March 7, 2016

Can Trust, Reciprocity, and Friendships Survive Contact with the Market?

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Read this chapter at SSRN

Critics of markets have often asserted that markets undermine morality and that market dealings are unfair and corrupting. In their perspective, the expansion of the market and market values taint the nature of the goods being exchanged and the relationships between the parties to the deal. This chapter gives reasons to suspect this critique of markets and attempts to push back against these complaints. It argues that the market is a social arena where individuals not only pursue their material goals but also exercise their moral selves; after all, meaningful social bonds characterized by trust and trustworthiness can and do develop in market settings. The market depends on and promotes trust and trustworthiness as well as fairness and reciprocity and these values, as suggested by experimental economic evidence, play important roles in successful market exchanges.