How governments break the “circle of trust”

By Troy Camplin – Contributor

Very recently my wife bought a treadmill from a swap site on Facebook. How easy that sentence sounds to us. But think for a minute about what that sentence really means.

First, there is a site on Facebook that allows you to post things you want to sell to someone locally. You can think of it as a sort of online garage sale, except you don’t have to save up a bunch of stuff and hope that people will stop as they drive by. And you don’t have to get a permit from the local city government to hold one of the few garage sales allowed that year. The existence of this site allows you to bypass all of these issues.

Second, think about all of the trust involved in this. My wife arranged for me to go pick up the treadmill from the woman’s house. This means that my wife and I trusted that when I showed up at this stranger’s house, that she would have what we agreed to buy, and that I would not be robbed, assaulted, or even killed. More, the woman trusted that the person coming to get the treadmill would in fact pay for the equipment, and not rob, assault, or even kill her. Two complete strangers trusting each other.

Now that may not seem like a strange thing to us. After all, we go around trusting people all the time. I am writing this in the middle of a Starbucks, surrounded by strangers. There are twenty two people in here, and I can trust them all to behave themselves. Do you know what would happen if you placed twenty two chimpanzees who did not know each other in one room? There would be a horrendous bloodbath.

What makes us differ from one of our closest relatives? Our history of murder, ethnic cleansing, xenophobia, and war would suggest not much. But the fact is that we are quite different from them. We are extremely cooperative relative to chimpanzees, even at our worst (and the level of cooperation we see in so many countries of literally millions suggests we are not anywhere near our worst nowadays). But what makes us so cooperative?

The thing that made two strangers not just cooperative, but downright friendly toward each other when we met: trade. Humans engage in mutual trade, and that’s what makes us different. It is what sets us apart and makes us the most hypersocial of all mammals. It fosters trust, and it fosters it amongst even complete strangers.

Of course, trade also cannot exist without trust. Trade fosters trust, and trust fosters trade. If you want to destroy one, destroy the other.

How do you destroy trust? One way is to get neighbors to inform on each other. The simplest of laws can do this. Laws that regulate what you can and cannot do on and with your own property create a situation where people can call and complain about you to the local government. How many stories have we read about local governments shutting down kids’ lemonade stands? The focus is typically on how ridiculous it is that the local government came down on some kid selling lemonade – and it is ridiculous that the laws exist that would allow local governments to do this – but rarely does anyone focus on the fact that there was someone in that neighborhood who actually called to complain. It was the complaint that got the police to show up, and that complaint came from a neighbor.

Of course, without the law, the complaint would amount to nothing. But the fact that the law exists means the complaints will not amount to nothing. As a consequence, we come to trust our neighbors less and less. We associate with our neighbors less and less. This means neighbors are no longer looking out for each other, and that means more crime – meaning more police. Lack of local social cooperation in turn leads to fewer local private solutions to problems such as poverty, leading to arguments that since private individuals are not helping each other, the government has to do so.

The result of local property regulations is thus a reduction of trust, which in turn results in less social cooperation, less philanthropic activity, and more crime – all of which lead to calls for more government intervention. Those who favor free markets will have to deal with these local issues first and foremost. We have to prevent our local governments from giving anti-social busybodies teeth if we want to have the kinds of cooperative cultures necessary to support free markets.

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