Trust is on the decline.

Interpersonal trust in the United States appears to be at an all time low. The public’s trust in government is similarly at a historical low level. This erosion is not limited to any one demographic; from Republicans to Democrats, Baby Boomers to Millenials, and across racial lines, trust in the federal government is lower than it has ever been. When looking at non-federal institutions there’s slightly wider disparity. Unfortunately, people’s confidence in big business, corporations, labor organizations, banks, public schools, the news media, and other institutions have been slipping for almost a decade.

Yet despite these numbers, it’s never been a better time to be alive.

Though media headlines might venture to convince us otherwise, we’re currently living through some pretty good time. It’s currently the most peaceful time in human history. Violence, globally, is at among its lowest levels in recorded history. Even in the wake of the 2008-09 recession, global prosperity has continued rising, lifting the poorest of humanity out of the depths of poverty. Perhaps most interestingly, however, is even as trust in interpersonal relations, government, and civil institutions has continued to decline, trust in the online ecosystem has been on the rise.

In a 2015 paper on the economic benefits associated with encryption, Josh Hampson and I found, among other things, that:

  • The number of Internet denizens using online banking rose by 30 percent between 2000 and 2013. More notably, the number of online banking users accessing their bank portals via mobile phones rose by 50 percent in just two years between 2011 and 2013.
  • In 1994, total online e-commerce retail sales amounted to just $100 million. By 2015, that number had exploded to well over $350 billion.
  • In the late 1990s, the worldwide cybersecurity market was valued at a few billion dollars. As of 2015, the total value was approximately $100 billion.

So even as trust in banking institutions has fallen, trust in banking online has risen. Diminished trust in big corporations has nonetheless failed to translate into diminished sales in e-commerce transactions. Though cybersecurity breaches are all the news these days, more people than ever before are online—and that number is only growing.

This begs the question: if trust throughout society—from the trust we beget one another to the trust we hold in institutions—is on the decline, why have we seen a continued growth in the trust afforded in the online sphere?

One answer may lie in the unique characteristics of the Internet. As a decentralized network that, at its most fundamental level, simply connects human minds to one another, the Internet requires, and engenders, a different set of social trust mechanisms to function. Robust reputation systems, for example, are the bedrock upon which the Internet ecosystem thrives. In an age of decreasing trust in traditional institutions, cyberspace has largely remained a resilient bastion of trust. Part of that is undoubtedly tied to its relatively recent emergence—the Internet simply hasn’t been around long enough for significant social fissures to begin tearing it asunder. Additionally, near-instantaneous information feedback loops provide heightened levels of resiliency that traditional organizations have difficulty matching (this may be one of the reasons that, for example, we see increasing consumer confidence in mobile banking, but decreasing trust in “banks” as institutions).

Another, more fundamental, reason for this mismatch of trust between cyberspace and “meatspace” goes to the heart of reputation mechanisms: identification.

As Matt Ridley remarked in The Rational Optimist:

The remarkable thing about the early days of the Internet was not how hard it proved to enable people to trust each other in the anonymous reaches of the ether, but how easy. All it took was for eBay to solicit feedback from customers after each transaction and post the comments of buyers about the sellers. Suddenly every deal lay under the shadow of the future; suddenly, every eBay user felt the hot breath of reputation on his neck as surely as a Stone Age reindeer hide salesman returning to a trading place after selling a rotten hide the year before.

Ridley correctly observes the reputation feedback loops of the Internet as fundamental to its operation; he also correctly ties this phenomenon to the earliest days of human commercial interactions. More importantly, and less overtly addressed, is the more fundamental need for appropriately identifying that individual to whom his or her reputation is tied. Reputation is only as good as an accurate association.

Take Uber’s feedback system. Riders leave ratings and reviews for drivers, communicating a host of valuable information for other customers who may, or may not, choose to use a particular operator based on his or her accrued reputation. The same is true for drivers, who can leave a rating for riders, thereby communicating similar information to other drivers. Uber itself, can then enact policies that incentivize both riders and drivers to maintain a floor rating to remain in good standing, and continue using the service. The entire feedback system is robust, resilient, and effective; but only so long as the reputation of every individual can be accurately tied to his or her person. The system only works so long as we can identify one another.

Identification helps foment trust amongst strangers in an otherwise obfuscating medium like the Internet. It also helps establish collective trust in cyberspace, which in turn helps lay the foundations for a healthy, well-functioning online ecosystem. There are, however, limits to the effectiveness of identification in promoting trust.

Biometrics and RFID chips, for example, can communicate a high degree of accuracy about who we are. Yet a state-sanctioned program mandating the installation of computer chips in newborn infants or centralized government databases storing the DNA markers of each and every citizen likely wouldn’t create a more trust-filled relationship between citizens and the government. Indeed, the mere specter of such a program would likely compound the citizen-state relationship in ways even the Snowden revelations did not.

A ubiquitous, omnipresent surveillance apparatus will not cure what ails society; but neither will policies that mandate obfuscation of our routine digital lives. As I’ve written previously, there are trade offs with enhanced privacy and obfuscation online. Between free speech, innovation and economic growth, bureaucratic efficiency, and the trust engendered through basic identification, a very complex picture of privacy’s costs and benefits begins to take form.

As Norman Mailer once said, “there is more good than bad in the sum of us and our workings.” I think that’s true. But if we cannot parse the good from the bad amidst our ranks, if we cannot identify those we can trust and those we cannot, then we cannot maintain trust amongst our digital selves.