Life & Research Notes

In writing the background section of my Promiserver thesis, I’ve recently spent some time reading and thinking about promises and the relation to trust and social systems. I think of a promise as a relationship among participants who trust one another to make good on certain pre-specified goals and conditions. The foundation of this trust is the promise institution: the context in which a promise is made, and the methods by which it is enforced. (I grokked this idea of promise institutions from perusing the first few chapters of F.H. Buckley’s Just Exchange.)

Consider a basic laissez-faire market model in which each party tries to maximize its own gain, and in which their is no trust between the parties. There will be many cases like the Prisoners’ Dilemma in which cooperation is the optimal group strategy, but the individual strategy is uncooperativeness. A promise institution can change these outcomes, aligning the individual’s best interest with the group’s. As an outside force acting on the participants, the institution uses some condoned enforcement mechanism to deter breach of promise and incentivize cooperation.

The character of the promise institution may vary considerably. We can divide the set of institutions into two core classes of social and legal. Each operates differently, yet they overlap considerably in their scope. We rely on the social promise institution when we make promises with friends or family, or within a community. These are agreements that we would never expect to go to court. The social promise institution uses emotional, interpersonal, and community enforcement, such as gossip, guilt, shaming, or decrease in standing or reputation.

We invoke the legal promise institution in matters of government or business, where the social enforcement lacks sufficient scope or strength to ensure cooperation. The legal institution offers the greater trust firepower needed to deal with corporations and governments, yet at a cost of higher barrier to entry and far greater stakes. Participating in a legally binding contract generally often involves lawyers, fees and time for at least one party, and potentially severe legal ramifications for breach.

Promiserver lives in the social end of the spectrum, but cautiously dips its toes into legal territory. Enforcement is reputation based—clearly the social promise institution—but it aims to extend social enforcement further into the space in which people would traditionally feel the need to turn to the legal institution.

These promise institutions are critical, to both life and business. The more we trust the accuracy and efficacy of the institutions, the more we may trust in the promises we make. If I trust my community and feel they are fair and reasonable, I am more likely to make a social promise. If I feel the legal system is fair and reasonable, the more trust I place in the contracts I sign. In either case, good institutions incentivize cooperation.

Yet these institutions are not owned by any person, company, or government. They are created and owned by all of us as members and participants. Though at times the individual best interest may run counter to the enforcement laid out by the institution, the purpose of the promise institution is to protect the best interests of the group as a whole. If a corporation bribes a judge, thereby corrupting the legal institution, it may temporarily serve the best interest of that corporation, but in the long run it hurts everyone because it adversely affects our trust in the institution. This sort of “fragile, owned by everyone, benefits everyone” resource is classically referred to as the commons.

This line of thinking has reaffirmed for me that Promiserver is dabbling within a critical space. I’m currently reading Peter Barnes’s interesting Capitalism 3.0, which makes a case for creation of new policy to protect endangered commons like the environment using market incentives, and has me interested in how we approach other, intangible commons. So I’ve stepped onto this ride that is my thesis. It’s been a little slow and creaky on the uphill, but it is leading to something, and I see some interesting curves approaching.

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