Coase's "Nature of the Firm" on Polyamory

Obviously finding multiple lovers is more work than finding one lover. But, this doesn't explain monogamy. Monogamy is not just "one lover is enough", it is "you are forbidden to take multiple lovers (even if they are easily available)". I don't think the latter is explainable by any sort of efficiency argument, it's just a question of jealousy and/or cultural convention.

And, polyamory doesn't have to be "ephemeral". How long you relationships last and how many relationships you have are a priori independent variables

Another way to look it, most people have many relationships, if platonic relationships are included. The difference between monogamy and polyamory is not how many people you have in your life, it's are you allowed to kiss / have sex with more than one of them.

Weakly positive on this one overall.  I like Coase's theory of the firm, and like making analogies with it to other things.  I don't think this application felt like it quite worked to me, and trying to write up why.

One thing is I think feels off is an incomplete understanding of the Coase paper.  What I think the article gets correct: Coase looks at the difference between markets (economists preferred efficient mechanism) and firms / corporation, and observes that transaction costs (for people these would be contracts, but in general all transaction costs are included) are avoided in firms.  What I think it misses: A primary question explored in the paper is what factors govern the size of firms, and this leads to a mechanistic model that the transaction costs internal to the firm increase with the size of the firm until they reach a limit of the same as transaction costs for the open market (and thus the expected maximum efficient size of a non-monopoly firm).  A second, smaller, missed point I think is that the price mechanism works for transactions outside the firm, but does not for transactions inside the firm.

Given these, I think the metaphor presented here seems incomplete.  It's drawing connections to some of the parts of the paper, but not all of the central parts, and not enough to connect to the central question of size.

I'm confused exactly what parts of the metaphor map to the paper's concept of market and firm.  Is monogamy the market, since it doesn't require high-order coordination?  Is polyamory the market since everyone can be a free-ish actor in an unbundled way?  Is monogamy the firm since it's not using price-like mechanisms to negotiate individual unbundled goods?  Is polyamory the firm since its subject to the transaction cost scaling limit of size?

I do think that it seems to use the 'transaction costs matter' pretty solidly from the paper, so there is that bit.

I don't really have much I can say about the polyamory bits outside of the economics bits.

I'm not sure Coase, here, is a good understanding of specialization at the level you mention in a lot of cases, e.g., specialist programmer in, say, search functions and then one for, say, sort functions rather than the programmer that is a generalist in a particular language. I think Smith's division of labor and extent of the market might be more appropriate here.

It also seems that the one could view the firm very much as a polygamous structure because it includes many people filling similar roles in their relationship to the central contracting party (the firm).

>The answer, of course, is that there are transaction costs to using the market.

This doesn't seem like the whole answer, unless we take a trivially large notion of "transaction".

There's computations that just aren't shaped modularly, or least you don't know yet how to make them modular. E.g. you can't make a good chess playing committee by hiring a Knight expert, a Bishop expert, a Pawn expert, .... E.g. some (most? ~all?) people can't have sex without forming bonds of expected behavior.

This is a fantastic piece of economic reasoning applied to a not-flagged-as-economics puzzle! As the post says, a lot of its content is floating out there on the internet somewhere: the draw here is putting all those scattered insights together under their common theory of the firm and transaction costs framework. In doing so, it explicitly hooked up two parts of my world model that had previously remained separate, because they weren't obviously connected.

A downside of polyamorous relationships not mentioned here is that it removes guarantees of availability, which for many is an important (the most important?) value component of a long-term relationship.

For example, consider a couple X and Y. Let's say X has a bad day at work. X knows that, when they get home, Y will be there to provide emotional support. This provides benefit for X in two ways - X knows that Y will be there for support later even while the bad day is playing out, and X additionally benefits from the actual support from Y once home. Y feels happy to be there for X. End result: everyone is OK.

Or, let's suppose X is sick. They know that, if they need care, Y can be there for them. Yes, Y may have other obligations that need to be pushed aside (e.g. work) but it's generally accepted for Y to take time off work for this kind of reason.

By contrast, in a polyamorous relationship between X, Y and Z, these guarantees no longer hold. X may have a bad day at work, but maybe Z has had an even worse day (or claims to). The result is that Y feels conflicted (but ends up supporting Z over X), and X feels unsupported. End result: 2 out of the 3 people are not OK.

There will always be (at least the risk of) competition for availability in a polyamorous relationship. This is a failure mode not present in the same way in monogamous relationships.

Yes, in polyamorous relationships one can unbundle sexual attraction, intellectual attraction, long-term companionship and childrearing to some degree and thus optimize those individually. But many in a long-term monogamous relationship already feel they are close (enough) to optimal on each of those dimensions already, so would not benefit from unbundling.

I only read the title and the first two paragraphs, which basically tell the story. I love it.

This is exactly the sort of mental move that the framing exercises [? · GW] are trying to teach.

Interesting post, I wish I had seen it initially. 

It makes a point closely related to something I wrote on Ribbonfarm about corporate structure (and polyamory) a few years earlier:

As an aside, a question that initially bothered me about polyamory was: why isn’t polyamory more widespread, especially among people who aren’t religious or traditional? Yes, there are some scale limits. At the very least, there is a tradeoff between the frequency you can see someone and the number of people involved, but I’m sure there are people who would be happy to juggle 5 or 10 partners. Why isn’t it more common? Why don’t adults keep pivoting, and why is polygamy now relatively rare? Traditional marriage was a good tradeoff for social designers who wanted legible structures, but it’s less obvious why it’s useful for the people. Given that, it’s confusing why so many people nowadays think there is a single “correct” family structure.

I’ll leave that as a question for now, because it should answer itself later, once we figure out why companies don’t stay agile as they scale. The parallel to companies, though, is clear; what social structures work, for what purposes, and why?
<snip half of the (very long) post>
(This also finally answers the questions about polyamory; typical structures are comfortable, and the simplest structure that allows for a relationship is a dyad.) 

This post doesn't really say anything more than having more partners is harder; dressed in more complicated language and loosely related economic theory.  Am I missing something?

The answer, of course, is that there are transaction costs to using the market. There's a cost to searching for and finding a trustworthy contractor, which is avoided by keeping me around.

With the internet and fully online on boarding, could be a good way to explain the rise of contracting gig jobs in recent years

There just aren't enough people in the market for specialization. If you only find one person for a specific task and need, you both have that specific need satisfied for each other, but both of you need to seek out others for your other needs. If you go to the extreme of depersonalization and say someone specialize in sex only, like sex workers, they can only serve so many customers. Then you have people who specialize in all the other stuff you've mentioned, intellectual companionship, long term relationship, child rearing. Maybe you can see how the logistics just breaks down based on our basic human conditions, especially the emotional aspect of each profession.

Relationships aren't like jobs where you are paid in money for a specific service. Relationships are about spending time together doing whatever you happen to like to do together. Sometimes you want to have sex, sometimes you want to do watch TV, sometimes you want to talk about stuff. Maybe if we are all robots then people won't feel jealous of others in a polyamorous relationship based on the services they provide. Maybe you can just pay people to do those things for you without having to be in a amorous relationship with them if you have the money to do so.

I really like the analogy in the OP, but no mention of paternity assurance or anxiety about infectious disease in the OP is confusing. The first, and to a lesser extent, the second seem to be some the primary drivers for long term monogamy.

I assert that now that paternity tests are available, and it's theoretically possible for the state to easily care for a new human, monogamy in the form of marital restrictions on women's sexuality, and obligatory paternal investment into children are probably both functionally obsolete, but persist because culture tends to be sticky.

Personally, I found that sexual jealousy is pointless, though I prefer deep longer term bonding instead of short term sexual relationships, someone having STIs (all of which are preventable/treatable) is an indication of irresponsibility that probably means that a relationship with me won't last, and for entirely emotional reasons, and I would attempt to raise/be involved with any child who is genetically mine (but will avoid a child of a partner which is not). Unbundling the other stuff massively improved my life, I have great platonic relationships with people I'm (glad to) not having sex with anymore, and great sexual relationships with people with whom I wouldn't be able to live with and don't share any hobbies/other interests. I recommend it.

I pay my taxes, so child poverty and poor education shouldn't be a thing in my community (even though it is)