Economics and Ethics

Call for abstracts: Pro-Social Strategies for Public Welfare (The Role of Social Capital and Trust)

Mark D. White

Pro-Social Strategies for Public Welfare: The Role of Social Capital and Trust

Panel/Stream Proposal for IIPPE Fourth Annual Conference in Political Economy, International Institute for Social Studies, The Hague, The Netherlands July 9-11, 2013

Dr. Luca Andriani, Birkbeck College University of London, UK

Dr. Asimina Christoforou, Athens University of Economics and Business, Greece

 

The Fourth International Conference in Political Economy will take place in The Hague (The Netherlands) July 9-11, 2013. The conference theme is “Activism and Alterative Economic Strategies” in light of the on-going economic and political crisis (for details, please consult IIPPE’s new website at http://iippe.org/wp/).

As members of the IIPPE social capital working group, we propose a panel on “Pro-social Strategies for Public Welfare: The Role of Social Capital and Trust”. In the past decades, state and market institutions have failed to deliver redistribution and welfare in both developing and high-income geopolitical contexts, particularly after the global economic crisis broke out. This induced agents to engage in short-term, self-oriented strategies either to consolidate their power or salvage a subsistence level of living, which impedes collective action for social reform and the promotion of long-term public benefits. Nonetheless, and in response to deeper recession, social upheaval and political instability, there are collective efforts for social awareness and mobilisation to confront immediate problems of destitution and to reclaim people’s right to a quality of life.

In this sense, the panel aims to open a constructive discussion on the role of social capital and trust in building pro-social strategies for public welfare. We ask how norms and networks of cooperation, reciprocity and trust could facilitate – or hinder – a wider range of pro-social strategies, which could include, but are not limited to:

• active social and political participation to deal with the democratic deficit of both the developed and developing world;
• assessing events of corruption associated not only with the effects and motives of rent-seeking behaviour and tax evasion, but also with the imperspicuous transactions of powerful economic and political groups;
• advocacy and redistributive functions of non-governmental organisations and voluntary associations that represent disadvantaged groups and fight for their needs and rights;
• activities of social enterprises and cooperatives that provide alternative ways of production, based on general-interest objectives and innovative forms of democratic participation of
  stakeholders, workers and investors.

We welcome works that derive from various social science disciplines and use different units of analysis (individual, regional, country or cross-country level), methodologies and techniques (theoretical, empirical, qualitative and quantitative).

Abstracts (500 words maximum) should be submitted by the 10^th of February 2013 to: Luca Andriani (luca.andriani@bbk.ac.uk) and/or Asimina Christoforou (asimina.christoforou@gmail.com)

Trust—The Magic Elixer

Jonathan B. Wight

Via Brad DeLong comes this quote from Declan Trott:

[W]ealth depends on the division of labour, and the division of labour is limited by the extent of the market. But the extent of the market is not limited only by transport and taxes. It is limited also by trust: by the rules and expectations that allow cooperation for mutual gain between people who do not know each other. And these rules and expectations, particularly the expectations, are hard to build but easy to destroy. In the worst case, not just the extent of the market but its very existence is threatened.

[Image from http://perkettprsuasion.com/2011/04/07/define-trust-not-so-easy-is-it/]

Trott is reviewing Partha Dasgupta, Economics: A Very Short Introduction (Oxford University Press, 2007). The key point of the book is that trust has huge implications for "communities, markets, households and firms." While economists generally assume that transactions involve homogenous products and anonymous traders, the reality is that most transactions involve face-to-face contact and a wide variation of service quality. When services are involved (e.g., finance, medicine, construction, and education) a huge problem of asymmetric information exists. The seller generally knows more than the buyer about how the house was constructed. That is why trust is so essential.

A theme developed on this blog is that trust does not arise simply from enlightened self-interest. If that were the case, people would be trustworthy only if there were a reasonable chance of being caught and punished. While such accountability is crucial, it is not the only part of the story. There is a deeper kind of trust that arises when people adopt Kantian duty as their mindset, or when people uphold honesty because of that virtue for virtue's sake.

The problem I have with neoclassical accounts of markets is that they do not accurately convey important elements of the philosophical and psychological dimensions of trust-creation.