Signpostings

Relationships in a World of Individualism

  • rWorld

    The rWorld is about more than Dale Kuehne's book Sex and the iWorld.
    The rWorld is a New England based, non-profit (in formation), that is composed of a growing number of people and organizations from many faith and ideological backgrounds worldwide. We believe that much of the fulfillment for which women and men are looking can be found by enhancing the quality of our relationships. While the individual freedom we enjoy in the West is a gift, the love and intimacy for which humans yearn will not be found in self-serving materialism or hedonism, but in a variety of healthy relationships.

    Contact us if you'd like get involved:
    scr.im/rwld

  • Dale Kuehne

    Sex & the iWorld

    Professor of Politics and The Richard L. Bready Chair for Ethics, Economics, and the Common Good at Saint Anselm College, Manchester, NH.

    In this blog I'm highlighting signposts of the world in which we presently reside as a means of helping promote a civil, and meaningful dialogue about what kind of world in which we wish to live. I am particularly interested in exploring how might we reconcile the individual good and the common good, and where reconciliation isn’t possible, which should take precedence and why.

    I also blog at Sharewik.com

    [Content Caution]

rLiving 23: Mortgage Crisis (Directness, Power)

Posted by Simon on February 18, 2011

Money, like power, gets a bad rap. It’s seen as so purely evil that we just cripple ourselves with guilt about having it or wanting it. Or else we resent, then reject, the guilt and instead embrace money as though it were God himself, the source of all life and happiness. The Bible calls it “greed, which is idolatry” (Col. 3v5).

But money is actually a major cause of human relationships by mere fact that none of us inherently have everything we want or need: we have to trade. We’re forced into a relationship caused by something I have (in the nature of material, skill or time) that you want. And vice versa. ‘Money’ is often the means of that exchange. And that is a very good thing. In millions of fair and equitable transactions every day around the world, from markets in Soroti, Uganda to corporate offices in Boston, MA, relationships are established and built upon and people get and give what they want.

The evil of greed and idolatry is that it focuses on the means, money itself, rather than the ends; a fair trade relationship in which we both gain what we were seeking and even build something new in the process. The other evil of greed and idolatry is that it lusts in power over others; it relishes in being able to extract more than it gives. It leads to injustice. Finally, its irony is that it’s never satisfied. To the question, “How much is enough?”, Rockefeller wisely responded, “just a little bit more.”

Relational Proximity Dimension #1 is “Directness”. My relationship with someone is better and healthier the less mediated it is. It can be mediated by technology or other people: these reduce our ability to communicate fully and know each other better.

Relational Proximity Dimension #4 is Parity. The greater the asymmetry of power between me and someone else the greater the potential for difficult and strained relationships. This asymmetry can be real or perceived, and its affect on relationships can be more about the use and misuse of power than the mere existence of power disparity.

I contend that the more a relationship is mediated – that is, the less direct it is – the weaker it is, because more mediation means less knowledge. And less knowledge means less trust. Less knowledge also means, I think, ‘less human’. When we don’t know people we render them less than fully human, less than ‘normal’. It explains why we demonize some and idolize others – we’re literally ignorant about them. So the ‘less-than-human’ becomes an object, an item, something to generalize about but not an individual with a name, a story, a past and a future.

So if we consider a relationship mediated by an unfathomable array of individuals, institutions and mathematical formula, then throw in ‘disparity’ (unequal power), I think you have an explanation of the mortgage crisis: Relational distance caused less knowledge, then less consideration, then less proper care for the human being at the end of the money chain. There wasn’t a human being at the other end, in fact, they were too distant to even be noticed.

One shouldn’t ascribe evil intent to Wall St bankers, necessarily. Greed and idolatry could just as easily be ascribed to the house buyers. No, relational distance and power asymmetry were objective facts of the matter. Even a heart of gold at either end would have had trouble ensuring an equitable trade, because between the hearts of gold were bureaucratic institutions and non-human mathematic formulae whose goal was, ostensibly, to minimize financial risk and maximize financial profit for the Lender. [UPDATE: This paragraph originally started with “One shouldn’t ascribe evil intent just to Wall St bankers.” This implied we should ascribe evil intent to house buyers also, which was not my intent! Instead, this paragraph was meant to point out that greed/idolatry is neither the sole preserve of Wall St bankers, nor, necessarily, the functional cause of the problem.]

We have a dilemma, however, and I’ll end the post with this. The financial wizardry behind the crises has just been an extension of the sound and prudent engine behind the economic explosion of the last 50 years: the pooling of money and the spreading of risk. What needs further investigation is how to manage the dilemma of relational directness and financial stewardship in such a way that it fosters parity and human flourishing in the context of trading relationships.

[See the introduction for the background to this series and the five dimensions of Relational Proximity.]

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4 Responses to “rLiving 23: Mortgage Crisis (Directness, Power)”

  1. Ann F-R said

    Yes, there has long been a problem in Wall Street with disparity and relational distance from those people whose hard-earned money came from production of goods/services. The business of handling money, not producing any goods or services apart from handling money in ever more abstract & “innovative” ways derived from statistical & mathematical modeling creates ever greater distance. I watched this distance increase over 20 years of involvement w/ economics and capital markets, including work in Wall St banking/investment firms in NYC.

    The financial system in itself has been corrupted over the past 30-50 years by decreasing regulation and increasingly arcane instruments whose sophistication disguises the fact that Las Vegas and lower Manhattan bankers stack the odds for the house in statistically parallel fashions. The disparity of knowledge of these arcane investment vehicles and the risks associated with them severely weighted the risk to the unknowledgeable investors while insiders hedged their positions, with statistical gambling.

    The further from direct money transactions between buyer & seller, lender, investor & responsible owner that Wall St. investment firms get, the more astronomical the risk or boom/bust. Study the derivatives market, and note the complete dearth of regulation of swaps. That market doesn’t operate in reality of material goods and transactions, and not even in slices of securitized assets. It is Vegas, NYC style. One doesn’t need to read motive or evil intent, here; one just needs a fine knowledge of statistics to see that the outcomes are stacked, and very few have the ability intellectually with computing power to ride the financial waves under which everyone else is dashed onto the rocks.

    • Simon said

      Thanks so much for your comment, Ann. And especially thanks for confirming my analysis that the root of the problem is relational distance. As you say, it’s not a matter of whether the individuals on Wall Street have evil intent or not, simply that relational distance – so many intermediaries and so many impossibly complex algorithms – creates “disparity of knowledge” (great phrase!) which creates the disparity in power and heightened risk.

      At the rWorld we’ll be hoping to explore the causes and propose potential remedies over the coming years.
      Thanks again,
      Simon

    • Simon said

      Actually, I’ll be very interested to get your thoughts on a post coming up in a few days, Ann. It’s about “Derivatives” where I flesh out the idea of relational distance a bit more, in particular with respect to regulation.

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