The Tax of Living in a Low-Trust Society: How Collapsed Trust Costs You
yourbrainonmoney.substack.comI just remember reading "the rational optimist", and they talked about and trust trade.
Basically with trust, trade is unfettered.
We trade productively with trust and we all prosper.
I see this in my life. I have good trust in costco, and I buy there with very little friction/mistrust. I know a bunch of things - they give me a decent price without trickery (unless you count giving my money back as rebates), they vet the products they sell, and they have a great return policy if I don't like the purchase for any reason.
meanwhile buying an airplane ticket, making a hotel reservation or getting a tow truck. That is a low-trust high-nonsense situation that makes me unhappy from reservation to checkout, almost to the point I dread travel. I do travel less, and I'm less spontaneous.
I find myself at Costco several times a week lately, and I always try to interact with employees. Even just "hello", "good morning", or "thanks I'm a fan of your work" gives you an opportunity to sense if employees are happy and treated well.
Good companies take care of their employees and customers.
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This is interesting because there is a cheating epidemic going on in higher education and I'm continuously wondering what happens if it isn't resolved. Students cheating with impunity breeds more students cheating, into a spiral until all students cheat and the credentials becomes meaningless.
The credentials enable trust at scale.
You're pointing at people leaning on reputations for trust. What happens when the most reputable institutional credentials no longer represent the quality they once did?
Just one more unsettling thing to think about
Also high schools. demographics of Thomas Jefferson High School (one of the best in the country) vs. Fairfax county.
I spent decades foolishly believing people didn’t cheat because I grew up around a bunch of Christians. Now, cheating is pervasive. Game theory in action
> I spent decades foolishly believing people didn’t cheat because I grew up around a bunch of Christians.
I will just say this: "Christians" is not a wholly uniform population.
Good point. Presbyterians specifically
That's... Not what they are saying.
They are saying, ironically, that claimed membership of that group or belief isn't actually a high trust signal.
I think they meant Christians cheat a lot (or, enough of them do so as to not be a high trust signal).
Interesting. When I was at university there were a few foreign contingents known for cheating academically. It was unexpected and strange ...yet, despite that, some of the students were smart yet cheated in areas they were weak in. But also didn't seem to mind sharing assignments in any area among themselves. I guess they assumed they'd learn much of what they needed in the real-world on the job.
It's sad to learn this attitude has begun to permeate our own students. People want to take short-cuts and skip the work necessary to get to the goal and miss out on the learning aspect. Maybe they expect "A.I" to do the thinking for them --but then what will they have to offer a prospective emplyer?
The more people lose trust in your work history and other credentials, the more metaphorical leetcode becomes relevant.
> but I do not think the problem is capitalism itself as much as institutions and structures that force short-term rewards.
Capitalism, at least its currently flavor, seems to increasingly favor short term rewards.
Nothing is planned and built for the long term. Companies have no interest in selling you a product that lasts forever. Planned obsolescence and things built to fail are commonplace. In fact they would rather not sell you products, but that you rent them instead.
Governments operate on short term election cycles. Corporations operate in quarterly reports. If something makes sense for the long term but is bad on the short term, it is scraped.
> Every email could be phishing. Every phone call could be fraud.
From my personal experience I can say that the majority of E-Mails is spam and the majority of phone calls is fraud.
Every ad could be a virus is why everyone has ad blockers.
Amazon solved trust. Credit cards did too. Guaranteed reliable help when things do go wrong is one way to do it.
Cross border commerce makes trust worse because you can never get justice for being wronged.
Amazon solved trust is very much different than my perception of them:
- ads everywhere trying to push low quality product
- fake/bought product reviews
- commingled inventory (up until recently, still I would never buy food items, drugs or other health sensitive items like air filters or sunscreen there)
This is true to a certain degree, you’ll be wrecked by reviews. If you’re a brand selling direct, then you’re cooked forever by bad reviews.
Best saying I heard on this topic: trust is speed
And time is money.
Started in the 1950s with the dawn of consumer credit. Mis selling that to buyers was highly profitable and everywhere. Really shook people’s trust. The dawn of the salesman.
Before that it was merely single low trust events. Scandals type. Lead in paint style.
That is not really true, at least from the "global history" point of view.
Sovereigns would debase coins routinely. Scammers would sell snake oil medicine in every village, then disappear. The Church would sell absolutions. All sorts of fake goods flooded the markets, from wine to guano. Bubbles like the South Sea Bubble devastated entire economies. Arguably the Ancient Régime in France was fatally weakened by too many such scandals on its watch.
Quite a lot of the current regulatory framework is a reaction to the ubiquity of scams in history.
Hmmm. This also means that there is an opportunity in there.
In the Early Modern Ages, powerful people wove endless plots against one another, the Borgias held papacy, poisoning was a common way to solve disputes, all sorts of offices were sold openly...
... and in the middle of this, the Huguenots and Calvinists built huge business empires by being known as honest and reliable.
Maybe there is some space to repeat this by just avoiding the entshittification trap. I can see this happening in some corners of the IT world already. For example, Cloudflare has a good reputation in almost all regards. Linux has also held and expanded its market share by not being scammy and sleazy.
I even feel that CloudFlare is beginning to go the way of the enshittification — I don’t have anything in particular to point to at the moment but the data points are adding up, for me
Trust has been eroded for the last 30 years for many reasons and most of them are due to how the politicians and public institutions have behaved.
In all western countries, if you dig a little, you will find scandals after scandals from the ruling parties or the so called elite.
Why should a lambda citizen believe that there is any sense of trust anymore when those who are at the top clearly have no problem lying to get in or stay in power?
It's the same problem with the media biases. Newspapers and news organizations have completely stopped providing information and started pushing propaganda. Nothing more.
Then we lament the loss of confidence and the demise of democracy in the west.
Increased transparency is part of the process.
Prior to the Internet, it was much harder to keep up with all the dirty details of whatever was happening in your parliament/Congress/government/town hall. Most people defaulted to a certain degree of trust by being happily ignorant.
There is a common note among the old political journalists (I mean 100+ years ago) saying that the practical execution of power was extremely dirty and that blessed is anyone who does not know.
Well, now we all know.
The Fourth Turning argues institutional effectiveness is cyclical and that the US is headeds towards the end of tearing down institutions versus building them up (and towards the end of focus on self versus community).
This does assume the current crisis is successfully resolved as it was for the Civil War and Great Depression/WWII.
https://en.wikipedia.org/wiki/The_Fourth_Turning https://en.wikipedia.org/wiki/The_Fourth_Turning_Is_Here
People have gotten more and more exposed to how the government and politicians have been lying to them for decades. What would you expect but a low trust society with this.
Politicians have been breaking promises and not answering direct questions and burying inconvenient facts for decades.
They've only recently started directly lying.
There is a difference and conflating the two is a large part of the problem.
You can find examples of them lying in history, but those were huge scandals that brought down governments. Lying had consequences. That's what we've lost
1. The late stage of capitalism must have started back in Roman times, caveat emptor.
2. Most societies are low trust societies, with certain exceptions usually based on draconian law enforcement.
I don't trust a lot of thought was put into this article
I don't even think the examples provided are even what most people would call "trust" scenarios. In most of these examples we should have never ever assumed any trust on the other party in the first place.