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
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: Suggested Citation
