Trust me…

I wish we were a more trusting species.

Disclaimer. This is not an idealist’s candy-floss wish of a world made of rainbows and unicorns. Lack of trust is not just a problem on moral grounds. It is a problem worth a mention because it is economically inefficient. My contention is that a deficit of trust is the single largest source of all wastage in business, in politics, in life. Wherever there is a lack of trust, costs go up. Effort goes up. And yet, despite all our efforts to fool-proof things, the net return comes down.

Think about it. Switch on the TV. Dozens of brands, vying for your wallet. Every toothpaste on the shelf is “recommended by dentists”. Every shampoo bottle is the “dermatologists’ favorite”. You know all (but one) of them are lying. You don’t trust them. Which makes them howl even louder and lie even better to woo you. Or to hire skinnier girls to do it for them.

Marketing exists because there is a lack of trust.

Lawyers thrive because people don’t trust people.

My mother wastes her otherwise productive time running after the housemaid because she does not trust that she will clean under the bed.

Relationships fail because one (or both) of the partners no longer trust the other.

You need an SEC and a SEBI because corporations cannot be trusted to not burn the world down to ashes if left on their own.

They have a lovely technical term for all of this. Its called “Transactional Cost of Trust Deficit”.



Now imagine a world that operates on trust. I tell my subordinate to finish a report by evening, and I don’t have to follow up on him. A company promises a client to deliver on X things by Y time, and there is no further contract required. Think of the time, effort, competence, red tape headaches, phone calls, automobile fuel, paper and ink saved!

The government trusts us to fill in our taxes. Less money is laundered, less money is spent on catching the launderer. With lesser mud to sling, politicians are forced to think about doing something of actual consequence.

With demand and supply being the only two forces in play, with the externality of deceit out of the picture, markets become self-regulatory. When you read in the papers about Reliance not being successful in a business venture, you know it is because there is something fundamentally wrong there. And not wonder whether it is an Ambani-sponsored article so that he can hoard his own company’s shares before he lets you in on the good news he is hiding. Fewer bubbles. Fewer recessions.

Less watchdogs required. So much more time and brains freed up. So much more innovation.

Last but far from least, no more locks. Which means no more keys. One less lost item for me to locate.

Trust others, be honest, be trustworthy. It might have more than just karmic payoffs.

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4 thoughts on “Trust me…

  1. Very pertinent. I have been saying this to people around me for years now.I have an addition to this though – materialism. The more one acquires material wealth and possessions, the greater the desire to protect them. Those who don't have them, will want to get them, and those who have them, will want to protect them. This leads to additional costs being incurred in the effort to protect whatever one already possesses, or in acquiring whatever one doesn't already. This is where the deficit of trust emerges.Simplicity, and a shift from 'wants' to 'needs' will be a BIG step in bringing peace to the world.

  2. And with one post you destroy the entire anti-trust industry – swooosh go the lawyers, the firms, the trademark companies, security firms all down the drain!

  3. @Akshay: Hmmm, chicken-and-egg soup, this one (pun unintended). Correct me if I'm wrong but I hear you saying that a pursuit of material stuff leads to a trust deficit. While what I am saying is that if only men were able to rise beyond their suspicions of one another, happiness – material AND otherwise – would be easier to come by. Or, at the very least, resources would be freed up for these pursuits.That I want a Merc does not make me hate you. Being a hateful person makes me hate you. The poor Merc has little to do with it.By the way, astonishing red colours, you show! Be all the commie you want, but don't drag me down with you! 😉

  4. @Prasad: Yep, kinda the whole point. I see them all as wasteful industries. Think of all the brainiacs that would be unleashed in the world of research if only law schools weren't an option!

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