DOES “HIGH TRUST” MEAN? HIGH TRUST = LOW TRANSACTION COSTS = HIGH QUANTITY AND V

https://en.wikipedia.org/wiki/The_Moral_Basis_of_a_Backward_SocietyWHAT DOES “HIGH TRUST” MEAN?

HIGH TRUST = LOW TRANSACTION COSTS = HIGH QUANTITY AND VELOCITY OF EXCHANGE = GREATER WEATH AT LOWER RISK.

(the not so obvious but obvious)

When we say ‘high trust’ and ‘low trust’ what we mean, is the willingness that one has to conduct a contract, whether formal or informal, with a random party that is not a member of your friends or family.

In a low trust society you can only really trust personal relations. In a very low trust society you can only really trust family members. In a high trust society you can trust the average person on the street as thoroughly as you can a friend or family member. (Often more so than family members.)

And given that politicians are universally corrupt, and that we depend upon judges and juries enforce this universal trust, and that judges and juries consist of people from the community, then the community must consist of high trust members for the system to perpetuate itself. So how does one construct a high trust society? Well, western europeans did it with property rights, prohibition on inbreeding and cousin marriage, and prohibition on marriage and child rearing until one had home and hearth.

Other than hiring a legion of northern european jurists, adopting the common law, requiring wills, granting universal private property rights, prohibiting cousin marriage out to four or six generations, prohibiting cohabitation between generations, it’s pretty much impossible.

And feminists and socialists are doing everything in their power to dismantle the total prohibition on free riding that the northern european people have created over five thousand years, but most importantly in the past 1500.

Those of us who claim to be ‘gentlemen’, will often do business on a handshake. Doing business by handshake is a status symbol. For me, I have always said that “I made a deal, we stick to the deal” because this preserves your ability to make deals with high trust. Sometimes we fail.

One of my long time business partners was notorious for constantly revising deals for his own convenience. Which makes me a bit nuts. But people put up with it from him because he always appears to be so honest. But the truth is, it’s an act. He’s always acting in his own pragmatic interest.

Using rural Italy as the example, the first and best work is the Moral Basis of a Backward Society by Edward Banfield.