Trust and the Benefit of the Doubt

Posted by {"login"=>"dvollrath", "email"=>"[email protected]", "display_name"=>"dvollrath", "first_name"=>"", "last_name"=>""} on April 21, 2015 · 9 mins read

This is going to go off the rails quickly, so hang on. First, read this classic Douglas Adams story, and pay attention to what you think this tells you about English culture:

This actually did happen to a real person, and the real person was me. I had gone to catch a train. This was April 1976, in Cambridge, U.K. I was a bit early for the train. I’d gotten the time of the train wrong. I went to get myself a newspaper to do the crossword, and a cup of coffee and a packet of cookies. I went and sat at a table.

I want you to picture the scene. It’s very important that you get this very clear in your mind. Here’s the table, newspaper, cup of coffee, packet of cookies. There’s a guy sitting opposite me, perfectly ordinary-looking guy wearing a business suit, carrying a briefcase. It didn’t look like he was going to do anything weird. What he did was this: he suddenly leaned across, picked up the packet of cookies, tore it open, took one out, and ate it.

Now this, I have to say, is the sort of thing the British are very bad at dealing with. There’s nothing in our background, upbringing, or education that teaches you how to deal with someone who in broad daylight has just stolen your cookies.

You know what would happen if this had been South Central Los Angeles. There would have very quickly been gunfire, helicopters coming in, CNN, you know. . . But in the end, I did what any red-blooded Englishman would do: I ignored it. And I stared at the newspaper, took a sip of coffee, tried to do a clue in the newspaper, couldn’t do anything, and thought, what am I going to do?

In the end I thought, Nothing for it, I’ll just have to go for it, and I tried very hard not to notice the fact that the packet was already mysteriously opened. I took out a cookie for myself. I thought, That settled him. But it hadn’t because a moment or two later he did it again. He took another cookie. Having not mentioned it the first time, it was somehow even harder to raise the subject the second time around. “Excuse me, I couldn’t help but notice . . .” I mean, it doesn’t really work.

We went through the whole packet like this. When I say the whole packet, I mean there were only about eight cookies, but it felt like a lifetime. He took one, I took one, he took one, I took one. Finally, when we got to the end, he stood up and walked away. Well, we exchanged meaningful looks, then he walked away, and I breathed a sigh of relief and sat back.

A moment or two later the train was coming in, so I tossed back the rest of my coffee, stood up, picked up the newspaper, and underneath the newspaper were my cookies.

The thing I like particularly about this story is the sensation that somewhere in England there has been wandering around for the last quarter-century a perfectly ordinary guy who’s had the same exact story, only he doesn’t have the punch line.

You're welcome for funny story and lack of math. Now, is there something to make out of this story regarding cultural explanations for economic growth? (If you answered no, let me remind you that this is the internet, so yes, of course every anecdote has deep meaning.)

Think about Adams and the other man bumbling around England on a day to day basis, taking advantage of a culture in which trust is high. They make anonymous transaction after anonymous transaction with strangers every day: buying the cookies, buying the newspaper, getting a train ticket, etc.. They never really question that the other party will come through with the cookies, the newspaper, or the train ride. It saves them all the time and effort of either providing these things themselves, or of spending their time and effort enforcing their implicit contracts (perhaps through physical coercion). Trust also implies that property rights will be respected. People will not arbitrarily steal my things, and I will not arbitrarily steal theirs. So I am willing to undertake transactions, because I know I can retain the profits/goods/utility from that transaction.

But in the story, *both* Adams and the stranger think the other has deviated from that norm. He stole the cookies!

And what do they do about it? Nothing! Nothing happens. This violation of the culture of trust does not cause Adams or the other man to play "deviate" and assault the other, or demand the cookies, or even so much as mention it. So this got me to think about what exactly is the important element of the norm of trust.

Perhaps it is really just the benefit of the doubt. Adams says nothing because he trusts that the other man wouldn't deliberately violate the norm. As it turns out, this is correct; the man did not. So does trust mean that even if there is a deviation from the norm, you act as if there was not? You allow for the possibility or likelihood that it was accidental. This allows you to avoid confrontation, cost, and a breakdown of trust. Does trust matter because it makes you wait a minute, a day, or whatever before acting to punish someone who deviates? And in so doing ensures that you only punish those who actually deviate? Which means you can expect the same consideration, and so are willing to undertake transactions, because you know you won't be falsely accused if you are acting in good faith? Let's call this "Type II trust" in that you want to avoid falsely rejecting the null of cooperation by the other person. I think Adams and the other man display Type II trust: they is incredibly unwilling to reject the null. So unwilling that one of them even walks away having literally been cheated out of his cookies (and Adams walks away with a great story).

This is differentiated from "Type I trust", where you want to avoid falsely accepting the null of cooperation when in fact you are being cheated. Type I trust is pretty naive: assume that everyone will cooperate with you, and occasionally you'll be wrong. Type I trust would be like the other man pushing the box of cookies over to Adams and offering him one explicitly, perhaps on the assumption that Adams would return the favor. But that is clearly not what Adams is describing.

Perhaps the cultural advantage of the Western economies in economic transactions is that they have a particularly large amount of Type II trust, but not necessarily more Type I trust. That is, Western economies are just as suspicious of new transactions with strangers, and usually need some third-party reference to undertake them in the first place. However, once convinced to transact with a stranger, they have a higher tolerance for apparent deviation, willing to wait it out to see if in fact they were cheated. More transactions take place successfully, and more people are able to acquire trustworthy reputations, because there is no rush to judgement. More trustworthy reputations means more transactions, and so forth.

Yes, I know that's a lot to suck out of a Douglas Adams anecdote. And I'm certain that somewhere, someone has written something about these varying shades of trust before. So feel free to school me up in the comments.