Trust

Definition

See the entry in Wikipedia for a description of the concept.

See also p2ptrust.org, not recently updated but with some good links.

How different scientific domains define trust, see http://www.trustlet.org/wiki/Definitions_of_trust

Description

The Science of Trust

John Clippinger [1] reviews the science confirming we are beings of trust:

“These good acts give pleasure, but how it happens that they give us pleasure? Because nature hath implanted in our breasts a love of others, a sense of duty to them, a moral instinct. In short, which prompts us irresistibly to feel and succor their distresses.”

-Thomas Jefferson, 1814

"What makes the discussion of trust today different than in any other time in history, is that that it has become the object of scientific investigation and technological innovation. A variety of “hard science” disciplines, neuroscience, evolutionary biology and psychology and “new sciences” are converging on a scientific understanding of trust. These scientific findings in turn are leading to the design of social network technologies that spontaneously scale to generate trust relationships for a variety of economic and social activities. Not surprisingly, these findings have dramatically changed the scientific basis for our understanding of human nature.

Underlying all political theories are certain “folk” assumptions about human nature. These have been typically framed through appeals to a fictitious past, a “state of nature,” where early humans competed ferociously to advance their self interests. Much of contemporary economic theory and policy is still rooted in such foundation myths. For instance, one of the core principles of economic analysis, the notion of Nash Equilibrium, is based upon the premise that all “rational actors” are primarily motivated through “lucid greed”. As a consequence, significant additional social, economic and legal inducements are required to get people to trust one another. The argument goes that since people are not naturally inclined to trust another, public trust requires “wealth incentives” to motivate risk taking. According to this view, there is no inherent benefit to trusting or participating in a larger social effort. Against this hard-nosed argument of narrow self interest, Thomas Jefferson’s above quoted appeal to people’s “moral instinct” to help one another seems decidedly naïve and Polyannish.

But Science has weighed in on this debate and it seems that Jefferson was right. People are wired for trust. They have the “moral instinct”. It is called oxytocin, a neurotransmitter located in the hypothalamus that rewards acts of trust and social attachment. Contrary to the expectations of free market economics, evolution has wired people to feel better when they trust and help one another. In one sense trust is its own reward But in another sense, public trust is the way a group - a species - ensures its survival. Trust in this sense creates more effective collective and coordinated action, not only by reducing transaction costs, but selecting for those joint behaviors that exploit all the resources of a group.

So strong is the survival premium of people NOT endlessly competing with one another, (though competition certainly has its place,) that human beings have evolved “mirror neurons” that enable them to understand what others are experiencing, in short, to empathize with one another. Although people have a natural propensity to trust, trust is not necessarily ‘blind”. It requires transparency, accountability and credible ways of signaling success. Even though evolution has recognized the importance of trust by encoding it in many neural mechanisms, there still have to be certain types of “social scaffolding” in order for these innate social mechanisms of trust to function.

According to evolutionary psychologists and biologists, the human brain evolved many highly sophisticated social exchange algorithms for interpreting, signaling, and coordinating human interactions. It turns out that human beings evolved as a social species - not as atomic individuals, and hence, evolved joint innate mechanisms for shared behaviors and experiences. The reason that markets work is not becauseof any individual capacity for reflecting on rational self interest, (”lucid greed”) but rather because of biologically encoded, preconscious mechanisms for joint social exchange and coordination. In other words, pricing mechanisms and exchange contracts are the social scaffoldings that trigger people’s innate propensity to trust and exchange goods. Neurosciences and several neuro-economic experiments have shown that the principal mental processes involved in economic activities are not conscious but preconscious, and hence, not reflective, utility maximizing nor principally self-interested.

The neurosciences continue to make extraordinary progress in understanding the specific neural pathways involved in human interaction and trust building. Experiments have demonstrated that there are specific neural mechanisms for trust - (detecting cheaters, sense of fairness, shame, fairness, etc.) and they have a high degree of social fitness value. Similarly, evolutionary biology and new branches of economics, neuro-economics and evolutionary economics, have documented the conditions under which certain social network roles and modes of interaction increase social trust, and thereby further overall economic fitness.

The science of trust is proceeding on two fronts. The neurosciences are mapping the mechanisms of trust in the brain and the evolutionary sciences (biology, psychology, sociology and economics) showing why such trust mechanisms evolved within groups and how they are necessary to create more fit and adaptive forms of human organization. Evolutionary biology and game theory are providing the basis for assessing which forms of social exchange are the more “evolutionary stable strategies”, thereby providing criteria to assess different approaches to public trust.

The implications for public policy of the findings of the science of trust are far reaching and profound. For the first time, political assumptions about human nature can be grounded in the hard sciences, which in turn, can provide the basis for leveraging that understanding to create more human, viable, and adaptive social and economic institutions.

Francis Fukuyama, the noted author of a major book on trust and economic well being, argued that “spontaneous sociability” underpinned the success of modern economies.” Recent multi-national studies on trust and economic well being have born out Fukuyama’s insights. They have shown that high trust societies have significantly lower incidents of crime and greater economic prosperity. Yet as long as trust is treated as a moral virtue, or as a cultural intangible, it will still be difficult, if not impossible to shape through policy. But if trust were something that Science can understand, and technologies can enhance, then it becomes a different ballgame altogether. Then trust can be approached as a malleable human artifact, which like health, longevity or income equity can be quantified and directly affected by technological and policy interventions." (http://www.jclippinger.com/science-of-trust/)

Technologies of Trust

John Clippinger [2]:

"According to the evolutionary anthropologist, Robin Dunbar, the human brain evolved to accommodate the complexities of social interaction and that it has reached an upper limit of 150 to 200 individuals that it can keep track off. Beyond that limit, the human brain can’t compute all the debits and credits, obligations, and protocols of social exchanges, and as a result confusion, distrust, and hierarchy can set in.

Technology may offer an important boost to public trust by augmenting the human capacity for social computation thereby making it possible to scale trust to include not just hundreds, but thousands and even millions of participants. The Internet from its inception was designed on the principle of gift exchange and it has grown to offer new forms of social exchange and work that were thought totally impossible just a decade ago. In addition to the well documented successes of the Open Source Movement, the success of eBay is perhaps the most powerful “existence proof” of the power and scalability of trust. With the exception of eBay founder, Pierre Omidyar, few economists thought that buyers and sellers were sufficiently predisposed to trust one another that they would undertake significant transactions with strangers over the Internet. Yet through trial and error and well honed intuitions about human nature, Omidyar recognized that given sufficient transparency, a credible system of ratings, and community accountability and enforcement, spontaneous communities of trust would self-organize to enable significant economic transactions. In eBay’s case, $12 billion in revenues in 2002." (http://www.jclippinger.com/science-of-trust/)

Policies of Trust

John Clippinger [3]:

"As the sciences of trust begin to reveal the role and dimension of trust in social organization, the public policy and education challenge becomes how to translate this often esoteric knowledge into actionable public discourse. The first task is educational, to bring these findings to the attention of those in government, business, the non profit sector and academia and derive the implications of these findings for these different constituencies. It is our view that the implications of the science and technologies of trust will be so far reaching as to entail a rethinking of many of the key premises and approaches to public policy; in effect, bringing to an end the anecdotal thinking of the Enlightenment and ushering in a more rigorous scientific understanding that will have political and institutional implications for generations to come. Rather than pitting “free markets” against the “heavy hand” of top down government regulation, a trust approach offers a third alternative, one that creates a “context of trust” whereby conditions of transparency, mutuality and accountability trigger innate self-organizing social exchange processes that in turn catalyze Fukuyama’s spontaneous sociability." (http://www.jclippinger.com/science-of-trust/)

Discussion

Trust in Peers is replacing trust in institutions

From the Edelman Trust Barometer, 2006:

"“The most profound finding of the 2006 Edelman Trust Barometer is that in six of the 11 countries surveyed, the “person like yourself or your peer" is seen as the most credible spokesperson about a company and among the top three spokespeople in every country surveyed. This has advanced steadily over the past three years.

In the US, for example, the “person like yourself or your peer" was only trusted by 22% of respondents as recently as 2003, while in this year’s study, 68% of respondents said they trusted a peer. Contrast that to the CEO, who ranks in the bottom half of credible sources in all countries, at 28% trust in the US, near the level of lawyers and legislators. In China, the “person like yourself or your peer" is trusted by 54% of respondents, compared to the next highest spokesperson, a doctor, at 43%.

Meanwhile, “friends and family" and “colleagues" rank as two of the three most credible sources for information about a company, just behind articles in business magazines. Again, in the US, the “colleagues" number has jumped from 38% in 2003 to 56% in 2006. We facilitated the revolt by employees of Morgan Stanley against top management, soliciting opinions through their futureofms.com website, which then led to stories in traditional media.

Why the change, with increased reliance on those you know? The Edelman Trust Barometer shows clearly the deep trust void facing traditional institutions including business, government, and the media." (http://blog.p2pfoundation.net/?p=50)

On the Decline of Trust

"Full Survey: Trust in Governments, Corporations and Global Institutions Continues to Decline

Since signaling the importance of trust in world affairs, the World Economic Forum has been monitoring public trust levels through a bi-annual global public opinion poll conducted by GlobeScan Incorporated. The latest findings from the poll show that trust in a range of institutions has dropped significantly since January 2004 to levels not seen since the months following the September 11 terrorist attacks in 2001. The poll also reveals that public trust in national governments and the United Nations has fallen the most over the past two years.

The same set of questions has been put to representative samples of citizens around the world since January 2001. The major findings from this year’s poll are:

• Public trust levels in national governments, the United Nations and global companies are now at their lowest since tracking began in January 2001.

• Since 2004, trust in government has declined by statistically significant margins in 12 of the 16 countries for which tracking is available. The Russian government is the only exception, enjoying continuously increasing trust from its citizens since 2001.

• The United Nations, while continuing to receive higher trust levels than other institutions, has experienced a significant decline in trust from 2004 levels in 12 of 17 tracking countries, suggesting an impact from the scandal over the Oil for Food Program.

• Public trust in companies has also eroded over the last two years. After recovering trust in 2004 to pre-Enron levels, trust has since declined for both large national companies and for global companies. Trust in global companies is now at its lowest level since tracking began.

• NGOs remain the leaders in trust, but they also have to contend with decline. In 10 of 17 countries for which data is available, trust in NGOs has fallen since 2004, in some cases sharply (e.g., Brazil, India and South Korea).

These findings are based on a global public opinion poll involving a total of 20,791 interviews with citizens across 20 countries (n = 1,000 in most countries), conducted between June and August 2005 by respected research institutes in each participating country under the leadership of GlobeScan." (cited here: http://communities-dominate.blogs.com/brands/2006/03/the_erosion_of_.html)

Projects

1. TrustLet is a collaborative research project on Trust Metrics
2. The infoliberalism project includes a p2p trust system that aims to form the base of a new political and economic order.

More Information

See our entry on Trust Metrics

A formula for calculating Aggregated Trust

Key Book to Read

• Book: Trust: Making and Breaking Cooperative Relations, edited by Diego Gambetta. Basil Blackwell, 1988, online in full-text format