Politics & Policy

The Importance of Trust

People walk at Gamla Stan in the Old City of Stockholm, Sweden. (Ints Kalnins/Reuters)
In government as in life, it’s hard to build and easy to squander.

We interviewed a dog-sitter today. For obvious reasons, this made me think about Denmark.

As some of you know, I have a little dachshund of which I am very fond. If you have a dog and you travel a lot, then you have to give some serious thought to who looks after your dog when you are away and can’t bring your dog with you. Sometimes you use a kennel, but sometimes you just need someone to fill in for a day trip or a short overnight.

But hiring a visiting dog-sitter is no easy thing. You are entrusting this person with something vulnerable — and with the keys to your house, too, a less sentimental consideration. You want to be careful about that. (I met a candidate for the position who sported a hall-of-fame aptronym: Kibble.) The leading candidate not only came with good recommendations but, more important, came with good recommendations from people we know, lives nearby, belongs to a club that includes neighbors we know, etc. It is difficult to trust strangers, but it is easier to trust people who are trusted by people you trust.

That is what we call social capital, and trust is one of its most important forms.

Trust enables social cooperation in part by lowering what economists call transaction costs. When you want to buy something — whether it’s a bar of soap or the labor of a would-be employee — there are costs beyond the nominal price. You have to look around to see what’s available, compare options, evaluate the sellers and providers, etc. Sometimes, that’s pretty easy: I don’t worry too much about whether the avocados I buy at Whole Foods are going to be poisonous, because I trust Whole Foods to perform due diligence and quality control. The more trust, the lower the transaction costs, and, as a purely commercial matter, that can be significant: Surely I am not the only consumer on Earth who will sometimes pay a buck or two more for a product available via Amazon because the transaction is easier and does not require giving out financial information to a new entity that has not yet earned my trust.

The bigger the commitment — and the more difficult it is to disentangle oneself from it — the more trust matters, and the more difficult it is to earn. Even if a real-estate agent rejoices in a formal endorsement from the National Association of Realtors, you’re going to want something more than his say-so before signing on the line which is dotted.

Similarly, you don’t usually hire a full-time employee simply based on someone’s recommendation, even if you trust that person. A recommendation from a trusted person (or institution — an Ivy League degree is just another way of getting a general recommendation from a trusted source) might be enough to win a candidate an interview, but you’ll want to see for yourself. Even so, that’s a lot easier than going through a slush pile of résumés and giving each one equal consideration.

There are some obvious problems with that approach, too, one of which is that we tend to trust people who are related to us, who are known to us, and who are demographically similar to us, meaning that things like ethnic and socioeconomic bias can profoundly influence our trust networks. This is a deeply rooted characteristic of human beings: There is a little nugget in our brains that apparently does little other than examine the faces of those around us and attempt to calculate how closely related to us they are. But it isn’t just kinship: If English is your primary language, it’s easier to build trusting relationships with other English speakers, and very difficult to build them with people who do not speak English. This is one reason why the overwhelming majority of people in Iceland speak English as well as Icelandic — in an increasingly global world, English helps to build trust. But Icelandic-speaking people almost certainly are more easily able to establish trust with other Icelandic-speaking people, and this probably works more powerfully for people who come from relatively small language communities — Icelandic, Finnish, Danish — than for people who speak languages shared by large groups of diverse people, such as English and Spanish. Presumably, all the world’s native Paakantyi speakers know one another.

Progressives who believe that replicating the government policies of Scandinavian societies in the United States will necessarily replicate Scandinavian outcomes ignore the role that prior Scandinavian social conditions have played in shaping those societies, which were not constructed ex nihilo by acts of parliaments. The Scandinavian countries have long been relatively homogeneous — their linguistic barriers tend to socially exclude outsiders and newcomers — with very high levels of trust and other social capital and long, deep traditions of social cooperation and relative egalitarianism. And it’s not just Scandinavia: As I often point out, the most important thing about Switzerland isn’t its localism, direct democracy, or business-friendly tax and regulatory environment — it’s the fact that it is full of Swiss people. Replicating Swedish social-welfare policies in Pennsylvania is unlikely to end up with Philadelphia being a lot like Stockholm.

In fact, that doesn’t even work particularly well in Sweden, where immigrants have significantly worse outcomes in everything from health to employment compared to the native population. (One of the reasons immigrants to Sweden cite for declining to seek medical care is that it is too expensive — so much for “free” health care.) Native Swedes at the same time are far less trusting of immigrants and more likely to believe that they are freeloading on the welfare system and not inclined to work.

Trust takes generations to build. It can be destroyed in a terribly short period of time. Something to keep in mind given the news out of Washington on any given day.

Nuclear weapons? I wouldn’t trust these grifters and con artists with my dachshund.