central to community will be destroyed by such things.

Now, Marglin doesn't go into this, but it strikes me that one of the forces that, in a world without individual protections such as insurance, unemployment benefits, etc., one of the forces that keeps community together is the implicit fear that if one does not cleave to one's community, one will be left alone when one is in one's hour of need.

And yet, it is precisely this fear that one may be abandoned by the community that drives us to want insurance, unemployment benefits, welfare, etc. Our fear that the other members of our family, parish, neighborhood, etc. may not take care of us lead us to seek guaranteed protection from the biggest kid on the block -- the national state. And yet, this very move is what is most likely to both enable us to be on the outs with our families, parishes and neighborhoods, and also make those communities feel that they have less responsibility for us.

This really struck me when I came to it. All along as I was thinking about what Marglin was saying, I was mentally rejoining: "Whatever destructive effects that markets may have on community, it must surely be outweighed by one's ability, given sufficient choice, to surround oneself with people who really are kindred spirits."

For all that I often find myself wishing that I lived in a neighborhood that was a community, rather than living 10-20 minutes drive from all our friends, I invariably find this desire outweighed by my gratitude that I am able to socialize primarily with other devout Catholic families with kids rather than whatever people happen to live next door to me. And yet, as I consider it from this point of view, I wonder if what causes the widely fractured religious, social and cultural views that make me prefer to spend my time with the people I choose rather than the people I live near is, in fact, the lack of reliance on those around us which the modern individualistic economy allows. I find the idea of relying on those geographically around me (as opposed to perhaps those in my church or my family) unattractive because I have little in common with them. But perhaps the reason why, by this time, I have little in common with them is because the ability of people to move and switch jobs and protect themselves from disaster via state services, insurance and all the other trappings of the modern, individualistic economy, has allowed people for form much more diverse and at times divisive views than they would if they seriously relied upon their neighbors for essential personal, financial and physical help.