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Disruptive distrust

Three critical inferences from the latest global trust barometer.
It’s one thing to measure trust in government, business and the media, but the real issue is whether we trust statistics, systems – and each other. Image: Shutterstock

When a story is repeated often enough, most old hacks will start ignoring it as old news. The public too tires of the refrain and the event quickly fades from the headlines. But occasionally the repetition itself becomes the headline and assumes far greater significance than before.

The compilers of the Edelman Trust Barometer are hard pressed each year to squeeze some headlines out of the trust survey, finding them in annual, country and sector comparisons or shifts in trust between different institutions.

So, for instance, much has been made of South Africa’s bottom ranking in trust in government. It has always had this dubious position, albeit as a latecomer (since 2014) to the fold of country respondents. Indeed at 20% this level is 3% higher than when first measured, and the annual drop of 1% is certainly not surprising in light of load shedding and the inquiry into state capture.

But globally one comes to an almost frightening picture if one takes a 10-year view of the research. That’s about the time I have been covering this report for Moneyweb, with frequent references to this critical issue in my writing in between. The relatively low level of trust in most institutions has for the most part been consistent over this period and probably much earlier, moving from serious to acute to chronic.

This gives three critical inferences that can be made, and which put the dire state of our economic construct in perspective.

Disruptive and endemic distrust

Over time we have clearly shifted from lack of trust to endemic and active distrust.

When distrust becomes an existential reality humanity can be said to be in a crisis.

“If we do not trust one another, we shall all die,” says human activist writer Ariel Dorfman.

In the past few years, this distrust has taken the shape of activism on many fronts and has led to violent protests in, among others, South Africa, France, India, Iraq, Venezuela, Algeria, Haiti, Spain, Hong Kong, Colombia, Puerto Rico and Iran. Millions of people have taken to the streets to demand change, mostly in well organised yet spontaneous and leaderless hordes.

Distrust is the hallmark of the deep polarising of American society, and the national and geopolitical tensions that have developed globally in deglobalisation, trade wars, Brexit, and between nations such as the US and Iran, and the US and Russia.

Ideologies in question

Nearly 60% of the trust barometer respondents reflected a distrust of capitalism “as it was being practiced”.

This is bound to revive the kind of cold war rhetoric that existed before the Berlin wall fell. Nothing can be more counterproductive than people fleeing back into ideological comfort zones and echo chambers of hackneyed platitudes.

Perhaps it is time to move beyond the debilitating semantics of capitalism and socialism. There are so many permutations of both in different settings that neither exists in its pure form. Yet the words themselves ignite knee-jerk responses based on stubbornly nurtured prejudices.

The money crisis

Like the discussions at the World Economic Forum itself, very little serious attention is given in the trust report to the root cause of most of the global distrust – the development of two economies, one mercantile and industrial, and the other financial. The latter has become virtually exclusive, not only fuelling inequality frustrations but starving the real economy of both consumer and productive capital. This was fully covered in my last article, Bracing for a big-bubbles burst.

The trust barometer compilers would do well to broaden their research to the more important existential factors of society. It is one thing to measure trust in government, business, media and non-governmental organisations, but the real issue of distrust lies in whether people trust statistics such as unemployment, inflation, growth figures and GDP itself, as well as money, markets, prices, investments, stock markets, ideologies, policies, climate, health, education, generations and systems themselves. Above all, do we trust each other?

Trust is a victim of a rapidly changing world.

In many respects we are in a place we have never been, but we should not be too afraid of ‘uncharted waters’, drawing some comfort from history that we have been in unfamiliar places before, and somehow emerged with new approaches and discoveries. 

This time is no different. Although perhaps it is – in terms of the scale and depth of questioning all assumptions about economics and about ourselves as a species. The view is increasingly being seen through an evolutionary rather than the traditional reactive quantitative lens – do we evolve, or do we construct on statistical models? This lens is being captured in research directions and discoveries within evolutionary economics and complexity economics, and is being driven by a number of institutions and scholars.

Reflecting on five or so decades of observing our economic course, I am convinced more than ever that there is a slow evolutionary and intergenerational shift in our entire socio-economic construct.

I am equally convinced that what will emerge will be so much better.

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Yet another insightful and remarkable report by the author hereof.

Your 2nd last paragraph holds the key to this phenomena.

Human behaviour have evolved. People now dare to disagree and to stand up against a higher power. They are more informed than ever before as a result of the internet, smart phones and a more open world. The human race no longer just follow instructions of the king, general or president. They query almost every fallacy dished up as facts and as the best solution. People have learned that politicians, governments and business alike (other people) err, lie, deceive and will disappoint the ordinary citizens.

This evolution and growth in self contemplation, general decision making and resistance development is still in its adolescent stage and will rapidly grow and develop even further going forward. And that is of course a good thing for the next generations inhabiting this man-broken world.

Thank you, Jerry.

From where I am sitting on my little perch, I see the declining levels of trust as the logical consequence of a manmade phenomenon. When people transact, then complete strangers exchange the fruits of their labour, and they accept the currency as a medium of that exchange.

Complete strangers trust each other to the extent that they are willing to hand over their precious possession, their creation, their property in exchange for that of the other person. The consumer who buys a tomato does not know the farmer who produces it. They have never met each other, and they don’t have to, because the currency, the medium of exchange, the rand, is the token of the trust between them. The farmer accepts this token of trust with the expectation that it will reward him for parting with his produce. The consumer hands over the token of trust, the currency, to compensate the farmer.

Currency, therefore, is a token of trust, a measure of the trust between strangers. When the currency is debased, then trust itself is debased. Currency debasement does not merely destroy the purchasing power of the currency, there are more severe consequences. When Reserve Banks debase the currency in an effort to fund socialist government projects or to save the banking system from collapse, they are debasing trust itself. By the ongoing process of inflation, Reserve Banks are slowly but surely destroying the token, or measure, of trust between strangers.

Many of the most terrible episodes in history can be linked directly to this phenomenon. The holocaust followed after the debasement of the Reichsmark. During the middle ages, the marked increase in the drowning and burning of “witches” coincides with periods of currency debasement. The French Revolution followed the debasement of the livre and the assignat. The burning of Christians by Emperor Nero followed after the debasement of the metallic coin.

When Reserve Banks debase our currency, they are debasing the levels of trust in society. Inequality is merely a symptom of devaluation or debasement. Social unrest and the many service delivery protests, the EWC debate, racial policies etc are manifestations of the lack of trust in society.

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
~ John Maynard Keynes

End of comments.

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