Trust and confidence are supreme virtues in economics and society
Ok, a local attorney offered a narrative on family finances on social media. She stated that money in a joint account is like a joint tenancy of land. It follows a principle in law that the survivor takes all. Consequently, whoever gets to the bank first on break up, falling out, deception, divorce, or death, owns the contents of that account. That is the reality.
A second revelation offered was that when we put money into a bank account, the cash belongs to the bank, not the depositor. If the bank fails, we become creditors and must stand in line with others to get our cash back.
Third, there was the explanation that not all title deeds to land are equal. A deed she stated may allow a transfer to beneficiaries or not. There is a difference between joint tenants and tenants in common. The latter alone, can legitimately will land to beneficiaries. I hope that my assertions on the attorney’s statement are correct.
The preceding, if I got it right, had me thinking. It alerted me to a reality that I have observed over many decades of life, and that is that trust is everything. Trust is especially critical in transactions and agreements, of every type. Then, confidence comes a close second: in fact, trust and confidence are siblings. Trust and confidence are twins. What we trust, in that, we have confidence. Where there is trust there is confidence.
The world of finance and capital including that attorney’s own legal culture sits on the platforms of trust and confidence primarily. Wise men and women have understood this reality for centuries. Without trust and confidence, we might as well transact with baboons.
All value, from the cash in our wallets, the company stocks we own, to the homes we live in is trust based. Trust and confidence determine value. Value derives from our history and culture; but trust remains central to value.
Your car loan or mortgage is a transaction based on trust, even if the bank requires a form of security. When you default that trust is broken. It will be more difficult to get another loan; your credit history goes south. It is the same with the relationship between doctor and patient, and attorney and client. Trust forms the crucial link even where there are instances of breakdown in that trust. When that trust is broken, the relationship is broken.
We place cash in a bank because we trust the bank to return our cash on demand; though, we may not want that cash for years. Consumers never question payment in specific currencies, such as the dollar, Euro and Pound. We are confident in their value simply because of the trust and confidence we place in the value of these monies. These paper currencies are not gold, precious stones, or anything materially useful on their own. However, they hold the trust and confidence of billions of consumers and producers the world over. These currencies are the face of the culture and society where they are printed. That trust and confidence is the redundancy factor in the value of money.
Drop the currency of some banana republic in our hands and we prefer toilet paper. Why? Because we have no trust in that currency.
Dickson Igwe is an education official in the Virgin Islands. He is also a national sea safety instructor. He writes a national column across media and has authored a story book on the Caribbean: 'The Adventures of a West Indian Villager'. Dickson is focused on economics articles, and he believes economics holds the answer to the full economic and social development of the Caribbean. He is of both West African and Caribbean heritage. Dickson is married with one son.
