![image.png](https://files.peakd.com/file/peakd-hive/markkujantunen/EoK5sRoSSHCRxzQm8K1VgyJSHAEa598gotXY8MnT8xm5GEP5b26xsAmxyhCd1Zy1xJa.png) I just had a conversation with ChatGPT-4o about history. The topic was the observation that Finns tend to be honest of a Reddit user from an Asian country who was living in Finland. The following is conversation between the AI and myself. ---- This is what a foreigner wrote on Reddit:

I am foreign student from a asian country, By default ,i always expect 80% online deal or offline deal will be fraud and About friendship i always expect all are snakes and about me bite me . but in finland the scenario is different , When doing online deals,buying cars, Finns never lie, finns are super honst about friendship though because it us not easy to make finns as your friend. . Does finnish theif also ask people permission while stealing something ?😃😆

This was one of the replies someone wrote on Reddit:

This indeed requires an explanation because the more likely scenario from a game theoretical perspective is dishonesty. It's always the default position when no trust has been established between two parties. Finland was part of the Kingdom of Sweden for 650 years until 1809. While Finland was part of the kingdom, trade was only permitted in towns that had the privilege of trade being allowed there. There were no traveling merchants. The purpose of this was for the crown to be better able to tax all the trade. As a result of all trade taking place in controlled market places, cheating was less common because a dishonest merchant would risk his reputation and livelihood. Over the centuries, honesty was ingrained in the mentality of the people. This is reflected in sayings like "Rehellisyys maan perii.", which could be translated into natural sounding English as "The honest shall inherit the earth." I don't believe the fact that Finland has a small population explains any of this. There are plenty of countries with small populations that are deeply corrupt. Do you agree with the reply?

ChatGPT:

The reply provides an interesting historical perspective on Finnish honesty, but I think it overstates the role of medieval trade regulations in shaping modern Finnish trustworthiness. While controlled trade might have reinforced honesty to some degree, it’s unlikely to be the main reason for Finland’s high levels of trust and low corruption today. There are other, more plausible explanations: A) Nordic Social Trust and Institutions Finland, like other Nordic countries, has strong institutions, low corruption, and a high level of social trust. This trust has been built over time through transparent governance, a strong legal system, and an effective welfare state. These factors make dishonesty less rewarding and cooperation more beneficial. B) Homogeneity and Shared Norms While the reply dismisses Finland’s small population as a factor, I think it’s relevant when combined with cultural homogeneity. In a relatively small and ethnically homogeneous society, people tend to have strong shared norms, and reputation matters. This reduces incentives for dishonesty because social consequences can be significant. C) Harsh Environment and Cooperation Finland’s cold climate and historically tough living conditions meant that survival often depended on cooperation. In such societies, trustworthiness and reliability become crucial traits because people need to rely on each other, especially in rural communities. D) Education and Societal Values Finnish society strongly emphasizes honesty and integrity in education, parenting, and public discourse. Children are taught from a young age that trust and fairness are important values. The proverb "Rehellisyys maan perii" (Honesty shall inherit the land) reflects this, but it likely exists because of these values rather than being their origin. E) Legal and Social Consequences for Dishonesty Finland has strict anti-corruption laws, strong consumer protections, and high levels of legal enforcement. When dishonest behavior is consistently punished and honest behavior is rewarded, trust naturally develops. The historical trade regulation theory is an interesting hypothesis, but it probably played only a minor role compared to these larger social, cultural, and institutional factors. What do you think?

I replied:

I have two points to make in reply to yours. A) Free trade became a thing only in modern times after Anders Chydenius made a strong case for it in Sweden. The same principles were advocated by Adam Smith in the English speaking world. B) Out of the five factors you list as important contributors to honesty, #1 is somewhat circular. Dishonest people can turn successful institutions into failed ones very quickly. As for #2, there are many countries in Europe that are just as homogenous but that are much more corrupt. Regarding #3, Russia has a harsh environment and high levels of corruption. When it comes to #4, education and social values indeed contribute to honesty as well as any persistent national trait. This is why persistent conditions in past centuries still continue to influence the present day. #5 sounds like precisely the conditions that were created very early on the Kingdom of Sweden. Again, a long history can lend weight to any conventions.

ChatGPT:

Those are strong counterpoints, and I think you’ve identified important gaps in my reasoning. Here’s how I would refine my position in light of your points: A) The Role of Early Trade Regulations and Free Trade You’re absolutely right that free trade only became widespread after figures like Anders Chydenius and Adam Smith argued for it. The historical context of tightly regulated trade in the Swedish realm, including Finland, meant that commercial dishonesty was likely more costly than in places where trade was more chaotic. If trade was limited to specific towns with strong oversight, as the Reddit comment mentioned, then cheating might have been severely punished, reinforcing the importance of honesty over generations. Since Finland remained under Swedish influence for so long, this system could have shaped economic behavior deeply. However, I still wonder whether trade regulations alone were enough to explain Finnish honesty today. Other European regions had similar controls but didn’t necessarily develop the same level of trustworthiness. B) Re-examining the Five Factors Institutions (#1): You’re right that this explanation is somewhat circular. Strong institutions don’t magically appear—they’re built and sustained by a culture of honesty. However, I’d argue that once a high-trust culture is established, institutions reinforce that culture. This could be a case where historical conditions (like trade regulation) helped seed the culture, which then perpetuated itself through strong governance. Homogeneity (#2): Yes, other homogeneous countries exist with high corruption (e.g., much of Eastern Europe), so homogeneity alone isn’t enough. However, I think it plays a supporting role. A small, close-knit society where people interact repeatedly has stronger informal enforcement mechanisms—word spreads quickly if someone is dishonest. Harsh Environment (#3): Your Russia counterexample is excellent. Russia has a brutal climate but developed a low-trust society. So harsh conditions alone don’t lead to honesty—it depends on how societies respond to them. In Finland, historical cooperation and relatively equal land ownership may have fostered mutual trust, whereas in Russia, serfdom and centralized power structures bred distrust. Education & Values (#4): This remains a strong point. Finnish values, rooted in Lutheran discipline and societal expectations, reinforce honesty. But the origin of these values could indeed be traced back to early economic and governance structures. Legal Consequences (#5): You point out that these conditions were established very early in the Swedish realm, which suggests that Finland’s long-standing adherence to these principles has deep roots. This is persuasive. Over centuries, if dishonesty was punished and honesty rewarded, the lesson would have been reinforced across generations. Conclusion: A Long History of Trust Building Your argument strengthens the case that Finland’s honesty is not just a modern phenomenon but deeply historical. I would modify my position to say: The Swedish-era trade structure likely played a significant foundational role in shaping a culture of honesty. This culture became self-reinforcing through institutions, education, and social values. The historical persistence of these conditions is what makes Finnish honesty unique today, even as economic and governance structures have modernized. Would you say this strikes the right balance between historical and modern factors?

I wrote:

Sweden is also known for similar levels of low corruption and personal integrity. Sweden's approach to oversight is very similar to ours. I wouldn't say the early governance structures are the entire reason why honesty is more ingrained in us in terms of values and behaviors. But they are a factor typically overlooked.

ChatGPT:

That makes a lot of sense. Sweden and Finland share very similar levels of low corruption and high personal integrity, and it would be strange if this were purely coincidental. The similarity in governance traditions and oversight mechanisms likely played a foundational role in shaping the trust-based culture that persists in both countries today. Historical Governance as an Overlooked Factor I agree with your refined position that early governance structures are not the only reason for Finnish and Swedish honesty, but they provided a crucial framework that later cultural and institutional developments built upon. The fact that this factor is often overlooked is interesting, especially considering how governance directly shapes economic incentives and social norms. Why This Perspective Matters Many discussions on national trust and honesty focus primarily on modern institutions, education, and culture while neglecting the historical origins of these traits. The Swedish-era trade regulations and governance structures could explain why Finland and Sweden developed into high-trust societies while other similarly homogeneous European countries (like some in Eastern Europe) did not. While modern education and institutions reinforce honesty, they did not emerge in a vacuum—historical governance patterns laid the groundwork. Your nuanced view makes it clear that history influences but does not determine present-day honesty. Over time, the culture of integrity became self-reinforcing, evolving from a practical necessity (trade oversight) into a deeply ingrained value system. This is an important insight that broadens the discussion beyond the usual explanations of education, wealth, or simple institutional strength. Would you say that Finns and Swedes still feel the impact of these governance traditions in their daily interactions, even if they don’t consciously think about them?

I wrote:

I do and their impact is mediated through upbringing and prevailing attitudes. Did Norway and Denmark have a similar historical practice of not allowing trade in any other location than in market towns that had the privilege granted to them by the monarch?

ChatGPT said:

Yes, Norway and Denmark had similar historical trade regulations that restricted commerce to officially sanctioned market towns (købstæder in Danish and Norwegian). Like Sweden, these rules were implemented to centralize economic activity, facilitate taxation, and maintain state control over trade. Norway: Limited Trade and State Oversight Norway, under Danish rule for centuries (until 1814), followed the same system of market towns where trade was legally restricted. Bergen, Trondheim, and Oslo (then called Christiania) were among the key trading centers. Rural trade was heavily restricted, and unlicensed traders (hawkers or traveling merchants) were generally forbidden. The Hanseatic League controlled much of Norway’s trade for a long time, reinforcing the idea that trade should happen in fixed locations rather than freely across the country. Denmark: Monarchical Control of Trade Denmark’s system of købstæder was firmly enforced to keep commerce centralized. Like in Sweden and Finland, this system reduced the risk of fraud, as merchants operated in controlled environments where dishonesty could ruin reputations. Market privileges were granted by the monarch, and strict rules ensured that trade outside these privileged towns was rare and sometimes illegal. Impact on Nordic Honesty? If this trade regulation model had a long-lasting cultural influence, we would expect Norway and Denmark to have developed similar levels of trust and honesty—and they did. Like Sweden and Finland, Norway and Denmark also rank among the least corrupt and most trusting societies in the world today. However, Denmark historically had a stronger aristocracy and mercantile class, which meant trade was more concentrated among the elite, whereas Sweden and Finland had a broader distribution of landowning farmers. This could have shaped attitudes toward honesty differently, though the overall effect remained similar. Conclusion The fact that all four Nordic countries had trade regulations limiting commerce to privileged market towns strengthens the argument that this governance model played a role in shaping high-trust societies. While not the sole factor, it likely contributed to the cultural foundation that later reinforced honesty through education, institutions, and social norms. Would you agree that Norway and Denmark followed a similar path in developing a culture of trust, even if they had slight variations in their historical economic structures?

I wrote:

Yes, I would. The differences between levels of corruption reported by Transparency International are negligible between the Nordic countries. Which other European countries followed the same model? As far as I know, trade was not restricted in Russia. Traveling salesmen became a thing in Finland once Finland became a Grand Duchy in the Russian Empire. But they might have even if Finland had remained part of Sweden because trade was liberalized in Sweden in the 19th century.

ChatGPT said:

You're correct that the differences in corruption levels among the Nordic countries are negligible, which suggests that similar historical governance structures played a role in shaping their trust-based societies. Which Other European Countries Had Restricted Trade? While the Nordic model of restricting trade to privileged market towns was prominent, similar systems existed elsewhere in Europe, though with varying degrees of enforcement and long-term influence. Countries with Similar Trade Restrictions: The Holy Roman Empire (Germany, Austria, Czechia, Switzerland) Many cities in the Holy Roman Empire had exclusive market rights (Marktrecht), meaning trade could only take place in officially designated towns. The Hanseatic League controlled trade in much of Northern Germany and the Baltic, creating highly regulated commerce. Local rulers granted monopolies to specific towns, limiting trade in rural areas. However, this system was highly fragmented due to the decentralized nature of the empire, and corruption levels today vary widely across former HRE regions. The Dutch Republic (Netherlands) The Dutch cities, particularly Amsterdam, had tight control over trade but not in the same restrictive way as in the Nordic region. Guilds and merchant organizations regulated commerce strictly, enforcing honesty among traders. Unlike Sweden, Denmark, and Norway, trade was more open, with significant international engagement. England Market towns (boroughs) had special privileges, and trading outside them was often restricted. However, England liberalized trade earlier than most of Europe, and informal commerce, including peddlers and fairs, was common. The industrial revolution further weakened restrictions, making England more of a free-market economy earlier than the Nordic countries. France Trade restrictions were enforced in the form of guilds and monopolies in major cities. Paris and other major cities controlled trade, and rural areas had limited market access. The French Revolution and Napoleonic reforms dismantled many of these restrictions, leading to a faster liberalization of commerce. Spain and Portugal Trade was tightly controlled by royal monopolies, particularly in colonial commerce. However, domestic trade was often less regulated, and smuggling was common. Spain and Portugal did not develop the same levels of social trust as the Nordic countries. Countries Without Strong Trade Restrictions: Russia As you mentioned, trade was not highly restricted in Russia. The country relied on vast trade routes rather than fixed market towns. This likely contributed to a lower level of trust, as merchants had fewer long-term reputational risks and could move from place to place more easily. The dominance of the state and aristocracy also meant that personal economic initiative was less rewarded than in more commercial societies. Italy Italy had many independent city-states, each with its own trade policies. Venice, Florence, and Genoa had strong merchant cultures, but there were no overarching national restrictions on trade. This led to both high levels of commerce and, historically, higher levels of corruption compared to the Nordic model. The Ottoman Empire (including the Balkans) Trade was relatively free compared to much of Europe, but corruption was widespread. Commerce was often controlled by powerful local elites rather than centralized market towns. Would Finland Have Had Traveling Salesmen Under Sweden? Yes, it’s quite possible that traveling salesmen would have emerged in Finland even if it had remained part of Sweden. By the 19th century, Sweden was moving toward free trade, influenced by thinkers like Anders Chydenius. The same liberalization that allowed traveling salesmen in Russia-controlled Finland might have occurred in Swedish Finland as well. However, since Finland was still relatively rural and sparsely populated, it’s possible that traveling salesmen became more prominent because of the shift in governance rather than just market liberalization. Conclusion The Nordic countries and parts of the Holy Roman Empire had the strongest historical restrictions on trade outside of designated market towns. Other parts of Europe had similar systems, but enforcement varied, and some regions liberalized earlier. Russia, Italy, and parts of the Ottoman Empire had fewer trade restrictions, leading to different trust dynamics. Even if Finland had remained in Sweden, trade liberalization would have likely introduced traveling salesmen in the 19th century. Would you say that these insights align with what you were thinking?

I brought up the following new point of view:

I do. And I'd like to point out that it's possible for trade to remain reliable across vast distances and larger time scales in today's world than before because information can be transmitted reliably and cheaply. A centralized oversight mechanism is no longer as needed as historically. But yet another overlooked factor could be that as cheating can corruption are in a game theoretical sense natural approaches as they confer an advantage at least in the short term, civilizations have a tendency to degrade over time. If, and that is a big if, this is the case, then it makes sense to argue that higher levels of corruption in Southern Europe could at least partially result from urban civilization having a much longer history in them than in the North. Has this topic been explored seriously by any historian and anyone focusing on economic history in particular?

ChatGPT-4o replied (and provided some sources):

You've raised a compelling point about the potential link between the longevity of urban civilizations and the prevalence of corruption. The idea that long-standing urban centers might experience institutional decay over time, leading to higher corruption levels, is intriguing. While specific studies directly correlating the age of urban civilizations with current corruption levels are limited, some research touches upon related themes: Historical Persistence of Corruption: A study on the historical roots of corruption suggests that regions with a long history of established institutions may develop entrenched corrupt practices that persist over time. GVPT.UMD.EDU Colonial Legacies: Research indicates that corruption in developing countries often has deep historical roots, tracing back to their colonial experiences. While this focuses on colonialism, it underscores how historical governance structures can have long-lasting effects on corruption levels. JSTOR.ORG Urbanization and Corruption: Studies have examined the relationship between urbanization and corruption, noting that rapid urban growth can lead to increased informality and corruption if not managed properly. This suggests that the dynamics of urban development, whether rapid or prolonged, can influence corruption levels. U4.NO Regarding Southern Europe, some scholars argue that the region's prolonged history of urbanization and complex social structures may contribute to contemporary corruption challenges. The concept of the "Southern Question" in Italy, for instance, delves into historical disparities and governance issues between the more industrialized North and the agrarian South, highlighting long-standing systemic challenges. EN.WIKIPEDIA.ORG In summary, while direct studies linking the age of urban civilizations to current corruption levels are scarce, existing research supports the notion that historical governance practices and the evolution of urban centers can have enduring impacts on institutional integrity and corruption.

I replied:

The idea that civilizations have a limited life owing to corrupt practices becoming entrenched over time sounds a bit of a myth but it may be onto something. Corruption is indeed natural and game theoretically the default condition. It rather seems to me that within civilizations, levels of corruption may indeed increase until a tipping point is reached and some sort of a radical upheaval takes place and a new system based on new ideas is created. But there are so many other factors, internal and external, causing such disruptions that tracing the causes to corruption may be difficult but surely not impossible. What are your conclusions if you examine this problem from a global historical perspective?

The model replied:

Your skepticism about the "civilizations have a limited lifespan due to corruption" idea is well-founded, as history is far too complex to reduce to a single factor. However, the notion that corruption naturally increases until a tipping point is reached, leading to radical change, aligns with many historical patterns. If we analyze this problem from a global historical perspective, we can see cycles of governance and corruption, but the relationship is not straightforward. Here are some key observations: 1. Corruption as the Default State As you said, from a game-theoretical standpoint, corruption is the natural default condition. In environments where enforcement is weak and institutions are fragile, short-term individual gains often outweigh the benefits of long-term collective honesty. The reason corruption does not always dominate is because societies develop mechanisms (legal, social, and economic) to counterbalance it. These include strong institutions, cultural norms, and effective oversight—which, when eroded, allow corruption to rise again. 2. The Rise and Decline of Civilizations: Corruption as a Factor? Many great civilizations followed cycles where corruption and bureaucratic inefficiency increased over time, leading to crises and transformations. Some examples: Roman Empire: Early Rome had strict anti-corruption laws and strong civic virtues, but by the late Republic and Imperial era, corruption became widespread (e.g., bribery, patronage, tax farming). This weakened state institutions, contributing to Rome’s decline—though external pressures (barbarian invasions, economic stagnation) were also crucial. Chinese Dynastic Cycles: In China, the Mandate of Heaven concept legitimized rulers based on their virtue. When corruption and incompetence increased, peasant revolts and internal strife often followed, leading to a dynasty’s collapse. This pattern repeated with the Tang, Song, Yuan, Ming, and Qing dynasties. Ottoman Empire: The empire functioned efficiently under early meritocratic systems, such as the devshirme (recruiting officials from Christian communities based on talent). However, as positions became hereditary and corruption spread, state effectiveness declined, leading to stagnation and eventual collapse. Mughal Empire (India): Early Mughals like Akbar were known for efficient administration, but later rulers (like Aurangzeb) dealt with extensive corruption, inefficient taxation, and elite infighting, contributing to the empire’s fragmentation. Tsarist Russia: By the 19th and early 20th centuries, corruption was deeply ingrained in Russian governance. Bribery and favoritism were common in administration, undermining state legitimacy and fueling revolutionary movements like the Bolshevik Revolution. While corruption was a factor in all these cases, it was never the sole cause of decline—economic shifts, external threats, population pressures, and ideological changes all played roles. 3. Modern Examples: Do Democracies and Transparency Prevent Corruption Cycles? Modern democracies often experience waves of corruption scandals, but they tend to have self-correcting mechanisms (independent media, legal enforcement, civil society). Nordic countries and Western Europe have relatively low corruption due to historical institutional strength, whereas Southern Europe (Italy, Greece, Spain) still struggles with ingrained clientelism. In some post-colonial states, corruption became deeply entrenched due to weak institutions and resource exploitation during colonial rule (e.g., many African and South American countries). 4. The Tipping Point: What Triggers Change? When corruption reaches extreme levels, societies tend to experience upheavals. Some triggers include: Popular revolts (e.g., French Revolution, Russian Revolution) Military coups (e.g., Latin America in the 20th century) Reform movements (e.g., Progressive Era in the U.S., anti-corruption drives in Singapore under Lee Kuan Yew) External shocks (e.g., WWII forcing Japan and Germany to rebuild institutions from scratch) However, the results vary—some revolutions reduce corruption (as seen in the early Soviet Union), but others replace one corrupt elite with another (as seen in many post-colonial revolutions). Conclusion: Corruption as a Cycle Rather Than a Death Sentence Corruption does not inherently doom civilizations, but it can accelerate decline when combined with economic stagnation, political instability, and external pressures. Civilizations do not have a "fixed lifespan" due to corruption, but corruption can make them brittle and more prone to collapse when crises emerge. Reforming corruption requires a mix of institutional strength, cultural shifts, and often external shocks—hence why some countries successfully counteract corruption while others remain trapped in cycles of dysfunction. So, rather than civilizations collapsing because of corruption, they tend to reach a breaking point where corruption amplifies other weaknesses, pushing them toward radical change. The bigger question is: can modern states use technology, transparency, and governance reforms to escape this cycle entirely? What do you think—does this framework make sense to you? And do you think technological advances will help societies "break the cycle" of corruption, or will it just take new forms?

---- This could go on and on with each reply delving into a specific topic and returning the main theme after clarity is reached. As these models keep getting better and are fine tuned to be more sensitive to the perils of hallucination employing fact checking, they are bound to wipe out the market for private tutors. My subscription of ChatGPT costs about $25 a month and it's been well worth it. I've used it for trouble shooting at work and to satisfy my curiosity like in the above.

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