To Endow Trust
By Benedikt Herrmann
When the extent of the financial crisis came to light in 2008, former chair of the U.S. Federal Reserve Alan Greenspan had to admit to Congress that he had "made a mistake in presuming that the self interest of organizations … was such that they were best capable of protecting their own shareholders and the equity in the firms" -- a mistake that turned out to be very costly, and not only to the American economy. It might be unfair to blame Greenspan for his misperception of the self-interest of organizations. Until very recently, there was no way for someone to objectively and impartially measure the nature of human social behavior. From Aristotle to George W. Bush, decisions have been made based on personal beliefs about how selfishly or cooperatively other people will act.
However, the situation is changing. Aided by replicable experiments and game-theoretical analysis, intriguing research in a range of disciplines is illuminating the actual nature of human social behavior. Unfortunately, the increasingly specialized language within disciplines makes it difficult for an interested public to follow these advances. Thus it helps to have a lucid and informative account such as Bruce Schneier's Liars and Outliers. The book provides an interesting and entertaining summary of the state of play of research on human social behavior, with a special emphasis on trust and trustworthiness.
Trust forms the fundamental ingredient for the functioning of modern societies and economies. Each day, they involve millions of interactions between strangers. As Schneier nicely demonstrates with many lively examples, our social and economic activities require a high level of trust. If everyone has to be actively monitored to ensure that she or he keeps commitments, our societies could hardly develop.
Schneier (a cryptographer, security specialist, and writer) has a personal interest in the issue of how trust and trustworthiness can evolve in societies where people increasingly interact anonymously with one another. The book demonstrates that he has thoroughly surveyed the existing academic literature. Free from preoccupations and personal attachments to any of the scientific disciplines working on the topic, he has compiled a well-structured overview of what research can tell us about how trust and trustworthiness accumulate (although some academic readers may find their publications presented in an unexpected context). This he enlivens by adding real-life experiences on how to build trust and keep trustworthiness alive.
Step by step, Schneier elaborates the evolution of trust from the "atom" of trust, the individual, through to the top level of trust systems, entire societies. At times, the steps are rather large -- as, for instance, when he covers in a few pages the whole discussion on the evolutionary history of human social behavior.
On other occasions, the steps turn very small, and he may specific features of trust and trustworthiness in extensive detail. But in this way, readers become acquainted with dozens of insightful examples of social dilemmas on the levels of the individual, family, firms, and entire societies. In addition, they gain an easy and intuitive introduction to the game-theoretical framework behind much of the academic dispute on the nature of human social behavior.
Some relevant points are, however, missing. With its focus on selfish and social behavior, the book neglects very recent developments in experimental research on the "dark side" of humans -- features such as competitive spite and pure aggression. People not only fear falling victim to selfish exploiters of their readiness to behave in a trustworthy manner, they also dread irrational attackers. This raises an additional hurdle to instilling security: Some security technologies adopted to combat overaggression can by themselves damage innocent people, thus increasing distrust. It also would have been nice if Schneier had extended his perspective beyond the United States, as recent research demonstrates that, for instance, norms of cooperation may vary considerably across societies.
Nevertheless, overall Liars and Outliers offers a good introduction to human social behavior. Most likely, Greenspan would have enjoyed a read before 2008.
Schneier.com is a personal website. Opinions expressed are not necessarily those of Co3 Systems, Inc.