Trust - why we need it

"You may be deceived if you trust too much, but you will live in torment if you don't trust enough." – Frank Crane

We need to talk about trust. It is something so fundamental to our way of life that its erosion must be thought through.

We rely heavily on trust. It is ever present in our society from the banks we use, deliveries we pay for in advance, the quality of the medicines and the drinking water we get. I think we are seeing a reduction in trust in many old institutions that play a huge role in our lives and an increase in trust in others. I believe, the erosion of trust in some of our most important institutions is being felt by most people and that has a negative consequence for many common goods. Below are some of the most everyday examples of trust:

Trust Examples	How we rely on it
Utilities	Expect usable water, gas and electrcity on demand
Government	Will count our vote, pay our pension, provide public services, will not waste tax revenues
News Media	Inform us, tell us what is most relevant to us
Banks	Safely keep your money, pay the bills you direct it to.
Online Shops	Deliver you the goods you paid for online
Cryptocurrency	Cannot be hacked or manipulated against your interests and you can access value into fiat currency when needed.
AI	Gives you a well researched view that has access to good data sources.
Judiciary	Impartial system able to give you a fair trial and punish those who do wrong to you.
Currency	Can hold its value as a place for you to store your future earnings.
Public Healthcare	There to help you maximise your healthspan.

How can we define trust?

Trust is an abstract concept. It forms a social glue, where people will enter a leap of faith without needing to verify it much. I find the trust equation useful to explain it:

i) credibility: how credible an institution is at achieving its goal

e.g. can I believe what you say

ii) reliability: how reliable it is in doing it

e.g. can I depend on you

iii) intimacy: how open and transparent it is

e.g. are we open with each other

iv) self-orientation: how well it manages its own interests with broader society

e.g. are they trying to help me or themselves

Relationships and businesses that have a high level of trust save time and money. If you can make payments without needing to investigate who the person is or avoid expensive legal documentation, life is easier for you. Diamond merchants in Antwerp are famous for transacting large deals merely on handshakes, a sign of a very trustworthy market.

What is happening to trust today?

There is evidence that many of our traditional institutions are facing a loss of trust. This is in many walks of life: the church, the government, political parties, the UN, the oldest newspapers, the police for example.

The chart below from Pew Research shows that trust in government has been low for the last 10-15 years with most people distrusting the government.

Trust is not going that way in everything though. Over the last few decades some corporates have used new technologies to create trust at scale. We use Uber, Airbnb, Amazon, Vanguard etc who have primarily internet interfaces. We trust that when we work with these companies, we will get what we have paid for. An additional form of trust that is growing is Cryptocurrency, which is trying to solve two trust problems, the store and transfer of value internationally without need for a banking system.

Imagine a world without trust

Low trust environments are difficult. What if you lived in this world:

You wake up to have a shower, but unsure about whether the water is safe to shower in, if it comes at all. You lock up every window and door with grills because you are worried about your property being robbed when you leave. Afterwards you go onto the street, where you carry a weapon to prevent someone harming you and go to the local shops where you are not sure whether the items you need will be there or not. You carry cash because you are not sure whether your bank account will release the funds.

You get the gist. It brings a huge amount of waste as we waste a lot of time verifying and protecting rather than doing. Declining trust in institutions means that people are opting out of certain things.

Many people now seek alternative media as they believe mainstream media is telling them what the billionaire owners want them to hear rather than what is happening.
Many people have deep distrust in government and believe they have been captured by corporate interests or undemocratic agendas: the “deep state”
Many ignore health advice e.g. taking vaccines and safety of drinking water

This is sometimes dismissed as “conspiracy thinking” but at its core lies a lack of trust. An example would be Pharma. Pharma are by far the largest sector lobbying the government in the US. This perceived conflict of interest is seized upon as an indication that approval for their products has been bought rather than has gone through a rigorous thought process.

What practically happens when trust erodes

Polarisation: Politics becomes more polarised. Fearing the worst things that the opposing party can do. Polarisation has been a necessary first step for civil wars.
Economic inefficiencies: Narrower set of business relationships: Less trust means that long term contracts will more likely go to people that you know well, or require lots protections.
Societal challenges: How can we get people to buy into health, education or work programmes if individuals do not believe it is in their best interest?
Inaction: In classic game theory, if we do not trust others to do the right thing, we will not do it either. We are seeing this with regards to action on climate change. People fear it will be an economic cost without them being able to influence the outcome enough. This is also being seen in government, international bodies, councils etc. Inaction hastens the end of an institution.

The fourth turning?

One idea called the fourth turning (link below) has a hypothesis that every 80 years (4 generations) the loss of trust means that there is a bonfire of institutions and competing sides with drastically different agendas lock horns and fight for the soul of a country.

This is relevant now, as many of the institutions we use today were founded 4 generations (80years) ago. The UN, the IMF, the World Bank, the World Health organisation, NHS and the first entities of the EU were all founded in the 1930s or 1940s. It feels like many of these institutions solved problems in ways that now feels out of date. Perhaps we will see many of these reform or dissolve and make way for newer institutions like BRICs, the New Development Bank or the Global Energy Alliance for People and Planet.

What are ways institutions can increase trust?

Coming back to the trust equation, it's clear that institutions need to work hard to stay reliable:

Credibility: Continue investing in capabilities. Meet timelines. Openly communicate goals, challenges, and progress.
Reliability: Keep promises and show consistency in actions and policies. Deliver on commitments. Enforce standards, be consistent and predictable behavior.
Intimacy: Listen to involved parties. Host forums, conduct surveys, and maintain open channels of communication.
Self-Orientation: Encourage accountability. Admit mistakes. Keep regular updates and ensure ethical practices. Engage broader stakeholders.

For me the masters at this, are Amazon. They are not without controversy, but as a consumer it performs well on all of these metrics. It has really swung the relationship in favour of the consumer. I remember only too well trying to return goods to small shops in the 1990s!

How to operate in a low trust world

On a personal note, the loss of trust feels very uneasy. What news shall I watch? Does my vote matter? Which scientific publications avoid conflicts of interest? What's the point in getting to up to speed on things, if people in charge seem to do whatever they were planning to anyway?

Personally I see low trust times as an opportunity. I think a loss of trust in many institutions makes those willing to swim against the tide more valuable. Those who can solve the challenge of trust through simple dependable messages will win in this environment.

So what?

Traditional institutions are losing trust: Governments, media, and international bodies, are experiencing a decline in trust, leading to widespread negative consequences.
Trust is societally important: Trust reduces inefficiencies and facilitates smoother interactions. Societies with high trust save time and resources.
Declining trust causes challenges: A lack of trust leads to polarization, economic inefficiencies, societal disengagement, and inaction on critical issues like climate change. This mistrust often manifests as skepticism toward health advice, government decisions, and media narratives.
How do you operate in a world of declining trust: This is a great time to rebuild and reform to increase trust in your institution. Institutions that prioritize credibility, reliability, intimacy, and low self-orientation will rebuild trust.