Thursday, 12 September 2013

Trust and Value

If human survival is largely determined by our capacity to predict the future, then the capacity to predict our fellow human being's behaviour is a survival advantage.

To trust someone is to believe you have the capacity to be able to predict how they will behave in a given situation. The more you trust someone, the more confident you are that you can predict their behaviour in a wide range of contexts.

Any tool we have that may help us to predict our neighbour's future behaviour therefore has survival value

Take money, fiat currency in particular, it is nothing more than a socially agreed unit of trust. If I exchange this much of 'x' good or service with you for 'y' quantity of currency unit, I can exchange 'y' quantity of currency units with any member of the same social grouping for 'x' amount of goods or services. 

An agreed upon enforcement mechanism within the social grouping allows individuals within the grouping to trust each other without building a relationship - i.e. observing a person's behavioural responses for a long enough period of time and across various contexts to accurately predict their future behaviour. This is reliant on the consistency with which the group enforces agreed the upon rules.  

Given the above, the fundamental unit of value is trust. It therefore follows that the only unit worth attempting to gain control of is trust.

If this line of reasoning is followed three ideas become apparent:

1. If whatever you are doing is not building more trust than it's consuming, it's not worth doing.

2. Activities who's outcomes are impossible to predict (games of chance) and therefore do not create trust even if engaged with repeatedly are not worth pursing. The end result will always be a zero-sum.

3. In order to create trust (value), it is necessary to combine inputs in such a way that they produce a more reliable outcome. The trust output must be greater than the trust inputs. The sum must be greater than it's parts. 

In conclusion: trust, the capacity to predict future behaviour, is the fundamental unit of survival value and is represented in our modern world by fiat currency. The only way to 'get rich' is to create trust, once trust is created, people will exchange the community's trust for your trust in them. You therefore start to control a larger pool of the overall societal trust.

Please comment, all points of view welcome, in fact, pick holes right through it!

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