We Americans are very lucky to have inherited a high trust society from our forebears. How much longer will it last?
Econtalk: David Rose of the University of Missouri, St. Louis and the author of The Moral Foundation of Economic Behavior talks with EconTalk host Russ Roberts about the book and the role morality plays in prosperity. Rose argues that morality plays a crucial role in prosperity and economic development. Knowing that the people you trade with have a principled aversion to exploiting opportunities for cheating in dealing with others allows economic actors to trust one another. That in turn allows for the widespread specialization and interaction through markets with strangers that creates prosperity. In this conversation, Rose explores the nature of the principles that work best to engender trust. The conversation closes with a discussion of the current trend in morality in America and the implications for trust and prosperity.
See also this Wired article: The Neurobiology of Integrity.
In short, when people didn’t sell out their principles, it wasn’t because the price wasn’t right. It just seemed wrong. “There’s one bucket of things that are utilitarian, and another bucket of categorical things,” Berns said. “If it’s a sacred value to you, then you can’t even conceive of it in a cost-benefit framework.” ...
Whether sacred principles offer utilitarian benefits over long periods of time — many years, perhaps many generations, and at population-wide as well as individual scales — is beyond the current study design, but Berns suspects that one of their benefits is simplicity.
“My hypothesis about the Ten Commandments is that they exist because they’re too hard to think about on a cost-benefit basis,” he said. “It’s far easier to have a rule saying, ‘Thou shalt not commit adultery.’ It simplifies decisionmaking.”