I witnessed an exchange today that was unsettling. It was between a supervisor and one of his employees, who just happens to be his son. In front of me, this supervisor/owner used aggressive posture and shaming tone and belittling rhetoric to attempt to control behavior. I’ve lived long enough to recognize that there is usually a great deal more than the obvious behind a moment of crescendo, and I try not to jump to conclusions. Still, I wondered why the situation warranted that action.

Over my years as a parent, consultant, and student of life, I have thought often of behavior modification. A great many people have studied how to motivate others, how to get things done, how to help others grow. There are a lot of reasons to do that: to overcome problems in a society, to help children grow into happy and well-adjusted adults, to maximize profits, to get the kids off their butts and doing their chores. Behavior modification, whether overt or subconscious, undergirds perhaps most of our relationship interactions. But that’s actually not what I want to talk about.

I’m more curious what happens to a relationship when we pay each other for something.

Money is a very convenient medium of exchange, allowing us to have a common economic language that makes our transactions simpler, sometimes seamless. Price, the value in money that we give an object or service, exerts an interesting effect on us, however.

Manipulating Demand

A classic supply/demand diagram demonstrates the relationships of price and supply and price and demand with a magical equilibrium point that prevents either surplus or shortage at a particular price point. If one has a surplus, one can increase demand by lowering price, and if one has a shortage, one can decrease demand by increasing price. Hence, less-desired merchandise is easily moved on a clearance aisle, because we’re that predictable.

As a life-long bargain shopper, I’m not offended by that point, because sometimes I just want the good; I’m not having a philosophical discussion with myself about whether I’m being manipulated or not. If I need what is being sold at a cheaper price, and the good is sufficient to meet that need, and it fits my budget, I will buy it. In addition, other considerations surrounding that good don’t play into my decision-making process, like its quality or desirability to others.

Wal-Mart executives have long prided themselves on increasing the standard of living by increasing the purchasing power of buyers in the geographic areas of their stores through their consistently lower price points. It’s also true, however, that those buyers are manipulated into purchasing more than they might otherwise because the price points are within the surplus area, which devalues the good.

Interesting effect: increased demand of a devalued product.

And how do we think of Wal-Mart? It’s synonymous with cheap, low-quality items of temporary use. Supplying more of these increases our standard of living?

Reducing Expectations

Because of this reality (whether it’s trained into me or human nature), I have knee-jerk expectations of low quality based on a low price point, and a related expectation of low value in everything associated with that low-cost good. This extends beyond goods we purchase to other less apparent economic effects.

For instance, how much do you earn? It’s a highly personal question because we assign a very intimate value to each other based on the number of dollars required to purchase our knowledge, skills, and abilities.

In addition, when our time, knowledge, skills, and abilities have been purchased, there is an expectation in both minds. If the number assigned to one’s value is low, the relationship teeter-totter between the consumer (employer) and the good (employee) is weighted in the direction of the employer, and a host of behaviors unfold from that expectation quite subconsciously. Conversely, if the number assigned to one’s value is high, the teeter-totter between employer and employee is skewed in the direction of the employee, and the relationship has an entirely different character, with a host of different expectations.

Just as with the product, when the price point is low, the expectations are reduced and the players are devalued. I have noticed that people in these situations expect less to treat each other with respect,  have lower trust levels, and engage in more dissembling behaviors. In general, the employee who is poorly paid is usually considered a poor value all-around, and the employer is considered in equally negative light.

So we have the same effect: employers have a high demand for employees they can pay as little as possible, but whom they will devalue if they are successful at purchasing them at the lower price point. The value returned to them in knowledge, skills, and abilities is also diminished. So we have a cheap, low-quality labor supply in an environment of mutually-limited expectations.

Focusing on Price

So should everyone be paid extravagantly? A public finance professor once demonstrated the effect of altering the basis of our transactions with a story. You go to your mother-in-law’s house for Thanksgiving dinner. She prepares a wonderful repast: a perfectly basted turkey, a lovely glazed ham, sides of great variety and wonderful flavor, and scrumptious dessert. You are filled and deeply grateful, so you push back from the table, satisfied, look at her with a huge smile and say, “That was spectacular! How much do I owe you?”

The universal recoil we feel is based on how that response upends the unspoken expectation of the exchange and how it alters value. Some relationships are destroyed by affixing that ubiquitous price point to them. For instance, the intimacy shared by husband and wife is profoundly valuable, but when a dollar value is affixed to their most intimate exchanges, it becomes something profoundly different, something, in fact, that even in a secular society is usually not even legal. We have a devalued good, devalued participants in the transaction, and yet it is in high demand: cheap, low-quality relationships with mutually-limited expectations of personal value.

To Pay or Be Paid, That is the Question

In my pondering, I wondered what makes some transactions relationship-builders. For instance, those who give to charity have consistently been shown to rate themselves as more happy than those who do not. There is a price affixed to their good – altruism – that is also affected by supply and demand curves. However, they are often less affected by the collateral transaction costs of monetizing: neither the good nor the relationship suffers devaluing, and expectations of the good and the relationship remain high.

In addition, adherents to religious philosophies experience increased devotion when they give monetarily, demonstrating greater commitment to the ideologies of their faith and greater connection to those with whom they give. Clearly, it is not only the presence of payment that cankers the exchange. So what does?

Relationship vs Price Point

A price point creates a natural comparison. If you pay your mother-in-law for Thanksgiving dinner, you (1) establish a number value to your relationship that destabilizes every other aspect of the relationship, (2) create a set of expectations for both her and your behaviors to which neither of you will satisfactorily measure up, and (3) devalue her knowledge, skills, and abilities; your relationship, and her. If you offer instead to do the dishes, you have not limited the value of her offering in any way by trying to assign it a value; you have exceeded any expectation and valued her offering, your relationship, and her.

I am not the only business or behavior consultant to point out that all transactions contain elements of a relationship opportunity. Today, however, I realized that the relationship element must always supersede in importance the price point element for it to be a net positive transaction.

Translation

So, after that whole social economics discussion, I really do have a moral and philosophical point. We live bi-polar lives, artificially separating our spiritual and worldly selves, with sets of behaviors that are not compatible with one another exercising subconscious control over our interactions with each other. It makes us double-minded in ways that we’ve probably come to accept as natural.

When we experience expectations, especially around anything involving a price point, we can ask ourselves about our experience of the other person’s value, our own value, and the value of the thing involved in the exchange. Consider how we are affected by affixing price points to our transactions. We haven’t even addressed the attendant resentment toward both the good traded and the participants if the price point is considered too high or the payment too low. And what of the concept of owing someone or being owed that occurs when we perceive an imbalance in the trade? This can extend to anyone and anything.

• How much is our child’s education worth?
• What is the teacher’s value? The curriculum’s? The school’s?
• How well do the police, courts, hospital staff do their jobs?
• How does the cost of the services or fees we incur from them affect our outlook?
• How much can we trust our employees? our bosses?
• What is the value of the work we do? they do?
• How do we feel about the bank, or the tellers, the Fed, or the IMF?
• What is the contribution of public agencies? public servants?
• How are the rich, the poor, and the middle growing or destabilizing our country?

How are these feelings colored by how much we pay for these services, or are paid for them, the services individuals receive, or the contributions they make? How does that price point - a cost or a payment – manipulate our behaviors with one another?

Transcending the Telestial

Elder Bednar was running on a theme a few years ago about the importance of acting rather than being acted upon. Stephen Covey talked often about the space between stimulus and response. And I have my Second Mile Philosophy, which encapsulates the personal power and triumph over limited circumstances taught in the Sermon on the Mount. In each of these, we own what we choose when our choice transcends instinct and the manipulation of circumstance. Much like fasting, which is a voluntary decision to be uncomfortable when comfort is available to us, and consecration, which is a voluntary decision to give to others what we could keep for ourselves, we become most powerful when we rise above the telestial laws of interaction that tell us how we will behave when money is involved.

Follow the money, and we will find the Prince of This World. I firmly believe that if we transcend that stimulus and make relationships primary in every transaction, we will escape being acted upon and cease being the double-minded consumers and business people we unfortunately often are. Shifting our perspective in this way, setting aside subconscious devaluations and expectations, seeing people and their offerings individually, would change the world.

May I never forget that I am a mom, sister, neighbor, friend, person in need of a blow dryer, capable offerer of landscaping services, writer, reader, consultant, or consumer first, and a participant in a money transaction only much, much later. Would there be less stress in our workplaces, in our trade of goods and services with one another, if we were merely two parties meeting one another for a mutually-beneficial transaction? What would that be like to never instinctively devalue someone else?

And I wonder if that would make us want to give someone more, rather than see how little we could offer to get what we want?

I leave you with the Capuchin monkey experiment, and your own conclusions.