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{{Quote|An old turnip farmer falls upon hard times. One day, a wealthy merchant pays him a visit and asks for a turnip. Rather perplexed, the old man rummages in his sack, and provides one. <br>
{{a|devil|}}{{Quote|
“What did you do that for, Dad?” asks his daughter, “you don’t even ''like'' turnips.  And you are a wealthy man. You could buy any number of turnips from the grocer down the road. Why impose your will on this poor old fellow? <br>
{{turnip farmer}}}}
“Because now I am in his debt,” replies the merchant,  ”and now he needs not feel shame to ask a favour of me.”}}{{a|devil|}}:''I believe for every drop of rain that falls, a flower grows. ''
:''I believe that somewhere in the darkest night, a candle glows. ''
:''I believe for everyone who goes astray, someone will come to show the way'' <br>
:::—Roger Whittaker


:'''[[Credit]]''': Latin, vb (3rd pers. sing.): He, she or it ''[[I believe|believes]]''.
{{d|Credit|/ˈkrɛdɪt/|v|}}


'''TL;DR''': A  feature, not a bug.
A merchant’s ability obtain goods or services before payment, based on the provider’s trust that the merchant will subsequently pay for them. (''From the [[Latin]], credere, to believe''.)


[[Trust]]: a fundamental part of every legal, political, and financial system that has ever existed and one the need for which cannot be dissolved by technology<ref>Not even [[blockchain]]. ''Especially'' not blockchain.</ref>. Trust converts the ''single-round'' [[prisoner’s dilemma]] — in which a rational ''homo economicus'' would, and therefore ''should'', throw {{sex|her}} co-conspirator under the bus — to the ''iterated'' [[prisoner’s dilemma]], in which the longer term benefits of ''not'' doing that outweigh the undeniable headrush it provides in short term. If you know you will see her again, and go through this again — or even if you aren’t pretty sure you ''won’t — the rational thing is to cooperate, at least as long as your co-conspirator does.
===A feature, not a bug.===
 
[[Trust]] is fundamental to every legal, political, and financial system that has ever existed. It is the one component of a prosperous polity that cannot be dissolved by technology.<ref>Not even [[blockchain]]. ''Especially'' not blockchain.</ref> Trust converts the “''single-round”'' [[prisoner’s dilemma]] — in which a rational ''homo economicus'' would, and therefore ''should'', throw {{sex|her}} co-conspirator under the bus — to the “''iterated”'' [[prisoner’s dilemma]], in which the longer term benefits of ''not'' doing that outweigh the undeniable headrush it would provide in short term if you did.  
 
If you know you will a fellow merchant again, and go through this again — or even if you aren’t pretty sure you won’t, but ''can’t quite be sure —'' the rational thing to do is cooperate, at least as long as your co-conspirator does.


[[Trust]] is a ''moral'' imperative, not a legal one. It derives  its power from the very fact that it is ''not'' backed by obligation. It is not a compulsion; it is a voluntary submission to the mercy of a third party in the hope of a reciprocal submission back. It is to make oneself vulnerable for the betterment of all. It explains the fable of the wealthy merchant who accosts the elderly pauper.  
[[Trust]] is a ''moral'' imperative, not a legal one. It derives  its power from the very fact that it is ''not'' backed by obligation. It is not a compulsion; it is a voluntary submission to the mercy of a third party in the hope of a reciprocal submission back. It is to make oneself vulnerable for the betterment of all. It explains the fable of the wealthy merchant who accosts the elderly pauper.  
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To trust someone is to ''take a [[risk]]''.
To trust someone is to ''take a [[risk]]''.


Prevailing orthodoxy is to [[Taxonomy|taxonomise]], categorise, and eliminate every foible, variable, weakness, and [[risk]], as you go, delimiting, boxing, [[reductionism|reducing]] and bit-crushing risks down into their smallest components. “By so isolating and atomising risks,” the orthodox are prone to say,  “you eliminate them, you see.”
=== Rules are a poor proxy for trust ===
Prevailing orthodoxy is to [[Taxonomy|taxonomise]], categorise, and eliminate every foible, variable, weakness, and [[risk]], as you go, delimiting, boxing, [[reductionism|reducing]] and bit-crushing risks down into their smallest components.  


A great risk in the system is that posed by humans beings: all their inconstancy, unreliability, stupidity or mendacity. Thus, eliminating risk tends to be conflated with eliminating ''individuals'', or at least the need to ''[[trust]]'' them. Hence, a millenarian yen to rid the present system of the need for trust, replacing it with technology. To be clear here: distributed ledgers do not reinforce trust between transactors: they ''eliminate the need for'' it.
“By so isolating and atomising risks,” the orthodox are prone to say,  “you eliminate them, you see.”
 
A great risk in the system is that posed by humans beings: all their inconstancy, unreliability, stupidity or mendacity. Thus, eliminating risk tends to be conflated with eliminating ''individuals'', or at least the need to ''[[trust]]'' them. Hence, a millenarian yen to rid the present system of the need for trust, replacing it with ''rules'' and ''[[Electric monk|technology]]''.  
 
To be clear here: distributed ledgers do not reinforce trust between merchants: they ''eliminate the need for'' it.


So in the same way that rules, playbooks and policies override the judgment of and confidence in individuals using them — thereby deprecating those individuals and stunting their ability to connect on an emotional level — the will to eliminate [[Trusted intermediary|trusted intermediaries]] in a [[Blockchain|distributed ledger]] system has the same fundamental shortcoming.  
So in the same way that rules, playbooks and policies override the judgment of and confidence in individuals using them — thereby deprecating those individuals and stunting their ability to connect on an emotional level — the will to eliminate [[Trusted intermediary|trusted intermediaries]] in a [[Blockchain|distributed ledger]] system has the same fundamental shortcoming.  
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By way of analogy, converting a ''moral'' obligation to someone else (say, “pick your children up promptly at the conclusion of today’s kindergarten session”)<ref>You may remember this from Freakonomics</ref> into a ''financial'' one (if you arrive more than ten minutes after the session ends, you will be charged a late collection fee) has the same effect. Now there is a price on your time: I can pay for my delinquency without compunction.
By way of analogy, converting a ''moral'' obligation to someone else (say, “pick your children up promptly at the conclusion of today’s kindergarten session”)<ref>You may remember this from Freakonomics</ref> into a ''financial'' one (if you arrive more than ten minutes after the session ends, you will be charged a late collection fee) has the same effect. Now there is a price on your time: I can pay for my delinquency without compunction.


Social relationships, friendships and emotional connections — which [[High modernism|modernist]]<nowiki/>s view as irrelevant at best, or more likely indications of graft or nepotism in the system — in fact have a perfectly sensible role: ''they reinforce bonds of trust'' between participants.  
Social relationships, friendships and emotional connections — which [[High modernism|modernist]]<nowiki/>s view as irrelevant at best, or more likely indications of graft or nepotism in the system — in fact have a perfectly sensible role: ''they reinforce bonds of trust'' between participants.


now to be sure: this may be unfair to outsiders who don’t have those connections or any way of making them — but the answer is to create opportunities for those at the margins, who might otherwise be disenfranchised (as they are systematically deprived of the opportunities to enter the market in favour of insiders) to build those social relations.  For example: be imaginative about your hiring choices. Why do you reflexively hire from magic circle firms and Russell Group universities? but a decentralised ledger where no-one ''needs'' to trust others in the market is hardly a decent no substitute. You cannot banish bonds of trust.
Now to be sure: this may be unfair to outsiders who don’t have those connections or any way of making them — but the answer is to create opportunities for those at the margins, who might otherwise be disenfranchised (as they are systematically deprived of the opportunities to enter the market in favour of insiders) to build those social relations.  For example: be imaginative about your hiring choices. Why do you reflexively hire from magic circle firms and Russell Group universities? but a decentralised ledger where no-one ''needs'' to trust others in the market is hardly a decent no substitute. You cannot banish bonds of trust.


The answer is not to prevent these activities, but create alternative structures which lower the barriers to entry into relations of trust for those without the necessary connections.  
The answer is not to prevent these activities, but create alternative structures which lower the barriers to entry into relations of trust for those without the necessary connections.  


{{Sa}}{{draft}}


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*{{br|Debt: The First 5,000 Years|''Debt: The First 5000 Years}}
*{{br|Bitcoin is Venice}}
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