real-world economics review, issue no. 100 subscribe for free
Issue no. 18, 2003
How Reality Ate Itself: Orthodoxy, Economy & Trust Jamie Morgan [The Open University, UK]
Copyright: Jamie Morgan, 2022
You may post comments on this paper at https://rwer.wordpress.com/comments-on-rwer-issue-no-100/
Quis custodiet ipsos custodies? Who guards the guards?
An economic theory that cannot sustain its own possibility is a poor one but can also be a powerful one. A market economy may valorise the symbolism of the invisible hand but it is as equally beholden to the symbolism of the tacit handshake. The handshake is a metonym for a relation and a market economy is a set of relations inscribed in rules, tacit or otherwise. First amongst equals are trust and the means by which trust is enacted and maintained. Without trust nothing else functions and social reality would be impossible. The philosopher J. L. Austin was one of the first to recognise the importance of this.1 There are at least two dynamics to talking about social reality. First, description where we designate things true or false by reference to them as objects or past events - the hat is black, yesterday was Wednesday and we had lunch. Second, performance, where current conduct and dialogue constitute a new conceptual element to social reality with material repercussions for future relations the meeting of hands and a a , or the negotiation and witnessed signing of a contract. In the immediate sense, performance is neither strictly true nor false since it is not initially a description, but a doing or making. The doing is in this first instance appropriate or inappropriate, sincere or insincere, successful or a failure. That it is done is in the second instance true or false the contract as negotiated by two parties with the legal authority to engage in those negotiations was signed by each and entered into in good faith. The glue in this transition is the trust that binds the particular rules of appropriate interaction. The interaction may fail for a variety of reasons that cause immediate problems an earthquake may prevent the delivery of a consignment required for a just in time production process. But these reasons are not devastating to the social institution in which they occur the sustainability of business agreements perpetuating economic activity. However, when practices are designed to confound basic principles of transparent dealing, when rules are insincerely held, when a promise ceases to be e g e d ee , d e a d a e cea e e a e vibrant.
1 pp. 45-52, J. L. Austin, How To Do Things With Words (Oxford: Oxford University Press, 1962)
14