FEEM working papers "Note di lavoro" series
2014 .010

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


Authors: Nicola Genovese, Maria Grazia La Spada
Series: Economy and Society
Editor: Giuseppe Sammarco
Keywords: Sustainable Development, Public Happiness, Origin of Money, Behaviour Economics, Exchanges Between Primitive Populations
JEL n.: Q01, A13, B15, E 40

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.

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Suggested citation: Genovese, N., M. G. La Spada, (2014), 'Trust as a Key Variable of Sustainable Development and Public Happiness:  A Historical and Theoretical Example Regarding the Creation of Money', Nota di Lavoro 10.2014, Milan, Italy: Fondazione Eni Enrico Mattei.

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