In this chapter, we look at the three types of trust: government trust, business trust, and personal trust. Our objective is not to exhaustively describe or characterize them or their applications, but rather to introduce the basic features of how these trust providers work. Trust is unique in that it is something that is extremely valuable, but not something that individuals can create at a large scale by themselves. There is a natural limit on the amount of trust we can create ourselves. As a baseline, we may trust our family and our close friends, and this means the number of people we trust is in the tens or maybe as many as a hundred. There simply isn’t time in our days to maintain more friends than this without help. For any interactions beyond this natural limit, we need an intermediary or a technology to expand our trust potential.

We cannot predict the future, but if what’s past is prologue, we are confident that humans will demand increasing amounts of trust. There are billions of humans on the sidelines of the modern economy and bringing them into modernity will require that we trust them and that they trust us. This trust could be supplied by governments, by corporations, by NGOs, by microregulators, or by any number of other technologies or institutions. In all likelihood, it will be provided by a mix of these, operating in what we call the “market for trust.”

Self-regulation sounds like an oxymoron. Parents do not go out to the opera and leave their kids alone – they hire a babysitter. But there is a powerful logic to self-regulation in some cases (although not for children). In this chapter, we look at the regulation of stockbrokers, which, since the 1700s, has primarily been accomplished through various self-regulatory organizations (SROs). These SROs, while not perfect, provide an interesting case study for the broader points we are making in this book about the role of non-governmental providers of trust. We do not believe, and do not claim, that these providers can accomplish their trust-creating job without government. We live on planet Earth, not on some libertarian fantasy world. Instead, our goal in this chapter is merely to demonstrate how private trust-creating forces can operate in lieu of, but yet supported by, government regulation.

Although viewers of the USA Network series Mr. Robot may associate the term “hack” with unauthorized access to and disruption of computer services – the so-called 5/9 hack that brought down E-Corp. – in Silicon Valley parlance, a hack also has a much rosier meaning: a hack in the Bay Area is a solution to a problem. Techies routinely hold hackathons in which they put their computer programming skills to work to solve discrete problems. When we say that Uber has “hacked” trust, we mean it in this way. It has figured out a way, using software code, the internet, and human ingenuity, to solve the problem of trust in an elegant way. And Uber is only the beginning.

There have been four main epochs of human history and new forms of trust have arisen in each. In fact, these trust innovations – what we have called “social technologies” of trust – have made the transition from one epoch to another possible. After all, Homo sapiens are thought to have outcompeted Neanderthals in large part because of our ability to communicate and transmit knowledge more efficiently than trial and error. Our social technologies of trust enabled our ancestors to communicate, to cooperate, to exchange, and to expand our locus of trust in ways that enabled the survival of our species.

Think about your first ride in a stranger’s car. If your parents were like ours, we suspect you heard from them not to get into that panel van, even to see puppies or get candy. As you got older, you probably heard you shouldn’t hitchhike either – it is too risky. Or, thinking of it another way, you can’t trust a stranger to give you a ride from point A to point B. This is good advice and, if you followed it, it has kept you out of a lot of potential mischief. Trust cannot be assumed; it must be earned or created.

Regulation in all its various forms has been used over the past century and more to create the trust necessary to enable strangers to share rides. As we explore in this chapter, the initial regulation of the ridesharing market was provided by government, which limited entry, set rates, and prescribed service standards. But, as the history we briefly survey in this chapter suggests, this approach, while beneficial, was not sacred. It was, given the resources and information available at the time, the best approach possible. That is no longer true, which gives us deep insights into the very nature of regulation and government power. The regulation of taxi cabs is another example of the interaction between private and public provisions of trust. Government regulation of some activities has been viewed as the only solution possible, imperfect as it is, for certain problems. Taxi regulation fits this description. As we will see through an examination of its rise and perseverance, despite well-known and well-documented problems, the government-enforced taxi cartel lasted for nearly 100 years. But the rise of ridesharing platforms, such as Uber, calls all this into doubt.

Trust is essential to human flourishing. It enables us to work together, to engage in voluntary trades, and to specialize in ways that dramatically increase our productivity and wellbeing. “Trust” can mean many things, but we define it as the information and reliability that enables two or more parties to coordinate, to cooperate, or to do business while having confidence in fair dealing. We trust that our parents will not harm us, that strangers will not attack us, that a hamburger at Shake Shack will not be poisonous, and that the shipment of steel will arrive as scheduled. The big question is: “Why?”

In the first nine chapters, we made our affirmative case for trust as a central feature of human development, for trust being delivered by social technologies of various types, for many different providers of trust, and for the central question of society regarding who is the most efficient supplier of trust. In this chapter, we imagine how the history and theory of trust that we’ve set out in earlier chapters may play out in various areas. Our views here are half-formed, at best, and are mere speculation. Many forces operate to influence the nature of trust, including social values, technological advancements, and political power. We may be wrong about how this all plays out, but we suspect that, if we are, it will be because those interested in the status quo constrain free operation of the market for trust. We can be certain, however, that trust will evolve, as it always has.

Although viewers of the USA Network series Mr. Robot may associate the term “hack” with unauthorized access to and disruption of computer services – the so-called 5/9 hack that brought down E-Corp. – in Silicon Valley parlance, a hack also has a much rosier meaning: a hack in the Bay Area is a solution to a problem. Techies routinely hold hackathons in which they put their computer programming skills to work to solve discrete problems. When we say that Uber has “hacked” trust, we mean it in this way. It has figured out a way, using software code, the internet, and human ingenuity, to solve the problem of trust in an elegant way. And Uber is only the beginning.

Trust appears to be falling, if not collapsing. Data from the 2014 General Social Survey, the National Opinion Research Center’s poll of US attitudes, found that only 30 percent of respondents agreed that people could generally be trusted, down from 46 percent in 1972. In his 2000 book Bowling Alone, Robert Putnam documents and laments the fall of civil engagement by US citizens and claims that a consequence of this will be the erosion of trust in our social fabric. Based on polling data, Putnam’s prediction seems to be coming true.