Henrik Karlsson
Hi, my name his Henrik. I’ve been lurking here for a long time, and today finally dared write something myself. I have been looking for a community like this for a long time, and I’m so grateful for being able to listen in to all the conversations happening. Emerging oneself in a better culture can really bring out good things in oneself. The last few months, after hanging out here, it feels like my thoughts are moving in new, orthogonal and fruitful directions. I just want to say my thanks to all the people working to make sure that this bubble can exist.
Good points! I agree with everything, and the way you puts it is clearer.
You’re definietly right that markets do not reduce trust. That was a bad turn of phrase: what I tried to say, and what I think you are saying, is that markets enables transactions with lower levels of personal trust.
And it is very true that markets are great enablers when they allow you to do things not possiblie within your network. Expanding my network to include someone with a truck might (or might not) be an efficient investment for me, for example. I don’t think it would be rational to exit the market. But it is important to remember that there is another direction one can look in, and that sometimes investing in growing your network is more efficient than raising your salary.
Thanks for your non-market essay feedback!
I don’t know exactly why shipping companies are so expensive in Scandinavia. Part of it is of course high tax and insurance cost, but that can’t explain the entire difference in cost compared to doing it your self. Maybe shipping is unattractive as a job for various reasons, so we have an undersupply of shipping companies?
And you’re definitly right that my post is cherry picking galore. I should have underlied that it was more of a hunch! I don’t have data to answer the question whether people in general could gain by moving more of their consumption of the market (or vice versa: gain by moving things they now do with in their network unto the market). What I do have is my single data point, and I’ve been finding a lot of ways to reduce how much I need to labor to be able to satisfy my needs by growing my network at the expense of my salaried career. (After having the realisation I share in the post, I’ve also expanded my network to supply me with food, and I’ve set up so I can loan a car instead of buying it.)
So the point I’m trying to make is a slightly different one than “trust is massively more effective than markets”. Its that one can have a higher marginal return on ones time if one consciously explore if what one wants to consume can best be served by the market or by one’s network. For me, I’ve been able to get higher returns by investing more in growing my network. (Though there are some things that I now do outside of markets that might be better served by the market!) But again, that’s one data point, and one has to go case by case. My intuition though is that since that more people could gain, given that for example the shipping companies operate though one can easily beat them by a wide margin by having (cultivating) good friends. And I thought that could be useful to share.
This is a great point that I had overlooked. I have similar bad experiences now that I think about it, mainly from starting a company with a friend, whom I should have questioned more on technical skills, but didn’t because of our high trust. That was a nightmare.
I need to think a bit more deeply about why relying more on trust has worked so well this time, because as you say, it is not a given. Your bullets are a good starting point for a more nuanced understanding of the comparative costs of markets and trust networks. Thanks!
Could you expand on this thought?
It is an interesting point that there is something non-zero-sum about a reputation transaction. “The hippie” mentioned in the essay worked very much on this assumption. By being extremely trustworthy he creates a reputation that expands his network of trust, so he can get more help with things he needs done etc; but being helped by him also raised my reputation, as I got his stamp of approval. (This can happen in a market transaction as well, since markets and relationships of trust bleed into each other.)
But I wonder how that can be formalized without being game:able? I’m a bit fascinated by experiments in the blockchain community, like bitclout, were peoples reputation (or whatever to call it) is a token that can be traded, so there is an incentive to invest in people who one precieves will grow in reputation. But I can’t wrap my head around how a system like that would behave if you pour in people and have them figure out ways to game it.
What’s your intuition as to how one would implement what you suggested?
To be clear, by hippie I mean any highly trustworthy person that is willing to do non-market transactions with an extended network, or something like that. But yeah, actively looking for more people like that is having some interesting effects on my life.
This post could be read as an introduction to a (hypothetical) sequence about using and scaling networks of trust. If there is interest, I might write another post detailing my observations so far. Any thoughts?
Thinking in public like this has been great—several of the comments have helped me clearify my thinking and pinpoint new opportunities and potential pitfalls.
Good points. These are important considerations to keep in mind when deciding when to rely on markets and when on friends, and also when deciding whom to include into your network of trust. I try to be highly selective about whom I transact with outside of markets, as well as in markets. Generally, the people I trust are not perfectly correlated with the people I consider my close friends. But the bias that makes us overrate people we trust is important, and I will try to correct for that, which might make markets more attractive compared to networks of trust.
I didn’t put a link in because I wasn’t sure. My best guess is this one.
I tried searching too, but couldn’t find it. I can’t remember his wording exactly. I do have that episode downloaded to my mp3-player though, so it seems likely. If I haven’t hallucinated it all.
So here’s my attempt at the find-more-hippies-question: https://www.lesswrong.com/posts/dktESGGtYJwwdTjeo/scaling-networks-of-trust-1
What is a pedestrian dilettante waffle? It sounds delicious.
Let’s hope! Probably that throw away guess is not the correct one for why shipping is so expensive here. There might be some regulatory mess I don’t see.
I do find it interesting, though, that certain jobs might be undersupplied because of presitige and social factors. I think Scott Alexander mentioned somewhere that plumbers make about the same as doctors, in the US. So if you where a rational economic agent, you would go into plumbing, because its less costly to learn, less stressful etc, but that doesn’t happen, I guess, because—who knows a cool plumber? (Super Mario not counting.)
Good points.
Can I double click on: “I don’t think it’s game-theoretically sound”?
And I don’t know enough about the Islamic merchants to answer that question. I guess the notes where countersigned along the way and so on. But true, it does sound a bit outlandish to modern ears (which is why I thought it’d make a cute opening).
I appreciated the length!
Its true, building a network with high barriers to entry is hard to scale, and will never compare to the scalability of a functioning justice system or something like blockchain. And it relies a lot on weeding out sociopaths to function; though the value of belonging to a high trust network can work as an incentive to play fair and not get excluded.
On Franklin: in Walter Isaacson’s biography, he makes a fairly convincing case that Franklin approached building trust networks deliberately and with great success, but choose friends based on more romantic notions that repeatedly ended in disasters. So I don’t think its a variance thing, but to separate categories of people in his life.
“This part wasn’t clear. If the neighbor moves? Defects? - then you’ll curse his name?” – Sorry for being unclear. I was trying to be funny. What I meant was that one of the things that keeps my neighbor from defecting is the fact that it would cause other people to lose trust in him, which would be costly. (At the moment though, I want to sing his praise. If you ever live close, I can’t recommend him enough.)
Trust often not being transitive is an important point that I had overlooked. Thanks a lot for that.
And I am fascinated with the pros and cons of N:N networks and 1:N networks at the moment. My model for thinking about them have been networks with a common border vs boundryless networks. (I say boundryless networks because 1:N networks will overlap with other 1:N networks creating a sort of diffuse bounryless whole). An upside of N:N is coordination. You can get a lot more done by forging a more definite community—say union, that negotiates on your behalf. But there is a lot of administrative overhead, and a higher risk that the network gets coopted by someone with a hunger for power. 1:N networks are more flexible, and it is easier to shed sociopaths even when large parts of N are fooled by them. And as long as trust is slightly transitive they might scale better, thanks to not having to deal with increasing coordination problems and consensus processes etc.
And yes, my description of companies is highly idealized (sort of based on Lazslo Bock’s descriptions of how they do recruiting at Google). I don’t think most companies fit the description. But compared to individuals, they at least has a mental framework for deliberately thinking about who to grant trust.
Franklin has a lot to teach. Isaacson’s biography is not detailed enough to be super useful, though. I’d want something more in line with what Robert Caro does for LBJ. If anyone has a suggestion, let me know.
This post reminds me of Bachtin’s work on dialogue. I keep rereading his Problems of Dostoyevsky’s Poetics—probably the only work of literary criticism that has had a meaningful impact on my life—where he discusses Dostoyevsky’s (implied) ethics of the uniqueness of human “voices”. I especially like the idea that your voice only can come forth truly in an open dialogue; this has been super useful for me personally, and professionally working with autistic children.
A really fascinating expansion of the idea of voices is Internal Family Systems Therapy (IFS), where you approach parts of your own psyche as if they also have unique voices, that can only be accessed through open dialogue. Kaj Sotala has a highly cerebral sequence on that topic.
This post was one of several nudges that made me change my note-taking system. Definitely the best thing that has happened me since, I don’t know, having my daughter. So thanks a ton.
I do it digitally, with Obsidian, so I have to be principled to keep the notes atomic. What I like about having the notes digitally is that I can use them like functions. I make their titles statements, instead of numbers, and so I can “call” them from other notes if I want to use a certain statement in a syllogism for example.
The really cool thing happens when I read something that makes me go update a note: sometimes that makes me change the title because I refined or changed my understanding, and then that is cascaded out into all the notes that reference it. That helps me with the mental mountains problem: notes in other domains get updated, even if I don’t realize that the new piece of information is relevant there when I make the update. Later, when I return to those notes, I can see that the syllogism no longer adds up to what I thought before and I can update there, instead of keep my old belief unaffected by the changes in other parts of my network, they way I did before changing note-taking system.
There is also something very generative about refactoring notes that grow to big, or merging notes from different parts of the network if they repeat similar thoughts. Often that helps me generalize and go more abstract so my notes can function in several different networks. That has improved my thinking. And I don’t think I could do that with paper notes.
I’m only 4 months in, so it will be interesting to see how it scales, and if my old notes will go stale the way you experienced.
I think this ties in a lot to Matuschak’s idea that it would be good to have an “authored time dimension” to books, sort of like how meditation apps spread out the experience of learning about mindfullness over several month. This makes learning about meditation from apps much more salient than reading about it from a book that you finish in the space of a few days. I find the idea that books should have an authored time dimension intriguing, and I think Matuschak’s thoughts on the topic indicates that you overstate the case that he does not understand the importance of letting ideas “take up an appreciable amount of room on our cognitive real estate”.