Trusting agency relationships enables complex social organization.

Evidence

In a provocative essay, Niklas Luhmann argued that trust serves to increase the potential of a system for complexity (1979, p. 8). As we have seen, the potential for complex forms of social organization afforded by agency relationships seems infinite: global exchanges unencumbered by distance, time, commodity, or familiarity, economies of scope and scale, transactional liquidity, expanding temporal possibilities, protection from risk, the magical ability to create wholes that are greater than the sum of their parts, and a rich material and cultural life. — Shapiro, Susan P., The Social Control of Impersonal Trust, 32 (#corroborates, via linked claim)

Luhmann does not confuse trust and trustworthiness conceptually, because it is genuinely his interest to explain trust, which he supposes is the individual’s device for dealing with complexity—although, of course, the device can work only if others are trustworthy. My own trustworthiness does not directly help me deal with complexity, although it might do so indirectly by begetting trust. On this account, trustworthiness is, in a sense, prior. Hence there is reason to suppose that it is the rise of trustworthiness that allows for the development of complexity, which actually results from successful trust. Trustworthiness not only enables us to handle complexity when we have it, but it also therefore enables us to develop complexity. — Russell Hardin, Trust and Trustworthiness, 683 (#corroborates, via linked claim)

The richest and most intricate agency relationships arise from collectivization. Principals often entrust their property to strangers, having recognized the value of aggregating their assets with those of others to enjoy economies of scale and to spread risk. By joining a money market fund, they command higher rates of interest for their meager savings than are otherwise available. By entrusting funds to an insurance company, they enjoy considerable protection at relatively small cost … These collective forms of agency frequently expand the temporal frame of social exchange, systematically anticipating and exploiting future contingencies. Principals transfer money or property to organizational agents in the expectation of some future payoff in the form of interest, dividends, pensions, inheritance, insurance benefits, or better health. … These “futures transactions” require even more resilient agency relationships than those that delegate property or responsibility to employees, experts, data collectors, or brokers. They demand that commitment be conferred far in advance of payoff without any necessary confirmation during the interim that the return on investment will eventually be honored. Agency arrangements serve as a temporal conduit, connecting relevant past events and future contingencies with present resources. — Shapiro, Susan P., The Social Control of Impersonal Trust, 29 (#expands, via linked claim)

Categorization

• XREF: connects to: Collective agency shifts trust from persons to future-dated impersonal systems — Shapiro, Susan P., The Social Control of Impersonal Trust, 29; Trust expands the complexity a social system can sustain. — Shapiro, Susan P., The Social Control of Impersonal Trust, 32; Social institutions function through trust only at the individual micro level (+5 more)

Related

• Trust expands the complexity a social system can sustain. (similarity 0.92)
• Collective agency shifts trust from persons to future-dated impersonal systems (similarity 0.89)
• Impersonal trust emerges where face-to-face control mechanisms are unavailable (similarity 0.84)
• Agency relationships drive social differentiation and bridge exchange distances (similarity 0.83)
• Trust reduces social complexity by replacing missing information with guaranteed security (similarity 0.82)
• The very conditions that create agency also preclude personalizing trust relationships. (similarity 0.82)
• Growth of communities inevitably pushes trust from personal to institutional forms (similarity 0.81)
• Social complexity forces the shift from personal to impersonal, system-governed trust. (similarity 0.81)
• Trustworthiness precedes and enables societal complexity (similarity 0.81)
• Trust is a social relationship of investing responsibility in another for uncertain future return. (similarity 0.80)
• Differentiated societies need more trust to reduce their greater complexity (similarity 0.80)
• Trust expands a system’s complexity potential and buys it time (similarity 0.80)
• Trust forms sequentially by reducing social complexity over discrete steps (similarity 0.80)
• Luhmann reframed trust as social, not merely psychological (similarity 0.79)
• Trust reduces the truster’s complexity while transferring that burden onto the trusted (similarity 0.79)

Broader Connections

• Trust expands the complexity a social system can sustain. #corroborates (0.92) — Shapiro, Susan P., The Social Control of Impersonal Trust, 32
• Trustworthiness precedes and enables societal complexity #corroborates (0.80) — Russell Hardin, Trust and Trustworthiness, 683
• Collective agency shifts trust from persons to future-dated impersonal systems #expands (0.75) — Shapiro, Susan P., The Social Control of Impersonal Trust, 29
• Social institutions function through trust only at the individual micro level #contradicts (0.72)
• Trust is a small-scale phenomenon that institutions must replace to enable large-scale cooperation #contradicts (0.72)