Would Adam Smith Surf?

Doug has raised some important questions about the stability of trust institutions in the context of the hospitality of couchsurfing (see his posts below). The obvious issues there are those of the safety and comfort of both the hosts and the guests. As I thought over some of the issues Doug was raising about how couchsurfing could design an ideal trust metric, I realized, as Doug said, that no system is foolproof to committed sociopaths. But this is not unique to couchsurfing. The marketplace is an example of both self interest and trust. A lot of people think of Adam Smith as the person who promoted the idea that everyone in a market is greedy. In fact, his most famous quote simply states that we do not require altruistic behavior from other people in order to benefit from the market.

We all understand this. We go into the car dealer showroom knowing that the dealer is out to make a buck, and is unlikely to throw much our way out of the goodness of his heart. Yet, we know that we have the possibility of getting a deal that makes us better off. But the market is also a trust institution in the sense that we revisit dealers whom we trust will not pull a bait-and-switch trick on us (a bait-and-switch tactic is where a seller advertises an item at a very attractive price, only to have the sales people find out that the item is out of stock and steer customers to a more expensive product). Large impersonal retail corporations require a significant amount of identification to pay by check; our local barber may accept one from us on face value. Adam Smith’s other great work, The Theory of Moral Sentiments, (perhaps made even more familiar today by P.J. O’Rourke’s book on Adam Smith) addresses the innate values of duty and compassion in human beings, the same human beings who address the market in a coldly maximizing way. However, in yet a third loop in the puzzle, we recognize that trust in the market is backed up by the coercive force of government in the form of weights and measures regulations, common law, civil law, and criminal law. Even with all of this, people do write hot checks and businesses do pull bait and switch schemes, yet with such low frequency that the marketplace survives.

It is not automatic that institutions have to survive strategic behavior. How many office coffee or water clubs have been disbanded because people drink but don’t pay? The early apostles had to revamp their original charitable institutions because of numerous complaints. A fantastic example of a new institution that appears to have conquered enough of the problems of trust to survive is eBay. That’s really the model for what couchsurfing has to do.

So where is Jesus in all of this? As wandering preachers, it is probable that Jesus and his disciples did a lot of couchsurfing. Interestingly, in sending out the disciples Jesus instructed them to find a house of “worthy” people (Matthew 10). Was there some local trust metric already at work? Looking beyond the first century context of Jesus and his disciples, what do we expect that Jesus’ vision of the Kingdom of God would look like in these contexts for today? That is a very complicated question, for some later post. In the meantime, I look forward to finding out what Doug hears from his inquiries.