Walker Wright is a think tank policy manager with a forthcoming book, In Trade We Trust: How Commerce Makes Us More Social, which will be published by Bloomsbury. Over the past several months, he has posted five essays exploring different aspects of trade and how it benefits societies. I will summarize and review each essay in sequence. This is Part 2 of 5.
This
essay explores how trade promotes trust and how it increases social capital in
addition to increasing economic capital. He summarizes the issue as follows:
“…trade depends on trust, and commercial societies
encourage people to extend trust beyond family and friends to strangers and
colleagues. Experiments and cross-country studies show that economic freedom
fosters cooperation, honesty, and reciprocity.”
Trust is, of course, stronger
among people with close social bonds, from family and close friends, and tends
to weaken outward. Below is a graph from a study by Virgil Henry Storr and
Ginny Choithat that compares trust among family, neighbors, known associates,
and people met for the first time in market and non-market economies. Both
economies show less trust in less close relationships as expected, but it also
suggests that market economies have better trust networks than non-market
economies, not by a lot, but consistently.
Wright cites the work of the American economist Ryan Murphy
of the Bridwell Institute. Murphy distinguishes two kinds of social capital:
bonding social capital and bridging social capital.
“Bonding social capital refers to what increases the
bond of affection with those in our inner circle, such as our family and
friends. Bridging social capital refers to what builds social bridges,
expanding our social network to those outside our inner circle. Too much
bonding can interfere with bridge-building and can even burn bridges, creating
a host of problems such as corruption and hostility toward out-groups. Trade
acts as a social bridge. And a trade society is one full of social bridges.”
He also cites other studies
that corroborate the increased level of trust found in market-based economies.
A graph from one of those is shown below, comparing economic freedom and trust.
Below, Wright explains that
experiments as well as surveys have shown the same result: that trade fosters
trust.
“The results of various laboratory experiments by Storr
and Choi are telling. In studies published between 2018 and 2022, the two
researchers demonstrate that in markets where cheating is possible,
participants learn to reward trustworthy partners with greater trust and
reciprocity (measured through token transfers). Those with positive market
interactions received significantly more tokens than cheaters. What’s more,
even strangers received more tokens than cheaters. In experiments where
cheating was prevented or its effect neutralized, positive relationships were
treated similarly to relationships between strangers. Storr and Choi stressed
that participants knew nothing about each other and could not communicate
beyond offers. That means the relationships were purely commercial, with no
distortions stemming from race, sex, religion, or the like. In short, when
corruption and dishonesty are absent from the marketplace, trust and equal
treatment emerge. When dishonesty is a factor (as it is in the real world),
trustworthiness is incentivized, and dishonesty is stigmatized. Positive market
transactions breed trust and trustworthiness.”
He cites experimental results
by other researchers that suggest that a “market mindset” makes people more
trusting of others. In a sense, the act of trading is pro-social and helps us
to become closer to strangers since we have a reciprocal relationship with
them. This also helps strangers become more familiar, which, as the word
implies, means more like family and less like strangers. People become more
optimistic regarding their relationship and less suspicious of one another.
Wright cites other
experiments that suggest internet businesspeople and CEOs have higher levels of
trust and are considered more trustworthy, even though some like to
characterize CEOs as greedy and indifferent.
He concludes:
“The fact that the commercial society exists should be
awe-inspiring. The absolute scale of trust and cooperation is incredible. But
markets aren’t magical. They are spaces in which people engage in repeated
trade, where individuals learn to consistently rely on and cooperate with each
other. As people demonstrate a pattern of trustworthy behavior, exchange
becomes more fluid, and trust becomes more concrete. Long-term success in the
market depends partly on developing strong bonds of trust. And this practical
necessity for economic success can eventually develop into a personal virtue.”
References:
In
Trade We Trust: How Markets Build Social Fabric: Far from eroding community
bonds, markets weave broader networks of trust. HumanProgress.org. Walker
Wright. October 3, 2025. In
Trade We Trust: How Markets Build Social Fabric - Human Progress
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