The Economics of Dignity: Why Respect Is a Market Advantage

You may hear economics explained using terms such as market price, supply and demand, and effective choice. But, between the terms of economics and their quantifiable measurements is another side of economics: dignity. While many may see dignity as merely a principle to consider in social situations involving service or helping others, dignity is also a principle of economics because while individuals may feel respected and valued for their presence within systems, others may cause them to shrink away. It is simple: disrespect = market disadvantage.

"Dignity" is referred to as “the sense of worth that individuals feel they possess,” or at least should possess. It is "a deep social and emotional need" to feel this self-respect or self-worth. This notion of dignity is often discussed or referred to as a principle or virtue but affects economic action directly. "A person's attendance at an appointment, or their return to a business or to recommend its service to others or to mind its instructions," is influenced by "feelings of self-respect" or self-worth as much as by its utility or benefit.

In most cases, especially where speed or efficiency is a factor, dignity is ignored or dismissed entirely because organizations seem to assume individuals will put up with being treated like they’re stuck inside a system if the thing at its center is effective at what it does. This just isn’t supported by anthropology or insights into human behavior because humans do not just assess effectiveness, they also assess feelings associated with use.

This is especially apparent in social services and public venues. A setting featuring wait lines or very visible interactions may inadvertently subject its users to embarrassment. A system requiring its users to make information openly visible invites feelings of shame. Details as mundane as whether one is instructed clearly or whether one sees apparent patience on the part of those offering the service influence whether individuals use or avoid such a system.

However, dignity also affects others beyond marginalized communities. Customer-facing enterprises of all economic means experience success if respect is established. Those enterprises which display legitimate politeness generate increased satisfaction and customer loyalty. Those restaurants whose waitstaff recognize diners increase customer revisitation. Those doctor's offices whose patients' concerns are listened to hear better to prescribed treatment. Those banks whose clientele is served without paternalism demonstrate trustworthiness even for intricate products or services.

These behaviors illustrate another principle: individuals favor systems that validate their worth. The value of dignity is emotional security because emotional security reduces the cost of participation. When business organizations remove barriers associated with dignity, they also reduce economic barriers.

One of the reasons why dignity is considered so important is because it is associated with culture. What is considered to be treated with respect is different from one culture to another. While being direct may indicate being professional in one culture, it may indicate being aggressive in another culture. While respecting privacy may be crucial to one culture, being social and transparent may take precedence in another culture. What constitutes eye contact, tone of voice, respect for privacy, formality, or hospitality also differs.

For instance, take the matter of anonymity. In Western settings, anonymity is often rather irrelevant to normal social interactions. Users are unwilling to share information anonymously or fill out surveys anonymously in public areas. In cultures where being visible to all as having a need is stigmatized to some extent, anonymity is crucial for its users. This could undermine usability because they have to enter sensitive information into a system while others are around to hear it. This is not illogical user behavior but culturally informed user behavior. This affects markets too.

At the same time, the aesthetic quality of such spaces can reinforce or deny dignity. Environmental spaces convey symbolic meanings: warmth, cleanliness, status, accessibility. When wait spaces include poor lighting, confusing signs, or hasty service staff indicate to the user his or her presence is unwanted. When spaces are organized and clearly signed, greeting users warmly while being mindful of user privacy convey to users the system values them as human beings, not just units to be processed.

Another aspect of dignity is to do with the detail of interaction. A system of conduct requiring repeatedly justifying itself to its users, excusing itself for not meeting their requirements or justifying their right to use its services is treating its users as objects of suspicion rather than as human actors to whom one ought to have regard. While in one system the emotional cost is high, and in other systems it is low.

The role of psychological safety is also applicable to this point. When individuals enjoy feelings of psychological safety, they become more receptive to seeking questions or admitting confusion and becoming involved in processes. When individuals lack feelings of safety, they will minimize their engagement and avoid any interaction that may endanger their feelings of self-worth. Before one can have feelings of psychological safety, one should have feelings of respect.

And even within completely commercial areas, dignity makes its presence felt. The upscale service industries tend to operate on measures of ritual respect–customized greeting and gestures of respect–not just because customers want to indulge in their luxury but also because through this gesture of respect they establish status themselves. At the same time, cost-effective enterprises which do not pay heed to dignity may cut costs but will end up losing customers as they themselves establish environments where customers feel respected.

In labor markets, dignity is as significant to workers' performance as monetary rewards are. Workers whose dignity is respected by their managers can be said to have high performance levels because they will be committed to their work, innovative, and reliable. Organizations or environments where workers' dignity is belittled may result in workers being disgruntled because their productivity will be impacted negatively. Theoretical approaches to workers that seem to portray workers as calculators forget that workers' key decisions are influenced by dignity.

The economics of dignity also have social components to consider here. Those societies that enshrine dignity through just laws and transparent processes experience higher civic engagement levels and trust levels too. Those societies that undermine dignity through corruption and random processes experience disengagement and lack of trust too. This kind of dignity thereby impacts social capital, which further affects economic development because social capital directly impacts economics too.

At its roots, dignity is never a soft or intangible thing. It is always a part of human decision-making systems. When systems support dignity, people engage with those systems openly. When systems undermine dignity, people engage with those systems cautiously or avoid them altogether. This is why respect becomes such a powerful differentiator: it lowers emotional barriers to entry and raises engagement levels and relationships.

Marrakech, Morocco

Across any market, whether commercial, public, or social, systems that recognize dignity have the edge over markets that do not. This is not a result of feelings but of anthropology. Humans want to operate in spaces that recognize them, that notice them. When markets recognize this truth, they gain not only moral legitimacy but also operational effectiveness. Ultimately, dignity is both a right of humans and a strategy for markets.