Brainstorming about Trust

So, trust is pretty much at the center of the economic universe. It is the life blood of most human cooperation, doubly so in a capitalist economy. The thing about trust is that we just can’t seem to escape a need for it. When we don’t trust each other, we trust in contracts, laws, and the legal system. We trust in them so that we can limit the amount of faith we need to have in our business partners. However, these intitution are created and administered by the American Aristocracy.[*] At first blush, it appears as though we are placing our trust in an impartial and fair institution[†], but in effect, we are really just shifting our trust to those who control the system; who I will call Aristocrats.[‡]

So now we’ve given these folks our trust. What do they do with it? Should we trust them? What happens if we do? What happens if we don’t?

Dr. Seuss comes to mind here, in his book “Did I Ever Tell You How Lucky You Are?” There is a town with only one bee, but the town’s people don’t think the bee is working hard enough. So they hire a member of their community to supervise the bee, and he becomes a Bee Watcher. However, the bee doesn’t work any harder, so the people decide someone needs to watch the Bee Watcher, enter the Bee Watcher Watcher. This cycle repeats itself over and over, until everyone in town is a Bee Watcher Watcher Watcher…

This story illustrates a point I want to make:

We should not want/try avoid the trust issue. It is involved in so much more than economics, it is vital for almost all human interaction and cooperation. The closer we get to trust, the better off everyone is, which is why honesty is such an important principle.

So, in addition to (or perhaps intead of) creating hedges to protect us from the effects of abused trust, we ought to focus more on highlighting the importance of trust. We ought to find innovative and inspired ways to cultivate trust among each other and across cultures.

Is the human race capable of making and living with such a commitment? Can those who trust fully withstand the injustices of those who will undoubtably violate trust? Can we deal with the consequences of a world without contracts?

Capitalism is based on self-interest, which can be, but frequently is not, alligned with the common good. Not exactly the ideal system for trust to flourish in. So, to answer the question of condition or problem, I am going to rule that a lack of trust is definitely a problem. What is more, I am going to say that it is a problem inextricably linked to capitalist self-interest. In such a system, where the chief motive is to make one self better off, trust will always be an issue.[§]

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[*] I’m going to assume that if you have the power/authority to author, interpret, and administer the rules of the game, you are part of the de facto aristocracy.
[†] This is what a middle class white kid from Troutdale might think at first blush. Others may have had much different first impressions of some of our governing institutions.
[‡] Not to be confused with these guys.
[§] Again, not trying to bash capitalism here, just trying to identify conditions vs. problems, and how to best look at them in order to start thinking about solutions.

Nice

Elyza comes in last night dressed as Snow White and asks her daddy, "How do I look Prince Charming?"
She then comes to me and I say, "Oh, what a beautiful Snow White you are."
To which she replies, "Thank you Evil Queen."

Yes, since most of her fairy tale stories involve a female villain, I am always the villain while daddy is always the prince.
Unless of course Elyza is in one of her grumpy moods, and then she is "the mean stepsister and I am going to tear your dress to pieces."
Precious.

Cheap Thoughts from a Wannabe Economist

I’ve been thinking a lot about the economy lately, not just about what’s going on in it, but what makes it run. I am engaging in some public brain storming here, so please don’t anyone get upset, many (if not all) of the following thoughts are just hatching.

I think that without some sort of commitment to community we may see a cycle of grab-what-you-can-while-you-can, which will continually destabilize our system that relies greatly on trust. In other words, repeating cycles (ever shortening) of what we have experienced over the last three years. If this is the case it will cripple the system to a point where no large scale business will be possible due to lack of trust in the regulatory system.

This seems to be a repeated cycle in free market economies. Some few who have a high measure of control/knowledge of the system are able to reinforce the system for their benefit.* These people are able to use the system to gain a great amount of wealth. Over time, the amount of wealth that these powerful few gather begins to be at great expense to those who have little or no relative power (the middle and lower classes). When wealth begins to concentrate too much in favor of the upper classes, large numbers of people get angry.**

When people get angry enough people loose their offices, and hopefully we start seeing a redistribution of income that is more evenly spread. In other words, the system corrects itself.

However, if the powerful have strong control over the pool of public ideas, they can direct the blame for unequal distribution of wealth wherever they please. It is possible that we are entering into one of these phases. So, one might ask, what is next?

Answer: I have no idea, and this is not the purpose of this post. The purpose is to illustrate a condition that is (in my opinion) sub-optimal. This opens us up to think about what underlying mechanics make our system run the way it does and what changes could we make to improve the situation. This also means we need to talk about what is could be considered merely a condition, and what is a problem that needs to be corrected.

Future posts I have planned will begin to explore these areas.

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* This does not preclude rags to riches stories, but does make them less and less probable. For all its virtues, who you know and who your parents still matters a great deal in America.

** Unless they can be made to blame someone else, and kept working hard for little pay and thus distracted from the situation.

Happy Halloween!

We hope you all had a happy Halloween and got to eat lots and lots of candy, candy, candy!

Pumpkins!

No pumpkin patch. Yah, seriously. Or maybe I just didn't look hard enough, but we just went to Target and bought ours the good ole fashion way :) * Kuddos to anyone who knows what the pic on Brian's pumpkin is.
Last night we went to Sea World's Halloween and did a little trick or treating and then saw a cool show with Shamu and Jack O. Lantern. All the aquatic people were dressed up like skeletons and there was fire and flashing lights. . . it was pretty cool.

Happy

As requested: A little Lyza to make you smile :)

My Favorite Thing about S.A.

I love the rain. I love the smell (which pretty much smells like dirt) after it rains. I love the cozy of dark clouds and the pattering of water on the roof. And here, the sound of a waterfall since our gutters are worthless :) The great thing here is when it rains, it downpours, every time. We have this little ditch between our street and the next, and it becomes a little river on rainy days. We also gets lots of really loud thunder and lightening. And it happens fairly often. I would say we have had just as many rainy days as not this past month or so.
And so, Elyza and I will enjoy our cozy day curled up on the couch, reading books, watching fun movies, and drinking hot chocolate, even though it isn't cold outside, but inside we can pretend it is a little :)