Trustworthiness as a Moral Determinant of Economic Activity: Lessons from the Classics

Abstract

This paper reviews the way that social norms and ethical values in general, and trustworthiness in particular, is perceived to affect the behavior of economic agents in view of the work of Adam Smith, Nassau William Senior and John Stuart Mill. Classical Political economists held that economic actions are context-dependent and thus constantly under the influence of social norms and values. It is further suggested here that Classical Economists had established that trustworthiness acts as a general ethical precondition for the efficient behaviour of the markets and an important asset of the national social capital.

Trust in modernity: The case of Adam Smith

“…More will be said below about the difference between ‘trust’ and ‘trustworthiness’, but in making clear an aspect of the notion of trust absent from recent discussions of Smith’s account (Rathbone, 2022, p. 213; Tomaselli, 2022, pp. 34–36; Zouboulakis, 2010, p. 213) it is necessary to return to his argument concerning the relations between trust and renumeration.…”

“…While the distinction between trust-giving and trustworthiness is clear cut, many discussions of trust ‘run trust and trustworthiness together’, as Hardin (1996, p. 28) puts it, ‘with claims about trust that might well apply to trustworthiness but that seem off the mark for trust’. This is true of the discussion of Smith, in which the terms ‘trust’ and ‘trustworthiness’ are used interchangeably, and without attention to Smith’s lexical situation (Bruni & Sugden, 2000, p. 23; Evensky, 2011, p. 250; Rathbone, 2022, p. 103; Tomaselli, 2022, p. 35; Zouboulakis, 2010, p. 212).…”

“…This is not to deny that trust has a ‘silent presence’ in classical social theory (Misztal, 1996, p. 1). The silence is broken, though, regarding the eighteenth-century writer Adam Smith, through a growing consensus regarding his treatment of trust and its continuity with current developments in the field (Bruni and Sugden, 2000; Evensky, 2011; Rathbone, 2022; Seligman, 1997; Silver, 1985; Tomaselli, 2022; Zouboulakis, 2010). It will be considered here whether Smith in fact did anticipate current conceptualisations of trust, as claimed by these authors, while his understanding of trust is comprehensively revealed in what follows.…”

Do family ties and structure matter for ethical and moral values?

“…Much has been written on the relationship between ethical values and the well-being of society, especially with respect to economic performance. Adam Smith and other classical political economists made this argument (Zouboulakis, 2010). Rose (2011) explained how ethical values rather than feelings of empathy and sympathy for others are a necessary underpinning to trust and the development of effective economic institutions.…”