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Why Trust Matters

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Why Trust Matters

An Economist's Guide to the Ties That Bind Us

Columbia UP,

15 min read
9 take-aways
Audio & text

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Looking at economic issues from the perspective of trust is surprisingly revealing.

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While you might think the subject of trust more apt for a book about law or sociology, professor Benjamin Ho proves that looking at economic issues through the perspective of trust is both informative and thought-provoking. Much of economic study tends to focus on theoretical efficiency, but Ho’s emphasis on trust, in contrast, offers a more rounded, real-world view. His commentary is illuminating and useful for anyone concerned about the destructive levels of mistrust so prevalent in contemporary society.


The ability to trust strangers is the mark of a successful developed economy.

The common economic unit of ancient humans was the small communal tribe. Traditional tribes operated informally and allocated tasks and benefits through mutual favors. These communities were groups of families large enough to cooperate for jobs like hunting and self-defense, but small enough that every individual or family could manage the complex web of favors and obligations required to keep such a group harmonious. For a community this small, informal gossip networks played a large role in encouraging individuals to be trustworthy. Studies about communal living reveal that 150 seems to be the maximum number of people with whom any one person can maintain relationships. This number crops up in diverse areas of human interplay: It’s the size of tribes before they break up, the number of troops within military units since Roman times and the typical number of Facebook friends with whom users regularly interact.

The leap toward economic development required specialization and demanded institutions that allowed a community to ...

About the Author

Benjamin Ho is an associate professor of behavioral economics at Vassar College and a faculty affiliate at the center for Global Energy Policy at Columbia University. He was also lead energy economist for the White House Council of Economic Advisers.

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