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How Empathy Can Save the Economy
It may be the Supreme Court’s buzzword du jour, but empathy’s emotional conclusion—trust—is the underpinning of our economy. Post-crash and post-Madoff, how will America restore this complicated neurological function?
In selecting Sonia Sotomayor as his nominee for the Supreme Court, President Obama first stressed that he wanted to choose a judge “with that quality of empathy, of understanding and identifying with people’s hopes and struggles.”
During the campaign, Obama described America’s “empathy deficit,” where selfish virtues are glorified and understanding others is seen as too touchy-feely, too girly to be important. If Republican reactions to Obama’s desire for empathy on the court are to be believed—most notably, party chairman Michael Steele’s jeering response, “I’ll give you empathy. I’ll empathize right on your behind”—then the empathy deficit is alive and well. Which is too bad, because we badly need that squishy, soft quality to restore the hardest of hard things, the economy.
If Republican reactions to Obama’s desire for empathy on the court are to be believed, the empathy deficit is alive and well. Which is too bad, because we badly need that squishy, soft quality to restore the hardest of hard things, the economy.
Indeed, empathy is the cornerstone of trust: If you cannot put yourself in the place of another and trust that he will behave predictably, you cannot trade with him. Far from being simply a nice maternal luxury, this empathic trust is the lifeblood of trade.
When the economy is humming along nicely, few people consider the amount of trust involved in every transaction. But simply eating at a restaurant involves implicit trust in hundreds of people—from the person who picks the lettuce to the server who takes your credit card. More abstractly, any commercial exchange implies trust in the millions of people whose collective faith sustains the dollar’s value.
Going back to Adam Smith, sociologists and economists have long pondered the role of trust in the economy. The idea of trusting strangers to behave well with money comes from being able to identify with them; in other words, to empathize. Businesspeople might want to use this “empathic” understanding in a less warm and fuzzy way to gain advantage—but if there’s no basic trust that money lent will be repaid, things won’t work too well.
Research shows that countries and regions in which there is little trust outside one’s own family tend to lag in economic development and growth. “Across countries, the level of trust predicts poverty strongly,” says Paul Zak, director of the Center for Neuroeconomic Studies at Claremont Graduate University in California. “The highest trust countries are Scandinavian, the lowest is Brazil.”
The less people trust each other, the more need there is for regulations, police, lawyers, and other security measures—and the longer it takes to negotiate terms and make contracts. “As trust goes down, transaction costs increase,” says Robert Kurzban, assistant professor of psychology at the University of Pennsylvania. Lack of trust, then, taxes every transaction and hampers economic growth.
The U.S. has historically been considered a high-trust society. Now, post-crash and post-Madoff, America may need to reconsider trust: where it comes from, how it can be damaged, and how it can be repaired as one of the essential ingredients for a lasting recovery.
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If empathy is going to save our economy, we are doomed.
I don't believe anyone is arguing that empathy is not an important component of the decision making process, regardless of the context. What seems to be implied by the President is that empathy should take precedent over the law. So, in Roe v. Wade the judges empathy for women with unwanted pregnancies caused them to invent the Constitutional right to privacy. Also, it seems to imply, based on his statements about Roberts, justice should somehow favor the "little guy" and act to balance out the inequities that exist in our society.
I wonder how Sonia can take the oath of office? The Supreme Court justices are to make rulings based on the Consitution. The oath reads that the Wealth or poverty or race is not to be taken into consideration in making a decision.
Strange to me liberals torn into Clarence Thomas and were not considered racist. But now we can not question Sonia without being called a racist.
Wow how unbalanced this country is becoming!!!
easyoke, please point to one of the 380 rulings by Judge Sotomayor where she disregarded the constitution.
Just because she, and every other human on earth, has background experiences that color their perceptions does not mean they can't be a Judge, if it did we'd have robot or Vulcan judges
And Clarence Thomas was "torn into" because he was accused of sexual harrassment, not because of the color of his skin or his background. And just an FYI...Pres. Bush, who nominated Thomas, thought he had great empathy, OH MY!
Empathy might destroy the country.
GM and Chrysler were " TOO BIG TO FAIL,"
so we bailed them out,
and they still wound up declaring bankruptcy anyway.
So where did all our EMPATHIC TAXPAYER MONEY go ?
Our " EMPATHIC " tax dollars bailed out some banks,
and coincidentally thereafter some of those same banks
recorded so-called "profits."
Were those numbers actually profits, or donations (from taxpayers)?
How many more people do we have to " EMPATHIZE "
with before the entire economy completely collapses ?
"the level of trust predicts poverty strongly," says Paul Zak, director of the Center for something or other ...
No, Paul, the economy determines the level of trust.
When you live in a nice safe country like Norway, you can afford to trust because you know every one of your countrymen has their health, housing, food & education needs fulfilled.
When you're surrounded by desperately poor Brazilians, who cannot feed their children, you would be right to suppose they might steal something from you.
Oxytocin increases levels of trust because it creates a feeling of comfort & safety. It might, just possibly, be better to work on wealth, stability & social distributions than to spray everyone with fake hormones!
Lol @ this article.
Thank you.
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