Philosophical commentary on contemporary political issues in the tradition of Charles Taylor, Alasdair MacIntyre, and Michael Sandel.

Wednesday, December 19, 2012

What kind of people do you want to buy from?

Think of your favorite restaurant. Now think of what you like about it. Maybe it's the food. Maybe it's the "ambience." If you're a particular cheapskate, it may even be the price. But something that is important for almost any dining experience is that the hosts treat you well. Of course, there are exceptions, but a rude server can be the make-or-break component for a good evening and even a customer's permanent personal opinion of the locale.

This attitude doesn't only apply to restaurants, though. The appeal of good barber shops, bakeries, car shops, insurance salesmen (I could go on) is that they provide a good service coupled with a good attitude. In his book Good to Great, Jim Collins says that successful companies require people who are passionate for their work and believe they are providing a valuable service. This is more true than ever at the point of interaction between seller and buyer.

This analysis, though, clashes sharply with one of the most famous lines in classical economic literature. In Adam Smith's Wealth of Nations, Smith says "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

While some have argued that this statement comes a bit out of context, it is nonetheless a building block of our understanding of market economics. People create not as a way to help others, but as a way to get what they want from others. One incisive critique of this viewpoint, however, comes from Alasdair MacIntyre in his book Dependent Rational Animals. He imagines an experience in which we walk into a butcher shop and observe the butcher suffering from a heart attack. He says that our first inclination would not be to move on and find another butcher who is in more of a position to sell us meat, but we would rather feel compelled to find help.

While this is a good point, I would argue that it does not take so dire a situation to find mutual interest in a routine economic exchange. All in all, we are best benefitted when we are sold meat by someone who A) wants to be a butcher and B) we want to support. There is a certain value that we gain from supporting the community butcher instead of buying at Wal-Mart, something that goes beyond the quality of the good. The best economic exchanges are ones in which we not only are happy to get what we want, but ones in which we are also happy to give.

Economics is often presented as a zero-sum game, but the best economic transactions are not ones in which people rationally balance gains and losses, it is the ones where people collapse the benefits bestowed with the benefits accrued. This means that an economic transaction must be viewed as more than just a means to an end, but as an end in itself. Think back to your favorite restaurant. When they are at their best, they aren't serving you food because they see you as an instrument, but they are undergoing the essential Kantian moral obligation by treating you as an end yourself.

This takes us back to Collins. In Good to Great, Collins says that the most successful companies are focused on on quality in particular: excellence. While the classical economist says that profit is about Xs and Os, companies like Apple, Chic-fil-a, and Chipotle continue to defy this logic by putting excellence first and letting the profits follow from that. And they've done pretty well for themselves.

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