Civil Society

In his celebrated article “On the New Theory of Consumer Behavior”, Gary Becker (1990, 134) referred explicitly to the “nonmarket sector” without reducing it to the government sector.  Household production for Becker was synonymous with all nonmarket production outside of government.  Roughly, it included all private activity allocated toward bringing about direct utility and use value as opposed to merely increasing revenue and exchange value.  However, Becker referred only implicitly to household production directly involving social action with other households, organizations, and firms.  By social action, I mean human action in which the subjective meaning or project directly involves other people (a la Alfred Schutz [1980, 144] via Max Weber).  Reciprocal, face-to-face communication is a paradigmatic form of social action.  Participating in a birthday celebration at the local park with friends and neighbors is an example of household production directly involving social action with other households; attending classes for non-pecuniary reasons is an example of household production directly involving social action with other organizations; and engaging in therapy sessions with a psychologist is an example of household production directly involving social action with other firms.  One can therefore define civil society as household production that directly involves social action with other households, organizations, or firms.

In “A Theory of the Allocation of Time”, Becker (1990, 91) gave the example of “the seeing of a play, which depends on the input of actors, script, theatre and the playgoer’s time.”  The performance of the play is a service and aspect of the market, but according to the definition offered above, the audience participation is an aspect of civil society and household production.  To be sure, attending a play does not primarily involve reciprocal communication, but it certainly involves social action.  The requirement of social action excludes from civil society simple forms of consumption such as eating a sandwich or drinking a soda while alone outside the home.  Activities only become aspects of civil society where they serve directly as inputs for the production of nonmarket, abstract goods–Becker’s “basic commodities”, such as “entertainment” or “companionship”–that involve social action with other households, organizations, and firms, such as participating in a birthday celebration at the local park.

One might object that this definition of civil society is too broad, as it would include everything from reverent participation at a spiritual gathering to attendance of a theatrical performance to pleasant conversation with a hair stylist.  However, the term ‘household production’, treated comparatively, is the term that is most overextended and in need of further refinement, as it connotes that all of these nonmarket, social activities take place within an isolated home.  It thereby, taken alone, not only underplays the complex social dimension of nonmarket production but also overlooks its varying physical and cyberspacial location.  The term ‘civil society’ accordingly captures the vast social dimension and varied physical and cyberspacial location of nonmarket production more aptly than ‘household production’ alone.

It is important to define and acknowledge civil society so as not to overlook household production directly involving social action with other households, organizations, and firms.  It also helps to refute the myth that rational choice theorists or praxeologists must treat everything as or reduce everything to merely market goods and services.  In this respect, it was misleading for Becker to refer to nonmarket, abstract goods as merely “basic commodities”, even though abstract goods include higher aspects of well-being such as “friendship” and “hope” (137).  I therefore have referred and will continue to refer to Becker’s “basic commodities” as abstract goods.  Becker’s treatment of the maximization of well-being via household production implicitly differentiates goods into a four-tier hierarchy: (type-4) nonmarket, “abstract” goods, such as culinary pleasure and self-esteem, that enter directly into the utility function; (type-3) nonmarket, “concrete” goods and activities, such as homemade sandwiches and hugs, that function as inputs for the household production of type-4 goods; (type-2) market, “concrete” goods and services, such as purchased bread and clinical therapy, that function as inputs for the nonmarket production of type-3 or type-4 goods and activities; and (type-1) monies that function in the purchase of type-2 goods.

 

Number Value Type Example
4. Use-Value Abstract Culinary Pleasure
3. Concrete and Nonmarket Home-made Cake
2. Exchange-Value Concrete and Market Store-bought Cake
1. Money US Dollars

 

For example, a purchased cake (type-2) may function as a substitute for a homemade cake (type-3), or a purchased cake mix (type-2) may function as merely an input for the nonmarket production of a cake (type-3).  Both type-3 goods, such as homemade sandwiches, and type-4 goods, such as culinary pleasure, involve nonmarket production.  However, in strict terms, nonmarket production of (type-3) concrete goods and activities is not the same thing as household production of (type-4) abstract goods.  Type-2 and type-3 goods are never more than merely inputs for the household production of type-4 goods.  In short, one cannot have one’s purchased cake (type-2) or homemade sandwich (type-3) and eat it too (Type-4).

The definition of civil society proposed here also excludes actions and transactions undertaken primarily to produce or purchase market (type-2) goods and services. Producing market goods and services corresponds to wage labor outside of household production.  Consumer shopping involves transaction costs of search, measurement, bargaining, and contracting.  Because shopping involves time aside from wage labor, some economists have treated purchasing market (type-2) goods and services as part of household production (type-4).  However, purchasing market goods and services typically entails transaction costs for the procurement of merely inputs for household production.  Therefore, the definition of civil society proposed here excludes transactions involving merely the purchase of goods and services.  Granted, shopping may itself involve production of type-4 goods such as amusement, but purchasing goods is not necessarily pleasurable activity and typically entails disutility.   Likewise, work itself may involve production of type-4 goods such as self-esteem, companionship, or enjoyment, but wage labor is not necessarily pleasurable activity and typically entails disutility.  These possibilities need further exploration.

In any case, for conceptual clarification and parsimony, one can understand work as directed primarily at acquiring wages (type-1), shopping as directed primarily at purchasing market goods and services (type-2), and household production and civil society as primarily involved in the nonmarket production of abstract goods (type-4).  For example, when one pays the bill at a local pub or coffee house, one is engaging primarily in a market transaction (type-2) rather than household production or civil society (type-4). However, when one engages in consumption of beverages and pleasant conversation with friends or neighbors at the local pub or coffee house, one is participating respectively in household production and civil society (type-4).  Ultimately, the differentiation between market and civil society is more a matter of social space than physical space.  Nevertheless, one can effectively define civil society as household production that directly involves social action with other households, organizations, or firms.

REFERENCES

Becker, Gary S.  1990 [1976].  The Economic Approach to Human Behavior.  Chicago and London: The University of Chicago Press.

Schutz, Alfred. 1980 [1960]. The Phenomenology of the Social World. Northwestern University Press.