The neglected economics of trust: The Bentham paradox and its implications

Economists have little understanding of trust, As economists, we are trained to think of the economy as an amalgam of individual agents, although the social element is an indispensable part of the economy. This perspective has caused us to lose sight of the role of trust. As a result, not only does the quality of life suffer, but the economy becomes less efficient. In this article, I want, to call attention to the central importance of trust in a marker economy. I will show that markets both require and destroy trust. As a result, measures that appear to promote the economy may actually threaten the long-term health of the marker by undermining trust.