Trust as a Key Variable of Sustainable Development and Public Happiness: A Historical and Theoretical Example Regarding the Creation of Money

Nicola Genovese and Maria Grazia La Spada

No 163619, Economy and Society from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This article purports to trace the origin of money on the basis of factors in interpersonal relationships, affecting a sustainable development and public happiness, namely trust, reciprocity and the concept of we-rationality. Both the historical approach and the one based on traditional economic theory have been found inadequate mainly because they did not take into account these factors. The hypothesis expounded in the paper is that these values underlaid the beginning of economic activity. Initially economic activity was carried out within small human groups. In such groups interpersonal relations were not based on individual self-interest. As a matter of fact, there is historical evidence supporting the notion that the first exchanges were gift-giving and were made possible by trust and reciprocity as expounded by Polanyi (1957) and Sudgen (2000) among others. When the exchanges strengthened between elements of various groups all with the same values and moral characteristics the process toward the creation of money started, without any intrinsic value and the presence of any superior authority. In the paper it is also hypothesized that the creation of money is one of the basic factors in the progress of economic and social activity, together with ancient phenomena as language ad writing. Finally, the paper advocates that in future the economic activity be permeated by those moral values on which a sustainable development can be based. This will, in turn, increase the rate of economic and social growth.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 15
Date: 2014-01
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemso:163619

DOI: 10.22004/ag.econ.163619

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