we use around individual human-to-human trust, they are all about conglomerations of trust relationships or about second-order derivations such as reputation. Economists are well aware that it is difficult to extrapolate from the theoretically rational individual actors modelled in game theory to multiple actors, particularly when neither the institution being trusted nor the context(s) for that trust relationship tend to be well-defined. Consider, for example, the phrase I don't trust the government and what different overtones that may hold when uttered by a single parent in their twenties and a multi-millionaire venture capitalist in their sixties. What do they trust the government to do or not to do, and what do they mean by the government? We are even further hampered by the geographical and jurisdictional differences. What I might mean by the government, writing this in the United Kingdom, is likely to be different to what is meant by a person of similar background in the US, Singapore, or Kazakhstan: even granted that we are talking about different bodies, the functions of those governments, their responsibilities to us, and our expectations of them are likely to be radically different.
Although it can cause confusion around the definition of party and of context, this territoriality—the connection to a particular territory or locality—as Axelrod25 calls it, provides some help when trying to define trust relationships and derive reputation, as it forces repeated interactions with known and easily recognised individuals. What is interesting about this is that Axelrod is pointing out the fact that institutions are represented by actual people who act as agents for the institution, as we noted in our discussion of our second case in Chapter 1.
Not all institutions are central authorities—although central or state banks exist, many institutions do not fit into either category—but one development that has been particularly significant is the rise in what Coleman26 identifies as explicitly social contracts with multiple corporate actors, over and beyond those with, and sometimes to the detriment of, the structural authorities that Hobbes described. Given that Coleman was writing in the mid-1980s, much of his forecast seems extremely prescient. From the move (in much of the world) from the support of party political manifestos to a much more issue-led political activism (the example du jour being Extinction Rebellion), to the astonishing power of search engines and social media sites, most of us maintain many more trust relationships to institutions in many more contexts than we would have done even 10 or 20 years ago. Nor does this disallow the possibility of some of those being state actors even outside our territory: the government of Estonia, for instance, has started offering e-residency27 for those who are not existing citizens, with a variety of mainly digital services attached. Of course, such non-territorial or extra-territorial authorities have existed for centuries—examples being the Roman Catholic Church, CND (the Campaign for Nuclear Disarmament), and Communist International (Comintern or the Third International)—though often, association with them has carried significant political risk for those involved.
Trust Based on Authority
The word authority has its etymology in the Latin word auctor: creator or originator. The English word author still carries this meaning, usually describing the person who wrote a particular novel, paper, poem, or other work of text. In most contexts, however, when we think of the word authority, we tend to think about being told to do something, as in phrases such as “Does she have the authority to tell me to do this?” There is another meaning as well, related to an entity—typically a person or an organisation—with expertise in a particular area, who may act as a trustee. Sometimes these authorities will endorse ideas, people, organisations, or systems, creating a second level of authority.
How are these secondary authorities endorsed and established? Historically, authority was vested in figures or texts that had become established through either consensus or endorsement by another type of authority, such as the Roman Catholic Church. Notable examples include:
The Bible—or, specifically, particular interpretations of the Bible that led to astronomical theories of geocentricism (with the Earth and planets revolving around the Sun) and that were defended by the Roman Catholic Church against the Copernican theories for which Galileo argued
Galen, a Roman doctor and writer on medicine in the Greek tradition, whose incorrect theories around the circulation of the blood, for instance, were accepted for centuries
Trofim Lysenko, a scientist (or arguably, pseudo-scientist) whose theories espousing inherited characteristics between generations led to a campaign against Darwinism and genetic theory pursued by the Soviet Union
The establishment of the endorsing authorities for these three examples are notably different. The first example is the theocratic rule of the Roman Catholic Church, whose control of much of Mediæval Europe was almost total, with spiritual power being backed up by economic and political (and concomitant military) power. The second example is the mediæval academe, whose practices and understandings of authority were established mainly through historical precedent and lack of philosophical means or impetus to challenge them, though they were also shored up by the Roman Catholic Church. The third was the autocratic regime of the Soviet Union, whose ability to influence research and teaching through political control—backed up by propaganda and force of arms—allowed them to endorse a particular viewpoint as authoritative.
The established endorsing authorities of the Middle Ages, including Biblical authority, the divine right of kings, and simplistic assumptions that force was sufficient to establish authority, came under question and then attack with the Renaissance and the Age of Reason (or Age of Enlightenment). Personal experience and the scientific method came to the fore, and the basis for authority was questioned. We have already looked at Thomas Hobbes's views on institutional authority: the assumptions that underlined these were exactly what Thomas Paine criticised as he attempted to find a new basis for social institutions and government in his late-eighteenth-century treatise The Rights of Man,28 which defended the French Revolution. It had a significant impact on political and societal theory and reflected the broader move to a more individualistic view of human rights and experience, at least within European and American society.
This move to a more individual-centric world view led both to a debasing of the Roman Catholic Church as the sole endorsing authority for matters spiritual within the West and to a new approach to science, where experimentation challenged and developed scientific theory. This move has arguably never been fully complete, as the study of the philosophy of science shows us; neither is the search for “objective scientific truth” a simple acceptance of new ideas as they come along—a point addressed by Thomas Kuhn in his work on paradigm shifts.29 The general march of society over the past few hundred years has, however, been towards an acceptance of science as an authority, with the scientific method its endorser, and experts in particular fields—we might say contexts for our purposes—as its practitioners.
We have more recently also seen a new set of ways in which endorsing authorities have become established and maintained their power. In a capital-based economy, money can be equally as powerful as force. In the modern era, wielding the two together is typically the reserve of nation-states, but in the past, organisations such as the East India Company were able to combine the two with great effectiveness. The multinational nature of much business in the modern era generally allows the effective exercise of economic power without employing military force: the overwhelming success of the x86 instruction set, pushed by the silicon chip vendor Intel, is a case in point. Other types of endorsing power in the modern era include:
Standards Bodies Organisations come together to create an industry standard that will benefit multiple parties.
De Facto Standards Enough groups