Friday, December 21, 2012

68. Trust: what is it?

Here I start a series in which I try to clarify the rich and slippery notion of trust: what is it, what is the basis for it, what are its limits, how does it work? Much is derived from my book Trust: forms, foundations, functions, failures and figures (Edward Elgar 2002).

Trust is a psychological state, a disposition that can lead to trusting behaviour.

What can one trust? The subject of trust is the trustor, the object is the trustee. One can trust things (the car) but it becomes interesting and more difficult when the object has a will of its own. One can trust a person but also an organization (e.g. on the basis of its reputation) or an industry (banking) or an economic system.

To trust one needs trust on all levels. People with good intentions may be caught in larger, countervailing interests. One needs trust in the people, the organization they work for and one has to take into account the pressures of survival on both. Will teaching ethics to bankers eliminate their misconduct? Bankers claim that they would prefer not to misbehave (taking too much risk and hiving it off on society; paying exorbitant bonuses) but can afford to do so only if other banks go along, and since all banks argue like that they lock each other up in their misconduct (in a prisoners’ dilemma). Thus one will either have to impose a way out of that dilemma or change financial markets to eliminate the incentives for misconduct. Ethical reform may help but does not suffice.

A distinction has been made between confidence and trust. With the first, one has no choice; one cannot regret to have become dependent, it was inevitable. Thus one speaks of confidence in the economy, or God, or the legal system.

Another important distinction is that between trust in competence, the technical ability to act in line with agreements, and trust in intentions, the will and commitment to do so according to the best of one’s ability, and not to cheat. Failure in competence requires a different response from failure in intentions.

A preliminary definition of trust may be: one is vulnerable to actions of an other and yet one feels that no great harm will be done. That leaves open many reasons to have trust.

A useful notion is that of reliance, which includes trust and control. The trustor may exert control over the trustee, for example with a contract, or as ‘the boss’. Trust goes beyond control, where the trustee is trustworthy on the basis of morality, ethics, friendship or custom or habit.

A narrower, tighter definition of trust then is that one expects no great harm to be done even though the trustee has both the opportunity and the incentive to cheat or to neglect the relationship, because his ethical stance will prevail. However, it is too much to expect the trustee to be loyal even at the cost of his/her own survival. The extent to which the trustee foregoes advantage at the expense of the trustor depends on his/her moral strength and on pressures of survival.

In sum, trust is a four-place predicate: the trustor (1) trusts the trustee (2) in some respect (3, competence, intentions), under certain conditions (4, pressures).

I will elaborate on these points in upcoming items.