Bain and the Character of Capitalism

Posted on January 13, 2012 by

Perhaps the problem with Bain Capital is in how they played the game. Under capitalism some people will be fired and profits will be made in whatever way (legally, if not ethically) possible. One could imagine an apologetic capitalist who points out that he had to cut off the patient’s foot to save the rest of the body or who laments that the patient died but her organs were harvested to save the life of another. This would be a show of character, a recognition that markets are places where people enact their values and show to others what their core beliefs and convictions are.

Those who criticize Romney and Bain Capital would do well not to mix their metaphors. If the brazen capitalist duped his patient, his character is in question. Imagine a patient who took her medicine from Bain Capital, expecting to feel better in time; instead, she died because Bain intentionally killed her so that her organs could be harvested and sold.

Right now the criticisms of Bain Capital mix the metaphors of the patient who could have recovered with the image of the patient who would have died anyway. First, identify the patients who deserved a longer life; those given assurances by their assumed savior that they would, if possible, be saved. Then declare a bane on the house of Romney.

Posted in Bain Capital, business ethics, election 2012, morality of capitalism, Romney | Tagged , , , , | Leave a comment

Verizon, It’s Not How Much But How

Posted on January 1, 2012 by

It’s only $2. Had monthly phone or data rates inched up on all plans by less than a dollar, who would have noticed? These are hard times and consumers are accustomed to paying a little more, within reason. The problem here is that Verizon focused too much on the mathematics and less on the meanings of the math.

If you ask consumers whether Verizon should charge more for specific categories of service, the answer will depend on the service you’re talking about. Sometimes consumers will appear to be penny wise but pound foolish as they quibble about a dollar here or there, but these consumers are acting appropriately given their understandings of what’s right and what’s wrong.

Economic sociologist Viviana Zelizer shows just how fraught spending categories can be in The Social Meaning of Money. Money earned by a child who delivers newspapers or who mows the neighbors’ lawns gets its own nickname (category): paper money, lawn mowing money. The child may be encouraged to use those funds for school related expenses or to buy toys, but those earnings are unlikely to be applied to the rent or the car note. Money that comes from a lottery win gets spent differently from money that comes from an adult’s salary. And what the right price is also depends on negotiation and group understandings. In other words, what we think we should do with our money depends on where it came from, who earned it, and the purpose to which it will be put. Paying more to pay a bill just feels wrong. It stirs up a collective memory of exploitation and usury. And these collective understandings of what the charges mean compel consumers to act to restore their sense of justice.

Markets are not amoral places; they are moral communities with situation-specific norms and principles that are keenly felt when breached. As Verizon comes to understand the morality of markets, they will find that they can charge more, but first they have to get their categories right.

 

Posted in convenience fee, moral community, social meaning of money, spending category, usury, Verizon, Viviana Zelizer | 2 Comments

The Power of Zealous Consumers

Posted on December 30, 2011 by

There were gunshots in the parking lot. Store doors ripped off their hinges. Men battling for the last pair of Air Jordans at or near their size. Had they lost their minds? Had the shoes attracted a “bad”group of shoppers who simply didn’t know how to act (appropriately)? Or had these shoppers simply been carried away (and along) by emotional energy?

We should care about the emotional energy manifested by zealous shoppers because this energy feeds into subsequent transactions. Our shopping episodes are linked, so a high intensity shopping moment makes future shopping engagements more charged than they would have been otherwise. As these emotional charges increase, confidence and future consumption go up. In religion, the zealots remind the community of believers who they are as believers. In the market, zealous shoppers spur middle-of-the-road consumers to pay attention to and participate in their brand communities. Though badly behaved, the zealots come as harbingers of stronger consumer confidence and brighter market days.

Posted in Air Jordans, consumer confidence, emotional energy | 1 Comment