​Trust and Capitalism

Why capitalism flourished in USA and western countries while terribly failing in the Iran, Latin American countries? Some call this a result of institutions, leaders, geographic locations and what not. These are all important but there is something more.
It is trust which makes all the difference.

Imagine a ball comprising of bees in pond of water. They need to get out of water by pushing the ball out. So few strike the ball in all direction, making no progress. After some strikes, all understood that the effort needs to be in particular direction. But even after knowing, they could not as all of them were not belonged to the same nest. Subsequently they perished and died.

But we are human. We understand logic. This fate was similar to American. Let’s see what they did.

America was born with blood battle between Red Indian and migrants. The migrants came from different countries – France, Britain, Spain etc who were not together in mainland. In adversity of wars they understood the need for trusting each other for survival. This paved way for new American way of life where an individual shed there difference and move together. Similar thing happened in European Union too.

But trust is absent in developing societies like India, Brazil. There are hierarchical system of caste and class so put in place respectively that ensure inefficiency. This ensures that resources – physical, social are concentrated to few portion of the society. Further the problem is more serious in India where ‘untouchable’ community may rise to the top but will not accepted by the society. Thus merit, which form basis of capitalism, is missing.

Hence trust is an significant ingredient of recipe of capitalism for the final meal of prosperity. Adequate amount is needed to make the recipe a success.

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