Reciprocity and Gratuitousness in the Market

Bruni, Luigino

Reciprocity and Gratuitousness in the Market

The proposal of Caritas in Veritate

Reciprocity and gratuitousness in the market

1. Reciprocity

To clear up the concept of reciprocity, let´s begin from an article that has caused a stir and which was published a few years ago in one of the most notable journals of economic theory3.

The authors, two well-respected economists, presented a theory of reciprocity maintaining that an altruistic person should choose himself an indifferent or less altruistic partner. These were their reasons: "An altruist would be saddened by the low level of happiness of his or her partner. But, if the second partner also worried about the first, then he or she, too, would be pained for having made the first partner sad"4. In other words, according to this theory on reciprocity, if the well-being of one person (A) also depends on the well-being of another (B), and if the well-being of B depends on that of A, when A is not well then B suffers because of it, and this fact makes A even worse because B is suffering because of him, and so on, in a growing spiral of suffering. The strategic indication contained in this theory is that if one wants to avoid suffering too much in difficult moments, it is necessary to choose a partner who does not worry too much about it, so that these mechanisms are not triggered.

The critique that British economist Robert Sugden gives that article is interesting: "Such  hypothesis contrasts with experience. When we´re unhappy, we want someone who hares our feelings; this makes us feel less unhappy, not more unhappy. We want a partner who is in tune with us in joy and in suffering"5.

What is it about the way Bernheim and Stark´s theory treats reciprocity that does not work? And, in general, that is it that does not work in the majority of today´s theoretical models dealing with reciprocity in social sciences and which are substantially based on the same hypothesis? In my opinion, the weak point of the whole structure is treating reciprocity as a question of individual preference 6, when in reality it is primarily a relationship and not a sum of individual preferences. To correctly study reciprocity, there would be need of a language, even a mathematical language, that is capable of describing relationships and not only preferences and individual choices. If reciprocity is second, relationship will be always more instrumental. An important attempt in this direction is the theory of "we rationality" 7, developed by economist Robert Sugden, Michael Bacharach, Alessandra Smerilli and others, which tries to interpret relationship as primal data, without renouncing - and here is the point - the primacy of the person for an indistinct holism or an abstract "we".

Then, there is a second problematic element in the current theory on reciprocity: the dimension of genuine sociality that is present in reciprocal behavior is measured simply through the sacrifice of "material" benefits, to award or punish the other at one´s own expense. This is not to say that self-sacrifice to punish or award others does not have a civil function - thinking of someone who risks himself in order to reproach another who throws paper onto the street. But even in this case, the attention is focused on individual behavior, losing sight of the fact that reciprocity is a relationship. These theories of reciprocity remain substantially individualistic, although containing individual altruistic or pro-social actions.

As a consequence, reciprocity is only understood as an "exchange of goods". Only this is considered as true and authentic reciprocity, while other forms of exchange of contracts and markets of the so-called "normal" economy are defined as "bad reciprocity", because they are not disinterested and not altruistic. A good part of the communitarian thought of today 8 moves in this direction, remaking itself according to this tradition´s progenitor, Aristotle 9. It is a shame that Aristotle did not actually think like this. For him, reciprocity, antipeponthós, in Nicomachean Ethics (1132 b 21) was the "social link" which held the life of the polis together. His was a vision of reciprocity that ranged from market relationships to virtuous friendship (philia). Even the Latin word reciprocus etymologically derives from recus (backwards) + procus (forwards): that which comes and which goes, which leaves and which returns to one another 10. Therefore, reciprocity is much more than just an exchange of gifts - certainly a type of reciprocity but not the only one.

Above all, gift ought not to be considered as a contrast to reciprocity (where one gives and receives) and the various forms of economic reciprocity which are lived in businesses, in contracts, in markets. If it were like this, we would be incapable of understanding civilly important phenomenon like commercial equity 11, microfinance 12, and the economy of communion 12, social enterprises whose citations in the encyclical are not by chance. It would limit good reciprocity to too narrow an environment of civil and economic life. History, recent history in particular, shows that people truly free themselves from the traps of poverty and exclusion more often with contracts than with gifts 14.

From this perspective, it is possible to find that in CV Benedict XVI is deeply coherent to what he wrote in his first encyclical, Deus Caritas est (2005), where he underlined the strong unitarianism of human love, being both one and many at the same time. Love has various forms - erotic, friendship, agapic - but the Pontiff reaffirmed that rather than opposition between these forms there is harmony, reciprocity. They are different loves, but each of the three forms responds to a certain call to love. The gift of agape, in fact, is sustainable and fully human love if is has the passion and desire of eros and the freedom of philia. Only a kind of love with various dimensions is true Christian love, and is therefore truly human.

This very necessity for coherence and non-dichotomic thought is found again in CV. A gift is not a contract, and neither of these can be a good form of reciprocity. Likewise, they can both be bad forms of reciprocity, as when contract hides exploitation of the weak and when gift hides relationships of power and dependence 15.

2. Gratuitousness

Caritas in Veritate speaks about gratuitousness and gift, and it speaks about them as words that deal with the market, the regular happenings of economy: "also...in mercantile relationships, the principle of gratuitousness and the logic of gift as expression of fraternity can and should find room among normal economic activity" (n.36).

Benedict XVI uses the expressions "gift" and "gratuitousness" as synonyms, showing himself to be an innovator with respect to the economic science that associates gift to altruistic or philanthropic behavior, and in general in regards to contents (a something") of human action. The gift that we find again in the encyclical, instead, is mostly a "giving of oneself", a "self-dedication" of the person, which is applied first in one´s being and then in his acting. It is an action that can take on various forms. Therefore, it is a model of acting - a transcendental, as Medieval thinkers would say - a "how" one acts. This is the more real and deep meaning of gratuitousness-gift, and we can and should find gratuitousness in the unfolding of every kind of action, even in our duties, contracts, the market and in business.

Therefore, the gift of gratuitousness is not a promotional free-bee, a discount, a present, points that show loyalty - as the traditional market normally considers gifts and which contains nothing of gratuitousness or its deeper and demanding nature. True gratuitousness places one in front of the other without mediators; it makes one vulnerable, as it goes beyond the calculation of equivalence and guarantees. It is always a potential wound, an insuppressible and tragic risk that modernity has expunged from markets and economy, contenting itself to more innocuous and negotiable categories.

This authentic gratuitousness can be found, for example, in the writings of two authors who are very different from each other but joined by a significant painful experience. Primo Levi wrote, "But at Auschwitz, I often noticed a curious phenomenon: the need to do one´s work "well" is so rooted that one will even complete slave work well, even though it is imposed on him by another. The Italian wall-builder who saved my life, bringing me hidden food for six months, hated the Germans, their food, their language, their war. But when they put him to making walls, he built them straight and solid, not out of obedience but out of dignity" 16. Building a "straight wall" out of dignity is an expression of gratuitousness, as it says that there exists in others, in oneself, and even in "walls", a vocation that must be respected and served, and never enslaved by our interests.

Another expression of the "art of gratuitousness" is explained by the great Russian theologian Pavel A. Florenskij. In the gulag (Russian concentration camp) of the Slovak islands, just a few months before being shot to death, he wrote, "In my life, things have always gone like this. In the very moment that I was able to dominate a certain subject, I was forced to abandon it for motives independent from my will, and I had to begin to face a new problem, always starting from its foundation, to roll out a road that I myself would not walk. Maybe there is a deeper meaning hidden in this, as this situation always repeats itself through the course of life: the art of gratuitousness" 17. To lay out roads that one will not be able to take, or to live one´s work with detachment and liberty: this is a splendid definition of the art of gratuitousness. It is the most difficult art to learn, but on it depends a good part or all of full personal fulfillment, which using the classic image, we can call the flowering of human existence.

This gratuitousness is already present in the title of the encyclical. In the times of the early Christians, caritas was written as charitas, remembering the Latin term that refers to the Greek translation of agape (love), but it also includes a reference to another Greek work, charis (thanks, gratuitousness). And so, seeing that charitas is agape, the love typical of Christianity, then in the title we implicitly find the concept of reciprocity, as Christian love is always a "love one another" (Jn 13:34), Jesus´ new commandment, expression of a new fraternity (another term that recurs in the encyclical).

The economic experiences imprinted with this type of gratuitousness - and, as we have seen, the encyclical mentions a few examples - are important attempts at valuing the civilizing and liberating function of the market, without abdicating gratuitousness and its most authentic nature. In such experiences, the aim is building communitas without taking refuge in the immunization guaranteed by the organizational hierarchy or letters of contract.

3. Conclusion

Only within this vision of reciprocity and gratuitousness can the idea of economic activity and economy present in CV be gathered. In the first place, if gratuitousness and gift are what we have tried to lay out until now, when these enter into the scene, it is not necessary to leave the economic sphere and enter into the social one, as some critical reviews of the encyclical have sustained 18. These critics are anchored to a dichotomic vision of gift and market. In fact, if the typical dimension of man is his openness to gift-gratuitousness, and if the economy is human activity, then an authentically human economy cannot set aside gratuitousness.

Besides, with this lens, one understands why the encyclical makes the invitation to overcome the non-profit/for-profit dichotomy in favor of an idea of "civil economy" - that tradition of thought and practice that envisions the entire market and every form of enterprise as all-accomplished human reality. As such, these are called to be open to gift-gratuitousness within themselves, if it is true that contract and gift can be forms of reciprocity united for a more civil society and not in conflict with one another.

If economy is human activity, it is never ethically and anthropologically neutral. Either it builds relationships of justice and charity, or it destroys them. Another alternative does not exist. From this perspective, the market is then called back to its original vocation (although often betrayed) to social inclusion, even present in the reflection of Adam Smith´ and other classic economists, where contract is subsidiary to authentic human promotion and to the common good. When the economy and society lose their relationship with gratuitousness, they end up losing touch with what is entirely human, and vocations are lost - as every vocation is an experience of gratuitousness - including artistic, scientific and enterpreneurial vocations. And we will once again find ourselves in a job in which, paraphrasing Oscar Wilde, we will know always more precisely the price of everything but the value of nothing 19.

Notes:

1 Benedict XVI, Encyclical Caritas in veritate (2009). The text is available at .

2 Cfr Sorge B., «Caritas in veritate: una bussola per il XXI secolo», in Aggiornamenti Sociali, 9-10 (2009) 565-570.

3 Bernheim D. – Stark O., «Altruism Within the Family Reconsidered: Do Nice Guys Finish Last?», in American Economic Review, 5 (1988) 1034-1045.

4 Ivi, 1036. [personal translation]

5 Sugden R., «Correspondence of Sentiments: An Explanation of the Pleasure of Social Interaction», in Bruni L. – Porta P. (ed.), Economics & Happiness. Framing the Analysis, Oxford University Press, Oxford 2005, 97. [personal translation]

6 Cfr Kolm S.-C., Reciprocity. An Economics of Social Relations, Oxford University Press, Oxford 2008.

7 This deals with a series of theories that aim at developing a conception of rationality in which the agent is perceived not as an individual but as part of a group, and therefore alternatives are evaluated based on the consequences for the group, framing one´s own actions as part of collective behavior. [N.d.R.]

8 For example, philosophers Elizabeth S. Anderson and Amitai Etzioni.

9 Cfr Bruni L., L’ethos del mercato. Una introduzione ai fondamenti antropologici e relazionali dell’economia, Bruno Mondandori, Milano 2010.

10 Cfr, for example, Pianigiani O., Vocabolario etimologico della lingua italiana, on www.etimo.it.

11 The term «fair and supportive commerce» defines a new model of business relationships between producers in the Southern hemisphere and consumers in the Northern hemisphere, compared to the traditional model. This new model gives room to the consideration not only to how the nature of the product effects the social fabric and the safeguard of the environment, but also the effects from the productive and distributive process, particularly with respect to human rights and the dignity of workers.; cfr Becchetti L., «Commercio equo e solidale», in Aggiornamenti Sociali, 1 (2004) 65-68.[N.d.R.]

12 This refers to initiatives aimed a making credit accessible to people are usually excluded because they cannot offer patrimonial guarantees, but who, receiving trust, show themselves to be capable of giving life to economic activities sufficiently stable enough to pay back the loan and allow an improvement in their quality of life. Cfr Maggio F., «Finanza etica», in Aggiornamenti Sociali, 1 (2003) 70-73;Reggiani T., «Premio Nobel al microcredito», in Aggiornamenti Sociali, 12 (2006) 823-833. [N.d.R.]

13 This deals with a particular entrepreneurial experience inspired by Chiara Lubich and linked to the Focolare Movement: the businesses involved, which have strong links between each other, work on the market but, unlike "normal" businesses, they do not destine their profits to pay back capital. Rather, they  allocate them to three goals: helping people in difficulty (creating new jobs and helping with basic needs), spreading the "culture of giving" and of love, and developing the business. Cfr and Ferrucci A., «Il progetto di Economia di Comunione», in Aggiornamenti Sociali, 4 (2002) 324-332. [N.d.R.]

14 Cfr Bruni L., Reciprocità. Dinamiche di cooperazione, economia e società civile, Bruno Mondadori, Milan 2006. For a brief presentation of the book, cfr Foglizzo P., «Mercato e relazioni: un’economia plurale», in Aggiornamenti Sociali, 7-8 (2007) 553-555.

15 The polysemy and possible ambiguity of the category of gift has been the object of study for sometime in the field of human and social sciences. To this regard, see cfr Gasparini G., «Il dono: tra economia e società», in Aggiornamenti Sociali, 3 (2004) 205-213; Costa G., «Donare, ovvero il rischio della relazione», in Aggiornamenti Sociali, 4 (2009) 307-309. [N.d.R.]

16 Levi P., «L’uomo salvato dal suo mestiere. Intervista di Philip Roth a Primo Levi», in Belpoliti M. (ed.), Primo Levi: conversazioni e interviste, 1963-1987, Einaudi, Turin 1997, 85.

17 From a letter of 11 May 1937, in Florenskij P. A., Non dimenticatemi. Le lettere dal gulag del grande matematico, filosofo e sacerdote russo, Mondadori, Milan 2006, 397-398.

18 Cfr ad es. Weigel G., Caritas in Veritate in Gold and Red, 7 July 2009, in .

19 «What is a cynic? A man who knows the price of everything and the value of nothing."Wilde O., Lady Windermere´s Fan (1892), Act III.

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