Trust Matters

TrustA drug dealer posed this business question to a graduate student: I have two competing deals on raw product (powdered cocaine). One offer is to pay 20% more than usual now, and get a 10% discount a year from now. The second deal is a 10% discount now if I agree to buy from him at the regular price a year from now.

What would you do?

“This all depends on whether you think the supply will be affected a year from now, right?” the student said.

“Right, so…?”

“Well, I don’t have any idea how this market works, so I’m not sure what to do.”

“No, that’s not how you need to think. You always take the sure bet in this game. Nothing can be predicted-not supply, not anything. The [guy] who tells you he’s going to have product a year from not is lying. He could be in jail or dead. So take your discount now.”

You always take the sure bet.

That conversation is reported in Sudhir Venkatesh’s captivating book, Gang Leader for a Day. Venkatesh stumbled into a difference in experience and perspective that shapes decision making on a basic level: is the future reliable or unpredictable?

In a community of stable resources and predictable futures, delayed gratification is a valuable skill. Spending less money now so I can save for retirement, or for my kids’ college tuition, or for the down payment on car is wise if I am confident that I will live long enough to retire, that my kids will go to college, and that the money I set aside will be there when I need it.

In an environment where there is never enough and the future is uncertain, saving for later does not seem wise. If I am a teenager who gets a job and saves money to buy a phone, but my parents take my savings to pay the electric bill, I might decide it would have been better to spend the money right away.

Saving for the futureIf arrive on time for a mandated court hearing but can’t get to the courtroom because the cell phones are prohibited and the cell phone storage lockers are suddenly gone, my world is unreliable. (That just happened in Chicago. The people who rode the bus – people who are poor – are the ones who were affected.)

Personal choices matter, but they are not made in a vacuum. Living in an environment where effort now reliably pays off in a benefit to me later is essential to making positive change.

Poor people seem to be judged a lot for choosing “badly.” But what about this possibility: Could people be making smart choices in an environment that is different from mine?

Check out this brief video describing how children learn to make decisions in a reliable or unreliable environment. Notice what the researcher says near the end about how long children waited, on average, in the two different settings.

Did you hear it? Children in the reliable setting waited four times as long as children in the unreliable setting!

Trust matters. I will not wait for something better if I don’t trust something better is really coming. We all have a responsibility to build a community that is more reliable for everyone.