Why do people stop at red lights? Sure there is the fear of possible punishment from law enforcement if you don’t. And there is the risk of being hit by someone coming the other way. But a mass disobedience by all the people encountering any given red light could obviate either of those in a moment. But that doesn’t happen. 99.99% of the time, people stop.

I submit that the primary reason they do is a conditioned understanding of the value of cooperative trust in a social system. My stopping on red gives someone else a chance to go; and the mutual stopping of others allows me to go in my turn. Through this unspoken but powerful social transaction, we all get where we are going faster and more efficiently.

Sure the punishment and injury threats strongly reinforce this behavior, but I still believe at its core is an innate knowledge, programmed into us by evolution, that cooperation based on trust aids the survival and thriving of our species.

All economies are built on a similar social trust in some form.

In the capitalist economies of the Industrial Age, we were asked to place that trust in large institutions, primarily banks that control the capital and governments that regulate its flow. While that economic model built great and mighty things, it also thrived on scarcity and finite games resulting in a few big winners and lots of lesser players (or losers).

In the emerging connected economy trust and the capital that flows from it are increasingly decentralized and distributed. Now it is possible for virtually anyone to become a center of trust and reputation in any given field. And from that center can flow capital (in all forms, not just money) and power/influence.

"Collaborative Consumption: A social and economic system driven by network technologies that enable the sharing and exchange of assets from spaces to skills to cars in ways and on a scale never possible before."

- Rachel Botsman

(from http://youtu.be/kTqgiF4HmgQ)

AirBNB is an online service that connects people with extra space (from a spare bedroom to a spare medieval castle) with people looking for a place to stay in a particular city. It has taken off incredibly, with people now in 192 countries willing to open their homes and spare spaces to strangers.

At the core of the success of AirBNB is an effective trust rating system based on reviews. Both guest and host can be reviewed. The benefit for hosts is obvious, but what is different and powerful here is the benefit for guests from such a rating system. A frequent guest who earns a high rating can command special deals and preferences from potential future hosts. Reputation has its perks.

According to Ms. Botsman, ”It’s about empowering people to make meaningful connections, connections that are enabling us to rediscover a humanness that we’ve lost somewhere along the way…Instead of consuming to beat the Jones’s, consuming to get to know the Jones’s.”

A study by the Pew Research Center found that “the typical internet user is more than twice as likely as others to feel that people can be trusted.” Online connections really do help establish reputation which turns into the power of trust.

Just because you’re trustworthy in one thing doesn’t mean you are in another. An individual’s “Reputation Capital [is] the worth of her reputation–intentions, capabilities, and values–across communities and marketplaces.” Rachel Botsman envisions that in the not-distant future there will be apps that will allow us to access the earned reputation of individuals across a broad array of categories.

There are already startups working on this. Reputation will become the most powerful currency in the 21st century. And it will make a number of staples of the 20th century industrial economy obsolete: credit scores, resumes, headhunting services among them.

All individuals in Cory Doctorow's novel Down & Out in the Magic Kingdom have implanted brain chips that are able to transmit and record wuffie. Wuffie is simply the cumulative score of reputation garnered from others who have encountered you. If you do something amazing or beneficial, your wuffie will go up. Be rude to someone or break a promise, and your wuffie may go down. Wuffie can be consciously sent to another, but most transactions take place automatically and unconsciously as the brain chips simply measure and transmit the sentiments of one human being toward another.

Author Rank (sometimes expressed as “AuthorRank” in homage to Google’s PageRank) is a community-created term for something Google has talked about, in patents and elsewhere, for several years now. The idea of Author Rank is to use Authorship to trace the social signals pointing at a given author’s content on a given topic and score the author in that topic by the amount of social trust signals directed toward it. Most importantly for our reputation credit discussion here, more important than how many people engage with a given piece of content is who does. If a person who also has a high trust ranking for “Google search” often interacts favorably with my Google search-related content, that will count for more for me in that topic than a lot of non-authoritative people doing the same. The resulting score would serve as a boost to the author in the search results when people search for the topic

If reputation is the currency of the new economy, how does one build up such capital. Some of the ways should be obvious from our current experience. Create a high-quality product or service. Provide exceptional customer service. Deliver more than is promised.

But there is another factor which I think will be many times more powerful in the connected economy than it was in the industrial economy: the power of giving it away.

In the connected economy, giving away will be a major way of directly earning capital. Not the old-style capital of money or money-related credit, but the new capital of reputation. By giving in ways meaningful and helpful to others in online communities, they begin to send major wuffie your way as they share your content, rate you favorably on rating services, and recommend you to their friends. And as we saw above in the Google example, the web is maturing in a way that can rapidly expand and spread the capital value of such good reputation.

What are you doing right now to build your reputational capital in the emerging connected economy?

(This Haiku Deck is based on my more extensive article "Trust: The Currency of the New Economy" at http://newmedialeaders.com/community/trust-the-currency-of-the-new-economy-...)