Who Can You Trust? summary

Trust is – and always has been – the thing that makes the business world tick. But trust itself has changed throughout human history.

Before our own age, there were two distinct periods. These can be defined as the age of local trust and the age of institutional trust.

We are increasingly moving away from institutional trust. Shocks like the 2008 financial crisis have amplified skepticism about the established institutions at the heart of our societies. The greed and chronic malpractice of the institutions that we trusted with our money became plain to see once the market crashed.

But the crash of 2008 expedited a process that was already underway. Technological change had been sapping confidence in institutions for some time prior to the financial crisis.

The sharing economy has changed the way we do business. The most successful representatives of the new ethos have broken with the old model of traditional outlets (selling goods and services) and instead focussed on connecting customers with peers online.

Take Uber and Airbnb. Both companies allow their users to generate income from otherwise unused assets like cars and spare rooms by connecting them with their peers. Their success speaks for itself. Uber is now worth $68 billion and is larger than established multinational giants such as Deutsche Bank and FedEx. Airbnb is the second-largest hospitality company in the world, with a worth of $31 billion.

Today’s technologies mean that betraying someone’s trust for short-term gain has negative long-term consequences.

That’s because we all leave a reputation trail behind us. Other people can see how trustworthy we are by following our trails, just as we can see how trustworthy they are by following theirs.

Rating systems are currently restricted to specific platforms. But what if your whole life was subject to such a system? China is currently implementing a policy that will make that eerie possibility an unsettling reality for all its citizens by 2020.

The Chinese Social Credit System (SCS) already exists, though it’s currently still optional. Its task is to rate all Chinese citizens and appraise their overall trustworthiness.

We’ve all heard of blockchain technology, but what exactly is it? And what does it have to do with trust?

Blockchain technology provides a record of every action undertaken by anything using the technology; it’s a kind of digital ledger in which the history of something is permanently stored.