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Ralf Dahrendorf, in his paper After the Crisis: Back to the Protestant Ethic? sought to find the causes that made the society decide to adopt debt-based capitalism while dropping the savings capitalism. He used Max Weber’s pieces to explain how thinking among the members of the society had transformed and how this contributed to the type of capitalism that had dominated the modern world. It is unquestionable that we cannot get into debt indefinitely— says Dahrendorf—but it’s certainly not possible a return to the Protestant ethics. So the key point is in what he calls responsible capitalism that includes the concepts of responsibility and trust and requires that the satisfaction of individual needs falls under a sustainable economic development model. The thesis presented in this paper is that, in order to facilitate the emergence of a new mentality based on responsibility, there should be more economic and social participation that can take place on the one hand, through processes of economic socialization and financial education and, on the other hand, through the selection of alternative financial instruments, particularly the ones which belong to the social finance. The latter includes in the broad sense socially responsible finance and micro-credit and, strictly speaking, the more recent phenomena of crowd funding and social impact investments.

One may track the origin of sociology back to the work of individuals such as Auguste Comte among other prominent scholars in the nineteenth century. Comte work of a general way to deal with the investigation of society stands out as one of a major contribution towards the cognitive development of sociology. The development of cognitive sociology can also be attributed to the ancient publications in the sociology of knowledge, sociology of culture, and cognitive and cultural anthropology. Arguably, scholars strive to understand the cognitive processes in order to understand how individuals come up with meanings for various phenomena in the society. John Stuart Mill deserves credit for his profound contribution in as far as the development of the methodology of the social science is concerned. His addition of a psychological perspective was critical to the development of sociology. Mill also incorporated the knowledge of psychology to explain what drives individuals to act in the manner they do while interacting with each other. Other than the deduction of the laws, Mill emphasized on the necessity of using an experiment to understand the personal and interpersonal interaction of individuals. However, other individuals who also made contributions to the development of the discipline of sociology dismissed and criticized his stand on the necessity of conducting experiments and not relying on deductive reasoning. Scholars who were opposed to Mill’s position subscribed to the idea of anti-psychologism. Some of the profound authors and scholars include Karl Marx, Max Weber, Watkins, L. von Mises, Popper, Menger, von Hayek, Boudon, and Elster among others. Popper stands out as one of the scholars who were sternly opposed to Mill’s idea of psychologism, contributing to the reinstatement of the autonomy of sociology and social laws. However, Millian convention and ideologies of integrating the psychologism perspective into sociology was adopted by several scholars from 1970s onwards. The purpose of this work is precisely to offer a more in-depth understanding of John Stuart Mill’s contribution to the cognitive development of sociology.

The principal objective of this research paper is to gain an in-depth understating on what is the critical driver of trust in the market, whether it is social capital or institutions. Works by several authors such as Robert Putnam, Ostrom, Francis Fukuyama, Douglass North, among others were used as primary sources for the research. It is, however, essential to note that there are no proven theories on what is the primary driver of trust in the market, but it is imperative to study a market to know whether institutions or social capital are the primary driver of trust in that particular market. The merits, demerits, and the composition of trust in social capital and institutions are identified in this paper. Generalized trust, values, and norms of reciprocity and cooperation are viewed as the key pillars of social capital and have an undeniable influence on confidence in markets. Trust in institutions, on the other hand, is influenced by the type of institution and institutional change. Organizations are viewed more formally by players in a market and are conceived to be credible; hence one cannot ignore their influence on trust in the market. According to this paper, trust in markets is driven by both social capital and institutions. One cannot solely rely on one and ignore the other. The interdependent relationship existing between institutions and social capital has a significant impact on economic, financial and financing decisions of the players in a market. Developing an even-handed, balanced employment of trust in social capital and trust in institutions could positively influence the socio-economic conditions of any market. In other words, to achieve their primary objective, which is profit maximization, the participants in a market have to learn how to strike a balance in the levels of trust they place on either social capital or institutions.

Nowadays the need for an ethical and socially responsible approach to finance appears increasingly evident, yet the sphere of ethical finance does not have the success that one could imagine. This work reflects on the possible causes of this lukewarm or just partial response to ethical finance by investors and does so using the paradigm of methodological individualism as an explanatory tool, focusing in particular on the issues of individual responsibility and personal freedom.