this post was submitted on 02 Apr 2024
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Simple: the earth produces a fuck tonne less food for like half the year, requiring some kind of strategy to handle the fact you have lots of food half the time and like no food the other half.
We took the "stash it in a special spot" approach.
But how do we stop other us's from stealing our stashes?
Strength in numbers, ape strong together. We form villages.
As we grow, we need leadership, mechanisms to keep track of each other, protect each other, and rules with how to fairly treat bad actors.
Laws, democracy, judicial systems come into play.
Oh shit, other village has cool shit. They want our cool shit. Trade? Trade! Commerce comes into play.
How do we keep track of people that are reliable to trade with and can be trusted across Trade networks?
Credit. Village A vouches on behalf of Trader, they have Credability, you can trust them.
Many villages create a unified system to describe this trust in a metric...
Thus: credit score.
In other words you have a credit score because of the way the earth makes food (that is to say, about half the time)
They did. Even before money was a thing, there was an unofficial tally kept by members of a community as to who contributed and who didn't. Non-contributing members would lose social status and potentially access to the community's resources.
You don’t need one when there’s only like a hundred to a thousand people in a village. But when you have literally billions of people across the globe, you’re gonna need a more sophisticated way to measure people’s credibility.
Why would a system for tracking someone's historical reliability in lending, and then paying back, money be an anomaly? I mean I get the general sense of distaste in being boiled down to a number by financial institutions, but what I don't get is why anyone seems confused about how or why credit scores exists (other than that it makes for a nice hot take on Twitter)
In what world would something like a credit score NOT exist, given that a) you have a customer base larger than a couple hundred individuals, and b) you have a technology that allows you to calculate a risk/reward index on those individuals?
Countless hours have been poured into algorithms to rate things like movies on an easy to digest point system, when the stakes are as low as 2 hours of your time and 15 bucks. OF COURSE there is going to exist a system for communicating the risk of extending a lease or car loan or mortgage to individuals.
The problem is, it doesn't really measure the risk of lending, it measures the profitability of lending. And it results in people who probably shouldn't be loaned money being taken advantage of by corporations.
They did have them, just under a different name/implementation.
But the concept of collective trust is pretty core to any herd animal.
Modern credit scores mostly just differ in the fact you can obtain that info lightning fast, instead of by having to write a letter and waiting several weeks for the response on "can we trust this person's claims? Can you vouch for them?"
fishermen / traders would have accounts at local shops allowing their families to have things while they were away at sea for months or even years at a time, and pay them back when they returned.
I'd place a lot less of the cause of credit scores on the Earth's seasons than you, but this does make me wonder what the economic systems would look like on a habitable planet with no seasons, with year round stable temperatures/humidity/etc.
Most of society as a whole is due to it.
Herd behavior as a whole primarily comes about due to food scarcity strategies to improve security.
When groups of animals fight over food, they naturally form into larger groups to improve odds of success and then share the spoils.
In low scarcity scenarios typically you see herd behavior rarer and rarer, there's little need to form a pack if you have all your needs already met, why bother?
Actually credit scores came about in the 1700-1800s but were turned into their modern design in the 1980s.
So just a little bit later than when you're describing.
Credit scores weren't called "credit scores" of course.
It would be along the limes of having the church or kingdom or etc's blessing, or paperwork to indicate you are with a given trade guild or etc.
It came in many different flavors, as many different countries... exist....
Point being that there *were * long before mechanisms for many different villages and cities having an agreed upon mechanism for discerning "can we trust this person?"
The principle of Identification was a very early on problem that needed solving.
If some rando rrolls into your village claiming to be a trader selling official wares of (some other village), how would you know they were who they said they were?
Typically signed documents with an official seal was a good first start.
And that network of everyone agreeing so-and-so networks seals were associated with good traders that sold good wares is your first concept of a "credit score".
In reality existing banks today assigning people credit scores is just an abstracted system around the fundamentally simple concept of a trade guild.
Everyone trusts the banks mechanisms for scoring.
The banks are involved in all major transactions and seal their official approval on them
And thus everyone participates in the trade guild by performing transactions with their legal tender.
This is sort of a fairly mandatory mechanism, and it's not even a terribly complex one tbh.
The only thing modern about it is the fact we store people's scores digitally and can share that info all across the world instantly. Which is very handy.
But it literally is just a number that evaluates "how much can you trust this person with lending them stuff" based on past times they've been trusted with important shot that got lent to them.
Unga lent Bunga his stick.
Bunga broke Ungas stick.
Unga tells whole village what happened.
Now no one will lend Bunga a new stick.
Credit score.
You play Civ don't you