The Company Of Strangers by renowned economist Paul Seabright illustrates how fragile everyday life can be. In this episode, he talks about the book and describes how our ability to reason abstractly has enabled institutions such as money, markets, and banking systems to lay the foundation for the social trust we rely on daily.

How did trust shift from smaller communities and family units to larger institutions like governments, states, and large companies? You won't want to miss out on Paul's insight into how disciplines like anthropology and biology explain how humans developed the ability to trust total strangers.

Episode Quotes:

What drew you to these other disciplines, biology, and anthropology, and see it as something adjacent to economics?

I guess there are two answers to that. One is that I hung around with many biologists and anthropologists, and people in my youth. I met Richard Dawkins. I've been advised by a tutor in philosophy to read up some socio-biology, which was the stuff that was happening at the time. He put me in touch with Richard a very long time ago, when Richard had just become famous as the author of The Selfish Gene. And then I spent quite a lot of time with anthropologists. For me, it was just a natural way of thinking about the world. I almost felt that I had to put on a special uniform to be an economist. In contrast, I felt comfortable with just thinking about human beings as this kind of population that you could study, pretty much like the nature movies that I watched.

On costly signaling and how brands are utilizing it to earn and build our trust as consumers:

If it's somebody wearing the uniform of Amazon from which I'd buy a dishwasher, then I do it very, very quickly. If it's a uniform, but not one I've ever seen before, you know, I might stop, and I would think. And then I would sort of figure out, 'Okay, what kind of company has that uniform?' So, there is implicitly a complex model in which I have the whole human resources department of that company in mind. And thinking about what are their incentives to do background checks on people. When you have innovations in a corporate organization like Uber, people start to ask themselves these questions. I think lots of people hadn't asked themselves why it might be important that it was so difficult to get a taxi license until Uber came along. And people realized that actually, in a world in which it's much easier to become an Uber driver than to get a taxi license, there may be hidden dangers.. Uber itself started to implement new policies and to make a lot of fuss about that. I often think that when you get innovation in a corporate form that suddenly you realize, all of these influences that are going in your head under the radar of consciousness have to be brought up into consciousness and inspected.

Thoughts on how women fit into a male dominated-narrative of trust in the 20th century?

Now there's a whole set of questions about the 20th-century roles on, about where do women fit into the story? In the traditional conquering, killing, and slaying the dragon myth, the damsel is waiting for the hero, and she falls into his arms. She's not engaged in a similar kind of heroic myth or heroic narrative herself. And clearly, something had to give in the way firms were organized. They had to give a role to the working woman. And not just say that it's the woman's job to be there for when the man returns from his quest.

How loyalty and trust is evolving in the workplace?

But of course, then the other thing was when, you realize that more and more, there are demands from modern life for people to be flexible. People who are going to be Uber drivers, many of them want flexibility. But what flexibility doesn't deliver is a narrative about your place in the wider whole. You may, at some period in your young life, be thrilled to be an Uber driver because you can fit it in around looking after your kids or, doing a second job, or doing a more lucrative job, which you can't do all the time. I think Uber is great in lots of ways, but it doesn't offer people this sense of belonging that those big firms used to.

Time Code:

00:01:23 What drew you to biology and anthropology, disciplines that are adjacent to economics?

00:04:34 What are the unique organizational, social and reproductive strategies of humans compared to gorillas, chimpanzees and bonobos?

00:08:14 Trusting at two levels; trusting kin and strangers

00:11:48 Why is the notion of reciprocity hardwired and how did this become mutation-resistant?

00:18:19 Violence inflicted between people because of fears

00:20:36 How do we take face-to-face signaling models and turn them into these larger institutional signals

00:23:52 How did trust shift from smaller communities and family units to larger institutions like governments, states, and large companies

00:32:27 Can we still rely on churches for sense of community and belongingness?

00:40:02 Sexual and gender relations of humans in comparison to other animals

00:46:41 Signaling in human males and females

00:49:49 Treating colleagues in a gender-neutral way

00:52:54 The importance of narratives in building trust

00:56:44 How strong and weak among women in marketplaces affect their careers

01:00:16 How can educational institutions encourage more exposure to thoughts outside of our main discipline?

Show Links:

Guest Profile

Profile at Toulouse School of Economics
Profile at VOX EU

His Work

Natural History of Economic Life: How Evolution Shaped Social Trust feat. Paul Seabright

unSILOed with Greg LaBlanc

Natural History of Economic Life: How Evolution Shaped Social Trust feat. Paul Seabright