A Guest Post from someone who wants to be known only as “Bastiat” deals with the importance of trust in a free society. Without trust, it is questionable whether freedom can exist or on what basis. When trust disappears or even declines, it implies a society vastly different from what we are used to.
What holds a society together?
In these troubling times, it is a question worth asking. While society is an unknowable and complex abstract, I think there is a very simple and very useful two-part answer to this question:
- The division of labor
The division of labor should make intuitive sense. Rather than all of us learning to make our own shoes, bake our own bread, grow our own food and sew our own clothes we are all better off if we specialize and trade. That way, we tend to do what we each do best increasing the productivity of society. As a result there is a a higher quality of more goods available. Clearly, we’re all better off if we specialize and trade. This benefit encourages social cooperation among individuals.
Trust is the tricky one.
The division of labor only works when there is exchange. And to enter into exchange, especially complex exchange, you’ve got to trust that the other person will hold up his end of the bargain. You’re also got to have confidence that the rules of the game won’t change as you are playing it. As far as possible you want to know the risks and manage them. Against The Gods is an excellent and entertaining study in how much of the modern world is made possible by the management of risk.
There is a basic presumption of fairness and equity