I tried searching too, but couldn't find it. I can't remember his wording exactly. I do have that episode downloaded to my mp3-player though, so it seems likely. If I haven't hallucinated it all.
Aren't we keeping the search light a little bit to narrow here? Overgeneralizing a bit, I'm sensing most answers are seeking what to optimize for in life in the direction of individual effectiveness or something like that. Some other possible areas:
Quality of conversation. That would probably be a lot of fun, lead to a healthy marriage, good parenting, a focus on developing skills that give you access to interesting people, a good network, probably an above avarage pay.
The wellbeing of your community. That is a known predictor for life-satisfaction, which is one reason why active Christians tend to outperform atheists (like me) in happiness surveys. It would also lead to more win-win-transactions, and other possible good things to optimize in life.
These are not necessarily my answers - I don't have one right now - but I feel they point in another, possibly fruitful direction.
I didn't put a link in because I wasn't sure. My best guess is this one.
Good points. These are important considerations to keep in mind when deciding when to rely on markets and when on friends, and also when deciding whom to include into your network of trust. I try to be highly selective about whom I transact with outside of markets, as well as in markets. Generally, the people I trust are not perfectly correlated with the people I consider my close friends. But the bias that makes us overrate people we trust is important, and I will try to correct for that, which might make markets more attractive compared to networks of trust.
To be clear, by hippie I mean any highly trustworthy person that is willing to do non-market transactions with an extended network, or something like that. But yeah, actively looking for more people like that is having some interesting effects on my life.
This post could be read as an introduction to a (hypothetical) sequence about using and scaling networks of trust. If there is interest, I might write another post detailing my observations so far. Any thoughts?
Thinking in public like this has been great - several of the comments have helped me clearify my thinking and pinpoint new opportunities and potential pitfalls.
Could you expand on this thought?
It is an interesting point that there is something non-zero-sum about a reputation transaction. "The hippie" mentioned in the essay worked very much on this assumption. By being extremely trustworthy he creates a reputation that expands his network of trust, so he can get more help with things he needs done etc; but being helped by him also raised my reputation, as I got his stamp of approval. (This can happen in a market transaction as well, since markets and relationships of trust bleed into each other.)
But I wonder how that can be formalized without being game:able? I'm a bit fascinated by experiments in the blockchain community, like bitclout, were peoples reputation (or whatever to call it) is a token that can be traded, so there is an incentive to invest in people who one precieves will grow in reputation. But I can't wrap my head around how a system like that would behave if you pour in people and have them figure out ways to game it.
What's your intuition as to how one would implement what you suggested?
This is a great point that I had overlooked. I have similar bad experiences now that I think about it, mainly from starting a company with a friend, whom I should have questioned more on technical skills, but didn't because of our high trust. That was a nightmare.
I need to think a bit more deeply about why relying more on trust has worked so well this time, because as you say, it is not a given. Your bullets are a good starting point for a more nuanced understanding of the comparative costs of markets and trust networks. Thanks!
Thanks for your non-market essay feedback!
I don't know exactly why shipping companies are so expensive in Scandinavia. Part of it is of course high tax and insurance cost, but that can't explain the entire difference in cost compared to doing it your self. Maybe shipping is unattractive as a job for various reasons, so we have an undersupply of shipping companies?
And you're definitly right that my post is cherry picking galore. I should have underlied that it was more of a hunch! I don't have data to answer the question whether people in general could gain by moving more of their consumption of the market (or vice versa: gain by moving things they now do with in their network unto the market). What I do have is my single data point, and I've been finding a lot of ways to reduce how much I need to labor to be able to satisfy my needs by growing my network at the expense of my salaried career. (After having the realisation I share in the post, I've also expanded my network to supply me with food, and I've set up so I can loan a car instead of buying it.)
So the point I'm trying to make is a slightly different one than "trust is massively more effective than markets". Its that one can have a higher marginal return on ones time if one consciously explore if what one wants to consume can best be served by the market or by one's network. For me, I've been able to get higher returns by investing more in growing my network. (Though there are some things that I now do outside of markets that might be better served by the market!) But again, that's one data point, and one has to go case by case. My intuition though is that since that more people could gain, given that for example the shipping companies operate though one can easily beat them by a wide margin by having (cultivating) good friends. And I thought that could be useful to share.
Good points! I agree with everything, and the way you puts it is clearer.
You're definietly right that markets do not reduce trust. That was a bad turn of phrase: what I tried to say, and what I think you are saying, is that markets enables transactions with lower levels of personal trust.
And it is very true that markets are great enablers when they allow you to do things not possiblie within your network. Expanding my network to include someone with a truck might (or might not) be an efficient investment for me, for example. I don't think it would be rational to exit the market. But it is important to remember that there is another direction one can look in, and that sometimes investing in growing your network is more efficient than raising your salary.
Hi, my name his Henrik. I've been lurking here for a long time, and today finally dared write something myself. I have been looking for a community like this for a long time, and I'm so grateful for being able to listen in to all the conversations happening. Emerging oneself in a better culture can really bring out good things in oneself. The last few months, after hanging out here, it feels like my thoughts are moving in new, orthogonal and fruitful directions. I just want to say my thanks to all the people working to make sure that this bubble can exist.