Hardly anything in our culture is so glaring as mistrust.
Out of mistrust comes all the vast apparatus of contract, lawsuit, insurance, and safety regulation. It is through this apparatus that all that was free and creative has gone out of capitalism—that capitalism has become an anti-human force.
Imagine it’s 1800 (or 1700 or 1900, really anytime from the Renaissance to about a hundred years go).
Say I’m a teacher with radical ideas about education and I want to start a school. I rent a cheap room, find a few students, and begin giving classes. Between my own modest living expenses, books, paper, art supplies, and rent on the space, maybe I spend $3,000/month (in 2022 dollars). I need maybe $10,000 in savings to start my school. If my ideas are good, my students thrive, the school grows. If not, they go somewhere else. Maybe my school lasts a few years or a few decades. A few students have had an interesting education. Maybe they’ve been inspired, nurtured, given moral strength.
This story is legally impossible now. There’d be all kinds of licenses and insurance, mountains of paperwork and fees. My “cheap room” will have to be correctly zoned, inspected, certified. This will require lots of capital. To cover costs, I'll have to attract a large number of students and charge lots of money. This means plenty of marketing, a much bigger and more attractive space, a faculty with impressive credentials, an admissions officer, a college counselor, and so on. Instead of $10,000 to start my school, it will take ten million. Instead of focusing on planning and running the school, I’ll have to spend my time courting donors or investors. It cannot be the odd-ball endeavor I had imagined. It must be up to all the latest trends and standards. It will be a thoroughly ordinary sort of school.
But even if my little shoestring-budget school were legally possible, what parent would trust me to educate their child by odd-ball methods in a private room? They’d think: “What if she doesn’t get into a good college? Am I going to gamble my child’s future on this weird little school?”
It’s the same in every industry. Permits, inspections, licenses, and insurance inflate every undertaking. So nothing can be small, personal, informal, homemade, weird. Just to be legal, it all has to be big, polished, regulated, normalized, and therefore capitalized, branded, marketed. A couple months ago, a student club in the school where I teach wanted to hold a bake-sale. They were told that they must not sell any food cooked at home; they had to buy the baked goods from a supermarket and sell them at a markup.
From this we get the peculiar character of American capitalism, where everything is big business, and everything tends towards a norm of polished blandness. But there is no reason why this is what “free market” has to mean.
On the streets of many cities in the so-called “third world” (where “first,” “second,” “third,” refer to the order in which the devil takes possession) you see a very different kind of free enterprise: bustling market places, people peddling wares and services of every kind on street corners and down alleyways—food, clothing, shaves and haircuts, dentistry, mechanics: a vast, unregulated economy of tiny businesses run on personal relations and practical knowledge learned on the job (not in classrooms, not paid for with tuition dollars, but learned while earning money).
To have an economy, an urbanism like that, you need trust. But we are afraid: that our child will get injured, that our food will be contaminated, that our barber will not sterilize his implements. These concerns are real: children do get injured (and mistreated, and exposed to toxins); people get sick from bad food; barbers fail to clean razors; doctors practice bad medicine. Regulating these industries probably makes errors less frequent—but of course, they still happen and always will happen.
The question is how much in the way of freedom, of energy and activity, of immediacy and practical inventiveness and thrift we are willing to sacrifice to protect ourselves (but never completely) against injury, sickness, and malpractice.
There are two ways to “ensure” yourself against the negligence, dishonesty, and incompetence of others: regulation or trust. It seems to me this choice is all about scale: it is harder to regulate many small businesses than a few large ones, and it is harder for small businesses to meet regulatory standards. On the other hand, the smaller a business is, the more its customers are personally acquainted with ownership and staff and the more the business is accountable to individual customers, so the more basis there is for trust. So a regulation-based economy favors big corporations and a trust-based economy favors little mom & pop shops.
But the thing about mistrust is, once it begins, it takes over. It becomes the only available mode.