“Know Before Whom You Stand”: Trust, The Marketplace, and Judaism

Jonas Prager

in The Oxford Handbook of Judaism and Economics

Published in print December 2010 | ISBN: 9780195398625
Published online September 2012 | | DOI:

Series: Oxford Handbooks

 “Know Before Whom You Stand”: Trust, The Marketplace, and Judaism

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Trust is the implicit basis of most economic transactions and hence it is fundamental to any functioning economic system. Hence, when trust is breached, its impact may well extend beyond the local, limited transaction. The breakdown of trust may reverberate throughout the economy both on the microeconomic or individual market level and on the macroeconomic or broad, economy-wide plane. The virtue of trust against the backdrop of Judaism is the essence. Trust can be instilled internally or fashioned externally. The confidence that members of a family or clan share stems from their family bonds. As markets become more complex and personal relationships give way to more impersonal ones, the need to rely upon external confidence-building mechanisms intensifies. Jewish law works through a dual mechanism to achieve its economic goals: an internal belief system and an external enforcement arrangement. The concluding part of this article explains the Jewish legal system clubbed with asymmetric information.

Keywords: economic transaction; Judaism; economic system; microeconomic; macroeconomic

Article.  9342 words. 

Subjects: Economics ; Economic History

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