Friday, August 10, 2018

The Three Ages of Trust

I just realized that I am going to have to read George Gilder's latest book, Life after Google: The Fall of Big Data and the Rise of the Blockchain Economy.

Why? Because I realized, reading a review of Gilder's book, that blockchain technology radically changes the nature of trust. To see why, let's look at trust through the lens of the three great Ages of Man.

In the hunter-gatherer age, we are talking about a pure face-to-face society. In that culture the dictum of J├╝rgen Habermas applies. Here is how I describe Habermas in my American Manifesto.
Habermas's Theory of Communicative Action, [is] an attempt to rescue Marxism from the obsolescence of its labor theory of value and the despair of Horkheimer and Adorno. Habermas still carries forward Marx’s two-world system of abstract labor and social labor; only now he finally detaches it from the exploded labor theory of value. Habermas converts the world of abstract labor and social labor into system and lifeworld. System is not just the alienating force of big bad capitalism, but of the terrible twins, rational government and rational business, the system of force and the system of money. Lifeworld is not just social labor producing social value, but, following Husserl and Heidegger, a full face-to-face culture of shared experience in the world, for being is not just consciousness of the ego, but being-there in the world, and being-with the Other.
I would say that the "lifeworld" of Habermas is the face-to-face world of the hunter-gatherer tribe, "a shared culture in which all things and all situations are 'always already' familiar." In this lifeworld trust, the social glue of human social cooperation, is obtained through the unified shared culture in which everyone is down with the always already familiar. To depart from this universal shared culture is to betray the trust that is automatically extended to all the members of the culture because they all know the rules. Such betrayal of trust is unthinkable.

But when communities grow bigger, and the hierarchy of kings and priests develops, then the universal lifeworld no longer applies. That is when written law and legal enforcement begins. It is very hard to betray the trust of the community in the hunter-gatherer tribe, but not so hard in the agricultural hierarchy. In fact it is notorious that underlings almost always steal from their bosses, from servants taking a nip of the master's gin and employees raiding the stationery cabinet at the office to the anonymous young men of the city forming into criminal gangs and confidence tricksters defrauding trusting old women. In other words, once you get out of a simple face-to-face community you have the problem of enforcing trust. And notice also that you see the emergence of a public politics in which the untrustworthiness of the Other is the basis of membership. Politicians make hay out of stirring mistrust in their supporters. In class politics they teach their followers to hate the rich and the businessmen; in race politics they teach them to hate the other races; in gender politics they teach their followers to hate the other gender. Still, people have managed to construct trust networks in the modern age. We see, of course, the growth of markets and brands, which are all about creating trust. And in the internet age we have credit cards, online retail and banking, in which trustable people can travel the globe and be trusted everywhere. Then there are online services like Uber and Ebay which create artificial trust reputations with their star systems.

Enter Blockchain. As I understand it, blockchain technology creates a quantum leap in trust. An example is title insurance. If the history of a piece of real estate is encoded in a blockchain it means that you can trust the history of the property you are buying. In fact, no need for Title Insurance Companies! But this means that we don't need government to enforce trust anymore. Trust is already encoded in the blockchains in which trustworthy people conduct their business. I imagine this also makes it much harder for cheats and frauds to practice their depredations. Thus trustworthy people do not need to pay for a bunch of government heavies to keep the peace and punish the evildoers. The system becomes trust-enforcing.

The most obvious application of blockchain is money, where government has been indispensable in enforcing a network of financial trust and has monstrously betrayed its trust. Imagine a world where the government can no longer cheat and inflate and muck around with the credit system by favoring its supporters.

Of course, it is early days, and nobody really knows what will ensue with the blockchain economy. But we can hope, and what I hope is that the ability of governments and politicians and activists  to sow distrust and loot the wealth creators will be seriously diminished. If that happens then humans may live into a new Golden Age where trust and fair dealing becomes not just the right thing to do but a matter of life and death, where it is no longer the poor that go to the wall, but the untrustworthy.

I have an idea, which I admit is just wishful thinking, that when crooks and frauds find that their cunning tricks no longer pay then they will pretty quickly mend their ways.

And find other ways to misbehave.

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