A model of dynamic balance among the three spheres of society – markets, governments, and communities

Abstract

This paper revisits old questions of the proper subject and bounds of economics: Does economics study "provisioning"? or markets? or a method of reasoning, selfinterested rational optimization? A variety of scholars and others in many fields make use of a taxonomy of society consisting of three "spheres": markets, governments, and communities. It is argued here that this tripartite taxonomy of society is fundamental and exhaustive. A variety of ways of understanding this taxonomy are explored, especially Fiske's (1991, 2004) Relational Models theory. Then-after communities and their products, social goods, are defined more thoroughly-a visual model of interactions among the three spheres is presented. The model is first used briefly to understand the historical development of markets. The model is then applied to understanding how economic thinking and market ideology, including the notion of social capital, can be destructive of communities and their production of social goods (and their production of social capital as well). It's not possible to measure these effects monetarily, so calculating precisely "how this affects results" in a standard economic model is impossible. Nevertheless we could better prepare students for real-world analysis, and better serve our clients, including the public, ifwhenever relevant, such as in textbook introductions and in benefit/cost analyseswe made them aware of the limitations of economic analysis with respect to communities and social goods. The three-spheres model offered here, based on Fiske's Relational Models theory, facilitates this awareness.

Assumption Without Representation: The Unacknowledged Abstraction from Communities and Social Goods

“…Fiske (1991Fiske ( , 2004 explains how "market pricing" (economic) motivation fits into this larger and more humane set of motivations. Wicks (2009) relates Fiske's four motivations -which Fiske calls relational models or modes (RMs) -to the three spheres of society: markets, governments, and communities; and to their production of, respectively, private, public, and social goods.…”

“…This paper draws in part on Wicks (2009). Wicks (2011) also drew in part on an earlier draft of this paper.…”

“…Feminist economists have recently directed attention to this issue again, though the fact that economics overlooks the social fabric of human relations has been pointed out for well over a century. There is an entire category of producer organizations in "civil society" that economic theory largely overlooks, and an entire category of goods that they produce: Communities (social groups based on kinship, location, or belief, such as families, neighborhoods, and religious groups) provide utility directly (unmediated by markets or governments) to their members (those who identify with and participate in them) via unpriced, unpriceable (untradeable) social goods (Wicks 2009).…”

“…McCloskey (2000b) is justifiably concerned with "oomph," but it thus suffices here that negative effects are possible; that many careful observers believe they are substantial; and that we might be able to ameliorate them without substantially injuring markets. The question is not markets or no markets (nor is it economics or not), but markets and economics while recognizing only economic thinking, or markets and economics while also recognizing other relational modes -in particular, those fostering communities and the production of social goods (Wicks 2009). …”

Social enterprise and corporate social responsibility

“…As such, our focus (and therefore subsequent choice as to which models to include in this paper) has been influenced by the impact each model has had in the ongoing development of scholarship. We begin with SE, considering continuum (Alter, 2007;Anderson, 2003, 2006;Young, 2001), three-sector models (Ridley-Duff, 2008;Ridley-Duff and Bull, 2011;Wicks, 2009), and the triangular representations evident through the EMES International SE Research network conceptualisation of SE Nyssens, 2008, 2014) and the fair trade (triangle) model (Huybrechts and Defourny, 2008).…”