Academic journal article Forum on Public Policy: A Journal of the Oxford Round Table

Representative Agency: The Fundamental Trust Relation of All Social Structure

Academic journal article Forum on Public Policy: A Journal of the Oxford Round Table

Representative Agency: The Fundamental Trust Relation of All Social Structure

Article excerpt

Representative Agency: The Fundamental Trust Relation of All Social Structure

Reliance on someone else's trustworthiness is dangerous, and only potentially useful. Trust is a dangerous act because it creates vulnerabilities and exposes one to the potentially catastrophic consequences of trust violations. Trust can be extraordinarily beneficial when mutual trust between individuals is validated by reciprocal acts of cooperation. From a social perspective, mutual trust relations are capable of increasing productivity, strengthening organizational cohesion and creating individual peace of mind.

Two different usages exist for trust. The first is unilateral trust, expressing confidence in social procedures and institutions: "I trust the municipal court system to produce reliable results," or "I trust FDA safety regulations for guiding health decisions." Unilateral trust can not be reciprocated because social institutions and procedures are inanimate, and incapable of trusting a person. Unilateral trust expresses an individual's degree of confidence without attributing specific causes for confidence.

This paper focuses on multilateral trust, mutually reciprocated trust between two or more individuals. Examining mutual trust leads to better understand of the moral and policy dilemmas at the core of social organization, and thereby clarifies why historical attempts to build stable, productive societies have always struggled with questions of how trust relations ought to be promoted and regulated. Answers require better understanding of how mutual trust can be maintained, and in what ways do trust violations weaken confidence in social organization and diminish organizational efficiency and reliability.

This study is premised on my belief that if blueprints for ideal government and business organizations, or well-honed versions of constitutional/legal systems, were exported to populations lacking abundant mutual trust relations, nothing would work as anticipated. Existence of mutual trust relations, in the form of representative agency, is fundamental to building effective social organization. My thesis is that widespread breaches of trust, or diminished numbers of well-functioning trust relations in a society, must surely lead to diminished voluntary cooperation, less efficient government and businesses organizations, and more extensive reliance on police powers and forms of slavery--in general, a withering away of the foundations upon which individual freedom and social prosperity depend.

The Fundamental Trust Relation

Mutual trust between individuals, implemented in the form of representative agency, requires at least one individual in the relation to find it in his/her self-interest to act in the interests of another. In essence, being a representative agent means choosing to be a servant! (1) For example, a pure form of representative agency is created when I choose to assign power of attorney to you, and you choose to wield that power in fulfilling my interests rather than use it to serve your own personal, private ends. (2) Power of attorney and similar arrangements that convey fiduciary duties to servers, establish potentially useful, yet dangerous, associations. The individual who agrees to act as a representative agent takes on extensive responsibilities, making that person accountable to one or more principals. The standards of accountability are often set by professional associations of servers, but ultimately rest on society's legal system. (3)

When you and I initiate a trust relation through self-interested decision-making, the end result for society is that a greater sum of resources will be devoted to serving principal interests. There results a redirection of time, special skills, and effort on the part of the representative agent. This augmentation of decision-making authority causes the agent's acts to become the equivalent of the principal's acts--for creating liabilities, disposing of assets, making gifts, paying taxes, et cetera--and creates a bit more social organization, whether it be private, government, or mixed public/private organization. …

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