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Taking a leap of faith

One of our base tendencies as humans is to avoid being cheated. Perhaps it is an evolutionary trait. I can see a caveman being approached by a caveman he has never seen asking if he could borrow his tools for hunting and in return for a share of whatever he managed to hunt with it, and the original caveman who agreed to such a proposition losing his tools never to be seen again.

Which is why middlemen make a lot of money being acting as a mutual party of trust between two unknown entities. Banks, especially, make a lot of money with a product they call 'guarantees', where all they do is accept money from one party and goods from another and release them to one another once both have deposited what they were expected to. And this is particularly useful for cross-border shipping.

In the lack of such a product, a farmer that needs to ship cocoa from Ivory Coast to a chocolatier in Switzerland whom he has never seen or met, might ask for the money to be wired to him upfront before he incurs the cost of shipping. Otherwise, he might ship the results of his back-breaking work and never receive a payment for it. On the other hand, the chocolatier will refrain from wiring the money until he receives the goods in his premises. Otherwise, he might be cheated out of his money.

So, they both go to an international bank that they trust and have an account with, who will act as the intermediary. The bank will confirm to the farmer that it has received the money and that he can ship the goods. And the bank pays him only after the goods arrive in Switzerland.

This is the multi-billion dollar industry of trust.

But, quite often, paying a middleman is not worth it. An online retailer like Amazon or Flipkart won't pay a middleman who will hold the money that the customer pays which is credited to them once the goods are received. Neither will a user go through the hassle of paying a bank first, waiting for it to be confirmed and then receive the goods. Not when they can walk down to a store an pick up what they want immediately.

So, online retailers take a leap of faith and offer cash-on-delivery. They incur the cost of shipping the goods without a certainty that the customer who placed the order will honour his end of the deal and make the payment when the shipment arrives.

And that leap of faith seems less risky when there are governmental laws in place to ensure that anyone abusing the contracts they get into stand to be punished. This doesn't remove delinquency altogether, but it reduces it to a large extent that the leap of faith becomes an easier choice.

On a personal level, however, we still seek out the guarantees of middlemen very often. We want to do thorough research on whether some practices and habits are worth getting into. We want to guarantee that something will work before we put in the effort.

But, in seeking out such guarantees, we will only end up restricting what we venture out to do.

This is why all the literature points in the direction of embracing the journey over the destination and to invest in the process rather than the end objectives. Because, that is simply framing the problem in such a way that the leap of faith becomes an easier choice.

Just like bank guarantees help us frame the problem differently resulting in smoother business transactions, investing in the process and embracing the journey over the destination will help us frame our actions where a leap of faith becomes easier, probabilistically increasing (but not guaranteeing) our shot at success.

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