If you can trust the processes of government, then that is a good thing. Good trust in government is based on processes that provide for accountability, checks and balances, equal protection, and punishment of official corruption.
Trusting the virtues of government leaders is a bad thing. It leads one to cede rights and powers to government that are easily abused.
…My idea of a high-trust society differs from that of many elites. Elitist journalists think that a high-trust society is one where we trust the mainstream media. Elitist politicians and activists think that a high-trust society is one where we trust legislators, regulators, and experts to exercise broad authority. In contrast, I believe that a high-trust society is one in which processes ensure that elites are subject to checks and accountability. It is particularly important for legislators, regulators, and experts to have their authority limited and their accountability assured.
Categories:
Institutional Economics
READER COMMENTS
Lars Smith
Jul 5 2007 at 1:08pm
A high trust society is one where vegetables can be sold unattended on the roadside, placed in boxes together with a price list, a pair of scales, and a cigar box for the money. Ditto for newspapers.
Mike
Jul 5 2007 at 1:29pm
I have observed that the topic of trust and its importance to a successful economy doesn’t seem to resonate with the audience as much as it should. You are to be commended on discussing the topic.
I particularly enjoyed the related discussion of Douglas North. The importance of how attitudes of consumers and producers toward themselves and government can not be over emphasized. All we need to do is observe how other countries are unable to breakout into sustained high rates of growth due to the inability to deal with corruption and antipathy to private property rights and market based economy (this pretty much applies to all “developing nations” such as Africa and Latin America not to mention Arab states).
Those countries which have succeeded do so by compromising on civil liberties (China and Russia). It takes generations to establish trusted institutions and the legal infrastructure to enforce property rights. Unfortunately, this trust can be destroyed much faster than it takes to establish that trust. Such is my biggest fear for our country. Citizens don’t really understand economics and we, as a nation, are getting increasingly confused by politicians about what it takes to establish and maintain the trust necessary for a free market economy to thrive.
This is the meaning of “commitment” in the time consistency literature. In fact, the time consistency concept might be a good topic to discuss as a natural extension of the discussion of trust.
Valerie Smalkin
Jul 6 2007 at 2:24pm
And so, is the balance of power idea still working at all? Congress hates the Judiciary; the Judiciary hates Congress; and everyone seems to hate the Executive. So, maybe it’s working. 😉
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