Trust is a very valuable commodity. However it’s a mistake to assume that just because you know someone you should be able to trust them.
I don’t find the statistics right now but if my memory is right people generally underrate the chance of various criminal behavior from acquaintances compared to strangers. Competency of friends is often overrated compared to strangers.
On average your friends are unlikely to be the best in the world or even in your city at what they are doing in their job. While the hippies in your example might be more skilled then the average carpenter they are an expection and a lot of people do now average carpenters.
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.
Trust is a very valuable commodity. However it’s a mistake to assume that just because you know someone you should be able to trust them.
I don’t find the statistics right now but if my memory is right people generally underrate the chance of various criminal behavior from acquaintances compared to strangers. Competency of friends is often overrated compared to strangers.
On average your friends are unlikely to be the best in the world or even in your city at what they are doing in their job. While the hippies in your example might be more skilled then the average carpenter they are an expection and a lot of people do now average carpenters.
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.