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Intimate Debts

posted by Viviana Zelizer

I am delighted to share my thoughts with the Credit Slips blog community. While I do not specialize in issues of credit and bankruptcy, I have been working on the moral and personal side of economic processes over my entire career. I began by studying the spread of life insurance. How, I asked, do organizations such as life insurance companies go about setting monetary prices for human life? I then moved on to the changing valuation of children's lives, documenting a dramatic transformation in children's economic and sentimental value in the US roughly between 1880 and 1930. How, I now asked, did this change in the economic valuation of children happen, and what were its consequences? For my next project, I left children for money. After studying children's allowances, I became intrigued by how we go about differentiating among different kinds of monies. Looking at families, welfare, gifts and other settings, I found people creating and managing different kinds of monies for different sets of social relations.

More recently, my book The Purchase of Intimacy, looks at the intersection of economic activity and intimate personal relations, both in everyday practices and in the law. How, I ask, do people manage without either botching the economic consequences or damaging the relations? Doesn't the mixture of intimacy and economic activity cripple both of them? After all, don't we know that cronyism corrupts business and money destroys love affairs as well as friendships? If you value your friendships, we are routinely warned, don't spoil it by loaning money to your friends. If you care about workplace efficiency, we hear, restrict workers' intimate associations. If workers get too chummy on the job, too intimate, they will spend more time with each other than with their work. So, people warn, mix intimate relations with economic activity at your own peril.

They are wrong, at least most of the time. My book, The Purchase of Intimacy, shows that the world does not divide into two segregated spheres of intimacy and economics. All of us routinely mix our most intimate relations with economic activities. In fact, we owe economic support to our children, our spouses, our parents, and often our friends. No loving household would last long without regular inputs of economic effort. People who have intimate relations with each other, who care for each other, regularly pool their money, make joint purchases, invest shared funds, organize inheritances, and negotiate divisions of household work.

Let me be more specific: couples buy engagement rings; parents pay nannies or child care workers to attend to their children; adoptive parents pay lawyers and agencies money to obtain babies, divorced spouses pay or receive alimony and child support payments, parents give their children allowances, subsidize their college educations, help them with their weddings and their first mortgage, and offer them substantial bequests in their wills. Friends and relatives send gifts of money as wedding presents, and friends loan each other money. Immigrants dispatch hard-earned money as remittances to kinfolk back home. In all these cases, people are making economic contributions to intimate relations.

The separation of spheres is a myth. Of course, people sometimes cheat, hurt, disappoint, and fail their intimate economic partners. Exploitation and economic irresponsibility often do occur in intimate relations. But it's not a necessary or even likely outcome of mixing intimacy with economic activity.

So why do we worry so much about the mingling? Where do these worries come from? Our concerns draw from two complementary but partly independent misunderstandings. We can call them "separate spheres" and "hostile worlds." Separate spheres notions identify two distinct domains of social life that operate according to different principles: rationality, efficiency, and planning on one side, solidarity, sentiment, and impulse on the other. Hostile worlds beliefs say that when such spheres come into contact they contaminate each other. Their mixing, goes the argument, corrupts both; invasion of the sentimental world by instrumental rationality desiccates that world, while introduction of sentiment into rational transactions produces inefficiency, favoritism, and cronyism. In this account, a sharp divide exists -- and should exist -- between intimate relations and economic transactions, since any contact between the two spheres contaminates both of them.

Separate spheres and hostile worlds ideas appear in social science, where generations of analysts have deplored what they saw as the erosion of authenticity and intimacy by an encroaching market. Outside of social science, the same themes frequently resound in moral discourse, when people explain bad behavior as a consequence of greed and call money the root of all evil. In American law, the doctrines of separate spheres and hostile worlds show up in new versions. Courts, for example, regularly rule that economic transactions between spouses must count as free gifts rather than quid pro quo exchanges - at least until the moment of divorce. But practices based on separate spheres and hostile worlds figure in everyday life as well. Sexually intimate couples, for example, ordinarily take great care to signal (both to others and to each other) that they are not simply exchanging sex for economic rewards.

Social scientists who are rightly suspicious of those widely held ideas have often replied with a "Markets Everywhere" argument. When you look closely enough, they argue, you see that intimate economies operate pretty much the same as corporations and retail stores, calculating costs and benefits.

My book, Purchase of Intimacy, takes up these questions in a variety of settings: looking at couples, relations of care, and household economies. It examines practices and also looks at what happens when things go wrong and people go to court. For example, when engagements sour and a jilted fiancée takes her ex to court demanding the return of expensive gifts, what do courts say? Or when a child takes care of her ill father for years, is she legally entitled to a greater share of the inheritance than her brother that seldom visited? Or, if parents help out their married daughter with her first mortgage, and later she divorces: was that money a gift or a loan? In divorce cases, should courts consider the economic value of a wife's household work in determining the settlement?

These specific questions suggest a larger set of questions for specialists in debt and bankruptcy. Here are a few:

1. How do courts decide whether a transfer of assets is a gift, a loan, quid-pro-quo compensation or fulfillment of a natural obligation?
2. How do ordinary Americans make the same distinctions?
3. Is there something distinctively American about those distinctions or are they common across the world?
4. Does the kinds of asset - for example, cash, real estate, jewelry, or personal services - make a difference in those decisions?
5. Does extensive debt or personal bankruptcy make a difference?
6. Under what conditions and how do loans undermine personal relations?

Later postings will touch on some of these issues.

If you want some background, you may want to look at one or another of my books:
Morals and Markets: The Development of Life Insurance in the United States, (first published 1979).
Pricing the Priceless Child: The Changing Social Value of Children (1985).
The Social Meaning of Money(1994).
The Purchase of Intimacy(2005).


Hi Dr. Zelizer -
I am very pleased to learn of your work. Both "The Social Meaning of Money" and "The Purchase of Intimacy" imply research and insight in areas that have interested me for some time. I am looking forward to reading them.

As the Chapter 13 trustee for Maine since 1981, I have observed the acute emotional and social pain of folks going through bankruptcy. Do you know of any work on the psychology of debt? Denial, avoidance, depression, and guilt are interwoven with nearly all debtors' pre-and post-bankruptcy experience. Which are the chickens and which are the eggs is not clear to me.

As you know Chapter 13 runs for a minimum of three and a maximum of five years. I am trying to figure out the predictors for those debtors who are more likely to fulfill their Chapter 13 plans and those that will trend toward "failure." ("Failure" is a complex concept in reorganization bankruptcy; we can discuss it further if you like, but there is neither time nor space to do so here.)

I am eagerly awaiting your further postings.


Peter C. Fessenden
Chapter 13 Trustee - District of Maine

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