Behavioral economist, Jeremy Riftkin, hypothesizes that modern economists fail to recognize a second "invisible hand" in today's market, social trust. He claims that commerce and trade are an extension of cultural relations, and without social trust markets would collapse. Current economic problems are at large due to a lack of trust domestically and globally. There is a lack of consumption because there is a fear that other's won't reciprocate. While developments in technology has enabled the integration of markets, causing interdependence between economies, the concept of the nation state is hindering the expansion of our empathy to the human species as a whole.
http://www.huffingtonpost.com/jeremy-rifkin/economic-recovery-will-fa_b_448353.html
http://www.newscientist.com/blogs/culturelab/2010/02/jeremy-rifkin-the-third-industrial-revolution.html
2 comments:
Although the structure of the market is extremely important to the success of an economy, cultural factors and the trust in the system really fuel and shape the economy. This is especially important in the current economic recovery, without trust in our market economy, and without consumer confidence to buy products and stimulate the economy, the recovery will most certainly lag.
Interesting article and like how they referred to social trust as a second "invisible hand." I agree it is a second invisible hand because social trust is very important in America and any market economy. My Dad is small business owner and this spring his business is the closest to pre-recession sales so I think social trust is higher than lead to believe in this article.
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