Imagine two experiences of buying something from a convenience store: On the one hand, buying it in an atomised, anonymous, monetised transaction; On the other, looking forward to buying the same thing from a shopkeeper because you know them and you'll have a nice chat. It's an obvious difference, but there’s no recognised term for it.
The difference, obviously, is that there is some relationship in the second case, or in economist terms a Relational Good. The difference is that a relationship continues even when you are not together, whereas a relational good is a specific event of the relationship that happened at a particular time.
In summary:
If it is not enjoyed by everyone involved, it is not a relational good.
The identity of the people involved matters, and so does their motivation.
The relational good is created and enjoyed at the same time.
It emerges spontaneously from the shared behaviour or interaction, rather than being consciously created, leading to an element of uncertainty that is missing from, say, standard market transactions.
A relational good is a good, with a value, but is not a commodity with a market price.
They are not used or exchanged for anything else, but have their own intrinsic value.
Put another way, relational goods are roughly what you don't get on your own, eating bugs, in a pod, wearing a Virtual Reality headset.
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2015 WORLD HAPPINESS REPORT
Chapter 7. Human Values, Civil Economy, and Subjective Well-being
Leonardo Becchetti, Luigino Bruni and Stefano Zamagni (1)
4. Relational goods
“One of the main reasons for the incapacity to broaden our view beyond the simplistic approach to the utility function and to go beyond anthropological reductionism is the missing concept of relational goods. Mainstream economists view relationships as a kind of background for market activity, or as useful and functional elements in the exchange or production of goods and services that are fully independent and distinct from the individual characteristics of agents and that are the typical objects of economic study.
In recent decades, however, attention has been given to relational themes such as trust, social capital, networking, and reciprocity. Words that were rarely used in the tradition of economics, such as brotherhood, spiritual capital, and intrinsic motivations, are beginning to enter the lexicon. In the light of this development, and also thanks to the space created within the discipline of economics for such categories, relational goods today represent a rising field of theoretical and empirical research.
The basic idea of the concept of relational goods – which may vary in terms of technical detail, and in part in content – is to assign the status of economic good (or evil) to relationships in themselves since each human relationship is an infinitely “greater” fact than the economic dimension alone. But, nevertheless, relational goods can be understood and described also as economic goods; that is, as realities to which people attribute economic value alongside other non-economic values, and from which they obtain well-being. With relational goods, the relationships among people (doing things together) are what increases utility and not the goods in themselves.
It is possible to identify the following as the basic characteristics of relational goods:
1. Identity
The identity of the individuals involved is a fundamental ingredient since “goods which arise in exchanges where anyone could anonymously supply one or both sides of the bargain are not relational.”
2. Reciprocity
Inasmuch as they are goods made of relationships, they can only be enjoyed recip- rocally. “Mutual activity, feeling, and awareness are such a deep part of what love and friendship are that Aristotle is unwilling to say that there is anything worthy of the name of love or friendship left, when the shared activities and the forms of communication that express it are taken away.”
3. Simultaneity
In contrast with normal market goods, whether private or public, where production is technically and logically separate from consumption, relational goods (such as many personal services) are simultaneously produced and consumed — the good is co-produced and co-consumed at the same time by those involved. Although the contribution to the production of the meeting may be asymmetric (consider the organization of a party among friends or the management of a social cooperative), in the act of consuming a relational good a pure free rider is not possible, since, to be enjoyed, the relation- al good requires that one become involved in a relationship with the characteristics that we are listing.
4. Motivations
In genuinely reciprocal relationships the motivation behind the behavior is an essential component. The same encounter—for example, a dinner—may create only standard goods or relational goods as well, based on the motivations of those involved. If the relationship is not an end, but only a means to something else (e.g. doing business), we cannot talk about relational goods.
5. Emergent Fact
Relational goods emerge within a relationship. Perhaps the category of “emergent fact” captures the nature of a relational good more than the economic category of “production.” That is, the relational good is a “third” that exceeds the contributions of those involved, which in many cases was not among the initial intentions. This is why a relational good can emerge within a normal market transaction, when at a certain point, right in the middle of an ordinary instrumental market relationship, something happens that leads those involved to transcend the reasons for which they had met.
6. Gratuitousness
An essential characteristic of relational goods is gratuitousness, in the sense that a relational good is such if the relationship is not “used” for anything else, if it is lived out as a good in itself, and arises from intrinsic motivations.27 This is why, as Martha Nussbaum claims, a relational good is a good in which the relationship is the good—a relationship that is not an encounter based on self-interest, but a gratuitous encounter. A relational good requires the presence of intrinsic motivations toward that particular relationship.
7. Good
Finally, another essential way of defining a relational good is focusing on the noun: it is a good but it is not a commodity (in Marx’s terminology). That is, it has a value (because it satisfies a need) but it does not have a market price (precisely because of gratuitousness), though it always has an “opportunity cost.”
These points, taken together, imply that relational goods present characteristics that are combinations of what economics call private and public goods. To understand the peculiar nature of relational goods, it is necessary to free oneself from the dichotomy of “public good” and “private good,” and from the idea of a good as a means or instrument for reaching something (utility) that is external to the relationship. In fact, as long as we try to situate relational goods among private goods (such as a pair of shoes or a sandwich, which are “rival” and exclusive goods in consumption) or, alternatively, among public goods (that is, non-rival goods, which tend to be non-exclusive), we remain within the non- relational paradigm. Neither of the definitions of “private good” or “public good” imply in fact any relationship among those people involved; the only difference between the two types of goods is the presence or absence of “interference” in consumption. The consumption of a public good is simply consumption by isolated individuals independently of each other. Consider the use of an uncongested road, or two or more people admiring the same painting in a museum: the good is public as long as the consumption by one does not interfere with that of the other. This is what is implied by the hypothesis of non-rivalry in public goods, but it can be enjoyed without any relationship or production of relational goods. It is therefore misleading to attempt to locate relational goods among public goods, because, we claim, it is more scientifically fertile to consider relational goods as a third genus of goods.”
(1) The World Happiness Report (WHR) has been produced annually since 2012, and is written by independent experts on behalf of the United Nations "The World Happiness Report was written by a group of independent experts acting in their personal capacities. Any views expressed in this report do not necessarily reflect the views of any organization, agency or programme of the United Nations." It aims to express ideas about happiness that are both useful and true.
First paragraph... looking forward to the relationship as I buy a cup of coffee, the feeling of being known, as I consume. The best way to live, no matter the depth, - it's mind, body, soul. Automated transactions are killing naturalness, if not just slowly killing.
Good read but the studies these people do 🤪 Seems so obvious.