ABSTRACT
In Bowling Alone, Robert Putnam (2000) has brought to light a fact that most American economists have largely ignored—that human relationships are the underpinning of all economic activity. In traditional economic theory, there has been scant recognition of human purpose as being economically significant in relationships within an enterprise or in the relationship of the enterprise with the community. Admittedly, research on transaction costs does focus on elements of trust, but this only applies to empirical relations between and within firms (e.g., Williamson 1980). Following standard empirical methods, neoclassical economics recognizes only quantifiable factors that can be measured and translated easily into systems that can be manipulated logically. Neoclassical economics is modeled upon the physical sciences, which are based on the discovery of observables, which follow systematic laws such as supply and demand; personal relationships and attitudes are considered "external" to the equations.
