As I was looking for documentation for this post, the top result from Google was a link to “Rachel Botsman: The currency of the new economy is trust” (link) followed by an OECD forum with a highlight on “Trust is at the heart of today’s complex global economy.”
While Botsman’s lecture, punctuated with examples of the emerging collaborative economy, is worth viewing, what I challenge is the idea that trust is a new currency or that trust is more important in today’s economy than it was in previous ones. With the exception of war and predatory economies, trust has always been at the very centre of the economy. If something has changed in the economy it is how globalisation has affected trust, its currency.
Trust is at the heart of the economy — and open societies!
In Adam Smith on Trust, Faith and Free Markets (link) Jerry Evensky writes:
In a constructive society, trust and security are based on mutual respect among citizens and between the citizen and the State. It is the maturation of the citizen and of the State together that makes the emergence of a commercial free-market society possible. It is the trust engendered by this maturation of civic ethics and institutions that makes it possible for individuals to enter the market system with confidence that the competition will be a game played by just rules.
When trust is shaken, individuals pull back and the system contracts. Where trust grows, individual energy and creativity are unleashed and the system grows. In Smith’s vision of humankind’s progress, trust is the central theme.