Markets and Communities

Markets disrupted traditional communities, but they’re also building new ones.

One thing I’m curious to explore is why, on the one hand, we are richer and healthier than ever — thanks to markets & economic growth — while we also seem to be suffering from increased anxiety, loneliness, and the deterioration of community. 

Below are some scattered musings on the topic.


In his book Tribe, Sebastian Junger writes about how he lost more friends *after* his army service due to suicide than during the war itself. “Humans don’t mind hardship,” he says, “they thrive on it; what they mind is not feeling necessary. Modern society has perfected the art of making people not feel necessary.”

Another book called The Third Pillar posits that for early humans, the tribe was everything — their state, their markets, and their community all rolled into one. This included raising children (community), exchanging goods (markets), and enforcing the law (state).

Overtime, the market and the state were unbundled from the community. Trade with more distant communities enabled everyone to specialize in what they were relatively good at, making everyone more prosperous, and states expanded their role too as local communities dissolved.

Personal property allowed people to make more individualistic choices about their lives, making us less reliant on one another. Markets reinforced self-interest, and as a result, we got so rich we didn’t have to depend on others as much for survival. 

The irony, of course, is that as a result of becoming more specialized, we’re actually morereliant on each other than ever.

In Nonzero (which I discussed in another post here), Robert Wright says our individual fates are becoming increasingly intertwined, which means we’ll have to encourage social bonds, and design them in new ways. That’s the great irony — we actually depend on each other more than we used to, it’s just harder to see. (Something of which a worldwide pandemic reminds us).

To recount: In primitive societies, people were entirely self-sufficient. They gathered their own food, made their own clothing, and found their own shelter. Today no one's self sufficient; we're all specialized and depend on many other people worldwide in a nonzero-sum way. Everything you consume you could never produce on your own — your daily life depends on the cooperation of millions of others.

To paint a picture: we wouldn’t even know how to make cereal from scratch by ourselves if we tried. Just imagine: you'd need to grow grain yourself, which would mean mining metals, which would mean finding metals, which would mean building machinery to do so, etc. Instead we buy cereal at a grocery store, not giving a second thought to the immense amounts of interdependence necessary to produce it.

This is because our reliance on one another has become increasingly abstract — the producer never meets the consumer, and so the dependencies between us aren’t as legible. Those dependencies that once formed strong bonds aren’t as strong today, as Robert Putnam shows us in Bowling Alone.

The Third Pillar argues this is a huge loss, and that communities are the “third pillar” needed alongside markets and the state for society to function. Community isn’t just important for emotional stability, but also social. It serves as a check on fraud, cheating, cowardice, corruption and cronyism; indeed: community protects us from states and markets run amok.

It’s clear today that we need community more than ever before. Adam Smith said capitalism would work with a strong moral fabric, but that moral fabric used to be religion, and with that decaying too, there’s now a vacuum.

Markets & technology have abstracted away the need for virtually all human contact, let alone humans depending on each other. Neighbors used to help deliver babies, now people just check into hospitals. The hospital will give you service, but they won’t care about you like your neighbor will. And that’s the tradeoff: better service with less care. When you’re getting heart surgery, you probably want the best doctor, but when it comes to your rabbi, for instance, you’d probably want someone who cares more.

Another angle is that, not only do we depend on each other less and less, but we also live in different realities, and have less in common to connect over as a result. Tyler Cowen’s book Create Your Own Economy observes that, as individualized social feeds have dwarfed newspapers and personalized Netflix recommendations dwarfed movie theaters, we have less of a shared substrate — less collective knowledge we all learn, less collective experiences we all share, and less collective identities we all embrace. If happiness is only real when shared, it’s harder to share happiness when we don’t even share the same reality.

As Cowen points out, you can understand what's going on by looking at actual media technologies and their declining dominance over time. 

We started with grand broadcast media from the middle of the 20th century up until about the 70s. Television, radio, and newspapers, were highly centralized, aggregated media technologies that held society together. Everyone read the same newspapers, watched the same TV channels, and listened to basically the same radio stations, which allowed us to engage in discourse on the same playing field as one another. 

This had a much more profound political significance than people realize. While it didn’t force people to agree, centralized media forced us to at least share the same coordinates around which we could agree (or disagree). The narrative was the same, even if our opinions on its relevance or importance were not.

To be sure, there’s always been left-wing media and right-wing media, and there's always been different disagreements and divisions. But the fact that you had a relatively small number of highly influential broadcast media outlets meant that we had an anchor point around which disagreements could be sensible. 

When the internet became dominant the cost of creating and distributing media decreased drastically, which enabled many more media creators to emerge. As a result you started to see this great fragmentation where creators offered customized messages to increasingly smaller niches. Paired with algorithmic feeds, viewers get the same message fed to them over and over, further pushing us into realities that others don’t even know exist.

It's not that we're living through a time of great disagreement. Instead we're living in a time where people are opting into their own realities, completely. And there's really no mechanism or infrastructure for those competing realities to calibrate or adjudicate which one is more accurate, which one is better, or which one others should opt into. And the worst part is they aren’t interoperable — they can’t cohere or reconcile with each other, unless faced with some common existential enemy. Reality is up for grabs right now.

Zooming out: great communities, in the traditional sense, required limited options so people would remain dependent: no specialists or external trade (to ensure we all collectively worked together), and no diversity or weird ideas (to ensure a homogenous group with a focus on tradition). We had far worse medical treatment, underwent excruciating manual labor, and didn’t necessarily share the same interests with others, but because we were dependent on each other, the bonds were strong. Now the options are virtually limitless, and we’re seeing our social bonds decay as a result.  

Junger mentions that Americans defected to Native American camps for their strong social bonds, but it didn’t go the other way. Yet, we don’t see that many people doing that today, as much as we long for a sense of community. We want to feel more rooted and less alone, but we just don’t want to sacrifice our quality of life to do that.

To reclaim our sense of community Junger claims we should go back to local community pressures, since the modern world doesn’t match our wiring. He says, “Poor people share their time and resources more than wealthy people, and as a result live in closer communities.” It’s the shared struggle, he claims, that brings us together.

But it's unclear if we’re less happy as a result of all this, or how much to trust happiness studies in general. Or, if we are less happy, it's unclear whether we'd rather be rich & unhappy or poor & happy. Judging by revealed preferences, it seems most people would rather be richer and “unhappy”.

As we’ve moved up Maslow’s hierarchy of needs, our challenges have evolved as well. 

Junger isn’t only saying we’re less happy; he’s also saying there’s less of a desire to sacrifice for the community today, and he’s got a point. Maybe people don’t sacrifice as much today: maybe they cheat more, or maybe they care for the common good less.

You can try to weed self-interest out of people — by shaming, punishing or killing, like we used to — or you can better design institutions to align self-interest with the common good.

Junger argues that we should go back to how we lived in local communities. I think we should “upgrade” our software — get over our need for revenge and manichaean thinking. We may have evolved from tribes, but we don’t want to go back to that, just like we don’t want to go back to dying at 35 and losing a few children at birth.

“What people miss [from the army] presumably isn’t danger or loss, but the unity that these things often engender.”

Indeed: markets and technology have disrupted traditional methods of cultivating communities, identity, and meaning, but they’re also helping us make new bonds — bonds that aren’t reliant on proximity, dependence, and nationalism, but on common interests & values. Communities, identities, and meanings based on choice, and less on circumstance.

In a sense, the internet killed communities, but it’s also rebuilding them, for the people perfect for you. 

“People can go an entire day — or life — mostly encountering complete strangers.”

Those strangers mentioned above? They are friendships waiting to happen.

Junger’s focus on hardship as a means of bringing us together is true — indeed, what doesn’t kill us makes us stronger. The problem is that the opposite is also true — when something's not making us stronger, it’s killing us. Being poor kills. Fighting in the army kills (sometimes). 

I don’t accept that there’s a necessary tradeoff between markets and our sense of community and identity.

For example, we trade stocks anonymously in the market but then go home to volunteer for the school board. We have multiple identities, as Amartya Sen emphasizes — trader during the day and deacon in the community church in the evening.

Technology gives us the means to create even more identities in the market, while giving us new ways of binding the community together. We just need to build better community toolkits and use the market for doing so. We should go deep on which parts of traditional communities we want to keep and which we want to discard, without throwing the baby out with the bathwater.

On a fundamental level, Junger says people need three things to be content. They need to feel:

  1. Competent at what they do

  2. Authentic in their lives

  3. Connected to others

The first two needs get satiated as a result of markets — specialization is encouraging more people to find their niche and excel at it. But connection? That goes back to purpose. The more you believe increasing economic growth increases the collective good, the more you believe your job is actually serving other people — the more you’ll find meaning in your work and connection to others. 

In pre-globalized societies, it was easier for you to instinctively feel your work had meaning — you produced something and saw someone consume it. But in a world where there are many layers between consumer and producer, you’ll have to trust that you being a “cog in the machine” is actually a good thing (as long as it's sustainable) — you are participating in something bigger than yourself, serving people you’ll never meet, as a part of this grand chain of activity that feeds billions of people. 

So to bring back community we need a few things:

  1. New ways of finding meaning

  2. New ways of connecting & belonging

  3. New ways to take care of each other

  4. The “good parts” from traditional communities

I’ll dive into solutions and more frameworks around community building in a future post, but for now I’ll leave you with this: Robert Frost once wrote that home is the place where, when you have to go there, they have to take you in. May we, through our meetup groups, fitness classes, video games, and virtual and physical communities, have places that will take us in when we need — and even when we don’t.


Read of the week: Rosie Colored Glasses by Brie Wolfson. I’ve been reading only non-fiction for a while so this was a nice change of pace.

Listen of the week: Joseph Henrich on the WEIRDness of the west, on Sean Carrol’s podcast.

Watch of the week: Eric Weinstein on The Realignment. I also made my debut on The Realignment

Cosign of the week: Zach Davidson — here’s a recent interview of him.

Until next week,

Erik