Originally written on March 30, 2019
My friends have eaten the food I cooked, without asking for a food permit. I have helped them academically without being asked for a teacher's degree. I have helped someone lose weight without a fitness trainer's certification. All these transactions became possible because people trusted me not because I was certified.
How many of you look up a barber's transcripts or the college he went to, instead of looking up his google reviews? How many look up all the certificates a vehicle has, instead of looking up its reviews? People look for trust. They go to the barber they trust, the car mechanic they trust, and the doctor they trust. Trust is what makes transactions possible. The more transactions a nation has, the more goods and services its members exchange, the more needs and wants get satisfied, and the more problems are solved.
Trust leads to transactions, which lead to wealth, or trust leads to wealth. If the relationship is true, why do nations want to make more money, than to build trust among their citizens? For instance, modern liberal democratic nations seem to be obsessed with education. Yes, it has a high multiplier. Perhaps, there are income differences between high school degree holders and college degree holders. However, would you not get your car repaired by an 8th-grade drop out whom your friends go to, who has been repairing cars for 10 years? Or would you go to a flashy shop where the mechanic has a technical education? Do you want to trust experience or education? Let us also not forget that an educational degree also needs trust for its own validation: trust in the people who certified the learner. Without that trust, it means nothing.
Money is just a measure of wealth, not wealth itself. Wealth is produced when people exchange things and do things for one another. It can exist even without money. It can grow so long people trustfully engage in mutually beneficial exchanges. In fact, wealth isn't solely an economic phenomenon, rather a moral one. In an immoral society, people are bound to be poor. They wouldn't be able to trust one another because they want to protect themselves. This would limit how many transactions they engage in. They wouldn't offer their services to those they don't like, nor would they buy products and services from them. They may even prefer to take small losses to buy from people they like or associate with. Thus, the market wouldn't be as competitive. It would operate at a sub-optimal level.
Consider what I observed in Starkville. The college community was divided into religious, racial, and ethnic groups, such as the Indian Student Association and the Black Student Association. Students joined with them because they did not feel supported by the majority population (white folks). They became sub-societies, which were premised on mutual support, a value missing in the original society. Over time, the separation allowed biases to develop. They started to live, hang out, date, and trade only within their groups. They left out all other groups and often developed biases against them. To me, they looked like nations that weren't trading with one another because they couldn't trust one another. Since I made friends with everyone, I was able to see what they were missing out. Often, members of one group had solutions to the problems of the others. In hindsight, my intuition was right. Dividing people by race and ethnicity was bad leadership. Missississippi State severely impoverished the student body. A united student body would have exchanged much more socioeconomic resources among themselves, becoming much wealthier than they were in small groups.
As we see, a nation's economic strategy should build trust among people, not to breed dumb money. Otherwise, even a population with a lot of gold can be made poor if they can't trust others enough to exchange socioeconomic resources. If everyone kept their golds to themselves, it is only about time they'd have no cars, no food, no housing, but just gold. Good luck with eating gold then.