How did trade norms evolve in Scandinavia? Long-distance trade and social trust in the Viking age

As the saying goes, “it takes years to build up trust and only seconds to destroy it.” In this paper, we argue that this is indeed the case when explaining trust formation in Scandinavia. Hence, in an attempt to explain why the Scandinavian welfare states hold the highest social trust scores in the world today, we argue that one possible historical root of social trust may be the long-distance trade practices of the Viking age. To manage the risk of being cheated, trade between strangers in an oral world required a strong informal institution of trust-based trade norms out of necessity to deal with the risk of being cheated. In contrast to similar cases like the famous medieval Maghribi traders, who counted on writing (Greif, 1989), the punishment of cheaters could not be supported by written documents such as legal documents and letters, as the large majority of Vikings were non-literate. If a trader did not keep his word, social sanctioning by word of mouth was most likely the only method to discipline the cheater and prevent future free-rider behavior. The early rise of trust-based trade norms in Scandinavia is an overlooked factor in the region’s long-term socio-economic development and social trust accumulation. This result points to the importance of free trade today, especially in poor countries with low levels of economic development and high rates of non-literacy.