The Magic Circle
Sacred, profane, and the essence of community
Is communal living feasible among people who make extremely different amounts of money?
This question was posed during a session on coliving hosted by Dialog.org, a group that organizes off-the-record roundtables for industry leaders.
It got me thinking.
The Magic Circle
In his 1938 Homo Ludens, Dutch historian Johan Huizinga argues that play is a necessary component of generating culture. “In the absence of the play-spirit, ” he writes, “civilization is impossible.” In play, the substance of civilization is formed.
For play to be possible, humans must create a “magic circle” — an intersubjective space in which the “real rules” of reality are suspended, and the “game rules” are all that matter. Within this magic circle, players are able to experience profound states of flow as they engage deeply with the game’s challenges — whether kicking a ball down the soccer pitch or competing in the virtual stadiums of contemporary Esports.
Huizinga, along with game designer Raph Koster and neuroscientist Kelly Clancy, argue that play is an essential part of personal development. Through play, humans are able to experiment with new strategies and behaviors, and develop important social skills, without the real-world consequences of failure, such as physical harm or social embarrassment. If we cannot play, society suffers.
The integrity of the magic circle is paramount. If the boundaries of the circle are broken — a phenomenon often understood as “cheating” — then the social contract underlying the game is broken as well.1
Critically, one thing that must be kept out of the magic circle is material interest (i.e. money). When money enters the magic circle, the game collapses, as every game element is re-interpreted through the lens of financial value. As Piers Kicks observes in his discussion of the history and future of gaming, once monetary value is assigned to an in-game item, it becomes difficult to assign to that item any other value.2
This does not mean that there cannot be financial interest in the outcomes of games — people gamble on sports all the time. The key distinction is that these financial interests are kept strictly outside of the magic circle.3 It is perfectly fine for an athlete to know that money is on the line, as long as the outcome is determined only by what exists within the magic circle — the player’s skill in the game.
The boundaries of a magic circle do not enforce themselves. The bigger and more consequential a game becomes, the more pressure is put on the boundaries of the circle — as evidenced by the prevalence of cheating in sports.
Maintaining the integrity of magic circles is a major social design challenge.
The Sacred and the Profane
In his seminal 1957 The Sacred and the Profane, Romanian historian Mircea Eliade discusses the nature of religious experience. For the religious person, Eliade argues, the sacred becomes as a “fixed point,” a central frame of reference, around which their lived experience revolves.
To quote Eliade:
Revelation of a sacred space makes it possible to obtain a fixed point and hence to acquire orientation in the chaos of homogeneity, to “found the world” and to live in a real sense. The profane experience, on the contrary, maintains the homogeneity and hence the relativity of space. No true orientation is now possible, for the fixed point no longer enjoys a unique ontological status; it appears and disappears in accordance with the needs of the day.
The profane, mundane world, is fungible, homogenous — every day, every bag of wheat, every transactional counter-party is indistinguishable from any other. It is only in the presence of the sacred — the sacred space of the temple, the sacred time of the festival — can the religious person find anything “real” through which to orient their experience of the world. Eliade writes that “Life is not possible without an opening toward the transcendent; in other words, human beings cannot live in chaos.”
His startling thesis is that for the religious person, the sacred is the only thing that is real. The profane world, lacking orientation, is incapable of holding meaning — and is thus hostile to human life.
The Utopian Socialists
These ideas of the magic circle, and the sacred and profane, emerging from cultural and religious history, can shed light on an ostensibly economic historical experience: that of the utopian socialists.
The 19th and early 20th centuries were busy times for social and cultural thinkers, grappling with the disruptions and implications of industrialization. Broken social units, overcrowded cities, dangerous work environments, and the erosion of traditional sources of meaning, identity, and belonging pushed many to experiment with alternative social forms.
Both the Fourierist phalanstères of the mid-19th century United States and the kibbutzim of Israel’s early-mid 20th-century pioneer era sought to create better worlds through the practice of new forms of organization — a concept known today as “prefigurative politics.” Putting higher ideals above mundane realities, these communities sought to create “sacred spaces” of relationship and community set apart from the “profane” world of money and markets.
In essence, these communities sought to create “magic circles” where material realities — such as the financial value of one’s labor — were excluded, and relationships of mutuality privileged. These early idealists worked long hours for low pay, motivated by their philosophy and belief that through hard work and sacrifice they could bootstrap their aspirational visions into reality.
The strategy worked, for a while.
In the case of America’s Fourierist communities, the harsh realities of 19th century agricultural life, combined with the logistical complexity of self-government, caused the average phalanstère to shut down after little more than three years (source). In the case of the Israeli kibbutzim, increasingly attractive career prospects in the country’s growing cities meant that the children and grandchildren of the founding members saw less and less of a reason to make the personal sacrifices their parents had been so eager to make. As I often joke, “ideology gets you two generations.”4
In both examples — American phalanstères and Israeli kibbutzim — the early pioneers sought to establish a “magic circle” in which sacred communal ideals could be set apart from profane realities, providing metaphysical orientation in a world that felt increasingly harsh and devoid of meaning.
Unfortunately, in both examples, that sacred center could not hold, and participants defected to pursue better material opportunities elsewhere.
Breaking the Circle
In their classic 2000 paper, “A Fine is a Price,” Israeli behavioral economists Uri Gneezy and Aldo Rustichini ran a peculiar experiment. At several day-cares in Haifa, Israel, they observed that parents would sometimes be late to pick up their children. Reasoning, as economists do, that a financial penalty might encourage the parents to arrive on-time, they asked the day-cares to start charging parents who arrived late.
Famously, the fines had the opposite effect: parents started arriving even later.
Rather than see the fines as a punishment to be avoided, the parents instead saw the fines as a “price” which they could freely pay in exchange for extra childcare. Whereas beforehand the parents had been punctual out of respect for the staff, they now saw themselves as “buying” a service, and felt less of a need to be on time.
Critically, once the fines were removed, the parents did not start arriving earlier.
This study underscores a key dynamic of magic circles: once broken, they can be difficult or impossible to repair. Before the fine, parents came on time out of a sense of mutual dependency and respect for a type of “sacred” social contract. Once the “profane” material of money was introduced, the circle was broken.
Removing the fine did not repair the circle; once something sacred has been profaned, it must be re-sanctified — at potentially great cost.5
Sacred Play
It should be clear by now where this is going: communal living requires creating and preserving a magic circle in which the “sacred game” of relationship can be played.
It may feel odd to characterize community as a game, but recall Huizinga, Koster, and Clancy. It is through ritualized play that skills are built, relationships are formed, and, ultimately, civilization is created.
Today, many are drawn to communal life, as were the early socialist pioneers, out of a sense that the “profane” world of homogeneity — of time, of place, and of people — is hostile to human flourishing. They often look to create a world-in-miniature — a sacred magic circle — where relational logic prevails.
Within these magic circles, relationships become the axis mundi, sacred centers around which reality revolves. The cultivation and enjoyment of relationships becomes a form of play, possible only within these carefully crafted containers.
To introduce profane material too casually would violate the integrity of these circles, and undermine the value of the relationships formed within them. To answer the question posed at the top of this essay: communal living may be feasible among those who make different amounts of money, but that material inequality must be carefully kept out of the communal social sphere. To the extent that money defines communal relationships, the sacred play-space will be characterized as much by power hierarchies as by interpersonal connection.6
Those looking to build coliving communities within a market society must stay keenly attuned to the ways material realities shape relationships. To succeed, they must make conscious choices to structure communal life in ways that privilege human connection over economic circumstance. In practice, this means keeping personal wealth out of view and creating a “magic circle” in which the quality of a person’s character has the freedom to play.
This essay is the first in a two-part series. The next installment will explore how these same tensions — between the sacred and the profane, the magic circle and the market — play out in the design of governance systems and digital institutions.
As Koster observes, cheating can be understood as “an apparently advantageous violation of player assumptions about the game,” not merely as a breaking of explicit rules.
Brooks Brown gives the example of Diablo III’s auction house. Once players were able to sell in-game loot for cash, the entire game was reduced to the small (and boring) set of strategies which produced the largest monetary rewards.
Consider the difference between gambling on the outcome of a boxing match (legitimate), and bribing a boxer to throw the match (illegitimate).
Favorable government policy helps too.
Eliade discusses the elaborate (and often sacrificial) rituals used to sanctify sacred space — often involving a “cosmogony-in-miniature,” or re-enactment of the creation of the world.
This is not to say that all participants must be on materially equal footing, but that these material differences should be carefully kept out of the “magic circle” of communal life. For instance, if one resident is the primary lease-holder or land-owner, their prerogatives should be limited and clearly defined. Or, if cleaners are hired to help maintain the physical space, attention should be paid to how the inevitable class dynamic may unintentionally subvert the community’s stated values.
This can also look like using economic privilege to prop up the community. For example, buying Diablo III for a friend who can't afford it so you can play together. While money's place should remain outside of the magic circle, it can certainly help build and expand it.