The Echoes of the Mind (158-4-1) In Money We Trust

 In Money We Trust

Norms of voluntary cooperation are difficult in a society of strangers unless they are mediated by some institution. ~ Italian economists Gabriele Camera, Marco Casari, & Maria Bigoni

Societies could not function without cooperative behaviors among its members. Trust is essential for cooperation. The trust required is that cooperation yields a reward. Trust is a bridging function between the present and the future for a positive outcome.

Mistrust grows with social heterogeneity among individuals, and sheer group size. To productively function, a society must establish a sufficient threshold of trust: something which can only be accomplished by a shared, imagined enforcement against transgressors of that trust.

While the idea of a functioning justice system is necessary for sustained cooperation, it is not sufficient. A ready medium of trust must be established to cajole cooperation. That medium is money.

Money is an institutional mechanism. People in modern societies cooperate economically only because they trust in their society’s political institutions to provide stability, especially with regard to money retaining its value. If trust fails, societies splinter into tribes.