Abstract
Contemporary communitarian critiques of classical liberalism argue that open markets do not produce the social capital necessary for their own functioning and that the excessive penetration of commercial values into public life may undermine the norms necessary to sustain a functioning market order. This article responds to these charges by setting out the role of the market in the spontaneous generation of the ‘bonding and bridging social capital’ that help to sustain a complex, advanced society.
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Notes
The use of the term ‘family’ in this context is not confined to the ‘nuclear’ family and to formal marriages, but may also include other ‘family-like’ relationships such as those between same-sex couples and close friendships of other sorts.
According to findings by the Hudson Institute, US private giving abroad comes close to the total amount of official government aid, from all donor countries combined—see the Global Index on Philanthropy, Hudson Institute: New York.
For a discussion of the internet as a new form of social capital, see Hardin (2004, Chapter 5).
Evidence of wage ‘stickiness’ in this context does not constitute ‘market failure’. It simply confirms that market forces do not behave in the mechanistic manner set out in neo-classical models. There is little or no reason to believe that government action could arrive at a more efficient set of wage rates given the inability of planners to access highly dispersed information concerning supply and demand conditions in the labour market and their complex interaction with the cultural norms of workers and employers.
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Acknowledgement
We would like to thank Paul Lewis and two anonymous referees for their comments on an earlier version of this article; the usual caveat applies. We would also like to gratefully acknowledge the generous support of the Earhart Foundation.
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Meadowcroft, J., Pennington, M. Bonding and bridging: Social capital and the communitarian critique of liberal markets. Rev Austrian Econ 21, 119–133 (2008). https://doi.org/10.1007/s11138-007-0032-2
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DOI: https://doi.org/10.1007/s11138-007-0032-2