The following is an article by Chris Farrell from Speaking of Faith
( http://speakingoffaith.publicradio.org/ )

Look at what science is learning about trust and empathy — and what
these qualities have to do with human character and economics. Paul
Zak is a pioneer in the emerging field of neuroeconomics.

Once upon a time not that long ago, economics was widely imagined as
the stuff of cold calculation and Wall Street as an icon of thriving
civil society. The latest crop of analysis analogizes its workings
with book titles like House of Cards and Animal Spirits. The field of
"behavioral economics" has been around for some time, but current
economic realities have brought it into the forefront of mainstream
thinking.

My guest, Paul Zak, is a leader in one of the offshoots of behavioral
economics. Zak became drawn into this orbit early in his career while
studying the correlation of "trust" with poverty or wealth in
different countries. He is a new brand of analyst — trained in
economics, but also in neuro-imaging and mathematics. His research has
centered around a powerful hormone that also acts as a
neurotransmitter — oxytocin — which has been dubbed "the moral
molecule." Through oxytocin, Paul Zak became interested in the
morality of economic decision-making — how and where trust comes into
that from a neurological perspective. He intensively analyzed the
Enron crisis of the early 2000s, finding it a case study for trust
gone awry at every level of an enterprise.

This kind of merger of hard science with social science is an
exercise, in some sense, in stating the obvious and explaining it
biochemically. Yet some of the "obvious facts" Zak takes as scientific
starting points are precisely what have been lost in our out-of-
control economy of recent years. For example, he reminds us that
economics is essentially a social act, that markets are meant at their
core to be places of mutually beneficial social transaction.

I've found it edifying to ponder this now — and to note that this
fundamental aspect of human economy from time immemorial is no longer
intuitive in so many economic transactions of modern Western life. The
economic structures and practices to which we've grown accustomed have
stretched and stressed human encounter at its core and — from Paul
Zak's perspective — they have challenged trust itself. This adds a new
dimension to the comfort many of us sense intuitively in rediscovering
the farmer's market, for example, or the small mom-and-pop store that
has managed to survive in a world of mega-retail. They touch something
deep in our humanity, even our physiology, beyond the benefits they
contribute to the environment or local economy.

One of Paul Zak's most interesting — and usable — learnings, I think,
is his observation that the natural inclination most of us have to
trust and be trustworthy can be diminished by circumstances. Stress
can measurably reduce our responsiveness to oxytocin, which in the
right circumstances innately inclines us to care about the effect of
our actions on others.

Again, common sense as much as science has already told us that stress
is bad for us. But Zak's science gives me one other way to grasp the
human recklessness that marked so many economic relationships, from
housing loans to investment portfolios, in recent years. Generosity
and empathy suffer — and this is measurable in biochemical, not merely
social terms — when we ourselves feel pressured.

One of Zak's most sobering assertions is that many of us will stop
asking those urgent questions of meaning and priority that the
economic crisis has provoked. As creatures of habit, most of us will
return to a kind of habitual complacency as perceived threats to our
well-being abate.

http://speakingoffaith.publicradio.org/programs/2009/neuroeconomics/video_farrell.shtml

What do YOU think?

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