I lead a company that operates in a highly competitive industry. I have 10 sales professionals working for me. I met with one of my newest hires who asked me for advice for how he could be more successful. I told him that development a sense of trust with his clients is the key. I told them that there were other facets of success, but without trust nothing else really matters. And with trust there is more room for negotiation, and also for forgiveness if mistakes are made.
I told him that maintaining trust is like surfing a wave... if you fall behind you can never paddle fast enough to catch it again. It takes ten "attaboys" to make up for one "oh shit".
The last point I made was the need to constant contact. Because there is something in human nature where the lack of contact results in mythological narratives that erode trust. Conscientiously or within our subconscious selves, we build some resentment over time when someone we know and like does not make contact with us. Conversely, there is something in our human nature that is more likely to build trust with face-to-face contact.
This is one of the reasons that I am down on the work from home trend.
Not all people have equal perception, thinking, and behavioral abilities. And that makes all the difference here...
" People are worried about being the only 'sucker.' "
More than that, a large set of them are worried about *repeatedly* being the sucker, and with no recourse. They find they must learn to apply the general rule popularized by Warren Buffett: "If you've been in the game 30 minutes and you don't know who the patsy is, *you're* the patsy." As a result, and as another wise man said, they learn that "Only the paranoid survive."
"But it's equally important to be trusted. To be a trustworthy person. To cultivate a good reputation."
Good luck with that. Because it is a commonplace that far too often it doesn't depend on trustworthiness, but rather *appearing* so, in relatively fleeting or shallow interactions. For some very good quick demonstrations of this variance, you need only read (with an open mind, well-written) pro and con accounts of political figures.
Generalizing this: If you are unable to sufficiently learn to overcome the disadvantages (especially in real-time) of relatively low native social/emotional intelligence, without sophisticated support you are going to have a very sorry life in a relatively unstructured Western society such as the US. You will not only suffer losses of all kinds, but you will often be *blamed* for your low inborn intelligence (unless it's got an approved "expert" stamp such as, say, autism; which comes with its own set of problems). Your problems will be treated as if *you created them*, and repeatedly, for some unknown reason; or (to today's frequently psychopath/sociopath leaders) have revealed yourself as morally "useless".
This has of course been happening throughout history, waxing and waning, but it's once again reaching a fever pitch. In recent decades we've been going far backwards, not forward; no human progress on this front.
"When we trust and cooperate with others, we learn who is trustworthy and who is not. We discover truths about the social world that we would otherwise be blind to."
Well, no, generally one cannot rely on this. In this evolving moral era in the West, this lack of universality matters greatly to people on the short end. Sure, if you're of high emotional and/or analytical native intelligence, you can regularly suss out good working models of truth to go with, especially *relative to other people*, and find value in your use of trust. But if you're not, even if you *think* you're good at it, you can easily and often be fooled, often forever, by some psychopathic/sociopathic/wanna-be person/group more capable, and never be the wiser. In that case, you discover after much pain that "something's rotten in the state of Denmark" without knowing very well, or at all, what it is.
That's a good way to create an angry person on a villain-hunt ... or a giant chunk of the population so motivated. A decrease in trust, due to a decrease in trust-ability, combined with bad actors is very likely the major factor that brings us modern Western populism. It's not some rabies-like disease bringing inexplicable irrationality. Current case: In the UnitedHealthcare CEO killing, there are very few dots to connect about peoples' reactions, so everyone recognizes the same "rotten" thing going on (even when having differing values and/or priorities). The rest of politics, not so much, even though this abuse is rampant everywhere. This social devolution is one of the reasons MAGA is a thing.
"When we distrust others, we never learn about those around us. We remain ignorant."
True. Hence, we have what I'll call the "stupid" person's dilemma: *Neither* trust nor distrust is sufficiently useful. The average person will find him/herself constantly abused by the anti-socials with higher intelligence, and in a society structured to morally fetishize intelligence, there's nothing that can be done about it. Moreover, the wanna-be's emerging sociopaths following these psychopaths think this is just fine, after all, it's "how the world works", as if there's no sense fighting the iron law of oligarchy even if they wanted to. "I've got mine", after all. But depending on the context, most of us will find ourselves, not just the "lower" classes, "stupid" enough to be confronted with this dilemma often.
“Trust trust and distrust distrust” That’s good advice. Over time, I have adopted the personal policy in life that if the only cost of believing a liar is that I look like a fool or a sucker for it, then I act toward the other person as if they are telling the truth. So far the benefits have outweighed the consequences.
As usual, reading your writing fills my head with thoughts and questions.
I love the notion that we must cooperate first, as a step to establishing trust.
I have a question about a superficial contradiction in the article, one that I'm trying to reason out. In the food-queues-in-China scenario, we see scarcity reducing trust; later in the article scarcity is not an obstacle to trust (otherwise, we'd still be living in caves, as you point out). I'm assuming the difference here is context, but I'm not quite sure how you'd characterize that difference in context.
I really love Adam Smith's views and perspectives. He was way ahead of his time. He is known as the father of capitalism, but was really a moral philosopher... and really a human behavior scientist.
I was going to comment on this point until I read your post. Yes, my view of trust is one where I understand and accept that everyone pursues their own self-interest in almost every interaction and transaction. It is only those with needs and wants exceeding their ability to apply a acceptable line of ethics or morality that I do not trust. Otherwise I feel capable of navigating a relationship and/or transaction in consideration of their self-interest. And to be effective in that approach, it is required that I really know the other party. Understanding others, I think, is a key to trust.
Brief summary of the evo psych evolved instincts on this matter: “we like those who like us back and we like those who are like us (in values, goals, intelligence and maturity level - or beneficence).
High trust societies are rich because they are high trust, not high trust because they are rich-- although there is a virtuous cycle at work. The institutions of market capitalism in fact are what enable trust among strangers in commercial transactions. This leads to a general expectation of trustworthiness among people because they are in the habit of being trustworthy.
Great essay Rob. The loss of trust is why crimes resulting from violations of trust receive harsh treatment, not so much in the area of time behind bars, but in the social and financial damage on the violator. Crimes against children are considered to be worthy of the most extreme social ostracism because to harm a child is to betray the trust that children expect from adults. Breaches of fiduciary trust brings on severe financial punishment and elimination of employment in areas that might place a person in a position of trust in relationship to other's assets. For example a person convicted of securities fraud can not be a banker, insurance agent, realtor, stock broker, investment manager, a doctor, nurse or druggist. There is however no way for a society to exist and function without high levels of trust, so declining trust is a warning sign of societal ills.
The resource curse is neither here nor there to materialism.
"Homo sapiens have been trusting one another and forging social bonds for millennia. Back when they lived on the edge of death. That’s how our ancestors survived in a dangerous world."
It's almost as if trust and cooperation evolved in response to material conditions.
"If human fate is predetermined by material circumstances, then we should all still be living in caves." 1. Materialism isn't a question of fate or predetermination. It's the idea that people adapt in response to changes in material conditions. Culture is one major area of adaptation. 2. Even if you'd accurately summarized a materialist view of history, how would what you wrote follow?
A great shortcut is the airport test. If your “friend” will either drive you to or pick you up from the airport they’re a good friend. Just a joke, but you’d be surprised at how often I would do people that favor for free (maybe get a token appreciation gift afterward) and the same “friend” wouldn’t return the favor, ever, even when I’d done repeated favors for them.
Some thoughts about capitalism, trust, competitiveness and income disparities:
I've seen a lot of comments (elsewhere) on how the current era parallels the Gilded Age. Usually the comments are focused around income disparities. But another parallel (which I think is strongly linked) is toleration of monopoly practices. One of the ideas behind free market capitalism is that competition will improve things. In an environment where monopolies prevail, one doesn't have competition driving prices down and efficiency up.
An excellent example of competition is the renewable energy market, especially solar PV. A few years ago, people thought investing in solar-related stocks/mutual funds/ETFs was a great idea because there was obviously a lot of money going into solar installations. At the equity investment level, this didn't really pan out. Why? The market was competitive and competition drove down prices and margins (and profitability). Good for the consumer, good for corporate revenues, not so great for the investor.
The "Magnificent 7", on the other hand, have great margins and outsized market cap (ridiculously so, in my book). I'd argue that monopolistic practices diminish trust. People see the monopolists getting rich and higher prices and margins than you see in competitive markets.
That said, it's messy. In part, the solar boom was driven by massive subsidies for solar cell manufacturers from the Chinese government. Subsidized solar prices from China caused American solar manufacturers to shut down (including Evergreen, which had the most efficient manufacturing process of any solar cell producer worldwide). State and federal rebates and credits for solar installations also tilted the market. In the real world, you never get conditions that are driven purely by market forces. But the end result of this is that solar has become more and more cost-effective.
Looping back to your piece: I'd say that low rates of trust in America are partially driven by monopolism-masquerading-as-capitalism. It's not the competition for scarce resources that drives distrust - it's the lack of competition in parts of the system. (I don't feel like this contradicts anything you or Gambetta say, it just augments it)
Another layer of this problem is what Greta Krippner refers to as financialization. Parts of the economy are focused not on goods and services, but on making money by moving money around. As Krippner notes, this happens even within manufacturing companies. Again, this results in inflated market cap. In this case, the market cap inflation of the financial sector happened around the late 20th and early 21st centuries. And again, you would expect that if competition were truly happening in the financial sector, finance would become more efficient (it's certainly become more computerized), margins would go down and the relative market cap of the financial sector would shrink. Some write it off to the death of Glass-Steagall, and that's probably part of it, but I suspect there's more to it.
Another obvious market failure: executive compensation in US corporations.
(I thought it best to break my comments in two, as they head off in different directions)
I lead a company that operates in a highly competitive industry. I have 10 sales professionals working for me. I met with one of my newest hires who asked me for advice for how he could be more successful. I told him that development a sense of trust with his clients is the key. I told them that there were other facets of success, but without trust nothing else really matters. And with trust there is more room for negotiation, and also for forgiveness if mistakes are made.
I told him that maintaining trust is like surfing a wave... if you fall behind you can never paddle fast enough to catch it again. It takes ten "attaboys" to make up for one "oh shit".
The last point I made was the need to constant contact. Because there is something in human nature where the lack of contact results in mythological narratives that erode trust. Conscientiously or within our subconscious selves, we build some resentment over time when someone we know and like does not make contact with us. Conversely, there is something in our human nature that is more likely to build trust with face-to-face contact.
This is one of the reasons that I am down on the work from home trend.
This is the most eye-opening and useful essay you have written, thank you Rob
“As coercion increases, trust declines.”
This is PRECISELY why the COVID related COERCIVE lockdowns, mandates, and related lies have eroded institutional trust so much.
Not all people have equal perception, thinking, and behavioral abilities. And that makes all the difference here...
" People are worried about being the only 'sucker.' "
More than that, a large set of them are worried about *repeatedly* being the sucker, and with no recourse. They find they must learn to apply the general rule popularized by Warren Buffett: "If you've been in the game 30 minutes and you don't know who the patsy is, *you're* the patsy." As a result, and as another wise man said, they learn that "Only the paranoid survive."
"But it's equally important to be trusted. To be a trustworthy person. To cultivate a good reputation."
Good luck with that. Because it is a commonplace that far too often it doesn't depend on trustworthiness, but rather *appearing* so, in relatively fleeting or shallow interactions. For some very good quick demonstrations of this variance, you need only read (with an open mind, well-written) pro and con accounts of political figures.
Generalizing this: If you are unable to sufficiently learn to overcome the disadvantages (especially in real-time) of relatively low native social/emotional intelligence, without sophisticated support you are going to have a very sorry life in a relatively unstructured Western society such as the US. You will not only suffer losses of all kinds, but you will often be *blamed* for your low inborn intelligence (unless it's got an approved "expert" stamp such as, say, autism; which comes with its own set of problems). Your problems will be treated as if *you created them*, and repeatedly, for some unknown reason; or (to today's frequently psychopath/sociopath leaders) have revealed yourself as morally "useless".
This has of course been happening throughout history, waxing and waning, but it's once again reaching a fever pitch. In recent decades we've been going far backwards, not forward; no human progress on this front.
"When we trust and cooperate with others, we learn who is trustworthy and who is not. We discover truths about the social world that we would otherwise be blind to."
Well, no, generally one cannot rely on this. In this evolving moral era in the West, this lack of universality matters greatly to people on the short end. Sure, if you're of high emotional and/or analytical native intelligence, you can regularly suss out good working models of truth to go with, especially *relative to other people*, and find value in your use of trust. But if you're not, even if you *think* you're good at it, you can easily and often be fooled, often forever, by some psychopathic/sociopathic/wanna-be person/group more capable, and never be the wiser. In that case, you discover after much pain that "something's rotten in the state of Denmark" without knowing very well, or at all, what it is.
That's a good way to create an angry person on a villain-hunt ... or a giant chunk of the population so motivated. A decrease in trust, due to a decrease in trust-ability, combined with bad actors is very likely the major factor that brings us modern Western populism. It's not some rabies-like disease bringing inexplicable irrationality. Current case: In the UnitedHealthcare CEO killing, there are very few dots to connect about peoples' reactions, so everyone recognizes the same "rotten" thing going on (even when having differing values and/or priorities). The rest of politics, not so much, even though this abuse is rampant everywhere. This social devolution is one of the reasons MAGA is a thing.
"When we distrust others, we never learn about those around us. We remain ignorant."
True. Hence, we have what I'll call the "stupid" person's dilemma: *Neither* trust nor distrust is sufficiently useful. The average person will find him/herself constantly abused by the anti-socials with higher intelligence, and in a society structured to morally fetishize intelligence, there's nothing that can be done about it. Moreover, the wanna-be's emerging sociopaths following these psychopaths think this is just fine, after all, it's "how the world works", as if there's no sense fighting the iron law of oligarchy even if they wanted to. "I've got mine", after all. But depending on the context, most of us will find ourselves, not just the "lower" classes, "stupid" enough to be confronted with this dilemma often.
“Trust trust and distrust distrust” That’s good advice. Over time, I have adopted the personal policy in life that if the only cost of believing a liar is that I look like a fool or a sucker for it, then I act toward the other person as if they are telling the truth. So far the benefits have outweighed the consequences.
As usual, reading your writing fills my head with thoughts and questions.
I love the notion that we must cooperate first, as a step to establishing trust.
I have a question about a superficial contradiction in the article, one that I'm trying to reason out. In the food-queues-in-China scenario, we see scarcity reducing trust; later in the article scarcity is not an obstacle to trust (otherwise, we'd still be living in caves, as you point out). I'm assuming the difference here is context, but I'm not quite sure how you'd characterize that difference in context.
Some time ago, I found a wonderful piece about Adam Smith and his ideas that interacting with and understanding of others is the key to developing a moral conscience. Long, but I found it well worth the read (even in a somewhat bumpy machine translation): https://hashiloach-org-il.translate.goog/the-fellow-in-the-chest/?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
I really love Adam Smith's views and perspectives. He was way ahead of his time. He is known as the father of capitalism, but was really a moral philosopher... and really a human behavior scientist.
I was going to comment on this point until I read your post. Yes, my view of trust is one where I understand and accept that everyone pursues their own self-interest in almost every interaction and transaction. It is only those with needs and wants exceeding their ability to apply a acceptable line of ethics or morality that I do not trust. Otherwise I feel capable of navigating a relationship and/or transaction in consideration of their self-interest. And to be effective in that approach, it is required that I really know the other party. Understanding others, I think, is a key to trust.
Brief summary of the evo psych evolved instincts on this matter: “we like those who like us back and we like those who are like us (in values, goals, intelligence and maturity level - or beneficence).
High trust societies are rich because they are high trust, not high trust because they are rich-- although there is a virtuous cycle at work. The institutions of market capitalism in fact are what enable trust among strangers in commercial transactions. This leads to a general expectation of trustworthiness among people because they are in the habit of being trustworthy.
Great essay Rob. The loss of trust is why crimes resulting from violations of trust receive harsh treatment, not so much in the area of time behind bars, but in the social and financial damage on the violator. Crimes against children are considered to be worthy of the most extreme social ostracism because to harm a child is to betray the trust that children expect from adults. Breaches of fiduciary trust brings on severe financial punishment and elimination of employment in areas that might place a person in a position of trust in relationship to other's assets. For example a person convicted of securities fraud can not be a banker, insurance agent, realtor, stock broker, investment manager, a doctor, nurse or druggist. There is however no way for a society to exist and function without high levels of trust, so declining trust is a warning sign of societal ills.
The resource curse is neither here nor there to materialism.
"Homo sapiens have been trusting one another and forging social bonds for millennia. Back when they lived on the edge of death. That’s how our ancestors survived in a dangerous world."
It's almost as if trust and cooperation evolved in response to material conditions.
"If human fate is predetermined by material circumstances, then we should all still be living in caves." 1. Materialism isn't a question of fate or predetermination. It's the idea that people adapt in response to changes in material conditions. Culture is one major area of adaptation. 2. Even if you'd accurately summarized a materialist view of history, how would what you wrote follow?
A great shortcut is the airport test. If your “friend” will either drive you to or pick you up from the airport they’re a good friend. Just a joke, but you’d be surprised at how often I would do people that favor for free (maybe get a token appreciation gift afterward) and the same “friend” wouldn’t return the favor, ever, even when I’d done repeated favors for them.
Some thoughts about capitalism, trust, competitiveness and income disparities:
I've seen a lot of comments (elsewhere) on how the current era parallels the Gilded Age. Usually the comments are focused around income disparities. But another parallel (which I think is strongly linked) is toleration of monopoly practices. One of the ideas behind free market capitalism is that competition will improve things. In an environment where monopolies prevail, one doesn't have competition driving prices down and efficiency up.
An excellent example of competition is the renewable energy market, especially solar PV. A few years ago, people thought investing in solar-related stocks/mutual funds/ETFs was a great idea because there was obviously a lot of money going into solar installations. At the equity investment level, this didn't really pan out. Why? The market was competitive and competition drove down prices and margins (and profitability). Good for the consumer, good for corporate revenues, not so great for the investor.
The "Magnificent 7", on the other hand, have great margins and outsized market cap (ridiculously so, in my book). I'd argue that monopolistic practices diminish trust. People see the monopolists getting rich and higher prices and margins than you see in competitive markets.
That said, it's messy. In part, the solar boom was driven by massive subsidies for solar cell manufacturers from the Chinese government. Subsidized solar prices from China caused American solar manufacturers to shut down (including Evergreen, which had the most efficient manufacturing process of any solar cell producer worldwide). State and federal rebates and credits for solar installations also tilted the market. In the real world, you never get conditions that are driven purely by market forces. But the end result of this is that solar has become more and more cost-effective.
Looping back to your piece: I'd say that low rates of trust in America are partially driven by monopolism-masquerading-as-capitalism. It's not the competition for scarce resources that drives distrust - it's the lack of competition in parts of the system. (I don't feel like this contradicts anything you or Gambetta say, it just augments it)
Another layer of this problem is what Greta Krippner refers to as financialization. Parts of the economy are focused not on goods and services, but on making money by moving money around. As Krippner notes, this happens even within manufacturing companies. Again, this results in inflated market cap. In this case, the market cap inflation of the financial sector happened around the late 20th and early 21st centuries. And again, you would expect that if competition were truly happening in the financial sector, finance would become more efficient (it's certainly become more computerized), margins would go down and the relative market cap of the financial sector would shrink. Some write it off to the death of Glass-Steagall, and that's probably part of it, but I suspect there's more to it.
Another obvious market failure: executive compensation in US corporations.
(I thought it best to break my comments in two, as they head off in different directions)