What do you need for win-win deals? Three things:
• People must be free to make choices with their time and money.
• They must have money they can trust.
• They must trust each other to respect their rights and property.
Yesterday, we described how these things don’t happen smoothly and without interruption. Progress is cyclical. Win-win deals add wealth and move society forward. But they depend on trust. And as trust increases, so does the temptation to cheat. When everyone leaves his liquor cabinet open, for example, who can resist having a drink? Then trust declines. Barriers go up. Costs increase. Win-win gives way to win-lose. Progress goes into reverse.