We recently had a panel discussion on the ethics of free markets at the Virginia Military Institute funded by the Charles Koch Foundation.
Professor Duncan Richter talked about the role of free markets in the context of positive and negative rights. He raises questions — given that free markets are clearly beneficial in providing goods and services efficiently — about how free markets can impact positive rights. His basic thesis is here: The Ethics of Free Markets.
Professor Michael Anderson talked about free markets from a Christian perspective — particularly the idea that Christians are stewards of God’s gifts. In that argument, free market efficiency ensures the best stewardship of God’s gifts. His basic thesis is here: Ethics of Free Markets_Anderson abstract.
Professor Wight explored Adam Smith’s view of free markets as expounded in the The Theory of Moral Sentiments. Professor Wight emphasized the role of trust as the predominant moral sentiment in the establishment of free markets as the most efficient form of economic activity. His thesis is available here: Ethics of Free Markets Wight Synopsis.
The view points expressed here begin to form a framework around which one can form a philosophy of individual behavior and the role and extent of government. It also suggests how human society can advance through productive means as opposed to predatory means — peace versus conflict. What do my respondents think? Comments welcome.
Political Economy of Conflict Discussion Group 
All three professors have very good view points, and the contrast between the types is nice for an overall view of possible reasons for having free markets. I believe that Professor Richter brought up the most crucial argument for modern day free markets on where the line between having rules and regulations versus freedom in the market place should be? He did not mention a specific point, but the idea that an absolutely free market can lead to the selling of almost anything from slaves to nuclear weapons creates a good argument for some regulation. This conflict is very well shown in political elections between the traditional democrat and republican stances which is normally a fight over this very argument. he also mentioned how free markets create efficiency of resource allocation which lowers costs and produces products closer to the optimal point. The efficiency argument that he brings up helps Professor Anderson’s argument.
The more efficient and cheaper products and services allow for the help of the poor. My only problem with Professor Anderson’s argument of helping the poor is that there will always be a loser in free markets, but maybe we can set a bar at which no one is ever lower then that point. He made it sound as if we can have every one become financially better off, but free markets need the cheaper labor.
Professor Wight’s idea that trust is a necessary outcome of free markets was well argued. The idea that without trust free markets will fail, brings up the idea that can instilling and teaching young kids to be more trust worthy and trust one another in the long run help stimulate economic growth? I feel that if this argument is true then it should, and that a focus on this approach could work well and be very cost effective in comparison of cost to benefits.
I do agree with you that all three speakers had good points, but I’d have to say that Professor Wight had a better argument that Richter. Yes although Richter brings up the point that without regulation there would be trading of unethical items.I believe he didn’t mention a specific point on where the line is of what a free market is because what unethical and unethical is all relative to societies. Richter can’t provide a certain answer to what exactly should be a free market and what its not. Though what can be “free” is applying what Professor Wight said and use trust. Trust comes hand in hand in making a market more free. If we can trust each other not to have an unfair market or selling and trading unethical items I believe that is freedom, to where we can freely trade without regulation. Having regulation in my opinion means that there is a lack of trust and if you break regulation there is punishment, but with trust, we trust each other like in a social contract. We can trust each other to a point where we don’t have to worry about one an other and carry out our day to day business. That in my mind, (living in a care free world) is freedom.
I agree with you that living in a carefree world would be true freedom, and that I didn’t say where the line should be drawn between what we leave free and what we regulate. Where to draw that line is a huge question, not one that I would ever try to answer, and certainly not in a ten-minute talk. I think, though, that we do need regulation because not everyone can be trusted.
One thing I disagree with is that what is ethical is relative to societies. Societies that believe in slavery, genocide, and infanticide are wrong. Ethical relativism is a complex topic, and there are different versions of it, but the popular version, which says that what is moral or immoral is determined by what each society believes, faces the following problems: 1. it implies that a sincerely Nazi or Taliban-ish society is right (but these people are evil, not right, so this is an immoral belief); 2. it implies that societies are all only different, none is better or worse than any other, but this is surely false (no one believes it, at any rate); 3. it seems extremely arbitrary (if slavery used to be right but now is wrong, what caused the change? the passing of time? and if genocide is right in one place but wrong in another, why is this? something in the air?); 4. it seems impossible to believe–who can honestly believe that pro-choice and pro-life people are equally right about abortion, or that Nazis and anti-Nazis are equally right, or that terrorists and anti-terrorists are equally right? It’s possible to root for one team or no teams, but not all teams equally. So you cannot believe that every society is equally right, unless really you believe that none of them is right. And then you just have no ethics at all. I’m not saying that this is what you believe. In fact I think no one believes it because it’s impossible to believe it. But it’s a reason to be careful about claiming that ethics are relative.
I highly agree with Professor Wight when he explains Adam Smith’s view of the free market through the Theory of Moral Sentiments. Being a part of VMI gives me a strong understanding of Adam Smith and Professor Wright view of the free market. The knowing of a punishment for unmoral behavior can affect an individual behavior over time. That individual behavior will change overtime by acting with better morals and creating less conflict. For example, the process from high school to VMI. It seemed like there was no real punishment for cheating in high school and a lot of kids cheated and did whatever they could to get an easy A. Now at VMI it seems like everyone does their own work and there isn’t any cheating or conflict. All together high school was a place full of conflict where VMI has been a place of peace compared to high school.
I thought this particular discussion was very relevant to everything we have done in class to this point, and I am sure that it will be even more relevant over the next two months. I would like to start by talking about Professor Wight’s comments. All three gentlemen made some great points, but I do think that Professor Wight’s were most relevant to me. He began by making speaking about his studies of Adam Smith and some of the ideas he gained from these studies. If you obey a rule or law long enough, it is understood that it will eventually become internal. He made this point with our honor code. When we come to VMI, we come to discipline our honor. When we graduate, it is just something that is expected and somewhat written into us. These same principles can be looked at on a much larger scale such as in a population. The one thing that creates successful businesses it trust. Although not the only contributing factor, he stated that trust is directly correlated with nations that have successful markets. He also mentioned that more trust will in turn result in higher productivity inside a business, and that of course trade requires equal amounts of trust between nations. He also elaborated towards the end of his point about the idea of moral sentiment. People are naturally greedy and have the instinct for survival, but that these things can be disciplined as well. People are also, depending on their upbringing, going to be emotionally connected to everyone they encounter. These things are just part of who we are. Our trust is a fundamental aspect of day to day activities that if we don’t have, then it is not likely that we or those we do business with will be successful. Again, all three gentlemen made some very good points. I also thought it was very interesting to hear all of them put their heads together and answer questions at the conclusion of the discussion.
After reading through each professor’s thesis, the biggest point that was brought to my attention was that even though people are self-interested, they will still adhere to the concept of trust. Trust gives people more incentives to do business with others. Moral trust will allow for a more successful business and gives them the freedom to work with who they want knowing they will be secure. It is evident that without trust a free market would fail. So even if government is not involved to make laws or rules, trust is something that needs to be inherited and followed in order for success to occur. With government involved in the regulation of the market, they are taking away from the trust from businesses. These regulations are put into place because people are self-interested and they do not believe they will make ethical transactions due to their lack of trust in people. These regulations mean there are punishments, punishments that instill fear into people when doing business. So where there is a lack of trust in the system, there is an abundance of fear. Ultimately the question is are we really trustworthy or are we in fear of getting punished? Regardless of our freedoms, there are still laws we have to abide by and for good reason. The point that people are selfish if a key indicator as to why regulations need to be put in place.
I thought the most interesting part of the three speeches was Dr. Richter talking about free markets not being completely free and that we need regulations because absolute freedom leads to anarchy. I think that it would be interesting to compare some countries that have different amounts of freedom and see who has the best mix right now and see if maybe there was some way you could calculate what the optimal mix might be. I agree on his point that absolute freedom would not be good. I think if there was absolute freedom then only the strong would survive and the weak who cannot obtain things like food, land, resources, and other necessities would die out. Too much freedom is a bad thing because when everyone is completely free then others won’t trust each other because their is no fear of being punished. If there are no rules then those who are evil will make others skeptical of everyone else and no one will trust each other. This will cause everyone to be for themselves and would cause greed and selfishness. So I agree that total freedom is bad and that their need to be an optimal mix of “positive” and “negative” freedom.
Professor Wight’s argument was eye-opening for me personally. I’ve always viewed honesty and trust as good and dishonesty and distrust as bad. These perceptions of mine were instilled in me first by my parents and then further by society over the years. For example, schools place punishments on cheating, the law bans stealing, and social groups shun liars. While I have always innately known these rights and wrongs, I did not really think about the root of these morals until hearing Professor Wight’s argument. Wight claimed that humans naturally strive for sociability and want to fit in with the group. Understanding this concept, has given me a better understanding of the evolution of society and how institutions have allowed these morals to be the norm.
What I grasped from the board of speakers was an advocacy for free market systems, but that there are some aspects of socialism that have the potential to enhance our system. All three speakers spoke of capitalism in a positive manor in that people have the power to obtain what they want at the price that they want most of time as long as they themselves are productive. People being productive is what drives capitalism as people strive for what they desire by working for it. However, there are some people who for one reason or another are not productive. The idea that the government helping these people out, or redistributing wealth, is appalling to many capitalists as they believe they shouldn’t be expected to be productive so that another person may be unproductive and still reap the rewards. However, from what I understood in the lecture was that people being unproductive is seen as a market failure and in order for a society to have an even more efficient market, we must make these unproductive people, productive. Mr. Anderson somewhat explained this as Christians need to help the poor out and are reminded incessantly, however, they are not forced to help people out. Nonetheless, though the church may not be forcing its followers to donate, the constant reminders can seen as a limited government intervention. From all three speakers, I believe that they all advocated a free market system, but in order to keep the cogs of the economy greased up, some government intervention is needed. Jets.
Although each speaker provided valid points in support of their arguments, I believe that Professor Wight had the most compelling, congruent, and logical speech during the panel discussion. He offered a thorough explanation relating Adam Smith’s construction of the “invisible hand” during the period of the Enlightenment to the concept of gravity discovered not too much earlier. This “invisible hand” in the social science of economics is the basic human need to be sociable. This human phenomena directly correlates with the lessons on evolutionary behavior in cultures that we have studied in class. In short, if a certain behavior provides distinct advantages over another behavior in a specific culture, this “fitter” behavior will most likely be adopted by a substantial portion of the society. One can see how a form of Darwinism that is typically attributed to biological science transcends to the realm of social science.
I believe that Professor Richter’s argument lost some credibility discussing the ethical implications of free markets due to the fact that he focused on many negative externalities that are attributed to market failures or crony capitalism. If the panel were to discuss the ethics of various economic policies, including, but not limited to; free markets, keynesian economics, facism, or socialism; then debaters should base their arguments on theory, not on practice. I say this because reality does not include a pure example of any of the previously listed theories. Additionally, in order to fully understand the ethical implications of each theory, one must decipher the ethical foundations of each theory. These can range from individualism vs. collectivism, private property rights vs. state owned property, free speech vs. censorship, etc.
In conclusion, I believe that the first two speakers exhibited a significant amount of confirmation bias in their respective speeches. The first having a bias towards providing the state with more authority over the practice of trade in society and the second having a bias towards the behavior of people based on presumed moral beliefs. I find it critical that social scientists should change their opinions based on what the facts reveal, not to skew data in order to support preconceived notions.
As a philosopher I’m not used to being criticized for focusing too much on facts and not enough on pure theory! If people want to discuss free markets without regard to actual practice that is OK with me, but then we would have to know what exactly was meant by the term ‘free market’. That is one of the things I raised questions about in my talk. Does it include the freedom to buy and sell slaves, for instance? Is it free in the sense that people are not prevented from doing things, or is it free in the sense that people are enabled to do things? Or both? We can use the words ‘free market’ however we like, especially in a purely theoretical discussion. My talk was intended to invite thought about how we want to use these words.
I felt very engaged during each speaker’s portion of the forum but felt the most relevance to myself from the topics brought up by Professor Wight. I agree with him when he explained how the predominant moral sentiment is trust. I could relate to him by thinking about how, overtime, I have adopted the value of honor here due to VMI’s strong emphasis on it and the ultimate punishment that results from breaking it. Before VMI, I often saw cheating and lying in school and disregarded it as a normal situation that goes unpunished for the most part. After being incorporated in VMI’s honor system, I grew to see that people, who act in dishonest ways, contradict my adopted beliefs and it now bothers me to observe it. I agree that trust will allow a free market to grow further than one that lacks this basic value. I feel this plays into the concept of free enterprise and how the US conducts trade. Trust is high which allows the government to see the value of minimal regulation because the trust we have in regards to trade will keep the economy stable and reduce conflict.
I agree with Cadet Reinecke with his connection to Professor Wight. I thought Professor Wight’s insight on the idea of trust as it relates to trade its importance to an economy was spot on. I recently watched the movie “Captain Phillips,” which about the ordeal which happened about 5 years ago with the Maersk Alabama. It made me think about what causes someone to resort to piracy. The question is obvious, an otherwise bad economy where no other solution than piracy was seen. Somolia simply does not have an economy. How can it when it is ruled by warlords? In other words there is no trust in the economy or in each other. Even seeing how the pirates interacted with each other was terrible. The comparison from the U.S. Navy personnel to the pirates gives you an idea of how their countries operate. One with trust, and one without.
There were aspects that I took from each of the speakers last Thursday that I thought were interesting evaluations of today’s markets. I thought that it was an interesting stance made by Dr. Richter in trying to evaluate whether or not today’s markets are actually “free”. In my opinion I feel that markets will never be completely “free”, due to the fact that laws and regulation are necessary in order ensure that public interest can be maintained. People are inherently self interested, but I feel that laws have been set on a basis with the benefit of the general market/public in mind in order to maintain structure and efficiency. As Dr. Richter stated, “complete freedom would mean anarchy”, which I believe defends the market system that we have in place today, which is regulated, but also provides more good aspects as opposed to bad aspects.
I also agreed with some points that Mr. Anderson made about the market from a Christian perspective. Being a Christian myself I support his statement and belief that, “wealth is a means, but not an end.” I feel that if more people reached out to help others, that society and the market as a whole could benefit for the greater good. Taking a Christian basis to evaluate the market puts the “greater good for the greater number” as the number one priority, which in turn will increase fairness and regulation based on the good of others.
To start, I disagree with Dr. Richter when he says that a negative aspect of a free market is that there are no guarantees. I believe that part of what defines a free market is that there are no guarantees. Free markets tend to be more efficient because some people make gains and some people make losses. If there were guarantees on jobs or making money, then where is the incentive to try? That being said, I liked what Professor Anderson said about the Christian Perspective, especially helping the poor. It is interesting that many Christians call themselves “republicans” in that they believe in a free market where those who need government assistance are simply lazy and do not deserve help. While there are losers and winners in a free market, simply abandoning members of a society creates distrust and civil unrest. These so called republicans are forgetting the basic foundations of the religion the so heavily associate with. I also agree with Professor Write in that trust is a major player in establishing an efficient free market. Companies need to be required to play by the rules because without regulations or punishment, there is no incentive not to cheat someone. As we spoke in class, trust can be indicated through interest rate, and historically, high interest rates are found in areas of civil unrest and conflict.
Here’s what I said about this: “Finally, 1, what bad aspects might free markets have that could outweigh the goodness of freedom and efficiency? One is that with freedom there are no guarantees. If people are free to hire other people or not then there is no guarantee of a job for everyone. Nor is there any guarantee that what jobs are available will pay a decent wage. Similarly there are no guarantees regarding healthcare, education, housing, and food. It might be better to sacrifice some freedom and efficiency in order to ensure that everyone has what they need to stay alive. It might be better to sacrifice some freedom and efficiency to make sure that everyone has more than this: a realistic chance to live a decent life. Again, I won’t try to say whether it is worth it or not, but we can ask the question, as well as questions about what a decent life is.”
I agree with you that part of what defines free markets is that there are no guarantees. And I did not say that this is a bad thing all things considered. I said that it might be a bad thing. You argue that uncertainty about jobs and money gives people an incentive to try. That’s true. And this might mean that the good of uncertainty outweighs the bad. But whether it does or not is partly an empirical question: does the uncertainty of the free market lead to more good than bad or not? For the most part, as I said, I think it does. But there are historical reasons why we have free healthcare available in emergency rooms, welfare for people in need, and so on. People can and do disagree about how much of this kind of aid should be provided, and even whether any should be at all, but we have tried living without providing help for people in need and decided, based on what happened, that it is not a good idea. This is by no means just an empirical question though. It is also an ethical one. Should those who have be taxed in order to give to those in need, for instance? The fact that in the past we answered this question with a Yes does not mean that we should do so now or in the future. How we answer the question will depend on our values. What is the relative value of trying and of staying alive? Would we prefer everyone to be guaranteed to have the food, healthcare, etc. that they need to stay alive at the risk of some people taking advantage of the system and being lazy, or would we prefer to have a guarantee that no one could get away with being lazy at the risk of some people dying of starvation or lack of healthcare? Or would we prefer some system in between, where help is available to those in severe need but most people have an incentive to try to take care of themselves? And if we choose that last option, what do we count as severe need? There are plenty of other questions to be asked, too, but these are some to be thinking about. My goal, as I said, was not to give answers but to raise questions like these.
Taking what Cory Reinecke mentioned a step further. I believe that having the institutions in place to foster that trust and honor within society are key to the growth of our free markets. I am not advocating for a heavy handed system, but I am in favor of social institutions that promote honor and trust through punishment for breaking away from those values. Much like Cory I have adopted the VMI lifestyle of honor after being thrown into this demanding way of life. I don’t necessarily think that the heavy handed punishment of the single sanction honor code is the sole cause for many cadets adopting this lifestyle. Rather, I think its the knowledge that everyone plays a role in ensuring no one breaks the code that we live by. This translates over to free markets and trust because every country is out for its own personal gain. However, they realize that if they break this trust among other nations then they will be cleaved from the herd and life to suffer. Therefore, they adopt a peaceful system that allows for free trade and the success of all.
First, I very much enjoyed the panel. I was planning to attend it regardless if it was required or not.
I felt each professor had great points, but I wish they would go more into what type of [liberal] law or government/society should operate with their idea of a free market. I am assuming a free market exists primarily in a democracy since if we go with the “invisible hand” pursuit, the idea of choice and freedoms seem to go hand in hand with the market economy of a free market, and a democratic form of government. It seems Professor Wight and Richter posed primarily what good a free market can bring, but not so much on what type of society should attach itself with free markets. Professor Anderson brought up his laws which can be found in Christian literature, assuming that being primarily the Bible. What I believe an issue with this is, religion can create problems with reason and logic since faith in a god or deity usually stems from spiritual apprehension and typically lacks proof and/or fact for that belief. This leaves a large grey area for justification since the moral and ethical reason for certain laws may not hold water with faith being the cup. I can go on and on about how this creates problems, but the point is having a religious backing for moral and ethical principles, is not practical to incorporate in a general populace. It should be a more individualistic pursuit. However, many of the qualities of Christianity such as love, trust, nurture, and compassion, are the elements needed in a successful free market. I would not preach it as a way to prove Christianity is the best religion to align with for successful free market. I am sure there are some religions out there that would operate better under the circumstances of free market. It would be even more terrifying, in my opinion, if government enacted upon a free market with religious justifications in mind, especially in a country like the United States (U.S.) where “freedom of religion” is a guaranteed right and using religious justifications to enact upon a U.S. citizen is infringement.
But has the invisible hand already played its part in the US? From what I understand, a little over three out of four US citizens align themselves with Christianity today and that the Christian faith was stronger as we go further back in history. Is it likely to say US citizens from the birth of this nation, align with free market systems and democracies mainly due to their moral and ethical principles which have stemmed from their Christian beliefs? This country was founded by men who were Christians (Church of England/Episcopal Church) so it may be safe to say their beliefs are incorporated into the current government existing today. Also, some and the same were deist and realized organized religion, as I stated earlier, has its faults and can not be used to rationalize morals and ethics in the government.
Religion aside, a pure free market can not exist. Anarchy would be inevitable, so we have society to set the boundaries of what can and can’t be done. As Prof. Richter said, free markets have laws, and societies have taxes. The balance is a great question and its that of a society to decide. This also is why I think an economy came before a society because barter and trade must have existed before community could be achieved. What becomes of an economy is another discussion; the chicken or the egg debate. But I digress. My overall stance is this. I do believe a free market, according to the natural and unalienable rights of man that should exist, is the best pursuit as an economic system. Democracy should also go in hand with a free market. The degree of laws and restrictions placed on both, should be a never ending discovery and should always be crafted and polished to enhance the living of a societies people and its economy.
Professor Anderson’s attempt to merge classical Christian morals with inherently temporal nature of free markets may have been presented nobly and compassionately, but I feel that such an entanglement is somewhat contradictory. Yes, Anderson points out that free markets are simply means to serve the Lord’s purpose, but I believe that the nature of free markets and men are too easily enchanted and corrupted by the pursuit of wealth to justify market capitalism as an enabler of Christian faith and ethics. Anderson points out that free markets have the ability to raise the welfare of humans, thus enabling them to flourish as the children of God. However, how many wealthy Christians give the majority of their wealth to the poor, doing as Jesus would, and devoting their lives to the welfare of others? Furthermore, how can one intertwine wealth and Christianity without addressing a few obvious contradictions? For instance, Anderson points out that wealth is a means to human flourishing. Yet, in a capitalist society, who is the individual concerned with? Himself; not “human flourishing.” Even Pope Francis spoke out against recent lightly-regulated free markets, saying “Money must serve, not rule!” I’d argue that money has a tendency to “rule” the minds of individuals in free markets. And finally, as the great satirist/news anchor Jon Stewart pointed out, the bible states that “you cannot serve both God and money.” I think that there is a clear contradiction here. Christian ethics and free markets can undoubtedly coincide, but to argue that they work towards a singular goal is quite difficult to support. ( Jon Stewart clip: http://www.dailykos.com/story/2013/12/06/1260581/-MUST-SEE-Jon-Stewart-BLASTS-arguments-against-raising-the-minimum-wage )
I tend to agree with Brick’s views here. I believe that certain elements that constitute Christianity and being a good Christian are applicable to free markets but, when holistically, the contradictions that Brick mentions begin to appear. This is why the argument can sound convincing at times and less than convincing at other times. The best evidence for this point is the excerpt from the Bible that Brick pulls from Jon Stewart, “you cannot serve both God and money”. This is the type of contradiction that is easy to overlook if you pick and choose the aspects of Christianity that you apply to the free market. The overlap between the Free Market and Christianity is nothing more than coincidental in my opinion.
My question would be to Professor Anderson. He mentioned that churches and other religious organizations have systems that help those less fortunate. But he said that these organizations are not built to handle the scale of the homeless of the world. He puts the responsibility of caring for these homeless on the government who tax the populace to help the few without jobs. But if I remember correctly he criticized the government for the potential corruption and inability to care for the homeless properly.
So my question to Professor Anderson is why shouldn’t we create institutions that are religious and have the ability to get people to care for the sick with incentives other than dollars? In this society there could still be a democracy and let people elect their leaders, which would ideally help correct corrupt priests. Most churches are kept “in the black” through donations of congregations. If the entire populace were to donate instead of having to pay taxes as well as be willing to help and donate time and energy to causes such as homelessness much more easily and with more organization/effectiveness. Would this be a viable society? Or would the consolidation of power lead to massive corruption, oppression and poverty?
I found Mr. Richters’ argument above very interesting in that it covers topics which I believe we all can agree are unethical. Also I think that it is true whether or not something is ethical doesn’t vary from any one society to another when you compare any two societies, however if you were to distinguish them by how developed they are relative to things like living conditions and economic stability. Sure no matter where you go it would be unethical to commit mass murder for any reason but what about something that falls into a grayer area. For example, if a man bathed in a stream near a highly populated area in the U.S. he would most likely be taken to jail for public indecency. However, take the same man in a third world country where there is no running water and he would be expected to bathe in a stream due to lack of any other means to do so. I’m not saying that the development of a society effects all decisions of ethical nature, only that it clearly effects some.
You make a good point. I would say two things about this: 1: it is absolutely true that different societies have different moral beliefs (like you, though, I don’t think it follows that these beliefs are all equally good), 2. circumstances matter a lot to the goodness or badness of certain actions. Undressing in private is OK, undressing in public is not OK. It isn’t different moral codes that make this difference, it’s different circumstances. Your example of a man who has nowhere to bathe except in a public area might be more a matter of different circumstances than of different moral beliefs, but of course living in different circumstances can be one of the things that leads to people’s having different values. In some cases there might be different but equally good sets of values. In other cases, some moral moral codes are much worse than others. I think we agree on all this.
All three of the speakers offered insightful views on the free market. Personally, I enjoyed Dr. Wight’s talk the most. I believe he raised several interesting and relevant points about trust. He offered that trade would be almost, if not completely, non-existent without trust. To me, this seems self-explanatory. However, he also raised the question of: Can higher trust lead to higher wealth of a country? To answer this question, he gave examples of Norway which has one of the highest rates of trust in the world along with high wealth. Conversely, he said that some of the poorest tribes in Africa also have very low trust. He argues that trust is correlated with trust and based on the example he gave, I believe this could be true. Dr. Wight also mentioned the fact that governments cannot create wealth on their own but rather they can create institutions of trust which leads higher wealth. It seemed that all three of the speakers believe free trade offers the best benefit to society. While answering a question at the end, one of the speakers gave an example of how free trade can reduce conflict. He gave the example of how President Nixon opened up trade to China to help combat communist influence. He also offered that the U.S. could reduce tension with Cuba by opening up trade with them. Overall, I thought it was a very interesting and insightful discussion.
One thing that stuck out to me during Professor Wright’s lecture was his reoccurring theme of the importance of trust in free markets. He said that trust is a huge factor in efficient markets, and without it, they will fail. However, I recently watched a lecture by Richard Wilkinson, in which he compared income inequality to numerous factors, including trust. In his models, the United States had the lowest amount of trust, yet we still have a relatively efficient market system. I am not disagreeing with professor Wright, I would just like to know more about how trust and income inequality are linked to efficient markets.