General

Capitalism and the Lack of Trust

By Dweep Chanana ⋅ April 23, 2006 ⋅  Email this post ⋅ Post a comment

Traveling in the Czech Republic, where people can speak up to 4 languages - Czech, German, Polish, or Russian - I had no way of communicating with most anybody. Such a handicap makes even the simplest of tasks difficult. Ordering food, getting directions, finding train timings - all become an exercise in patience and sign language.

In situations such as these, one is forced to trust others. I trusted people not to mislead or cheat me. They did not.

Thomas Hobbes claimed that man is selfish: “of the voluntary acts of every man, the object is some good to himself.” And on ideas such as these have revolved theories of government (The Leviathan) and classical economics. Yet Hobbes could not have explained why I managed to take the train from Trutnov to Adrspach and back, with the help of others. I don’t believe in selflessness, but there is some good to man.

The problem I have is that this is not accounted for in capitalism. Classical economics is based on Hobbes’ idea that we do everything to maximize personal gain. Yet, what if our social rules and obligations made us act in ways that did not? Would that mean that in countries that are community oriented, classical economics may not apply entirely?

We search for ways to make business more sustainable, capitalism more inclusive. Yet, capitalism continues to permeate ‘transition’, and ‘emerging’ economies - economies where, traditionally, ’social capital’ has been high. I worry that social capital is being depleted, because profit-maximization is being imported. What if these countries could, instead, develop self-governing communities that balanced social gain and profit, without intermediaries such as NGOs, watchdogs, and so forth? What if, god forbid, people could be trained to be actually good, or at least moderately so? At the very least, they could change some of economics’ underlying assumptions.