The Economy: Learning to Trust Again

We are designed to be trusting animals, you and me.

Paul Zak, professor of economics at Claremont University, and researcher in the emerging field of "neuroeconomics," discusses the way human brains work when we interact with one another in a APM Speaking of Faith broadcast from July, 9, 2009. Here's the link: http://speakingoffaith.publicradio.org/programs/2009/neuroeconomics


I urge you to take the time to listen. Zak asserts that the brain hormone oxytocin, the same hormone that is released in the brain of women while nursing, and in all of us during sexual arousal (the attachment hormone as I have come to think of it) is released in 98% of us when we interact with one another with trust. And this is particularly important, he asserts, in our interactions around money. We tend, he says, to begin with trust, and when trust is reciprocated, that trusting is reinforced. This is how an economy functions; we fundamentally trust one another. In particularly stressful times, the natural levels of our trust hormone go down.

When we are hurt by someone untrustworthy, another hormone, testosterone, is released in the brain and we universally demand revenge or justice. (He mentions the Enron failure and investment manager Bernie Madoff as key examples of this response.)


So in the large scheme of economic life, we are primed to be trusting, emotionally driven people in the market place. My takeaway? When our trust returns more fully, the economy should begin to restore itself.

This research has me thinking about how amazing it is that we are naturally designed to trust one another, and what to think about those 2-5% of human beings who lack this capacity. It explains to me something of what happens to those we think of as psychopaths, those who lack the capacity for human empathy. Perhaps one day, we will be able to run blood tests and brain scans and know more about how to treat the most violent among us. But that is a post for another day.

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