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Trust is a confident relationship with the unknown. From the moment we became conscious, humans have navigated the world through an ever more complex series of risk assessments. Should I try this new thing or go this new way? Should I hire this person or buy this product. Which loan should I take, which stock will give me the greatest return?
The problem is the world is incredibly complex. To complete a full risk assessment before taking any decision would be at best prohibitive and at worst incapacitating.
So, to help us move through the world more easily, we often seek shortcuts to help us navigate the unknown. This is especially prevalent when dealing with other people. Over time, the nature of these shortcuts has changed based on our circumstances.
In her book “Who Can You Trust?”, Rachel Botsman defines several cultural trust shifts. They point to changes in the shortcuts we use to navigate the unknown and the strangers around us. And, she continues, they help to explain why so much of the world right now seems chaotic and scary.
Local trust
Local trust lasted a long time. A really long time. In fact, most of human civilization has used this shortcut to help create and maintain trust relationships with other people.
When human habitats were about the size of small market towns, trust tended to be based on who one knew in the community. You would tend to see the same people every day. You’d buy your bread from Egbert. You’d borrow some money from Edmund. And if you didn’t pay for the bread or pay your loan back, everyone would know that you were an unsavory character. People wouldn’t do business with you and you would rapidly lose the protection of the community. This was a big deal and could quite literally be a matter of life or death.
Local trust was core to these tribes and towns all the way through to the late 18th century.
Features of local trust
- Subjective
- Open
- Small scale
- Isolated
- Non-hierarchical
As small market towns grew, they became more productive. In time they became more profitable too and people started to form companies. Eventually, it was impossible to avoid interacting and trading with strangers.
The problem was that local trust couldn’t really help you work out if someone new was trustworthy or not. There was no gossip about them. They’d not done business with anyone you knew. They had no reputation to tap into. They might even be working for someone else, someone who you had never and would never meet. This was a risk. So, humans developed our first major trust shift – institutional trust.
Institutional trust
The Honourable East India Company was formed in 1600 to trade in the Indian ocean and later with China. Soon it seized swathes of the Indian subcontinent, part of South East Asia (including Hong Kong), and had posts in the Persian Gulf. By the mid-1700s its main exports were cotton, silk, saltpeter, and tea. They turned over the modern equivalent of close to $1 billion and, like all conglomerates, showed their dark side through trade in slaves and opium.
With the arrival of companies like the East India Company and those like it (such as the Dutch Vereenigde Oost Indische Compagnie or V.O.C), humans stopped interacting with local markets as much and started to interact with huge and faceless corporations.
These brands had no concept of the individual which meant that people had to find new ways of forming trust relationships.
To do this, people had to make a trust shift. Rather than the reputation of an individual, people started to rely on black-box processes – things like contracts, insurance, and regulation – to ensure that their relationship with the unknown, in the hands of these faceless brands, could be trusted. In return, they would give these institutions incredible amounts of power to decide who was allowed to do what and how things could work (consider the hoops one needs to jump through to buy a house or get a loan).
This model formed the basis of our trust for another 300 years. The black-box processes became ever more convoluted, requiring ever expanding armies of technical consultants and experts to navigate. This form of trust served to lay the foundation for most of the economy and by extension all of the largest brands that have come to dominate the world today.
Features of institutional trust
- Opaque
- Closed
- Centralised
- Permission based (computer says no)
- Top down
Distributed trust
In the same way that local trust wasn’t designed for big cities and bigger businesses, institutional trust was not designed for the digital age. Technology meant people could pry open the inner workings of these black-box processes and see what was going on inside. Often, they didn’t like what they saw. Meanwhile, these large companies were able to utilize technology for greater and greater profit in more insidious ways.
These two elements working in tandem have led to a dramatic decrease in the trust placed in our institutions. There have been huge breaches. Things like Cambridge Analytica, the horsemeat scandal, all of Facebook and Prince Andrew existing.
At the same time, technology has enabled us to simplify the way we mere mortals judge big conglomerates because we can share opinions and reviews incredibly quickly. These are powerful. Good reviews, from eBay to Silk Road and Deliveroo to Airbnb, are now so critical that bad actors will pay serious money to have them fabricated just to boost their reputation (and in turn, their profit).
The mirror can be turned the other way, with companies like Uber and UpCounsel (Fiverr for Lawyers) rating you, the user, for your interactions and quality. The implications of a bad review mean you can be denied access to top-tier services.
The result is that trust has begun once again to sit outside institutions, in the apps on our smartphones and in the content of online reviews. Reputation no longer comes from your standing in a small community or the power of your brand, but rather the amalgamation of hundreds and thousands of data points, often from a wide range of demographics and cultures. This is known as distributed trust.
Features of distributed trust
- Transparent
- Inclusive
- Networked
- Accountability
- Bottom Up
The challenge
As technology becomes more sophisticated, some people see a slippery slope emerging. On the one hand, the big companies’ evidenced disregard for human and societal well-being is endemic.
Democracy and social cohesion seem to be under constant attack. Individuals are constantly bombarded with adverts and psychological tricks that are designed to leverage this new form of trust and generate ever more profit. Individual’s actions are now under a microscope more than ever before and it’s conceivable to imagine a big brother / Black Mirror type future where every interaction is rated and you end up with a social credit score that dictates your access to goods and services.
On the other hand, this most recent trust shift can lead to progressive and positive places. In this scenario, these trust systems are utilitarian. The technology promotes and supports trust relationships in a way that doesn’t require a constant and invasive system of surveillance. This route would mean the technology could augment and strengthen the types of things that local trust helped foster in the past – community and shared responsibility. For this route to simply emerge, let alone flourish, there needs to be a greater focus on trust-based incentives for individuals and companies alike.
Rachel Botsman is an expert in trust and technology and what this means for life, work, and how we do business. She’s a graduate and first-ever Trust Fellow of University and is a speaker well worth watching via her many talks online. A link for her book, Who Can You Trust? be found here: https://www.amazon.co.uk/Who-Can-You-Trust-Technology/dp/1541773675
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