Evolving Geometry of Trust in the Digital Age

Who to trust? Insights from Oxford's Network Readiness Index

The Network Readiness Index (NRI) assesses 134 economies across four dimensions: Technology, People, Governance, and Impact, using 58 indicators. The United States maintains its top position for the second consecutive year, with Singapore and Finland following in second and third place.

The 2023 NRI report, titled "Trust in a Network Society: A crisis of the digital age?" draws attention to a potential crisis in public trust in the internet and related technologies within an increasingly interconnected world. This emphasis on trust underscores the significance of the evolving digital landscape and its impact on society. The report not only evaluates the technological aspects but also delves into the societal implications and the potential challenges arising from a trust deficit.

As an entrepreneur, student of moral philosophy at Oxford, and a Senior Fellow at the Portulans Institute, I am interested in figuring out the geometry of trust in the digital age.

The paradox of trust

Amanda Knox was an American studying in Italy who was falsely accused and convicted of murdering her roommate. She ended up spending six years in prison before being released. Her only crime was not appearing sad enough in the middle of a murder investigation. Now consider Bernie Madoff, who seemed both trustworthy and reassuring, even while he ran the world’s largest Ponzi scheme. Citing such examples, Malcolm Gladwell explains why we make colossal judgment errors in his book “Talking to Strangers.”

We are constantly interacting with people whom we don’t know well and our psychological clumsiness, preconceived notions, and over-reliance on gut leads to misunderstandings at work, in social situations and even on social media. A few years back, University of Alabama’s Professor Timothy Levine developed the Truth-Default theory that suggests that given the choice to believe a stranger or not, almost all of us choose to believe, to trust, to give the benefit of the doubt. This holds for FBI agents, judges, and intelligence specialists despite their rigorous training.

If we are too naively unquestioning, should we compensate with a healthy dose of paranoia and skepticism in our daily lives? Absolutely not. Doing so will bring the entire economy to a halt. Oxford researcher Rachel Botsman suggests that almost all technology-led productivity gains are enabled by leaps of trust. We travel, date, rent, work, and live with people we know almost nothing about. Imagine life without Uber, AirBnb, and other platform economy wonders!

Research by Pew suggests that people are trusting governments and big institutions like banks and religious organizations much less than they used to. Institutional trust is at an all-time low and is making way for peer-to-peer trust which is far more accessible and approachable.

I see this in action every day on Network Capital where millennials around the world seek mentoring and career advice from peers. They are often strangers to begin with but the process of helping each other build meaningful careers creates a strong bond that often leads to new, mutually beneficial opportunities over time.

Can things go awry when we trust strangers? Absolutely. As Gladwell’s book suggests, we often pay a price for our naivete but at a macro-level, the advantages of giving strangers the benefit of the doubt are greater than the price we pay when trusting them backfires.

One person who did not subscribe to Levine’s “Truth Default” theory was an independent fraud investigator named Harry Markopolos, who tried to get the authorities to investigate Madoff on numerous occasions. He was so distrustful of everyone that when he had an opportunity to meet with a prosecutor to discuss Madoff’s case, he chose to leave the information anonymously. He was convinced that both Madoff and the government were out there to get him and he spent months on end without proper sleep, hiding under his bed. Gladwell says that if everyone on Wall Street behaved like Harry Markopolos, there would be no fraud on Wall Street but the air would be so thick with suspicion and paranoia that there would also be no Wall Street at all.

A useful mental model to deal with strangers is Hanlon’s Razor which suggests that we should never attribute to malice what can be explained by carelessness or stupidity. This is especially important in the digitally connected world where we text more than we meet, date people in different time zones, and incessantly tweet about productivity and politics. Judgment errors and misunderstandings are bound to happen but we can avoid the side effects we train ourselves to give the benefit of the doubt to strangers, as Hanlon’s Razor prescribes.

 Subconsciously we expect strangers to be transparent and reveal their thoughts in their demeanor, body language, and actions. But they don’t — not reliably. People who are nervous and sweaty and otherwise guilty-looking – like Amanda Knox - are just as likely to be telling the truth as they are to be lying. And the cool and collected ones – like Bernie Madoff - may simply be good at the confidence game.

Gladwell has a simple formula for dealing with strangers, an adaptation of Hanlon’s Razor: trust people with caution and humility. Caution because things can backfire and humility because we are not particularly good at reading strangers.