The Power of Trust

1. The Power of Trust Dr Robert Ghanea-Hercock www.agentdynamics.com

2. What is trust?

3. Who should I trust?

4. Trust • Trust each other again and again. When the trust level gets high enough, people transcend apparent limits, discovering new and awesome abilities for which they were previously unaware. David Armistead

5. Objectives - Trust • The aim is to address the following questions: • What is it? • Why is it of interest? • What is its relationship to the Bahá'í Faith? • Why is it important in social cohesion and economic and political affairs?

6. Trust men and they will be true to you; treat them greatly, and they will show themselves great. Ralph Waldo Emerson, Essays, First Series: Prudence, 1841

7. Social Capital • Social capital refers to those stocks of social trust, norms and networks that people can draw upon to solve common problems. Networks of civic engagement, such as neighbourhood associations, sports clubs, and cooperatives, are an essential form of social capital, • and the denser these networks, the more likely that members of a community will cooperate for mutual benefit. This is so, even in the face of persistent problems of collective action (tragedy of the commons, prisoner's dilemma etc.)

8. …Social capital is a capability that arises from the prevalence of trust in a society or in certain parts of it. It can be embodied in the smallest and most basic social group, the family, as well as the largest of all groups, the nation, and in all the other groups in between. • Fukuyama, F. Trust: Social Virtues and the Creation of Prosperity. (Simon and Schuster, 1996): 26.

9. Economics • Fukuyama discusses the role of trust in the creation of social capital, with attention to economic development. The core argument is that there are high trust and low trust societies and cultures. • High trust societies tend to develop greater social capital, and consequently enjoy greater economic growth, particularly in the transition to a post-industrial economy. Likewise, high trust groups and cultures accumulate greater social capital. Fukuyama sees social capital as the glue that holds the otherwise centrifugal structures of the market together.

10. The reference by Axtell and Cohen also considers the impact of Social Capital and provides a useful synopsis of the process: • "A society that relies on generalised reciprocity is more efficient than a distrustful society, just as money is more efficient than barter. Put simply, trust lubricates social life", (Axelrod & Cohen [12]).

11. “What Banks Are Still Missing: Trust” • According to the Kellogg School Financial Trust Index, faith in banks (and bankers) — on a scale of 1 to 5, where 1 denotes no trust and 5 complete confidence — slipped to 2.5. • …Things are even bleaker elsewhere.” • http://www.time.com/time/business May 4th 2009

12. Or as Putnam states, it is the: “connections among individuals – social networks and the norms of reciprocity and trustworthiness that arise from them.”Bowling Alone, Putnam, 2001 • If the employees of an organization feel trusted and operate in a high trust environment then open innovation and the genuine exchange of information is possible.

13. Clearly the iteration trust processes can lead to cycles of positive or negative feedback which leads to either a global low or high-trust regime.

14. Screenshot from simulation, showing a set of 2 stable agent groups. The lower left quadrant area shows a group of agents in a high-trust state.

15. Psychology Dimension • Trust is usually considered a belief or cognitive stance that could eventually be quantified by a subjective probability. • It is usually assumed that an agent will only engage in a transaction if the level of trust exceeds some personal threshold (the level of acceptable trustworthiness), which depends on the transaction context.

16. Second, trust typically is learned gradually, but can be destroyed in an instant by misfortune or a mistake. Once trust is lost, it may be costly or it may take a long time to rebuild it. This reflects certain fundamental mechanisms of human psychology known as the asymmetry principle. According to it, distrust is not merely the inverse of trust.

17. Trust and distrust are learned in different ways and they function differently. This might be explained by the following psychological reasons: – Humans perceive trust-destroying events as more noticeable than trust-building events. – Trust-destroying events carry much greater weight than trust-building events in subjective reasoning.

18. What is the problem? • Sources of trust-destroying events tend to be accepted as more credible than sources of trust-building events. • Once initiated, distrust tends to reinforce itself. In contrast, trust can be destroyed in an instant.

19. Positive Cycle

20. Negative Cycle

21. Faith I know God will not give me anything I can't handle. I just wish that He didn't trust me so much. Mother Teresa

22. Faith and Trust • Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy; 6:18 That they do good, that they be rich in good works, ready to distribute, willing to communicate; King James Bible, 1 Timothy

23. In God, then, let the faithful trust. The Qur'an (Rodwell tr), Sura 3 - The Family of Imran

24. The source of all good is trust in God, submission unto His command, and contentment with His holy will and pleasure. Baha'u'llah, Tablets of Baha'u'llah, p. 155

25. Trustworthiness • The Lord hath ordained that in every city a House of Justice be established wherein shall gather counsellors to the number of Baha... It behoveth them to be the trusted ones of the Merciful among men and to regard themselves as the guardians appointed of God for all that dwell on earth. It is incumbent upon them to take counsel together and to have regard for the interests of the servants of God, for His sake. Baha'u'llah, Synopsis and Codification of the Kitab-i-Aqdas, p. 13

26. Other attributes of perfection are to fear God, to love God by loving His servants, to exercise mildness and forbearance and calm, to be sincere, amenable, clement and compassionate; to have resolution and courage, trustworthiness and energy, to strive and struggle, to be generous, loyal, without malice, to have zeal and a sense of honor, to be high-minded and magnanimous, and to have regard for the rights of others. Abdu'l-Baha, The Secret of Divine Civilization, p. 40

27. Cling ye to the hem of virtue, and hold fast to the cord of trustworthiness and piety. Concern yourselves with the things that benefit mankind, and not with your corrupt and selfish desires. O ye followers of this Wronged One! Ye are the shepherds of mankind; liberate ye your flocks from the wolves of evil passions and desires, and adorn them with the ornament of the fear of God Baha'u'llah, Epistle to the Son of the Wolf, p. 29

28. Say: O people of God! Adorn your temples with the adornment of trustworthiness andpiety. Baha'u'llah, Epistle to the Son of the Wolf, p. 135

29. The virtues and attributes pertaining unto God are all evident and manifest, and have been mentioned and described in all the heavenly Books. Among them are trustworthiness, truthfulness, purity of heart while communing with God, forbearance, resignation to whatever the Almighty hath decreed, contentment with the things His Will hath provided,.. Baha'u'llah, Gleanings from the Writings of Baha'u'llah, p. 290

30. The purpose of the one true God in manifesting Himself is to summon all mankind to truthfulness and sincerity, to piety and trustworthiness, to resignation and submissiveness to the Will of God, to forbearance and kindliness, to uprightness and wisdom. His object is to array every man with the mantle of a saintly character, and to adorn him with the ornament of holy and goodly deeds. Baha'u'llah, Gleanings from the Writings of Baha'u'llah, p. 299

31. The fourth Taraz concerneth trustworthiness. Verily it is the door of security for all that dwell on earth and a token of glory on the part of the All-Merciful. He who partaketh thereof hath indeed partaken of the treasures of wealth and prosperity. Trustworthiness is the greatest portal leading unto the tranquillity and security of the people. In truth the stability of every affair hath depended and doth depend upon it. All the domains of power, of grandeur and of wealth are illumined by its light. • Not long ago these sublime words were revealed from the Pen of the Most High:

34. 'We will now mention unto thee Trustworthiness and the station thereof in the estimation of God, thy Lord, the Lord of the Mighty Throne. One day of days We repaired unto Our Green Island. Upon Our arrival, We beheld its streams flowing, and its trees luxuriant, and the sunlight playing in their midst. Turning Our face to the right, We beheld what the pen is powerless to describe; nor can it set forth that which the eye of the Lord of Mankind witnessed in that most sanctified, that most sublime, that blest, and most exalted Spot. Turning, then, to the left We gazed on one of the Beauties of the Most Sublime Paradise, standing on a pillar of light, and calling aloud saying:

35. O inmates of earth and heaven! Behold ye My beauty, and My radiance, and My revelation, and My effulgence. By God, the True One! I am Trustworthiness and the revelation thereof, and the beauty thereof. I will recompense whosoever will cleave unto Me, and recognize My rank and station, and hold fast unto My hem. I am the most great ornament of the people of Baha, and the vesture of glory unto all who are in the kingdom of creation. I am the supreme instrument for the prosperity of the world, and the horizon of assurance unto all beings." Thus have We sent down for thee that which will draw men nigh unto the Lord of creation.'

37. O people of Baha! Trustworthiness is in truth the best of vestures for your temples and the most glorious crown for your heads. Take ye fast hold of it at the behest of Him Who is the Ordainer, the All-Informed. Baha'u'llah, Tablets of Baha'u'llah, p. 37

38. As for those who are engaged in government service, they should perform their duties with the utmost fidelity, trustworthiness, rectitude, uprightness, integrity, and high-mindedness. Let them not tarnish their good repute by pursuing personal interests, nor, for the sake of transient worldly benefits, make themselves objects odium and outcasts of the Threshold of Grandeur. Abdu'l-Baha from a previous untranslated Tablet: Trustworthiness: A Cardinal Baha'i Virtue, a compilation of the Universal House of Justice, January 1997.

39. So what? Italy's debt crisis: doomed by corruption, bloated bureaucracy and poor productivity

40. Corruption in Russia • There is a road in Sochi which analysts say cost so much, it could have been paved with 9" of foisgras or Louis Vuitton handbags at three and a half inches deep. • Each year, some US$64 billion of capital is extracted from Russia, and sunk into fancy homes in this country.

42. Cost of Corruption • The World Bank estimates that corruption accounts for about $1tn a year worldwide. • It also says that proceeds of corruption in bribes received by public officials from developing and transition countries are estimated to be between $20bn and $40bn per annum.

43. Simulation results indicate that if an organization creates a high level of inter-agent trust then it possesses a significant degree of systemic robustness. • But, if the internal trust level falls below a critical threshold then the cohesion of the organization becomes fragile.

44. Summary • Trust matters • It is organic • Positive and negative feedback cycles develop • Social Capital is the economic driving force • Faith is foundation of moral basis for trust • Trust is the foundation and product of Social Capital Email complaints to: rhercock@gmail.com

46. Famous quotes Every kind of peaceful cooperation among men is primarily based on mutual trust and only secondarily on institutions such as courts of justice and police. Albert Einstein Love all, trust a few. Do wrong to none. William Shakespeare (1564 – 1616 Do not trust all men, but trust men of worth; the former course is silly, the latter a mark of prudence. Democritus (460 BC - 370 BC He who loves the world as his body may be entrusted with the empire. Lao-tzu (604 BC - 531 BC), The Way of Lao-tzu

47. References • Brainov S., Sandholm T., "Contracting with Uncertain Level of Trust", Proceedings of the first ACM conference on Electronic commerce, November 3-5, 1999. • Padgett J., & McLean P., "Economic and Social Exchange in Renaissance Florence",http://www.santafe.edu/sfi/publications/Working-Papers/02-07-032.pdf • Robert Putnam, "The Prosperous Community: Social Capital and Public Life," The American Prospect 13 (Spring 1993), 35-42; • Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity. New York: Free Press, 1995 • www.cpn.org/sections/tools/models/social_capital.html • Khare R., & Rifkin A., "Weaving a Web of Trust", working paper at http://www.cs.caltech.edu/~adam/local/trust.html

48. Yu B., and Singh M., "An Evidential Model of Distributed Reputation Management", International Conference of Autonomous Agents and Multi-Agent Systems, Bologna Italy, 2002. • Game Theory Tutorial, http://www.santafe.edu/sfi/publications/wpabstract/199804027 • Robert Putnam, "Making Democracy Work: Civic Traditions in Modern Italy", Princeton, NJ.:Princeton University Press, 1993a. • Robert Putnam, "Social Capital and Public Affairs", The American Prospect, no.13 (1993b):1-8. • Robert Axelrod and Michael Cohen, "Harnessing Complexity", The Free Press, New York, 1999.