The Rule of Social Exchange , put simply, says that to get what you want you have to give what others want.
The Social Exchange Theory has roots in sociology, psychology and economics. It postulates that relationships are about give and take, and that solid relationships entail a balance between what you give and what you take.
The people who have the most to give are the ones who will be able to take the most and are the ones who will be the most popular.
This post will be longish, but brace yourself and try to go through it, it will be worth it.
First of all I’d like to address a common concern. Many people think the Rule of Social Exchange is a dry and harsh way of looking at human relationships. That is usually a knee jerk reaction which I can fully understand: my first reaction is the same.
But when logic kicks in you realize it makes sense. First, giving and taking is not necessarily about material goods. You can give or give back by listening or with a smile, a hug or even making love.
Second, as for most rules, there are many exceptions and sometimes the simple act of giving with no expectations will make the giver feel great.
And third, I believe that what’s really harsh is not to give and take, but to take without ever giving. Or to ask without ever thinking about giving back. Sometimes life is a matter of perceptions :).
Let’s dig deeper and let’s start with what most people find valuable in a social exchange:
Fundamental Social Currencies: What People Want
There can be hundred of thousands of social currencies that people can exchange depending on the level of details we want to group them in.
But I found the most insightful grouping to be that of the visibility levels, which we will call layers.
The qualities people usually first notice in you
- Physical fitness
- Body language / Nonverbal cues
- How you move
Not necessary to exchange information but can be uncovered observing you environment
- Money / Resources
- People around you (the cooler your group the cooler you’ll be perceived)
- Social Proof (people respect you)
- Upbeat, positive personality (make people around you smile)
- Position in society / venue (owner, professor at uni etc.)
To access the deeper layer people need to get to know you
- Great personality
- Makes you feel good when interacting
- Riveting conversations
- Life experiences
- Life achievements
- Mastery (of something)
- Future potential (to acquire any of the above)
Social Currencies: Visibility
I divided the above fundamental qualities in terms of visibility because it’s a key distinction to understand how the layers of social currencies affect social exchanges:
It can End at External Layers: In some situations external layers are all that is needed. Some people won’t need deeper qualities and the gloss of the external shell will immediately make you a high value giver for them. This is why beautiful people sometimes need to fight the idea that they only achieved success because of their external qualities.
People high in external value tend to resent the people who only want them for their external qualities because most of us want to be appreciated for our deeper layers.
Example: dating is an obvious one, especially if you’re a woman. External currencies are especially attractive to lower status men who aren’t used to beauty -the cliche’ is the migrant minority for whom the trophy wife is a symbol of “having made it”-.
Noisy clubs are also an example of a situation where external layers are more important, partly because the loud environment makes it harder to reach and assess some of the deeper levels.
External Layers are Pass Through for Deeper Ones: Some people might require deeper values to enter in any meaningful interaction or relationship with them. But they will not be interested in getting to know your deeper qualities if you don’t reach at least a minimum threshold of external qualities. External qualities are then what will get your foot in the door. Have great external qualities and more and more people will be interested in your deeper layers.
Example: how willing are you to go for a beer with a smelly, hunchback homeless in tattered clothes? That homeless is the extreme example of someone with highly negative social external currency: just by being together he takes social value from you (note: a few people can transcend that but we’re talking 0.1% here).
Deeper Layers Make Deeper Bonds: Deeper layers tend to make for deeper and more long lasting relationships.
Layer Mixup: Importantly, all layers always influence each other all the times, and more than most people would think or realize.
Example: Beautiful people are perceived as smarter, people in authority positions are perceived as taller (Winning Body Language), and great personalities who make us feel good are perceived as more attractive.
Currency Marketability: What People Want Most
A Mastercard with a million USD in the bank lets you buy anything anywhere. A million cash also gives you good options. The equivalent value in Ukrainian Hryvnia gets complicated: few people are interested in that currency. A million USD worth in, say, Palladium, is even more impractical: how are you going to convert it?
Notice all currency manifestations have the same nominal value, they all take the same effort to acquire, but they heavily differ on how readily accepted they are.
Social currencies are similar, and it’s also connected to layers.
The external layers tend to be appreciated by most everyone, most everywhere and tend to be more uniformly appreciated. Deeper levels are more useful for deeper and long lasting mutually beneficial relationships, but can be more situational and people specific.
Life experiences in travels for example make your insight and stories hot currency to people who love travels and adventures or dream of something similar one day.
But people who are not interested in ever leaving their city? Not so much. There it can actually highlight how the two of you have little in common.
Deeper Layer Marketability: there are many deeper layers though that tend to be highly marketable currencies. Conversation skills and social skills for example are very attractive social currencies for everyone.
On the other end of the spectrum, if you invest most of your time developing a vast knowledge of, say, entomology and you become a research professor in that field that will not make you very interesting outside your classrooms -entomology is the study of insects-.
So you already see the first corollary of getting what you want with the social exchange rule: develop currency that most people want.
The Currency of Mastery: the Broad Appeal
However, being really good at something, anything, will likely make you more interesting across the board, even to people who are not particularly interested in your area of specialization -including entomology possibly, yes :D-.
You’re a developer? Boring to most anyone. But if you’re a wiz of coding, popular hacker and pioneering a whole new language, now that’s interesting.
It’s because high level of achievements say great things about you. For example, it says that you got grit and determination, that you can focus, and that you likely found your passion. In a world of undecided people who don’t know what they want that makes you stand out.
And of course, standing above the mediocre masses is often an attractive quality by itself.
Currency Value: a Situational Overview
There’s also a situational element in the value we possess.
Matteo can be an idiot most people don’t wanna speak with, but when he steps in his classroom many students crave his approval.
Or you be an idiot too, but if you bring a date to a club where you skip the line, get served quicker and everyone says hi to you, you look like you have loads of social value and being with you in that environment will feel to your date like they are getting a great deal.
That being said, it’s not all relative and the ability to create positive outcomes is even stronger currency than having positive situations.
For example if you have people treating you rudely but you sidestep it like a champion, you will look even better than if people treated you with respect.
And if you enter into a room where nobody knows and you make friends on the fly, that will again show even stronger qualities.
Also, the “great night at the nightclub” where everyone loved you can easily be forgotten the weeks after if that’s the only thing you got going on for you.
Currency Utility: a Situational & Subjectivity Overview
There’s also always a situational element in currencies. Nobody would exchange a million in cash for a hunting rifle these days. But if society were to collapse and we’d get thrown back to stone age, then a million in cash is useless scrap paper that won’t feed you for a second, while a hunting rifle becomes priceless.
Social currency is the same.
Any type of skill is a currency and how people will value is highly dependent on the situation, the person and the specific need in the specific time.
So for example if you’re buying a house and someone introduces you to a realtor who can share tips and knowledge, that realtor is hot currency. But after you bought a house and don’t have a cent left? That realtor better have something else going on for him.
In dating, younger girls are less into “boyfriend qualities”, but past the 25-26 YO mark your provider traits matter more.
Subjectivity also plays a role.
There are some standards of beauty and style, but there is also a level of subjectivity.
However, again, that is not to say that everything is relative. As we’ve already seen, some social currencies are better investments than others as they simply posses broader appeal and stronger adaptability.
High Value People: Who are They & What They Want
People with lots of value tend to have many of the qualities listed above.
And high value people have, of course, lots of value to give. But guess what? They prefer giving to other high value people. The Rule of Social Exchange says that people who have a lot to give also demand a lot back. And if you’re a high value person, it doesn’t make sense for you to enter into an exchange with someone who doesn’t have anything to give back.
The Rule of Social Exchange is the reason why people tend to pair up with mates who are similar in socio-economical background, education and even level of beauty.
Also high value people often experience lower value people trying to piggyback on their success, their status or their beauty. It gets tiresome and people with a lot to give tend to be wary and heavily guarded against people who seem to be just out to take.
The Burden of High Value: The Psychology
Imagine this situation:
Sara is the head recruiter of a major corporation. She’s smart, cute and takes care of herself. She has lots of value, particularly among those looking for employment or a career switch -or a mate-.
Sara has experienced lots of people pleading for help and then sending poor CVs with terrible cover letters that wasted hours of her time, including some friend of friends who put her in the difficult situation of having to refuse them. Some colleagues are also out swinging for her value: it’s almost routine that at the company’s parties someone gets drunk and sloppily tries to get it on with her. Last time one of her reports also awkwardly confessed his love and now they are both pretending it never happened.
She tries to fight it, but she can’t resist feeling a bit irritated for being a target to many simply because of her position or for her looks. She’d wish people could just see her for who she really is.
She particularly feels a pang of resentment when she sees the eyes of people brightening up when she mentions her job. She feels they only care about what she can do for them, and not about who she really is.
That’s how many high value people often feel in the presence of the many value takers trying to get something from them. That is, trying to get something from her without giving anything back.
Value Takers: Who Are They?
Most people tend to cluster around the middle and the average. Such as, most people are not particularly rich in social value to give and neither are they major social value takers.
However, it’s been my experience that the most consistent ones to fall afoul of the rules of social exchange show the following traits:
- Social Climbers: they see people only for what they can do for them -the ones brightening up when Sara mentions her job-
- Nervous & Insecure: states are contagious, nervous people make us feel nervous and we don’t appreciate that
- Egocentric: we all are the center of our own worlds and resent the “me, me, me” people who claim that spot all for themselves
- Braggarts: we like people who make us feel important, not those out to prove they are important
- Chatterboxes: we like to be heard, we don’t like to listening to nonstop blabber
- Teachers: people who “teach” without first making sure we want to learn. It’s annoying because the teacher position assumes superiority (and hence our inferiority), and that’s a role that should be given, not taken.
- Socially Oblivious: have no idea of how social dynamics work (one example below)
Shy, loners and socially awkward. This deserves a special mention. While we could argue that some of the above are personality flaws, being overly shy or socially awkward is more about skills. Shy and socially awkward people can otherwise be amazing human beings.
But the lack of social skills still makes them a social liability.
I have met many great human beings whom I would have loved to bring with me somewhere. But then I would think: he/she is going to stand all by himself and will only talk to me. The socially awkward and overly shy indeed are often overly dependent on you to have a good time and make you feel like a babysitter.
It might sound harsh to say, but it doesn’t make it any less true: overly shy and socially awkward people are a bigger social liability than any of the above category: not only they will make you look bad for having uncool friends, but they will be a drag on your time and freedom.
Value Takers: It’s All About Timing
The most obvious instances of value taking happens at the beginning of a relationship.
When a relationship is still fresh, there’s no past history, no favors done and taken and no goodwill. Also, the balance is exactly at 0. And the Rule of Social Exchange tells us that when people are getting to know each other they are unconsciously weighing each other up in terms of possible utility.
Conversely, it’s often acceptable to ask and take when you have a solid relationship already in place because you’ve likely given already a lot and you will likely give more in the future, so there’s more leeway.
Exception: a high infatuation at the beginning of a romantic relationship can be the exception that confirms the rule as people will blindly give without looking at the scores (Rusbult).
Typical Value Taker Sentences:
As we’ve just seen any request at the early beginning of a relationship can easily tip the balance between givers, takers, and the worst moochers of them all :).
Here are some examples of early deal breakers:
“lemme know when you’re having some cool party (so I can tag along)”
“are you doing something tonight (so I can tag along)”
“can I pick your brain over coffe sometimes (you give, I take)”
“can you help me with… “
“please, please, please… “
You will recognize that all these messages are requests that don’t give anything back.
Sometimes just a little fix could make them more balanced. For example the guy who wants to pick your brain could invite you to lunch. Lunch is a small token of course, but more than the monetary value it shows that the inviter gets it and shows respect and consideration for your time and knowledge.
Let’s see now how you can use the Rule of Social Exchange to get what you want.
1. Get What You Want With The Rule of Social Exchange
By now you should know the answer to get what you want is very simple: develop lots of currencies that people want. Start from the external ones as they are the ones that will open the most doors. That’s your 80% when it comes to the first moments of the interaction and when it comes to initiating new interactions.
Also a reminder we didn’t previously discuss: there are qualities that give social value and other qualities that give little value but take away lots of value when lacking. Remember the homeless example? He has many of the characteristics that take value away.
Hygiene for example is an expected baseline quality, and lack of it will take you into negative territory. Fresh or neutral breath and non smelling are also example of baseline traits you have to possess.
2. Get What You Want From X: Targeted Currency
As we’ve already seen the Rule of Social Exchange postulates that some some currencies will mean a lot to some people and little to someone else.
So here’s the second rule to getting what you want from specific people: give them what they specifically value.
Date an Artist: do you like artistic folks, do you want an artist as a wife/husband? Here’s what you do: we like people who share our same currencies, so start drawing, acting and attending art exhibitions. You’ll pick the lingo, the common topics and you’ll be able to give the comfort of a shared culture and passion. Learn history of art better than most and give her free classes -women dream to sleep with their professors :)-.
Learn from Top Business Masters: you want to attract a business mentor? Don’t write you seek employment from them, that’s what everybody does. Here’s what you will do instead: give him more value (that matters to him) than anyone else does. Tell him you’ll work for free for 3 months, and if you’re great and only if you’re great he can start paying you, otherwise you’ll be happy for having learned from him and he got free labor (and notice that you give free labor but also, importantly, make him feel special).
Now he’s going to listen.
Targeted Social Currency Trumps General One
Notice that in some instances the targeted social currency, the qualities that a specific group or person appreciates, can be more powerful than the general ones.
For example, a positive and upbeat personality is what most people like. But if you want to enter a circle of emo and Gothic subcultures your smiles and positive attitude might be low in demand currency there (like, what are you on dude, life sucks, you better cut yourself if you want some respect around here :).
Being a social chameleon indeed is all about understanding what the people around you appreciate and playing up those qualities while muting some others. A breadth of experience will help you develop lots of reference points so that you will always have something to offer to that specific person.
3. How To Get What You Want: WIIFT Mindset
So, by now it should be clear that the right mindset to get what you want is to provide what they want.
But how do you show you got what you want? How do you show your social currency, your value?
How Do You Show Your Value?
Knowing how to behave and how to show value in the specific situations you’re in is the pinnacle of social calibration. Which, incidentally, is one of the main traits that will make you a (wo)man of high value.
The Power Moves is all about those specifics, but this article is to give you the overview and not the specifics.
So here’s the overview:
Super Obvious: For When You’re the Asker
There are situations where you want to be as obvious as you can and front-load your value as quickly as you can and LEAD with what’s in it for them.
In these situations want make it as easy as possible for them to say yes and give you a chance, and you play by their rules because you don’t have (yet) the power and social pull to demand something back.
The characteristics of these situations are:
1. Obvious power imbalances: Power imbalances can be so obvious sometimes that there’s no point in trying to pretend they should be interested in you and that’s why you communicate first and foremost what’s in it for them
2. Not-in person: When not in person people can’t see or get a sense of your other qualities, so you have to go right to the point of what you can do for them
3. Time starved: When you have little time you can’t let them slowly discover your qualities, so you gotta be more obvious.
Here are some examples:
- Swipe-based online dating
- Sales cold reach out
- Elevator pitches
- Emailing for a job
- Asking for funding
Obvious: Logical Interactions
Logic based transactions are transactions where there is no social stigma in being upfront about what you want and what you can give. You are looking for something, they are looking for something and you have to prove to each other you have what it takes to enter into a mutually convenient transaction.
Here you want to be obvious about what you can give and at the same time be obvious and direct about what you want.
Some examples are:
- Some type of sales
- Arranged Marriages
- Interviewing for jobs
Hinting: Social Interactions
In social interactions you want to be more indirect. You want to show attractive external qualities and drop hints about the less visible parts of your value. Let them dig out for more as you slowly reveal more and more about your awesome personality.
“Oh my god” they’ll be thinking, “how many other cool things is this guy hiding“.
Keep The Mystery: Dating
Here the script is inverted. In dating the one who’s doing the selling is communicating he’s lower in the pecking order, and people -especially women- are not very attracted to those who are beneath them.
So ideally you want to show your external qualities first and foremost, but without selling yourself on the deeper ones. Then you build a connection by being interested in them. Ideally you will get physical on chemistry attraction even before she finds out about all your other deeper qualities.
Examples: Showing Value with the Rule of Social Exchange
I will show you a couple of examples.
How to Show Value: Two Guys Looking For a Room
I live in Berlin, where finding a good place to stay is extremely challenging. I ask for a relatively high rent and yet many people always reach out (to the left are the messages of people who wrote on Facebook only).
This is the type one, super obvious situation: there’s a clear power imbalance because they ask and I am the chooser. Plus it’s not in person and there is high demand.
This is when you have to front-load your value as much as you can.
Let’s see the difference between those who get it and those who are oblivious to the Rule of Social Exchance.
The shirtless selfie in front of the mirror is a great example. I wrote my ad in English, and he writes me in the local language, which is the first bad sign: you have to adapt to the chooser when you’re the asker.
Second, he doesn’t make it easy for me to proceed. What am I supposed to ask him a thousand questions now about when he’s free, what he does and if he can pay? Not going to waste my time on that dude.
And of course he makes the crucial mistake of not leading with what’s in it for me.
“Ich brauche das” literally means “I need it”.
These are the same people who complain that nobody replies them -and you really gotta wonder why… -.
Compare it to the two people who get it, which are those I invited over to get to know them.
They quickly show their interesting personalities (social currency), lay out a clear what’s in it for me (good job and ability to pay, traveling most of the time, no mess in the kitchen) and make it easy for me to say yes (propose their availability). Now, even if I didn’t particularly care about their benefits, it shows that these are people who get it.
And we all like people who get it.
How To Recognize Your Value in Social Exchanges
Since social value can be fairly subjective it’s a fair question to ask how we recognize the value we have for some specific person.
And the answer is that you recognize the value of your currency based on actions.
- Does the girl come out and meet you? Then she appreciates your currency
- Is the guy coming and meeting you for drinks? He digs your value
- Are they hiring you? Then they appreciate what you can give
There are also middle ways. Here for example I thought the guy asking me for coffe was a cool guy. But I don’t see any benefit in randomly drinking coffe -which I don’t even drink- without any defined objective.
In these cases, you will often see your invites being not rejected, but redirected.
For example, say no to a 1:1 meeting, but you can join them when they attend some public event.
Exceptions: There are notable exceptions to the “judge by the actions” rule.
For example someone might feel like they have so little to offer compared to your huge value that they will be too nervous to meet you or interact with you. They might even flat out reject you sometimes. These are the girls who say “he is too good for me” or the guys looking for the “girl next door”.
Much to say here, but it’s already a long enough article :). So let’s wrap it up and circle back to these other scenarios later on.
The Rule of Social Exchange: Summary
The Rule of Social Exchange gives you a very useful mindset with which to approach social interactions.
Granted, social dynamics do not always bend to the most rational and economical aspects of the Social Exchange Theory. Indeed, reading social dynamics as cold, rational exchanges is the best way NOT to develop deeper, more human relationships (read more on social norms VS market norms).
But discounting the whole paradigm would be a mistake. The Social Exchange Theory provides indeed a strong framework to explain many social intricacies which would otherwise be difficult to grasp.
I would say that two major take aways from the Social Exchange Theory are:
- Focus on Giving: Make this your N.1 Rule of Social Exchange
- Assess Takers and Givers: Are the people around you taking or giving? Cut out the takers, give more to the givers.