The trust is largely absent in the classical writings of Karl Marx and Max Weber on the origins and nature of capitalism. Jongchul Kim demonstrates in this excellent essay (that was awarded the Article of the Year by Journal of Economic Issues) that the trust is central to an adequate understanding of capitalism—including the capitalist institutions of modern banking, modern corporations, and representative democracy.
Credit economies before capitalism created institutions to protect debtors, or often revived the social order by cancelling debts. The capitalist credit economy, in contrast, considers strict debt obligations a supreme moral good and a way of securing social order. It creates a political scheme to ensure that debt obligations are strictly fulfilled. This thoughtfully essay argues that this scheme is a trust. The trust turns the debts of individuals, whose death can cancel their debt obligations, into the debts of imaginary groups, such as the modern state, whose identities and obligations are permanently maintained by replaceable trustees. The essay further argues that without this politics of the trust, modern banking could not have developed.
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