Creating Tanglible Assets By Enabling Trust

Can enabling trust create tanglible assets?

Most people familiar with stock market dynamics will answer a definitive "Yes" to this question. In fact, much of the market value of a stock depends on something else than profits and earnings.

This article starts from this experience and delves directly into the mechanics of creating tangible assets by nothing more significant than trust enablement. In other words , if conditions are right, how can we materialize them into tangible assets by "turning on" trust? Can we do this "on demand"?

First, let's step back 2,500 years and question what we are about to do. The Greek philosopher Socrates, who liked to "follow the argument" in his personal reflections, provides us with an useful starting point [1].

Voting is used extensively by organizations to make collective decisions that approve budgets, change by-laws, elect officers and, ultimately, create or destroy tangible assets. From Board meetings to shareholder meetings, organizations rely on voting results to get "the best qualified" and "the best answer" to difficult and, often, conflicting questions.

However, as Socrates might argue today, if voting would indeed provide the best answer to choose "the best qualified" from a list of choices, then airlines should elect their pilots from the employee list and college students would be approved by election from the class list.

What fails in those examples is that conditions were not "right". We cannot get tangible assets from nothing. Trust is not going to be the magic wand that turn stones into gold, even though misplaced trust may make stones look like gold. We need to wait for the "magic moment", that the conditions are right.

Thus, we start with the cautionary note that in creating tangible assets by enabling trust, we first need to ensure that the conditions are "right". If the organization is failing to create value, for example, no amount of trust enablement will actually create tangible assets. Example: Enron.

Under "right" conditions, the principle behind voting has proven itself to be a useful one for organizations, and governments alike, to make valuable collective decisions.

Now, this principle is changing. Our online society has considerably expanded the idea of voting, and made it easier -- but not necessarily better. What might be this new, changed and still changing, principle? How can it be used to help create tangible assets?

When "voting" is understood as a class of collaborative decision-making tools, it is possible to see what voting does in terms of trust. Voting, in the various forms that we use it today (consensus, polling, bidding, elections, etc.), helps induce trust within a particular population.

Voting measures trust and, at the same time, enables trust.

For example, if I know that 1000 people certainly agree on something then I may trust that something more than if I know that 100 people may agree with it, or if I now that only one or two agree with it. It is a matter of both quantity (1000 vs 100) and quality (certainly agree vs. may agree). Such trust may materialize itself to that particular population as a quite objective (i.e., independent of the observer) reliance on information, which will in turn legitimize an elected government, company Board, or define a market value for company shares.

In this scenario, voting can be used not only to define who will represent the user (voting) and what the market wants (polling) but also to distinguish between price and value (bidding, auction).

Value is no longer a vague market concept.

Today's value-seeking society is increasingly able to use the Internet in order to define the price it wants to pay according to a publicly perceived value, for example, by using online auction or bidding as a simplified voting process (viz. the recent trend for Internet-based auctions in determining real-time values of air fares and even common goods). In an auction, the seller seeks the highest value that can be paid while in bidding the buyer seeks the lowest value it needs to pay -- in other words, value is increasingly being defined by voluntary collaborative decisions.

Trust can be enabled voluntarily. Value can be created voluntarily.

This is, of course, not to be confused with the misuse of trust or voting tools to "justify" an agenda (e.g. based on few selective choices), to "set" a price in collusion or market manipulation (e.g. by spreading misinformation or fear) or "to shape" some desirable reality (e.g. by creating a false demand). Voting is a tool to make known what a collective decision should be, but this is only useful insofar as that decision must emerge from an unbiased selection list (though often biased and politically used to "justify" lesser evils according to rigged rules).

Online voting in various forms can be used to create tangible financial assets, on demand, creating value for both customers and stakeholders.

Thus:

Measure And Form Market Value: "turn on" trust to allow existing favorable conditions to be both measured and used in forming market value.
Materialize On Demand: materialize on demand your existing favorable conditions, quite objectively, by voluntarily "turning on" trust when conditions are best.
Use Online Trust Enablement: Online collaborative decision-making processes, such as voting, can help reduce cost and time, while motivating greater participation in voluntary trust enablement.

In creating tangible assets by enabling trust, keep the Golden Rule: Trust is earned [2]. "Turning on" trust is just the first step in trust enablement: trust must be earned and maintained by actually creating the value that supports the tangible assets.

Comments are welcome.

REFERENCES:

[1] Ed Gerck, "From Voting to Internet Voting", The Bell, ISSN 1530-048X, May 2000, available online at http://thebell.net/archives/thebell1.1.pdf

[2] Ed Gerck, "Trust as Qualified Reliance on Information, Part I", The COOK Report on Internet
Volume X, No. 10, January 2002, ISSN 1071 - 6327.