Monday, October 06, 2008

It’s a crisis of trust

Fear, fear in general. and a deep fear of losing more. That’s how I hear some TV pundits diagnose the continuing bad news from the stock and credit markets.

But I agree with the market analyst who blamed the present crisis on a lack of trust. How can you do business with others when you have found that you can’t really trust them?

The $700,000,000,000 bailout is supposed to prime the system’s pump, but can it do so if the public doesn’t trust those who have run, and still run, the system that they so badly mismanaged.

Nearly 10 years ago Free Press published Trust: the social virtues and the creation of prosperity by Francis Fukuyama. Economic life, Fukuyama maintained, depends on social trust, the unspoken, unwritten bond between fellow citizens that facilitates transactions and underpins collective activities. He warned that the U.S. drift toward greedy, overly self-centered individualism holds more peril for the future of America than any competition from abroad.

I wonder how many of our best business schools have their students, the future business leaders of America, read a book like Trust. Or like Lying by Sissela Bok.

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1 comment:

Anonymous said...

I heartily agree. Trust is gone & no wonder, we have been on an "I'll get mine" binge for more than 30 years (not a great period to be doing trade union work). It was no different under Clinton/Rubin, really (see here: )
You're spot-on about Fukuyama. In his book "Trust," Fukuyama was talking about businesses using trust to build informal information-sharing networks in highly-developed enterprises, among highly-skilled workers, managers, etc. What he said about the other end of the production scene, however, has relevance here. He talked about the "implicit premise" of "Taylorism" (the basic factory organizing principle for most low-skilled jobs) that there are "economies of scale in managerial intelligence" that benefit the enterprise; and that workers "react to this system through their unions" and demand formal guarantees about the operation of the workplace. Working without benefit of trade unions, however, most apparel and footwear workers in the developing world just go on from day to day in various stages of alienation.