Is Interest-Based Mediation Derived from a Misunderstanding?

Regular readers of this blog know that I practise mediation using the transformative model.  (For more information, please see the tag, transformative mediation.)

The most prominent and dominant approach to mediation is, however, the interest-based model, derived from the concept of homo economicus, that posits that a human being “acts to obtain the highest possible well-being for himself given available information about opportunities and other constraints”.   This concept in turn was developed from ideas found in Adam Smith’s, Wealth of Nations, from which comes this celebrated passage:

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.”

Amartya Sen, the Nobel Prize laureate in economics in 1998, believes that by and large Smith’s ideas in Wealth of Nations have been impoverished by a neglect of the framework he developed in his earlier work, The Theory of Moral SentimentsThis framework was drawn on substantially in Wealth of Nations.

“Beyond self-love, Smith discussed how the functioning of the economic system in general, and of the market in particular, can be helped enormously by other motives. There are two distinct propositions here. The first is one of epistemology, concerning the fact that human beings are not guided only by self-gain or even prudence. The second is one of practical reason, involving the claim that there are good ethical and practical grounds for encouraging motives other than self-interest, whether in the crude form of self-love or in the refined form of prudence. Indeed, Smith argues that while “prudence” was “of all virtues that which is most helpful to the individual”, “humanity, justice, generosity, and public spirit, are the qualities most useful to others”. These are two distinct points, and, unfortunately, a big part of modern economics gets both of them wrong in interpreting Smith.”

In other words, self-interest is not a sufficient lens from which to understand economic systems; there’s more than self-love to motivate human beings.  As well, the germ of the relational ideology of human nature can be seen in the distinction between “most helpful to the individual” and “most useful to others”.

If Sen is right in his view of Smith and implicitly the model of homo economicus, the theoretical and ideological foundations of interest-based mediation may be due for re-thinking.  If people in conflict have motives that are not exclusively related to self-interest, interest-based mediation outcomes may not be sustainable or, as important, comprehensive enough to comprise all of the things that really matter to the parties.