No Trust Without Greed

It's impossible for a violation to go undetected, certainly not for a considerable period of time. – B. Madoff

Δεν φοβάμαι τίποτα. Δεν ελπίζω τίποτα. Είμαι ελεύθερος. – Nikos Kazantzakis, from epitaph to epigraph

The motto of the United States is ‘In God we trust’ (or ‘Trust’), and so it is the motto of Brown University, although we put it in Latin: ‘In deo speramus.’ This can be read as an expression of hope rather than trust. What exactly do we trust God to do? To be there when we need Him? To smite our enemies? To dress our wounds when we are hurt? To reward our earnest efforts to do the right thing? Whichever it is, or if it is all of the above, the expression of trust is an admission of weakness. We can’t do it alone. We need others, human or superhuman, to lend a hand.

From the perspective of the theist, as from the perspective of the helpless child, trust is a matter of dependence and powerlessness. The trustor, the one who must trust, is in abject need and has nothing to offer. The trustee, the one who may come through to make it all better, has everything to offer but no obligation to do so.

The strict separation between need and power quickly dissolves. Where we first see dependence and domination, we soon detect interdependence and strategy. This is why behavioral economists and psychologists have come to model trust and power as games. In the canonical trust game, a trustor has an endowment of money, say $10, and a choice to keep it or to transfer it to a trustee. If the trustor trusts, the trustee receives a multiple of the transferred amount as if by magic, and then has a choice between keeping it all and splitting it with the trustor. Trust requires the expectation that the trustee will not pocket all the gains.

If we had two orthodox game theorists play this game, the outcome would be tragic, and they would know it, while basking in the glow of their own rationality. To them trust is irrational as they cannot see why the trustee should have any reason to split the money. However, many people naive to game theory do trust, and of these, many flourish because their trust is rewarded by trustees who honor the norm of reciprocity (or the golden rule or the commandment not to be a dick).

As a social dilemma, the problem of trust is reducible but it is not eliminable (Evans & Krueger, 2015). One horn of the dilemma is social isolation and early death; the other horn is exploitation and early death. Continually, we must ask ourselves whether we can trust the people who populate our social world, and we can never be certain that they will. As we edge toward certainty with friend Ferdinand because Ferdinand has been reliable so many times, the pain of betrayal is the greatest when it finally comes, and so is the magnitude of the anticipated betrayal when we play it out in our minds. “If Ferdinand cheats on me, I will be devastated!” we might say to ourselves. If we said this to Ferd’s face, we’d be expressing a lack of trust and we’d be placing an emotional burden on him he is likely to resent, a burden which might in fact make him more likely to pull the emotional plug. Trust works best if the expectation of reciprocity is left unspoken. To insist ‘I trust you to repay me’ implies the opposite of what it states, an uncertainty that may not be lost on the trustee.

Trust seems nice (Krueger et al. 2008) and some think that we trust in order to be nice (Dunning et al., 2019). Perhaps so, but perhaps it is just comforting to tell ourselves that. The presumed niceness of trust cannot be found in the arrangement of the available material outcomes. Indeed, when people (and their children) have the option to give generously to another person while knowing that this person cannot repay the favor, they give far less than they do in the trust game (Evans et al., 2013). When trust becomes an issue, it brings a tug between greed and fear. If the other reciprocates, you will have more than you had before; hence there is greed. If the other betrays your trust, you will have less; hence there is fear. The trustor’s choice to trust and invest money in a potentially profitable social exchange or to play it safe and keep what little they have reveals whether greed dominates fear or vice versa.

Both greed and fear appear to fall on the negative side of the moral spectrum, which poses a dilemma to the social observer (and to the trustors observing themselves). If trust signals greed and distrust signals fear, what is a trustor to do in order to earn moral credit? As it turns out, trustors are seen as morally better than distrustors (Krueger et al., 2008), which suggests that greed is acceptable when others profit as well. Egoism, in other words, can be a virtue if it lifts other boats as well. We do not need to be self-sacrificing altruists in order to earn moral credit.

The trust game appears to place the bulk of the psychological burden on the trustors. They are called upon to make a choice with calculated uncertainty. The trustees have the luxury of riskless choice, or rather: uncertainty-less choice. There are, though, interesting exceptions. Consider a Ponzi scheme of the type Mr. Madoff played for decades before settling into a federal penitentiary. Madoff’s clients trusted him with their money and he rewarded them yearly with money obtained from new clients (Henriques, 2018). A Ponzi scheme is a long game whose eventual collapse is guaranteed since no wealth is created along the way – in contrast to the trust game, where the invested amount is magically tripled. In a Ponzi scheme, investors can come out ahead if they exit before the game's collapse, leaving the fate of being suckered to the investors who succeed them. Yet, greed will entice them to trust and reinvest until it is too late. The pharaoh of the pyramid, the trustee in the mantle of Madoff, cannot get out easily without revealing the con. This is his psychological burden. Madoff lived well for decades spending other people's money. In hindsight, we may suspect that he discounted the future, and we cannot even be sure that he did so irrationally. For the sake of his soul, we would have to wish he enjoyed the ride.

If greed is constitutive of trust, then what of trust in God? If faith is a selfish affair – as Nietzsche suggested – then minding one’s own business might be the only rational alternative.

Let the last word be said by Hoca Camide. “Those who say ‘I wish I could trust people’,” Hoca Camide once said, “are really saying ‘I wish people were trustworthy.’ But if they got their wish, they wouldn’t need to trust. They are wishing for something that if they got it, they wouldn’t need it.”