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Adam Smith’s Essentials: On Trust, Faith, and Free Markets

Journal of the History of Economic Thought, Vol. 33, No. 2, pp. 249-268, 2011

19 Pages Posted: 27 Jan 2012 Last revised: 1 Mar 2012

Jerry M. Evensky

Syracuse University - Department of Economics

Date Written: 2011

Abstract

When trust is shaken, individuals pull back and the market system contracts. Where trust grows, individual energy and creativity are unleashed and the system grows. In Adam Smith’s vision of humankind’s progress, trust is the central theme. The Great Recession represents a classic case of a crisis of trust. Looking back to the work of Smith offers insight into the role of citizens and the State in creating an fruitful market environment based on trust, and the challenge of this process, given the human frailty of individuals (unfortunately, we are not angels) and the potential for State power to be captured and abused.

Keywords: Norms, values, ethics, Great Recession, Adam Smith, trust

JEL Classification: A13, B32, D50, D71, D72, D73, K20, P16, D43

Suggested Citation

Evensky, Jerry M., Adam Smith’s Essentials: On Trust, Faith, and Free Markets (2011). Journal of the History of Economic Thought, Vol. 33, No. 2, pp. 249-268, 2011. Available at SSRN: https://ssrn.com/abstract=1992001

Jerry M. Evensky (Contact Author)

Syracuse University - Department of Economics ( email )

110 Eggers Hall
Syracuse, NY 13244-1020
United States
315-443-5863 (Phone)
315-443-3717 (Fax)

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