AnCap wrote:"Reputation based economy".
So in other words a circlejerk?
Those only get smaller over time. I think I'd trade anyone's reputation for a handful of active, bright people any day.
Not so much. More, "Hey, I know that you're not going to rob me blind when we go meet for a trade. I think I'll trade with you more regularly." Kind of why we have resumes, credit history, etc.. Same concept at play.
The only reason a reputation based economy would get smaller over time is if the total population was decreasing or if bandits were being eliminated from the elective pool for recruitment and trade. Unselective recruitment and trading has lead to many villages being raided by alt accounts.
You are, of course, entirely free to ignore someone's reputation and history and recruit them merely for the sake of recruiting them. All consequences are on you one way or another.