Post No.: 0229
In business/commercial contexts, the ‘market norm’ or normal market behaviour is to explicitly trade money for goods or services and to shop around; whilst in family/friendship/relationship contexts, the ‘social norm’ or normal social behaviour is to not explicitly trade money for anything nor to view people as merely a means to an end. So in the former contexts, market norms dominate and we expect to pay for things or get paid for things, or at least trade things of equal perceived value with others; but in the latter contexts, social norms dominate and gifts without price tags and truly free favours without conscious expectation of return are given, and people aren’t to be treated like commodities or staff and gift horses shouldn’t be looked in the mouth. (Furrygifthorse does have some dashing gnashers though! But I can never quite tell how she’s feeling because she simultaneously grins a lot yet has a long face.)
Contract law recognises the difference between these two contexts – hence promises made between friends or family members are typically not made with an intention to create legal relations and thus are not enforceable, unless steps are taken to explicitly show that there’s this intention, usually in the form of a formally written contract, which might be fair enough regarding loans of personally large amounts between friends or family members. For personally small amounts it’s better to just gift it than keep tabs, and if any liberties are routinely taken by certain friends then stay friends but learn to simply not give them any more money! Without a formal contractual arrangement, a friend who borrows money (it’s clearly stipulated as a loan) from another is ‘merely’ morally, but not legally, obliged to pay the debt back eventually. Yet such dynamics of a friend, whether legally or informally, being owed money by another and begrudging them for it if they don’t or can’t repay it back can quickly damage social relationships. So better to either gift it if you can, don’t expect it back, don’t give them any (more) money, or pick better friends who can be trusted to reciprocate when they’re able to!
Under market norms, we seek strictly balanced (according to the market/agreed value) and timely (or at least invoiced) reciprocation, but the normal social behaviour is to not e.g. things are done without requesting payments, reciprocation can be delayed indefinitely, and promised favours aren’t legally bound (with a few exceptions such as if they became detrimentally relied upon). Reciprocation is still absolutely important in social contexts but it’s far more informal, loose and only roughly balanced, if that e.g. children aren’t expected to financially reciprocate with adults at all or ever. Friends and family members of the same generation will generally feel obliged to reciprocate tit-for-tat though (which can be especially problematic if one party cannot afford to give as much as the other), but genuine friends and family members don’t gift anything with the calculation of hoping to receive something of equal or greater value in return down the line (at least financially or materialistically).
This is unlike businesses, where gifts (or ‘gifts’) are part of the marketing budget and are only offered based on the calculation that they’ll hopefully overall drum up greater returns down the line than those gifts were worth. A person who explicitly says or hints loudly, “I’m giving you this so remember it because I expect something (with interest) back” feels more like a potential business client than a true friend. Reciprocation is implicit between friends and family rather than explicit.
So never begrudge a friend for not reciprocating (or not being able to reciprocate) a gift you gave them, especially if they didn’t ask for it, expect it or even need it. True gifts are given without conditions – that’s the definition of the term, otherwise it’s a trade. They’re given out of kindness and one’s freedom of choice rather than with an ulterior motive or because one was forced to. (This isn’t to say that speculative investments or taxes are necessarily immoral.) It’s nice and socially perfect if the other person does reciprocate, but from your own perspective you shouldn’t demand or expect it.
Sometimes people don’t wish to accept a social gift from somebody they’ve just met because they don’t feel like they’re friends with them (yet) and so treat them with market norms i.e. with strict reciprocation rules, where they don’t have anything (they want) to reciprocate with that new person (yet). But over time, if a deep friendship forms, kibble might be pinched from each other’s bowls without even asking and no one will call the police, which one might do if someone else tried to steal something from oneself! Overall, one can make money with one’s friends or family but one doesn’t seek to profit or even make any money at all off one’s friends or family. Meow!
The main difference is that cooperation (being on the same team) overrides all under social norms, whilst competition predominates under market norms. Friends are personal, business is not personal, so don’t make what’s personal business. (This isn’t to say that if something is ‘just business’ it means that absolutely anything is acceptable or ethical though.)
Some businesses and their marketing will claim to be ‘personal’, and like your ‘friends or family’ but really they will (and arguably should) leave you if they think they’re not going to make any money from you or they’re losing money with you (they arguably shouldn’t be wasting resources on anyone who has a ‘customer lifetime value’ of zero or less, otherwise this diminishes the business’s profits and the value for any shareholders, who’ll likely take their money out and invest elsewhere if they can get better returns elsewhere). They might give you free gifts but ultimately they hope it’s because you’ll give them custom in return. Marketing communications often name you personally and claim to be ‘just for you’ but you know the same identical email/letter has been sent to thousands of other people too except with their names in place of yours, hence it’s not really personal or exclusive. If you go into debt with them then they’ll normally chase you hard to get their money back. On the whole, it’s a very different relationship even though some businesses will try to give the impression that they’re like your true fluffy friends or family.
It’s not to say that cooperation in business (e.g. teamwork, partnerships) cannot increase staff commitment, morale, efficiency or opportunities, or that emotions and empathy in business aren’t useful for effective leadership; and at times it’s nice for businesses to give a personal touch for their customers. But one arguably cannot extend any general benefits of applying market norms onto social contexts in return. Competition between friends should never be ruthless.
Perhaps in the same way that a firm will go out of business if it keeps on making losses on its interactions with its customers, a friend shouldn’t be expected to go into debt with her/his interactions with her/his friends either – but this still contrasts greatly from intentionally seeking to profit from friends and/or keeping detailed ‘customer accounts’ or itemised tabs on each other. Friends should mutually profit in non-zero-sum/win-win ways for being together and being friends (e.g. both people simply and reciprocally enjoying each other’s company – see Post No.: 0211 for more about the benefits of good friendships) but the mind should never at any time be consciously focused on ‘counting the incomes and outgoings’, begrudgingly sharing anything without ‘invoicing’ someone (some people, who aren’t poor, won’t even give a friend a soda without making it seem like it’s some kind of huge deal(!)) or any such ‘accounting’, except in the most informal and loosest sense in order to not be exploited by people who can give something back but don’t. Money, and the counting of money, even if it’s in return for something of equal perceived value, risks turning a relationship into a market one. If you routinely treat your friends with market norms then you’re probably not being a true friend to anyone.
Loyalty also manifests differently in these different contexts – loyalty should always be rewarded in social contexts, but loyalty is sometimes punished in market contexts (e.g. when loyal customers receive the worst insurance renewal quotes). Friends and family share, implicitly trust and have loyalty. Business is about credits and debits, legally-enforced contracts and sometimes zero-sum/win-lose objectives. But some people don’t only wrongly treat their friends with the principles of accounting but wrongly treat businesses with principles of friendship, loyalty and over-trusting them.
So business is not normally personal but your social and family life always is. This is why it can be very tricky to mix business with pleasure. (Nepotism is problematic too.) There must be watertight shared interests (i.e. your partner failing will intimately mean that you’ll fail too) and clear boundaries between work and social life. This is incredibly difficult though because emotions from work will inevitably carry over to other parts of one’s life because we’re not robots who can switch modes so cleanly. Your partner’s success being the same as your success – i.e. when you really don’t want to see your partner lose, as much as you don’t want to see yourself lose – is why wife/husband and familial partnerships may have better chances of longevity and success than typically relatively-less-committed friend business partnerships. (We’re not so much likely to ditch a member of kin or a spouse and never see them again if a business relationship with them turns acrimonious as we might possibly ditch a friend.)
If you treat friends more as competition than companions and don’t want to share or support them, and they win – then you’ll lose. I like the setup of top sporting siblings, who want to beat each other yet ultimately support each other to do well – to raise each other up rather than wish to put the other down. And that attitude works triumphantly in the cases of the best sporting siblings.
Friends and/or family in business together can be great when things are going well, but can make both the professional and social relationship sour if things don’t. It’s sad when money comes between friends or family. What might help is preparing in advance an independent arbitrator who’ll hear both sides and come to a decision that must be followed, and then both sides moving on from the issue. An arbitrator whom both sides dislike may even improve the relationship because then the sides are more motivated to work together and avoid disagreements before it reaches arbitration!
Use a buffer, such as an agent, to negotiate on your behalf if you need to regularly do business with friends in order to prevent the parties from directly mixing friendship with business – you can then blame the agent for pushing the terms and asking for too much! (In market contexts, supervisors are often used by salespeople (e.g. car salespeople) when trying to negotiate with customers and for simulating a ‘friendship’ relationship with them – these salespeople can then blame their supervisor for not allowing a price to go through whilst giving the impression that they’re not the bad guy and that ‘they’re on the customer’s side’, when really of course they’re on the business’s or at least their own side. No ‘mates’ rates’ here! (Although the arm’s length principle must apply in some contexts.))
Financial sense always matters but there’s more to life than business – work is just a part of life rather than all of it or even most of it. Even businesses don’t always aim to make a profit from every single transaction. The main takeaway is that we shouldn’t confuse or inappropriately apply market norms and social norms in the wrong contexts.
…After all, there’s a massive difference between treating someone as a romantic partner and treating them as a prostitute!