10.23.2008

THE FAITH THAT MOVES MAMMON

As much as we try to paint the free markets as godless, and in contrast talk up the socialist image from Acts 2 of God's people sharing all belongings, there is a surprising undercurrent of community in capitalism. This article from last week's Economist reminds us, in light of the recent financial meltdown, of just how much interpersonal trust is required for our capital markets to work. After all, we might not trust our neighbor enough to lend him a hundred bucks, but we give far more to unknown borrowers who we'll never personally meet.

Here's the money quote, right at the end of the story: "For his part, Mr. Seabright concludes that the main reason people place their trust in others is because it is less risky than the alternative. He senses a 'nostalgia for self-sufficiency' induced by anxieties about globalisation. But this, he says, overlooks that 'self-sufficiency is fantastically risky.' Isolated people are often more vulnerable because they lack access to basic medical care and—when their harvests fail—to food. Integration with others massively reduces risk. Trust in strangers may be at odds with some of our instincts, but it is a price worth paying for a richer life." Indeed.
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