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What Does a Baby’s Laugh Tell Us About Trust?

... and why is trust an essential part of the economy?

Key points

  • Babies laugh before they walk because humans evolved laughter to build trust.
  • Trust is fundamental to cooperation, and cooperation is the basis of civilization.
  • Today, trust undergirds virtually all of our economic institutions.
  • New economic innovations, like blockchain and the sharing economy, are all based on trust.

Why do babies laugh before they walk? Most mammals are born knowing how to walk, but the laughs and giggles of human newborns will delight sleep-deprived parents long before the babies learn locomotion.

These were some of the questions I was pondering late at night as I was writing my book about trust, with two small boys keeping us awake through the night. The answer I came up with for why babies laugh, naturally, is based on trust: Humans use laughter to build trust and trust is fundamental to what makes us human.

Humans laugh at the unexpected. This explains the game of peekaboo. A baby forgets a person is there when they can no longer see the person’s face, and thus they laugh with unexpected delight the instant mom or dad shows up again. We laugh at things that defy expectations. We laugh at jokes that violate shared norms. Therefore, when we meet somebody that laughs at the same things we do, we understand that they likely had the same cultural expectations and shared the same norms. Effectively, we have met somebody that we can trust. Biologists who study laughter have identified the evolutionary and anatomical origins of laughter. They argue that the universality of laughter among humans, and its similarity to behaviors seen in non-human primates, highlights the key role laughter plays in human social bonding.

Nature has embedded a way to gain trust in our biology because trust is so essential to cooperation. We accomplish more working together than alone. But cooperation entails risk, and overcoming risk requires trust. And yet mechanisms like laughter only really work within small communities. Game theory and economic experiments show that our trust wanes when we are interacting with more socially distant others. To extend trust to larger groups, humans built new institutions, based on religions, markets, and the rule of law.

Trust in the economy

Joshua Hoehne/Unsplash
Trust is essential in the economy
Source: Joshua Hoehne/Unsplash

Today, trust permeates the economy from the banks that hold our money, to our relationships at work, to the brands we buy. Some of the most important recent innovations, like the sharing economy, e-commerce, and blockchain, were all based on ideas built around trust. We once scoffed at the idea of sharing a stranger’s car or even their house, yet today all that seems normal.

Trust is based on reputation. We build reputation through costly acts that involve personal sacrifice, and, once earned, that reputation becomes a commodity, shared with others via word of mouth. In pre-market tribes, our ancestors used informal gossip networks to keep track of who to trust. Over time, that informal trust became replaced with institutions like money, but the need for trust remains. Brands vie to become “the brand you trust” because we use brands as a shorthand for knowing who to rely on. Starting with online markets like Amazon and eBay, more and more of that trust has moved online, replacing with algorithms what was once transmitted by gossip. The sharing economy, led by Airbnb and Uber, showed that reputations could be digitized into reputation scores, and that we would have enough faith in these online systems to open up our homes, and share our vehicles with complete strangers.

Trust has allowed humans to accomplish so much. Adam Smith argued in 1776 that the wealth of nations derives from specialization and division of labor. His example was how a factory of 18 people doing specialized tasks could make pins much faster than a single individual. Today, the simplest task, like buying a book, relies on a supply chain of thousands of people, from the lumberjack who chopped the trees to the writer who filled the pages, to the banks who processed the transaction, to the delivery service that brought the book to your door. Each of those steps requires trust.

I often stand on a subway platform in New York City in awe of a system that can move millions of people in a single day and think about all of the cooperation involved in making that system function. The biggest problems our world faces, from the pandemic to global climate change, all require cooperation and trust at a global scale. Trust will only become even more central to being human.

A version of this post can be heard on The Academic Minute with WAMC and on NPR.

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