“Trust is to capitalism what alcohol is to wedding receptions,” suggests Jerry Useem in an article in The Atlantic last November, “a social lubricant … ‘If trust is sufficiently low,'” he continues, quoting economists Paul Zak and Stephen Knack, “‘economic growth is unachievable.'”
Public trust, specifically of the federal government, began to erode in the 1960s. The series of unfortunate events in the decades that followed – wars, Watergate, economic struggles, impeachments, ever-deepening political divisions – only contributed to what has become a steady decline of public confidence in the federal government. The only notable exception came with the brief spike in national unity in the aftermath of the 9/11 attacks. During the last two years, like so many other social conditions that pre-existed the COVID pandemic, the numbers hit an all-time low.
Our national distrust is not only aimed at Washington, D.C. According to a 2019 Pew Study, almost two-thirds of Americans believe trust in each other is falling. The inherent connection between interpersonal trust and social stability has an impact on the economy, among other things. In their report, titled “Trust and Growth,” Paul Zak and Stephen Knack describe that “low trust environments reduce the rate of investment and thus the economy’s growth rate … very low trust societies can be caught in a poverty trap.”
On the other hand, when social trust improves, so does interpersonal trust. This can actually lead to economic growth. Americans’ trust in each other, however, dropped from 45% in 1973 to just 30% in 2014. Useem thinks that had trust among Americans been stronger during that time frame, more like New Zealand for example, “(our annual GDP per capita would) be $16,000 higher.”
In addition to our pocketbooks, the loss of trust is affecting work. According to one study, 42% of employees think that their employers do not understand their pandemic experiences. Conversely, employers are showing a decline in trusting their employees. Since the pandemic started, the employee-monitoring software industry has grown by 50%. According to one study, 74% of remote workers are concerned their employer is monitoring when and how much they work. As one Forbes article that predates the pandemic put it, a lack of trust in the workplace “demotivates employees and is costing businesses dearly.”