​Trust

Sunday Evening Carpe Diem

​More below.

This is the gig economy in a nutshell. The Internet allows us to verify, and therefore trust individuals in ways we never have been able to before. It has allowed individuals to develop the same kind of trust that only institutions could develop in earlier ages. So, we are willing to call an Uber ride, and depend upon the driver to get us to our destination. 

In the past, we had no way of determining whether any individual we did not personally know was trustworthy, so we were only willing to trust individuals who were employed through institutions. But the Internet allows us to know substantially more about individuals, and this allows institutional level trust, or better. 

Older folks trust the Internets mechanisms for bridging uncertainty less than the young. 

The idea that institutions are losing trust is likely somewhat wrong. We simply now have other avenues of ascertaining the past actions of institutions, and individuals, and this allows us to assess our ability to trust an individual as higher than our experience to trust an institution. 

The speaker here notes that trust has come in three flavors: individual, institutional, and distributed. Individual trust came early on because we absolutely had to trust others for survival. It also created the first human societies which were communalist in nature, this requires small groups of not more than perhaps 100 or so people. Everyone needs to have a strong deep knowledge of the others for this level of trust. Failure of trust always ended in some sort of "excommunication," or banishment. These societies never thrive, and only barely survive. 

With the advent of institutions, the goal of the owners of the institution was to create a high level of trust with every individual acting on behalf of the institution. However, this results in a trust level at the lowest common denominator level, meaning that the individual who is willing to trust the institution will only do so to reasonable average of his experience with the individuals representing the institution. Another problem is that   the individual generally can only have a few experiences with a few institutions. So, institutions built trust reputations, which allows individuals without experience to assume they too will be able to trust the institution. Individuals commonly had great difficulty with this, outside of personal referrals.

The new advent in trust is the Internets ability to aggregate information, experiences, and distill them into small discrete informational packets. This allows us to quickly determine a trust level for a particular individual performing a task, say an Uber driver, or an independent contractor plumber hired off of Angie's List. 

SideBar: Institutional trust is really an AngloSaxon (atomized nuclear family) creation, it never existed in the other family (hierarchical) structure.

I'm not convinced of her argument about why we are losing trust in institutional entities. I suspect it is more related to the fact that we view trust as solely an individual to individual thing, and that the institutional trust was always little more than a foreign, but nominally acceptable mechanism to extend trust with some rudimentary assurances. In essence, we felt the institution's reputation was sufficiently valuable that the institution would ensure our trust levels were met should something go awry. But, in the end, it was the individual we were dealing with who acted, not the institution, so failures were inevitable since we could not ascertain how much to trust that individual.

It is not that online trust makes us accountable, but instead that living in a society where we all have personal responsibility for our actions, all have good, if not perfect, information about the others actions, and the ability to rate, or rank these actions creates individual accountability. Or as all concealed carry holders will say, an armed society is a polite society. Personal responsibility, with immediate consequences for bad acts results in more trust, than either the individual trust model, or the institutional trust model. 

While the Internet makes this easy, it is not necessary. The concealed carry program of the various states points out that if one simply creates a few minor barriers to entry, for example, concealed carry licensure costs, training time, and costs, that the self selections which occurs results in only the best individuals seeking the license. So, we find that consistently, the safest significant sized group in each state is those people who self select to carry a concealed handgun. 

Block chain will likely revolutionize finance, money, and the economy. I still think the more massive change will happen in work, employment, and wage. 

Employers today remain mired in the 19th century employment model. Employers must have physical control of employees, and ensure they are actually working. The Uber/gig economy concept is beginning to turn this on its head, allowing the conversion of employees into independent contractors who have control over their work place, times, hours, and most of the rest of the necessaries. Within the gig economy, the contracting individual seeking workers needs to trust that there will be contracting workers willing to work. That has not happened in the more general work world today, instead the 19th century industrial employment model remains. This will not last.

At some point in the near future it is very likely businesses will slowly begin to offer work, perhaps legal work first to more and more independent contractors. These are very likely to be former employers who will work on a gig economy basis. But this model can apply to nearly all current employees, from accountants, and bookkeepers, to inside sales representatives, to marketing departments, and on, and on. 

With Bitcoin revolutionizing the world of finance, and money, and a new gig economy revolutionizing the world of work, and employment, what is to stand in the way of the Internet/gig economy from revolutionizing the world of government? Little. I suspect that this revolution will take an initiator charge, but I suspect that charge will be the pension/budget/funding collapse which stalks state and local government today. As these issues cause more, and more fiscal problem in local and state government, there will be growing pressures to streamline, automate, gig employ, and otherwise revolutionize the government model.

I can hardly wait!