What is the cash value of trust?April 22 2007
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This one of those questions we almost never ask, but when you do, it leads to some interesting answers and a better understanding of the long term consequence of our actions in our own lives.
Trust, like water and air, are usually available for free, so the idea of assigning a cash value to them sounds odd. However when they are lacking in our lives there is no price we would not pay to have them made available.
Water and air I am sure you understand. But trust?
Without trust no business transaction could be undertaken, you would not dare to eat the food you bought in a grocery store nor would you allow the barber to trim your hair using his straight razor.
To better understand the dynamic of trust and how it creates value, I'd like to share with you a hypothetical game taught in introductory economics courses. Game participant include ten players and a game master. The game master gives each player an envelope and invites them to go off into a private corner and either place $10 for their own money into the envelope or to leave the envelope empty. Either way the players come back to the group and return their envelopes to the game master.
The game master then; opens all of the envelopes; collects and counts the contributed money; adds to the pool, double the amount of money contributed; and then distributes the total amount evenly among all players, whether they contributed or not. Assuming that you knew the rules of the game before you started. would you put $10 in the envelope? .... If every player put $10 in their envelopes then all players would make a profit of $20. If only you put in $10 then only you would lose $9 and everyone else would gain $1.
What we see here is a miniature model of how community cooperation can create a net gain for everyone, and how an ethic of non-cooperation punishes people who choose independently to contribute to the common community good.
This game model is not as contrived as it first appears. Each of has a large number of potential opportunities to create value and wealth every day by cooperating with various groups of people, in business, in families or in professional consortiums. The key to making these opportunities work is "trust" ... trust that if you put in your $10 so will everyone else. In these scenerios one opportunistic player who benefits repeatedly by choosing to benefit without contributing, could be enough to destroy the trust and the eliminate the opportunity for personal gain for everyone.
Trust does have a cash value. When you violate it, or destroy it, or support others who do the same, you may be paying an incalculable long term price in exchange for your cleverly gotten short term gain.
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