We toss around the word “economy” knowing that it defines much of our life without understanding very much about how or why. We know that it can be good or bad, growing or shrinking, risky (although seemingly-never safe), inflationary or deflationary, global, domestic, or local.
Economics can be one of several dozen “–isms” operated by a similar number of “-ists.” It is described by the academic discipline of “economics” – apparently comprised in equal parts of science, sociology, psychology, impenetrable statistics, arcane mathematics, bluster, and chutzpah.
But put in the most basic terms, “an economy” simply describes the intersection of two things: need and trust. Early “economies” were essentially the division of tasks anyone could do. In these simple economies one would bring water, another hunt, another start the fire. In those economies the needs were common to all, that is, everyone needed water, food, and fire. And, as individual skills were developed, each member of the community could improve the quality of their life by utilizing the skills of others. That is, their individual needs could be better satisfied by collective effort.
The other condition of creating “an economy” is trust. It is all fine and well to divvy up tasks. But the success of an economy, in fact, the very existence of an economy, depends upon trust – the belief that others will keep their commitments. Of course no one succeeds every time, but developing a reputation for “bringing home the bacon” and carrying their “share of the load” is a condition of sustaining a succe3ssful economy.
Since such distribution of labor began, even before the evolution of homo sapiens, these two conditions have described every economy. But as economies have become more complex, skills more specialized, and transaction systems entirely impersonal, identify needs and communicating trustworthiness has become much more complicated.
When every member of a community had the same basic needs – food, water, fire, security, shelter – and the communities were small enough for people to develop trust through one-to-one experience the process of identifying trustworthiness was relatively simple. And the creation of expectations – and, frankly, motivating people to “carry their load” – was relatively straight-forward. We created trust face-to-face and built shared community expectations in communities “of the whole.”
But as communities became more complex, needs more diverse, and specialization greater developing trusting relationships and, especially, creating shared community expectations became increasingly difficult. How would a community create efficient supply-chains, encourage private capital investment, prioritize its public investment, or attract quality workers if it could not be confident of a fair sharing of the collective load – that people individually invested in the community would also take responsibility for “carrying the water” of community building and maintenance and for creating a trustworthy economic environment.
What is a Chamber of Commerce? It is an association of people in each community who are dedicated to building these relationships, joining together to chose and develop economic resources and systems, and developing the shared expectations – the trust – necessary to sustain a vital economy.
My favorite example is barn-raising. In small agricultural communities in the late 1800s and early 1900s it was critical to have a ‘community of successful farms’ to sustain the infrastructure necessary for economic security. Without this the supply chain infrastructure and economic mass individual farms would literally wither. One of the ways in which communities insured success was to collectively create the core infrastructure on each of their neighbor’s farms. This was both public spirited and the creation and reinforcement of the trust necessary for these communities to thrive.
Chamber’s think about their economies in the same way. First and foremost the
Chamber is an association of people who depend upon trusting relationships within an economic community. The Chamber is an opportunity for them to have experiences together, to build a shared vision, and to form the core of a community willing to work together to achieve those visions.
The Chamber is also a principal steward of the “economy” that that community creates, evaluating threats and opportunities, building consortia to undertake key projects, and affirming the trust upon which that community relies.
Stewardship of those trusting relationships isn’t all that a Chamber does, but surely it is the most important of its tasks. .
Economics can be one of several dozen “–isms” operated by a similar number of “-ists.” It is described by the academic discipline of “economics” – apparently comprised in equal parts of science, sociology, psychology, impenetrable statistics, arcane mathematics, bluster, and chutzpah.
But put in the most basic terms, “an economy” simply describes the intersection of two things: need and trust. Early “economies” were essentially the division of tasks anyone could do. In these simple economies one would bring water, another hunt, another start the fire. In those economies the needs were common to all, that is, everyone needed water, food, and fire. And, as individual skills were developed, each member of the community could improve the quality of their life by utilizing the skills of others. That is, their individual needs could be better satisfied by collective effort.
The other condition of creating “an economy” is trust. It is all fine and well to divvy up tasks. But the success of an economy, in fact, the very existence of an economy, depends upon trust – the belief that others will keep their commitments. Of course no one succeeds every time, but developing a reputation for “bringing home the bacon” and carrying their “share of the load” is a condition of sustaining a succe3ssful economy.
Since such distribution of labor began, even before the evolution of homo sapiens, these two conditions have described every economy. But as economies have become more complex, skills more specialized, and transaction systems entirely impersonal, identify needs and communicating trustworthiness has become much more complicated.
When every member of a community had the same basic needs – food, water, fire, security, shelter – and the communities were small enough for people to develop trust through one-to-one experience the process of identifying trustworthiness was relatively simple. And the creation of expectations – and, frankly, motivating people to “carry their load” – was relatively straight-forward. We created trust face-to-face and built shared community expectations in communities “of the whole.”
But as communities became more complex, needs more diverse, and specialization greater developing trusting relationships and, especially, creating shared community expectations became increasingly difficult. How would a community create efficient supply-chains, encourage private capital investment, prioritize its public investment, or attract quality workers if it could not be confident of a fair sharing of the collective load – that people individually invested in the community would also take responsibility for “carrying the water” of community building and maintenance and for creating a trustworthy economic environment.
What is a Chamber of Commerce? It is an association of people in each community who are dedicated to building these relationships, joining together to chose and develop economic resources and systems, and developing the shared expectations – the trust – necessary to sustain a vital economy.
My favorite example is barn-raising. In small agricultural communities in the late 1800s and early 1900s it was critical to have a ‘community of successful farms’ to sustain the infrastructure necessary for economic security. Without this the supply chain infrastructure and economic mass individual farms would literally wither. One of the ways in which communities insured success was to collectively create the core infrastructure on each of their neighbor’s farms. This was both public spirited and the creation and reinforcement of the trust necessary for these communities to thrive.
Chamber’s think about their economies in the same way. First and foremost the
Chamber is an association of people who depend upon trusting relationships within an economic community. The Chamber is an opportunity for them to have experiences together, to build a shared vision, and to form the core of a community willing to work together to achieve those visions.
The Chamber is also a principal steward of the “economy” that that community creates, evaluating threats and opportunities, building consortia to undertake key projects, and affirming the trust upon which that community relies.
Stewardship of those trusting relationships isn’t all that a Chamber does, but surely it is the most important of its tasks. .
Author
William Tysseling, CEO
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