Liars and outliers

Bruce Schneier

Why I looked at this book

The working of our economy relies a great deal on trust - constantly having to check up on who we are dealing with would impose huge transaction costs. But we also feel that we live in a world where people are trying to profit at our expense, and we need to be vigilant to make sure that we get our money's worth. Clearly there are differences in going from entrepreneurship to wheeler-dealing and on to outright trickery, but sometimes it's hard to tell where the boundaries are. I hope that this book will discuss such issues, and point to how we can go about our lives without having to think that everyone is trying to trick us.

First impressions

The book starts with a look at the concept of trust. A trust of others is necessary for most of the things we want to do, but it's complicated. Those closest to us we trust out of confidence in them. For others it is more that we expect that society will penalise them if they abuse our trust and we know that gives them a good reason not to. But, then again, sometimes it is good for people to break with societal norms, in order to move society forward. The book looks to have an academic slant, spending quite a while defining terms at the start, but I'm hoping that it will be readable by the non-specialist.

Main review

The book wasn't that hard to read, but I still felt that it was primarily aimed at academics. Schneier develops a structure to model cooperation/defection situations and then gives the different pressures put on people to cooperate with a group ( which may be defection according to a larger group). The structure list the group interest and group norm and contrasts this with a competing interest and norm. Then the pressures which support the group norm are given, in particular moral, reputational, institutional and security. For instance in the Prisoner's dilemma situation we have:
Group interest: Minimise overall jail time. Group norm: Don't testify against others in the group
Competing interest: Minimise personal jail time Competing norm:Testify to get a good deal.
With the following pressures:
Moral: Feeling bad about what you're doing
Reputational: No longer trusted by others.
Institutional: Punished by criminal organisation
Security: Limit information that an individual has about others.

There's quite a bit of discussion about those working for a large corporation, and about whose interest they might promote. How can the business make sure they promote it's interest rather than their own. And how much might they put the overall interests of society ahead of those of the business?

I was hoping, however, for more about how we can make space for outliers. Society needs risk takers, but if the risk taking becomes institutionalised then this can lead to problems. Unfortunately there seemed to be very little discussion of such issues in this book. The book does have plenty of notes at the end, in fact I got the feeling that some of the more interesting stuff was in the notes, rather than the text itself, reinforcing my impression that this book is mainly aimed at an academic readership.
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