Monday, February 09, 2009

Non-relational transactions...

As someone who really likes using Amazon, self-checkout lanes and pay-at-the-pump, I have to take responsibility for some of the loss of community in America.  At least, that's one way of looking at it.
This story got me thinking about the demand for non-relational contracting. Ian MacNeil, my former colleague at Northwestern, was famous for claiming that most contracting is “relational” — or extends the duty to perform contracts through time and repeated transactions. But Sheen’s (possibly apocryphal) quotation has me thinking that there may be contexts in which people would pay a premium to avoid a relationship.
Some people may at times prefer A.T.M.’s to tellers in part because they don’t want to speak to tellers. Some people may prefer Merry Maids to a regular housekeeper (or may prefer to be absent when the cleaning is done). Or some people may prefer buying at in part because of the lack of human contact.
Indeed, what’s scariest to me as a professor is that part of the student demand for “distance learning” may come from students who don’t want to have relationships with their teachers.
A rising demand for non-relational contracting seems of a piece with Robert Putnam’s depressing Bowling Alone thesis that we are becoming increasingly disconnected from family, friends, and neighbors. I remember the day when you might have had a conversation with the person sitting next to you on an airplane. Nowadays, if you say more than a perfunctory hello when you initially sit down, you are trespassing into your seatmate’s personal space.
Of course, there are other ways to spin the demand for non-relational contracting. Restricting and regulating our contractual relationships allows us to control and concentrate our limited relationship energy on those people who matter most to us. Surely this is sometimes the case. But conserving our limited relationship energy may backfire. Our capacity to interact with others may atrophy if it goes unused.
Moreover, some of us may be healthiest and happiest when we interact with a variety of people on a variety of levels; it may not be good for us to concentrate all of our social energy on the most intense or important relationships in our lives. [More]

Much of this change in commerce carries over to the angst and anger now seething in what was once an previously placid (on the surface, at least) arena of land rental.  My latest column may not help calm the waters either, but it fairly represents my thinking.

Farmers are getting a first-hand look at what transparency means: doing business in broad daylight.  Formerly, ties of kinship and/or friendship greased the skids for land rentals, since the deal (50/50) was pretty much the same for everybody.  It was like the old Soviet Union, where the lack of market economy produced a market for influence.

As long as you were part of the group that controlled land, this was a pretty harmonious arrangment, but it was hard on outsiders or newcomers.  As labor has become less important compared to acres, the need for more acres meant dealing with more people than were inside the groups, and thus began the effort to extend "old-group" rules to people who were not part of the old group.

Many landowners - especially investors - decided to try another approach: open dealing with interested parties.  It turns out many business models embraced by farmers don't withstand close public scrutiny.

The result is a startling mix of self-righteous judgment [I could not help but note the absence of any mention of the Golden Rule in these religious opinions] and a drift toward non-relational contracting. 

What few seem to suspect is the emergence of competitors who can operate at several levels of engagement - purely financial to high-relationship transactions - as the situation warrants instead of imposing one standard on all.  This, I believe will be the mark of the next level of farm entrepreneurs.

1 comment:

Ol James said...

The Golden Rule is a great philosophy to use. I think the disassociation started when people started defining their "space".
One thing in the Top Producer blog that was overlooked. When you look in the mirror and look into your eye and have justified yourself, ....better use the other eye to see that a mob hasn't formed behind you.