Earlier today I was reading a piece about the financial crisis which argued that part of the problem with the financial system is a greater reliance on the technology, quants and trading over distance. There are fewer regular face to face meetings with counterparts in the market. This led to an erosion of trust and a sense of mutual obligation. Market actors were tempted to pursue the incentives they faced to put one over on others – or to act fraudulently – because they weren’t doing it to people they knew. It’s not going to hurt anyone, but it may make me rich(er). Just playing with numbers on a screen. Impersonal.
The argument is plausible, given the work in economic sociology and cultural economy on the role of trust and social norms in successful market functioning. Perhaps rehumanising the market is a necessary step to remoralising it.
It seems to me that there is a parallel here with the current programme of government welfare reform, particularly in relation to the reform of Incapacity Benefit. [Read more...]