Contract-based economic trust fails where state enforcement and market calculation are absent.

Evidence

The Frafra migrants face the problem of establishing economic forms, durable relations of partnership and hierarchy, in the city slum. Three basic models for how to go about this present themselves. The most obvious and apparently profitable of these is the contractual ethos of the civil society they think they have joined, that is individualism, rationality, market, impersonal law — the bourgeois package of city life. Here economic relations are in principle entered into freely and by choice, but the contract imposes binding obligations sanctioned by state law. There are several reasons why this does not generally work. State law does not apply except in the form of occasional punishment. Markets are erratic and the substantive conditions of rational calculation are largely absent. The Frafras have not been socialized to make and keep contracts of this sort (they are, for instance, rarely on time), and the impersonal disciplines involved have to be invented from scratch. They lack education. They have no grounds for confidence in outcomes established by contract. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2427

Categorization

• XREF: Mirrors Luhmann’s point that trust founded on familiarity presupposes institutional backup, and connects to the Saramago analysis where contractual order collapses without observable enforcement. — connects to: Overt state force is ineffective because labor contracts cannot stipulate every profitability requirement — Samuel Bowles and Herbert Gintis, Schooling in Capitalist America:…, 587