Cooperative Economics | "Impact-First" Investing | Transformative Leadership

Mutuality and Market Exchange

As I read through the dissertation of Fr. Emilio Travieso, SJ, I find myself giddy with excitement. Emilio draws on the explanatory power of the model Stephan Gudeman develops in his Anthropology of Economy (2008) — which I will synthesize briefly below and use it to reflect on my recent experience with Catholic impact investors.

I’m struck because last month I was deeply moved by Gary Dorrien’s “Economic Democracy” and Vera Zamagni’s “Worldwide History of Cooperatives and their Evolution“. In February, it was Marco Vangelisti’s teaching on monetary policy and argument that the 2020 quantitative easing (where $3 Trillion was added to the Fed’s balance sheet – nearly doubling what was there) represents a “secular” shift in our economy and potential instability.

I’m surprised because I often find academic — and in particular economics — literature aloof or unhelpful in my near-term positive projects of building an economy grounded in social values and a hopeful vision of how we can do business and life in common.

I’m excited because as I’ve started asking bigger questions (in this liminal space), these encounters are helping me see and weave together new frameworks for practical collaborations.

Investors Feeling the Push

Investment advisors are being pushed to grapple with our untenable climate and racial realities.

Asset owners — especially those who feel the particular weight of their responsibility — are hungry for new ways to understand the realm of possible ways to invest. They are eager for their capital to be aimed at systems transformation and not on-going complicity in the death-dealing revealed by Black Lives Matter, our Pandemic, and the growing — though gradual — climate crises.

So, what does Gudeman offer?

Emilio Travieso, SJ synthesizes Stephan Gudeman’s Anthropology of Economy in the following way:

All economies are composed of a dialectic between two dynamics, market exchange on the one hand, and mutuality on the other (Gudeman 2008: 4-5).

The market is the realm of impersonal exchange, where people act as competitive, self-interested rational choosers.

Mutuality is the realm of community, where people share according to heterogeneous systems of value, and steward a common “base,” composed of teh tangible and intangible elements that allow them to reproduce their collective existence.”

Whereas the market realm is characterized by short-term interactions, the realm of mutuality is about long-term relationships that extend even beyond the lifespan of individuals (Parry and Block 1989).

The realms are not different because they have distinct ontological essences (Gudeman 2016: 13); they are different because they correspond to the social fact that people tend to organize their economic lives this way. The difference may be ambiguous and the realms inevitably overlap, but ethnographers have shown that people go to great lengths to keep them separate.

It is a dialectic, because even though the two realms are irreducible to each other, they are also indissociable from each other. Markets require trust and mutuality to function, while people look to the market to obtain what they need to maintain their community’s base. This double bind of opposed but intertwined economic logics produces a tension between the poles, which we navigate in daily life as we move back and forth between our “disjoint” (market-oriented) and “conjoint” (community oriented) identities (Gudeman 2016: 13). The need to creatively negotiate this tension is the motor that ultimately drives all economies.

~”Reason to Hope” – by Emilio Travieso, SJ – unpublished – pages 23-24

For me, more clearly naming (the interrelated natures of these two realms — market exchange and mutuality) helps us understand the feelings we have when we — as investors — choose the impersonal market logic or instead see ourselves as stewarding a base — and want to reject the rent-seeking exploitative nature of market rate returns.

Many of the Catholic asset stewards I spent time with over the past few months seek to be investors that steward a long-term inter-generational concern for community. They seek an ethic of integral human development and integral ecology and want to ensure that our descendants to have the means to reproduce their collective existence.

Travieso goes on to describe Gudeman’s analysis of the “Dynamics of debasement”

“The market tends to cascade into the realm of mutuality, first in terms of it’s rationality, and then through the material consequences of that. As people increasingly engage in market trade, they become accustomed to commensuration and cost/benefit analysis. The proportion between short-term impersonal interactions and long-term relations of mutuality also begins to shift as the market gains prevalence in people’s lives, the disjoint identity, with it’s transaction attitude, calculative reason, and accelerated pace, is brought deeper and more often into the sphere of community.

~Emilio Travieso, Reason to Hope, page 26

This process is what I’ve grown to observe in the business operations of many churches and synagogues in my work at the Community Purchasing Alliance.

It’s also the process that many religious congregations, Catholic hospitals, and other asset stewards — even philanthropic foundations — fall into. My observation is that a large driver of this is the hiring of outside experts from conventional finance (the realm of market exchange) to lead most investment decision-making. Over the past 20-30 years, many congregations of women religious have begun to re-assert their agency with their investment decision-making through work around shareholder activism (led by Interfaith Center for Corporate Responsibility, SGI-CRI, IASJ and other groups). Also in this time period — and more recently — community development focused investing, as well as fossil fuel divestment have become growing expressions of the realm of mutuality being exerted more intentionally through investment decision-making.

The growing trend toward impact investing once again allows us to recapture the realm of mutuality for our investing logic.

Mutualism in nature.

My hope is that Stephan Gudeman can help us name the tensions we so often feel in impact investing circles — and the tensions inside ourselves between our disjoint (market-oriented) and conjoint (community oriented) identities.

I believe — like Emilio Travieso — that there is a creative way to navigate this tension and create a virtuous cycle that gives Reason for Hope.

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