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The Arrangement Economy
Mar. 16th, 2022 06:20 pmIn the comments of this week's Ecosophia post I brought up the point that, going forward, it'll be necessary to uncouple economic utility -- that is, goods and services -- from money by demonetizing as much of the economy as possible. Economists tell nice just-so stories about the evolution of money, about how it solved a problem with barter economics where Alice wants to trade cows for pigs, Bob wants to trade pigs for sheep, and so both need to find a third person to who'll trade sheep for cows.
Of course, there are other alternative forms of economics beyond barter, but the only two that really get any airtime at all are gift economies or the favor economy. The former is sometimes said (anyway, I've seen someone say this) to be the economy of a household -- although this isn't actually true, as we'll see in a second -- and you probably know the latter from the sort of TV shows and movies where the characters say things like "I'll owe you one," and "This makes us even." Sometimes you also hear about subsistence economics, which is depending entirely on your own efforts to survive.
In fact, there's at least one other form of non-monetary economy, although I don't think I've ever seen it singled out this way. To understand it, we need to put the different forms of economies in their proper contexts: to oversimplify, barter (and monetary economies, which is just a special case of barter) is for dealing with people you don't know or necessarily trust very well, gift economies are for jockeying for status, favor economies are for dealing with people you can trust to honor their obligations but who aren't otherwise bound to you by any obligations, and subsistence economics is for when you're Robinson Crusoe, alone on a deserted island.
You might notice that this leaves out the sort of economy you use with people with whom you have reciprocal obligations, such as feudal covenant or family ties -- and yes, I'm saying that feudalism and household those are two special cases of the same basic economic system. I call this system the "arrangement economy," as it occurs when two or more parties enter into an arrangement in which they promise to provide each other certain goods or services under certain conditions. This can be as explicit and detailed as the feudal covenant made by Higg son of Snell, or as implicit and open-ended as a marriage vow or an understanding between friends that you have each other's backs.
This is also the economy at the foundation of the lodge system: when a lodge member or someone in their family is in need, you help them. Not for status or on a whim, as with a gift economy, but because of the commitment you made to do so, and in the understanding that others will do the same if you or your need help. A good case can be made for reviving this sort of arrangement economy going forward.
But an arrangement economy can be more mundane still: a farmer and a lumberjack might have arrangement in which the farmer provides the lumberjack with chickens and vegetables and the lumberjack supplies the farmer with firewood. Again, this may be as formal as a chicken and five pounds of potatoes every week in exchange for a full cord of firewood, or it may be informal, with each offering what they feel a reasonable cut at reasonable intervals.
Of course, there are other alternative forms of economics beyond barter, but the only two that really get any airtime at all are gift economies or the favor economy. The former is sometimes said (anyway, I've seen someone say this) to be the economy of a household -- although this isn't actually true, as we'll see in a second -- and you probably know the latter from the sort of TV shows and movies where the characters say things like "I'll owe you one," and "This makes us even." Sometimes you also hear about subsistence economics, which is depending entirely on your own efforts to survive.
In fact, there's at least one other form of non-monetary economy, although I don't think I've ever seen it singled out this way. To understand it, we need to put the different forms of economies in their proper contexts: to oversimplify, barter (and monetary economies, which is just a special case of barter) is for dealing with people you don't know or necessarily trust very well, gift economies are for jockeying for status, favor economies are for dealing with people you can trust to honor their obligations but who aren't otherwise bound to you by any obligations, and subsistence economics is for when you're Robinson Crusoe, alone on a deserted island.
You might notice that this leaves out the sort of economy you use with people with whom you have reciprocal obligations, such as feudal covenant or family ties -- and yes, I'm saying that feudalism and household those are two special cases of the same basic economic system. I call this system the "arrangement economy," as it occurs when two or more parties enter into an arrangement in which they promise to provide each other certain goods or services under certain conditions. This can be as explicit and detailed as the feudal covenant made by Higg son of Snell, or as implicit and open-ended as a marriage vow or an understanding between friends that you have each other's backs.
This is also the economy at the foundation of the lodge system: when a lodge member or someone in their family is in need, you help them. Not for status or on a whim, as with a gift economy, but because of the commitment you made to do so, and in the understanding that others will do the same if you or your need help. A good case can be made for reviving this sort of arrangement economy going forward.
But an arrangement economy can be more mundane still: a farmer and a lumberjack might have arrangement in which the farmer provides the lumberjack with chickens and vegetables and the lumberjack supplies the farmer with firewood. Again, this may be as formal as a chicken and five pounds of potatoes every week in exchange for a full cord of firewood, or it may be informal, with each offering what they feel a reasonable cut at reasonable intervals.
