ABSTRACT OF PAPER
Title: TRUSTWORTHINESS AS A MORAL DETERMINANT OF ECONOMIC BEHAVIOR IN THE WORK OF SMITH, SENIOR AND MILL
Author: Zouboulakis Michel
For the last decade or so, mainstream economists and philosophers are trying to make a centerpiece of their analyses the way that social norms and ethical values affect economic behavior of entrepreneurs and consumers. Williamson (1985, 1993), in his effort to expand the logic of rational choice into other social disciplines, studied the notion of trust as a means to reduce moral hazard and the cost of transactions. Casson (1992, 1993) has maintained that the level of trust and other moral commitments is fundamental to the performance of an economy, while Pejovich (2002) held that the prevailing lack of trust in former socialist countries is a major source of the transaction costs specific to the process of transition. Additionally, Hausman (2002) developed the benefits from trustworthiness on the performance of firms. The idea of trustworthiness was however not strange to classical economists, who believed that economic actions are context-dependent and thus constantly under the influence of social norms and values. Through the presentation of the issue of trust as a moral determinant of the pursuit of wealth in the work of Adam Smith Nassau William Senior and John Stuart Mill, our main objective is to suggest that taking account of ethical norms has serious methodological consequences as far as the limits of economic explanation are concerned.
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