The Economics of Tribal Prejudice
By Roy D. Follendore III
Copyright (c) 2001 RDFollendoreIII
Suppose you were to have lived thousands of years ago. You were out hunting with your large stone knife. It was cold outside so you walked into a cave to get out of the wind. You are met by a large unarmed individual from a competitive tribe who has already made a warm fire in the cave. He looks strange and though you do not know this person, you have no animosity. He sees your knife and asks you to to give it to him before you come in.
Does that mean you should give the only knife to him?
Suppose you were to have lived thousands of years ago. A hunter from another tribe was out hunting with a large stone knife. It was cold outside so he walked into your cave to get out of the wind. You suddenly meet a large unarmed individual from a competitive tribe who want to be made a warm by your fire in the cave. He looks strange and though you do not know this person you have no animosity. You see his knife.
Should you ask him to to give the only knife to you before he comes in?
In situation #1 you are asking for something from another. In this case you are invading the other mans space and wanting to take advantage of the warmth of his fire and cave. In situation #2 your space is being invaded by someone else who wishes to take advantage of your fire and cave.
In each case what is the essential basis of risk to reward?
In the Situation #1 you want something the other has. You present a fundamental economic risk. You knew you have no animosity and your own sense of fairness but you did not know this about the other person.
In situation #2 you were being threatened by the presence of potential force for the shelter and warmth you created. You knew you had no animosity and your own sense of fairness but you do not know about the other person.
Predictability is the essence of tribal trust. Without knowledge there can be no trust. In both situations you are being expected to trust your life for the value of warmth and shelter without the benefit of trust.
The essential economic basis of risk to reward is trust. It is unlikely that all things being equal you would have given over your weapon. Trust is a value that can not be given. It must be earned over time. Short term tribal economics therefore operates on a different risk to reward basis than long term economics.
The stock market is the way in which the modern tribe makes decisions. The investors that create the deals and the entrepreneurs that create technology must build a common trust, without which business objectives and communications will ultimately fail.
Copyright (c) 2001-2007 RDFollendoreIII All Rights Reserved