Credibility Economy: The Credibility Revolution in Modern Business

Someone sent me a screenshot a couple of weeks ago with no message attached, which is how I knew it was funny. It was the options menu on a LinkedIn post, and down at the bottom, under the usual business about muting people and reporting spam, a new choice. Seems like AI slop.

LinkedIn shipped that on July 30, and says it will use those flags to decide how far a post travels beyond your own followers. A detection firm called Pangram had found that roughly 40% of long-form posts on the platform read as fully machine-written. Substack and Snapchat made similar moves the same month.

You knew before any of them measured it. You've felt the ick. Something scrolls past with that smooth, agreeable rhythm to it and you're gone before you could explain why if someone asked you to. I get the same feeling reading proposals now, and so do the people deciding which firm to hire.

The Credibility Economy

I have spent twenty-five years reading rooms, at Merck, in London, running a chamber. The rooms have not changed much. What has changed is how little being good at your job now proves about you.

Think about what came across your desk this week. Every deck was competent. Every memo, every proposal, competent. Competence has quietly become the floor instead of the differentiator, and once everybody clears a bar, the bar stops telling anyone anything.

So I've started calling what comes next the credibility economy. It's the market you get when competence becomes free and credibility becomes the scarce resource. An economist would call this a shift in what's actually scarce. Only one kind of trust survives a bad week, and it's the kind somebody else can verify. It's why the line on my website reads the way it does. Credibility isn't what you say. It's what can be verified.

That's not just a line for individuals. Institutions live or die by it too. The Federal Reserve spends more effort signaling credibility than most companies spend on their entire brand, because a government body nobody believes can't move a market no matter how sound its economics are. Transparency is the price of that belief. Say one thing and do another, and the agreement between an institution and the people it serves starts to weaken.

What Twenty-Six People in Construction Told Me

Last year I surveyed twenty-six project leaders inside a regional general contractor, all of them running seven and eight figure jobs against forces they don't control. Supply chain, 65%, was the top worry. Design errors, 62%. Then site conditions, subs, permitting, weather.

Then I asked the question I actually wanted answered. If your bid and your competitor's come back identical, same price, same schedule, same qualifications, what would determine the winner?

Several of them answered me in capital letters. TRUST. Who the client believes will call them the same morning something goes wrong instead of the following week.

Here's the number that stayed with me. Forty-six percent of how a client behaves during a disruption is set by trust that already existed before it. Close to half of what happens on your worst day was settled during the quiet stretch when nothing was happening at all. You cannot build that on the morning the concrete cracks. The implication is the same one economists reached decades ago, just without a journal to publish it in: findings, and firms, only hold up if the design behind them was credible to begin with.

An Economics Footnote

Economics had its own credibility revolution, and it's worth a paragraph, because it makes the same point from a different subject entirely.

In 2010, economists Joshua Angrist and Jörn-Steffen Pischke published a paper in the Journal of Economic Perspectives called “The Credibility Revolution in Empirical Economics.” It traced back to Edward Leamer's 1983 critique, a paper he titled “Let's Take the Con Out of Econometrics.” Leamer's argument, in short: too much empirical economics leaned on arbitrary, theory-driven modeling that couldn't survive skeptical review. He compared the honest version of the job to an agricultural trial. Randomize which plots get fertilizer, and you can reasonably attribute the observable yield differences to the fertilizer. Skip the randomization and you're guessing, then dressing the guess up as a determined result. His proposed remedy was more caution and more sensitivity analysis.

The 1970s and 1980s produced a longstanding pile of studies that, in hindsight, deserved that critique. What finally changed things wasn't a new theory. It was better research design; natural experiments, random assignment, the availability of more and better data, and a genuine advance in econometric technique. David Card and Alan Krueger's minimum wage study, comparing fast-food wages after a minimum-wage raise in New Jersey while Pennsylvania's stayed put, became one of empirical micro's go-to examples of causal inference done right. The credibility revolution didn't reject theory. It weakened theory's claim to being sufficient on its own, one practical constraint at a time. Progress was less dramatic in macroeconomics, by the authors' own account, but in empirical micro it was real. In 2021, the Nobel Prize in economics went to David Card, along with Joshua Angrist and Guido Imbens, for exactly this kind of work. If you want the fuller toolkit, Scott Cunningham's Causal Mixtape lays out where the field went from there.

None of that is my field, and this isn't a paper on econometric method. But an entire discipline decided competence wasn't enough, that findings had to be credible on their own terms, verifiable by someone with every incentive to be skeptical of them. That's a useful perspective on why the same shift is happening in business right now.

Testimony

Grab the last three things that went out under your name. For each one, find me the sentence that could only have been written by you. The one carrying a date, a room you were sitting in, a number you gathered yourself, a call you made and the reasoning behind it. That sentence is testimony, an attribution only you could make, not to whoever else might have sat in your chair.

Most people come up empty. What went out was accurate, well organized, and interchangeable with what anyone else in that seat would have sent. In the book this sits under Competence, the first leg of the Trust Trifecta, and it's the leg most people run backwards. Add one verifiable, first-person sentence to everything you send before Friday, then watch your reply rate.

Respect

Testimony only counts if someone's willing to hear it. Respect is what determines that. When you take someone's account seriously, you extend them basic credibility. When you don't, you get something philosophers call epistemic injustice: valid testimony dismissed not because it's wrong, but because of who's saying it. Prejudice does that quietly, and it breaks the basic agreement to evaluate a person's account on its merits before waving it off. There's an ethical dimension to who gets believed, and it shapes how much of anyone's credibility ever gets the chance to be tested at all.

The Word I Keep Arguing With

Twice this month someone has asked me to recommend the best soft skills training programs or provider for employee development. Both times I wanted to argue with the wording before I answered.

That word “soft” is doing quiet damage. It tells a CFO this is the first line item to cut. It tells a rising engineer that the thing between her and the promotion is a personality trait instead of a skill she could go learn. Forty-six percent of client behavior in a crisis is not soft. That is margin.

Why Now

I cap the Human in the Room Salons at twenty-five seats, because a bigger room stops being honest. The last two filled, with people joining from Barcelona, London, and across the U.S. I bring it up because of who is filling them. Senior people going out of their way to find one conversation a month they can be sure is real, and the fact that they have to go looking is the story.