Economics & Relationships

My research uses a method I call the study of relational dynamics. By this I mean studying two key dynamics.

• The first is how various parts of a social system relate to one another in a constantly interactive, self-organizing process.
• The second is how the people within that system relate to one another and to their natural environment.

As we have seen, both these sets of relations are different depending on the degree to which a culture or subculture orients to either end of the partnership-domination continuum. In the domination system, those on top control those below them – be it in families, politics, or economics. By contrast, the partnership system supports mutually respectful and caring relations.

As long as a culture is primarily based on the domination system, we cannot leave behind inequitable, inefficient, and environmentally destructive economic policies and practices. It’s only as we move toward the partnership system that policies and practices can support both our basic survival needs and our needs for community, creativity, meaning, and caring – in other words, the realization of our highest human potentials.

Making this shift requires that economic theories and models pay attention to the dynamics of relations in every sphere of life, not just in economics. Including these larger relational dynamics in economic thinking makes it possible to draw on important new finding from both the natural and social sciences that are ignored in conventional theories.

We can no longer disregard scientific findings that early childhood experiences and relations play a key role in the development of the capacities needed for a healthy economy. Both psychology and new research in neuroscience demonstrate the importance of these relations for the development of the capabilities that make people effective workers, responsible citizens, and fulfilled human beings.
Nor can we ignore the connection between economic prosperity and equity and the status of women, such as those described in Women, Men, and the Global Quality of Life.

These studies empirically verify what a some well-known economists already recognized intuitively over a hundred years ago. For instance, Charlotte Perkins Gilman’s popular 1898 Economics and Women proposed that a more just and productive economic system requires equal opportunities for women. Thorsten Veblen’s 1899 bestseller, The Theory of the Leisure Class, denounced “the barbarian status of women,” and argued that women’s activities must be counted in what he called economic provisioning.

But these ideas did not become part of the economic canon transmitted from generation to generation through textbooks and classes. By the second half of the 20th century, most of what was taught in U.S. economics classes dealt mainly with market production and consumption, and how “rational economic man” made choices governed by selfish self-interest. When the household was mentioned, it was to reiterate another fiction: that, though selfish in the market, man is an altruist when it comes to his family – even though the studies we looked at show that many men don’t use their economic resources for their families’ welfare.

There were of course 20th century theorists with a different view. For example, John Maynard Keynes and John Kenneth Galbraith. While they too focused largely on markets, they emphasized the need for government regulations, were deeply concerned about human welfare, and in Galbraith’s case, wrote about how women were what he called “crypto-servants” even in the democratic West. There were even branches of economics known as institutional economics and economic sociology, based on the recognition that “formalist”analyses give a false picture of reality because they don’t consider the cultural context of economics.

But the primary, often sole, focus in U.S. economic schools continued to be market-centered.  Indeed, economics largely became a discipline of abstract theorems and  mathematical equations that often fail to include what really matters in our lives: our relationships with one another and Mother Earth.

Excerpted from The Real Wealth of Nations: Creating a Caring Economics by Riane Eisler