There is also much to discuss on crypto, which exists as a method to do away with the need to trust in institutions altogether, and instead rely on an algorithm.
It might be better to find a way to improve trust in the institutions we have, or create new ones, rather than come up with a system that does an end run around our need to trust each other altogether. Ho is clear that money developed as a means of establishing trust:
You can get dizzy trying to pin down just what money is, and a popular misconception about how money arose is that money was a way to improve the barter system.
In fact, a better way to think about money is that money was a way to keep track of trust.
In hunter-gatherer societies, a lot of economic life was governed by gift exchange. I shared my hunt as a gift, in the hope that you will share your hunt next time.
As societies grew, it became more and more difficult to keep track of who owes who a favor.
People began using markers to keep track of favors. The earliest markers became the earliest form of writing. Other markers developed into money.
Ho also suggests, rather controversially these days, that we still behave as though we have a lot of trust in our financial institutions.
Think about how readily people spend money online, and read their credit card numbers into a phone or type them into a browser, and you get the point.
He also suggests that interest rates still function as the best measure of strong trust in a system is a low interest rate.
“We can back out mathematically, based on the interest rate that is charged, the probability that the parties involved think they will be repaid. For now interest rates remain low, and I think that does tell us something.”