The paradox of trust

John Plender reviews favourably¬†Trust: A History by Geoffrey Hosking. The review says: “He argues, convincingly, that there is a tendency to give too much attention to power and the law relative to trust. The workings of trust are nonetheless complex….In the complex modern world, what increases trust in one group can intensify distrust in another.”

This seems to me one of the most difficult questions in the trust/social capital literature: what is the scope of the relevant group for trust to be a positive rather than a negative influence on the economy? Criminal gangs can be high trust organisations yet decrease trust in the society of which they form a part, and so on. Divisions into inside and outsider groups rarely end well.

Last year I wrote a short essay for the OECD Forum on the economic cost of diminishing trust in many of the institutions in OECD societies, including trust in big business. It highlights the paradox that the complicated, interlinked modern economy could not work without high levels of trust and yet so many indicators show that trust in established institutions is declining. More questions than answers here too, I’m afraid. But one can’t help but feel that we’re in a very corrosive downward spiral in trust at present.

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Invisible wealth

Rebecca Solnit is one of my favourite writers. Her previous books include Wanderlust,¬†A Field Guide to Getting Lost and Motion Studies about Eadweard Muybridge. As this (rather lukewarm) Observer review of her new book, The Faraway Nearby, notes, she ought to be far better known in the UK. I’ve nearly finished the book, best described as a memoir of illness, I suppose. I particularly liked this:

“Kindness sown among the meek is harvested in crisis, in fairy tales and sometimes in actuality. I know a man who lost a fortune suddenly and was penniless with a legal battle to fight and children to support. He found that he had another kind of wealth in the ties of affection and respect he had built up, wealth he would never otherwise have seen. Lawyers took on his case pro bono, the grocery store extended credit, the schools gave scholarships and he got by on wealth that was invisible before the money dried up.”

It’s what we economists would prosaically label ‘social capital’.

Her writing is probably an acquired taste – I can understand why some readers would find it too, well, Californian. If you’ve not tried, though, I’d strongly recommend giving it a go, especially if you like the genre constituted by authors like W.G.Sebald (in The Rings of Saturn) and the Iain Sinclair of his John Clare book, Edge of the Orison.

Social vs financial capital

This morning’s email brought notification of this new working paper, Social Capital and Attitudes Toward Money. On a quick first read, its finding is rather interesting – in a sample of 634 Russians aged 20-59, there’s a clear negative correlation between civic identification and concern to get more money. To quote the summary:

Attitudes toward money as a means of influence and protection and the desire to accumulate it reflect a personal sense of dependency on money and lead to constant concern about it. A greater social capital, by providing social support that serves as an alternative source of security, influence, and protection, may reduce this dependence on money. An important finding of our research has been that the component of social capital that correlated most frequently and strongly with monetary attitudes, was civic identity.

This is a small sample in a distinctive country, but it reminded me of one of my all-time favourite social science books, Eric Klinenberg’s Heatwave: A Social Autopsy of Disaster in Chicago. He compared ‘excess deaths’ (ie. above the level you would normally expect) in different neighbourhoods of Chicago in a heatwave, controlling for income levels and other poverty indicators. Similar neighbourhoods that differed only in their ethnic composition had different rates: there were significantly more ‘excess deaths’ in African-American than in Hispanic neighbourhoods, due to the stronger family and community support in the latter.

(I’ve not read Klinenberg’s latest, the best-selling¬†Going Solo: The Extraordinary Rise and Surprising Appeal of Living Alone – the reviews were a bit sniffy about it. But I probably should, given how good Heatwave is.)