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July 16, 2007

Distinguishing Between Commodity and Value-Added Relations

In a seminal entry a couple months ago, I asserted that [s]ome (few!) relationships no doubt add value; others probably serve useful purposes, but are more or less commodities; and finally, others still have no utility (marginal or otherwise), and simply detract value from your existence (footnotes omitted). As is to be expected, there has been much brouhaha from the usual suspects about my purported cynicism and heartlessness that will all suddenly change upon finding the one, but let's face it: that happens every time I write in this blog. In my (most humble) opinion, the real problem with that post was not that I was too cynical (I was not), but that I was much too vague in defining what exactly distinguishes a value-added relationship from a commodity one. Clearly, this begs for more rigorous analysis.

In a nutshell, the difference between a commodity and value-added relationship is the dispensibility of the relation in question, i.e., is it fundamentally irreplaceable? And unfortunately, as much as I hate to admit it, in any discussion of human relationships, the dispensibility will turn on emotions. Specifically, I would contend the essential factor for a value-added relationship is trust, or loyalty of the other party.

Commodity relations, by definition, are indistinguishable, and as such, there is neither an expectation of, nor a need for loyalty. Going back to my earlier example, say my Fashionista commodity friend decides to stab me in the back (for whatever reason, presumably since it benefits him or her in some way) and tells me denim on denim is now back in style (even though, it is clearly not, nor should it ever be). I will then foolishly wear denim on denim once, be the laughing stock of those around me, and having had that bad experience, will purge my commodity friend and seek a replacement. The fundamental thing here though is that there will not be (or at least, should not be) any anger upon my part; since this person was a commodity to begin with, I should never have been vested enough to care that he or she was disloyal and betrayed me for his or her own benefit.

On the other hand, value-added relationships are that way specifically because one knows (or rather, trusts/hopes) that the other party will not fuck them over given the opportunity to do so, even if that person could derive some personal benefit. This Fuck-Over Factor (hereafter F.O.F.) is then our critical distinguishing criterion for value-added relationships. If there is an expectation that the other party will not act against you (even when it is in their interest to do so), you have a value-added relationship; if there is no such expectation, the person is a commodity.

Now, the F.O.F. is interesting, because from an economic perspective at least, one should never act outside of one's own self-interest to the benefit of someone else and the detriment of oneself. The fact that we as humans do practice loyalty (in interpersonal relationships2) at all is in itself irrational, and also explains why we place such a high value on it. As we know (or should know) from the Second Law of Thermodynamics, ΔS ≥ 0; similarly, the natural inclination for people is to be disloyal (i.e., analogous to entropy increasing), so for loyalty to persist, energy must be expended, which explains the premium we place on that characteristic trait.

In introducing the F.O.F., we also come to a rather counterintuitive conclusion. Most people, having read this entry and the original analysis, might assume that the ideal condition is to maximize the percentage of value-added relations in one's relationship portfolio while minimizing commodities and (hopefully) eliminating deadweight. However, if there is one thing I have learned from years of watching The X-Files, it is that we should always trust no one. Given the fundamentally irrational (and unsound) basis for value-added relations, i.e. loyalty, increasing the proportion of value-added relationship actually exposes us to more risk, since our expectations of loyalty are increased without any corresponding increase in our ability to accurately judge whether a person we enter a relationship with will be loyal or not. This makes it more probable that we will be the backstabbed by someone we erroneously labeled as falling in the value-added category.

Insofar as our goal is to maximize reward and minimize risk in our lives (and why wouldn't it be?), the ideal relationship portfolio should employ mostly commodity relationships, with no deadweight, and very limited value-added relationships (some are hard to lose, such as the ones you are born with, e.g., parents, siblings, etc.). Now, the same usual suspects are sure to argue about the value of such nonsense as love and meaningful emotional connections that value-added relations provide over commodities, but really, have these notions ever been proven to have any real (as opposed to sentimental, false nostalgic1) value outside of patently misguided poetry or idiotic romantic comedies? I think not. So, morons, please save our collective time by not arguing about loving and losing, because losing is losing is losing. If you're not first, you are last. Dixi.

1 By false nostalgia, I am referring to our irrational and inexplicable collective unconscious pining for things we never experienced ourselves, based on some idealized notion of that experience. This explains why there is so much nostalgia for the good ol' days, which in reality, were probably not all that good.
2 A previous version of this entry did not make the distinction between loyalty practiced generally, and that practiced specifically within the context of interpersonal, one-to-one relationships. See comments below for discussion.


"The fact that we as humans do practice loyalty at all is in itself irrational"

Not true! Come on Hobbes, brush up on your social contract theory.

OK, good point: all exhibitions of loyalty are not intrinsically irrational, and it is in our self-interest to abide by the social contract to prevent the perpetual war of all against all. However, in the case of one-to-one relationships, I maintain that loyalty is irrational, because the cost of disloyalty is generally not that high.

If I screw someone else over, the worst they can do to me is the same, but that is not guaranteed (they may just write it off and forget about it). The other option is to rely on some karmic notions of what goes around, comes around, but despite what JT says, it's not clear whether that actually happens in practice (though I'd like to believe it does, personally).

This may be a hopeless argument to make with the likes of you, but I think what is patently obvious here is that you have never actually experienced love in any meaningful way. What's worse, with the attitude you hold towards others (specifically your lack of trust), it's not certain whether you ever will.

Trying to rationalize love is like trying to reconcile Creationism with evolution; it is fundamentally an apples and oranges discussion that will never lead anywhere. Love is not rational, nor should it be—that's what makes it so beautiful.

Yes, loving/trusting someone is taking a huge risk, because more often than not, you are bound to be betrayed (in one way, or another), but this shouldn't stop you from taking that risk, because the rewards are infinitely greater than the risk you endure. I speak from experience; you cannot, as you obviously have none, my dear boy.

I think what will be really interesting is when you finally do fall in love, how your perspective will necessarily change. You can do all that you want to avoid it, or deny it, or ruin it for yourself, but you cannot will away your humanness, and love is fundamentally human.

From an old man to a young one, give it up: I too used to be like you, until I found my one, and now, I enjoy each day more than the last. When was the last time you could say that? Elementary school?

While I have to agree with your assertion that loyalty is indeed the critical defining characteristic of value-added relationships (ugh, I feel like a tool just typing that phrase), I cannot agree with the conclusion you draw based on it. The risk you incur with more of those sorts of relationships should be counterbalanced by the reward of these relationships, i.e., love or whatever else you want to call it.

So the ideal relationship portfolio would almost entirely be based on the risk profile of each individual. You're just risk-averse.

Katie makes an excellent point about risk-tolerance.

Although, I think for the sake of clarity you should further segregate value added relationships into "familial relationships" and "intimate relationships."

Familial relationships actually aren't too risky... the fuck over factor is fairly low, and the stability familial relationships can provide in times of crisis make them retain their value fairly flexibly.

Also, familiarity may breed contempt, but it can also serve as a safer substitute for divining loyalty than "intimacy." Familiarity allows you to rationally predict future actions based on past performance.

In the end it's "intimate relationships" that are the most risky. And the rewards are debatable.

For instance, you could live the George Clooney lifestyle, having casual and meaningless sex, sustaining your ego based on mass popularity and success, and sustaining your sanity based on familial relationships. Aside from the inherent deadwood that celebrity and wealth demands, that lifestyle seems pretty fantastic.

To Jon's point about separating family and intimate relations, I will say this: that makes a lot of sense if you are a commitment-phobic mid-20s male (à la Rohit)—or George Clooney—but less so if you are someone like Cupid above. I would venture that to him, his one is family.

Katie, you are indeed correct that the balancing of the portfolio will depend quite significantly on an individual's risk profile. However, the point I was getting at was this: generally, taking more risk should involve the prospect of a better return, and with value-added relationships, the extra risk isn't likely to provide additional value.

With regards to separating out the value-added category, I actually had thought about it the first time around, and was torn because of the very reason Katie brings up @ 17:54. While I (as a commitment-phobic mid-20s male) may see a distinction between people I know as friends (or significant others) and my family, I seriously doubt people who've been married 20 years would.

The fundamental confusion here revolves around what we define as intimacy. If we decouple sex from the equation (as we should, since sex is fundamentally a commodity—all value-added relations do not involve sex, nor are all sexual relationships value-added), we are basically left with intimacy defined as how much someone knows about you.

Obviously, the more someone knows about you, the more risk you incur, as they have more potential to fuck you over. As Jon points out, family (perhaps, blood) is not that risky, because this has historically been the strongest tie one can have.

Then, in this case, the most risky people are close friends and significant others, who you share a lot of information with, without the safety of shared blood. The problem, of course, is that you can't trust someone without testing their loyalty, and in testing their loyalty, you could get fucked over—the proverbial chicken-and-the-egg problem.

Really, what would be needed here to properly value relationships would be a mechanism to determine people's past loyalty, a database of sorts that records instances of people being loyal/disloyal. In practice, this tends to be implemented through shared webs of trust (I trust Bob, he vouches for Alice, and so, I give Alice a chance, maybe by sharing some non-public info with her). At best, this is imperfect and prone to falling apart at the weakest link, but I don't know that there's a better answer here.

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