RED

The Hidden Cost of Living in a Low-Trust Society Trust has enormous economic value. In Japan, for example, some farmers sell vegetables at unattended roadside stalls. They leave their produce with a price and a money box. Customers take what they want and pay. We spend so much time and money protecting ourselves from dishonesty. You employ someone, then constantly monitor them because they might steal. You enter a business agreement, but need witnesses, deposits and guarantors. You buy something online, but fear paying before delivery because you might never see the product. And the worst part is that these precautions are usually justified. People have been cheated enough times to know better. Every dishonest person makes life more expensive for everyone else. Businesses spend money preventing theft instead of expanding. Honest people are treated with suspicion. Transactions that should take minutes take days. Economists call these transaction costs. In his book Bowling Alone, Robert Putnam explains why societies built on mutual trust and reciprocity are more efficient than distrustful ones. And it doesn't end there. I build websites and online applications, and I know how frustrating it is when services like Stripe aren't fully available to us, or when PayPal comes with restrictions. Fraud isn't the only reason, but it's one of the risks these companies consider. So even those of us running legitimate businesses end up paying for a reputation we didn't personally create. And before someone blames poverty, some of the biggest thieves in our societies are already wealthy. Meanwhile, millions of poor people live honestly every day. Dishonesty isn't simply a consequence of poverty. Low trust is also one of the things that keeps societies poor. This brings me back to Africans who celebrate scamming Westerners as intelligence. Some even justify it with colonialism. But stealing an American pensioner's savings doesn't recover a single resource from Africa. It simply enriches another dishonest person. We complain about corrupt politicians, dishonest contractors and officials who demand bribes, yet celebrate the same cunning when someone else is the victim. A scammer might make a fortune exploiting someone's trust, but his society pays a much greater price when dishonesty becomes normal. Nigeria is a good example. The actions of scammers have tarnished the reputation of an entire country, and millions of honest Nigerians who have never scammed anyone are left dealing with the suspicion and distrust. The real achievement isn't becoming so cunning that nobody can fool you. It's building a society where you don't need to be cunning just to go about your ordinary life.

This is something I used to ask myself until I realised that we live in a low-trust society. It's often easier to scam Westerners precisely because they come from high-trust societies, and we mistake that trust for stupidity. Take the US, for example. You can print your own check, deposit a check by simply taking a picture with your banking app, and even start using some of the money before the check has fully cleared. You don't even have to visit a bank. Compare that with most parts of Africa, where something as simple as forgetting your banking app password can mean physically visiting a bank branch with all your identification documents. We have become so accustomed to suspicion and distrust that we mistake our cunningness for intelligence and other people's trust for foolishness. We think we are smarter because we are harder to fool, without realising that we have built societies where nobody trusts anybody.