Cooperation Without Trust?

5. Cooperation Without Law or Trust

83 Chapter 5 Cooperation Without Law or Trust N OW WE turn to the heart of our enterprise, which is to explain how people manage their lives in the absence of trust and largely in the absence of legal or state enforcement of cooperative arrangements , all despite sometime inequality of power and often solid grounds for distrust. As is prima facie evident, the existence of the state and a legal system to govern many relationships can substitute for trust and other spontaneous motivations for cooperation in joint ventures of various kinds. In the role of providing law and stability, the state does not generally provoke cooperation but only enables it. Indeed, this fact is the rationale of the Hobbesian vision of order under an all-powerful sovereign (Hobbes 1651/1968). The failure or limits of state regulation or legal devices often leads to the creative development of informal devices. For example, the informal economies of the Third World arise in the context of weak states.1 But such informal “contractual” dealings permeate First World contexts as well, in part because law is too imprecise and too costly to cover the details of ordinary commercial agreements (Macauley 1963; Portes and Sassen-Koob 1987). There is evidence that strong informal institutions can thrive locally when central government is weak.2 Contrary to the more nearly standard view, we might argue that, historically, commerce seems to have stimulated the growth of law and legal institutions, which were not necessary for the early development of commerce (Mueller 1999, 95–98). Adam Smith (1776/1976, 412), crediting David Hume with the original insight, remarks that with the rise of towns, “commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals.” Robert Ellickson (1991, 1998) argues that, in the face of potentially prohibitive conflict more generally, local norms commonly handle many economic issues of cooperation that the law could not handle as efficiently or as well. In many of his cases, there is an ongoing relationship, which suggests the likelihood of developing a trust relationship that makes cooperation relatively easy. Ellickson’s work and even the title of his 1991 book are forerunners to the present book, although he addresses cooperation without law and we are concerned with the supposedly even harder problem of cooperation with neither law nor trust. We may conclude that many activities are best regulated by norms and that the law itself requires norms to enable its own working (Hetcher 2004, ch. 2). In analyzing cooperation without trust, we begin in this chapter at the individual level and with largely spontaneous interactions. Then we turn to relatively systematic patterns of interaction, but still at the level of individuals rather than of institutions. Many social practices can readily be seen de facto as devices for managing and motivating cooperative behavior in the absence of adequate trust, or even in the presence of substantial distrust. Often we need to be able to cooperate with some of those whom we do not trust. In fact, of course, we are in no position to trust the vast majority of people in our society, and possibly we cannot trust even the vast majority of those with whom we have to deal, both directly and indirectly. If we could handle these relationships through the law, we might not need to worry about the lack of trust. But many of the cooperative relations we would like to enter cannot be regulated by law. Even for many of those that could be brought under law, the costs of appealing to legal institutions might dwarf the benefits of the relationships. Ideally we might wish we could find people whom we could trust. In the large number of cases in which that is not possible, we would like to have some less formal social devices available to give potentially useful partners the incentive to be cooperative. The state may lurk in the background for most of the interactions discussed here, but often the scale or the specificity (sometimes to the point of idiosyncrasy) of an interaction makes it not a good candidate for legal oversight. Even then, the general order that the state provides is usually the essential background on which all of these devices play out. If there were no stable order, we would not be so heavily engaged in cooperative interactions because we would be more focused on self-protection than on marginal improvements in our lives. All...