Each of these data points could, of course, have multiple causes. But together they point in a worrisome direction: We may be in the midst of a trust recession.
Trust is to capitalism what alcohol is to wedding receptions: a social lubricant.
In low-trust societies (Russia, southern Italy), economic growth is constrained. People who don’t trust other people think twice before investing in, collaborating with, or hiring someone who isn’t a family member (or a member of their criminal gang).
The concept may sound squishy, but the effect isn’t. The economists Paul Zak and Stephen Knack found, in a study published in 1998, that a 15 percent bump in a nation’s belief that “most people can be trusted” adds a full percentage point to economic growth each year.
That means that if, for the past 20 years, Americans had trusted one another like Ukrainians did, our annual GDP per capita would be $11,000 lower; if we had trusted like New Zealanders did, it’d be $16,000 higher.
“If trust is sufficiently low,” they wrote, “economic growth is unachievable.”
If you can rely on people to do what they say they’re going to do—without costly coercive mechanisms to make them dependable—a lot of things become possible, argued Francis Fukuyama in his 1995 book, Trust.
In the late 19th century, it was “highly sociable Americans” who developed the first large-scale corporations, effectively pooling the ideas, efforts, and interests of strangers. In the late 20th, some of the earliest iterations of the internet emerged from the same talent for association.
Throughout nearly all of America’s history, its economy has benefited from a high degree of trust. But leaks in the trust reservoir have been evident since the ’70s.
Trust in government dropped sharply from its peak in 1964, according to the Pew Research Center, and, with a few exceptions, has been sputtering ever since.
This trend coincides with broader cultural shifts like declining church membership, the rise of social media, and a contentious political atmosphere.