The Good, The Bad, The Economy

Does human nature rule out a better world?

Lack of Trust A Harbinger of Social Breakdown?

Arming against government, trying to starve it, are danger signs.

It’s not surprising that the killing of twenty first graders and six adults at a Connecticut elementary school in December made the world seem a scarier place to many.  If the tell-tale signs of potentially lethal intentions are difficult to detect, we may feel the need to look over our shoulders that much more, the desire to put guards and metal detectors in every school.

But both the discussion surrounding Newtown and the latest cliff-hanger in Congress have me thinking again about the problem of trust. That’s because a common theme of both the gun lobby’s attachment to the Second Amendment and the willingness of ultra-right representatives to push the world economy into a depression in the name of anti-tax ideology, is lack of trust in government.  It’s possible to argue that the ultimate source of this sentiment is lack of trust in one another; and there’s disturbing evidence that such a lack of trust—if not contained and reversed—could be a harbinger of a general breakdown in the social order and the consignment of the U.S. to future economic and social backwardness.

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Think first of the Second Amendment.  Its basic philosophical premise is that people should have the right to defend themselves against an oppressive government.  How that premise can have any coherence in a day and age in which our nation’s army commands arsenals of nuclear warheads, fighter jets, bunker-buster bombs, and drones, unless small groups of citizens are to field similar arsenals, is beyond me.  Like it or not, if we need an army for reasons of national defense, then we have to accept that the way in which we defend our individual liberties against government oppression can’t really be by arming ourselves to the teeth, but must be through our constitutional and legal protections and the mechanisms through which we, the people, make the government our tool.  Clinging to a right to bear arms as a safeguard against our own government strikes me as a sad expression of lack of faith in our democratic institutions.  (Note well: I’m not arguing here about whether there’s any place for owning guns; I’m only questioning the political premise some use to uphold it as a fundamental right.)  

Fanatical antipathy to funding government programs other than military ones seems likewise to bespeak mistrust of government as a tool that we as a society can use to address various large scale problems.  Those problems range from assuring the safety of our food supply and maintaining transportation infrastructures to funding basic scientific research and aiding storm victims.  Yes, it’s crucial in the long run that government live within its means, but that entails both imposing tests of affordability on the programs we choose to fund and agreeing on appropriate ways to pay for them through the mandatory levies we call taxes.  The long run stipulation is also important, with most economists agreeing that excessive belt-tightening during a recession is a sure way to worsen it.

The body of experimental economics research about which I’ve been writing in this space is very clear on the importance of social trust and of overcoming the problems that stand in the way of effective collective action.  In my post “Social Norms Underpin the Wealth of Nations,” I reported on how researchers found that subjects in Switzerland, Denmark, the U.S. and the U.K. achieved successful cooperation in the decision lab partly because many individuals took it upon themselves both to contribute to a group effort and to impose penalties on those who shirked their parts, voluntarily bearing the cost of doing so.  Facing exactly the same experimental decision challenge, subjects in Russia, Turkey and the Middle East failed to cooperate, in part because those who dared to punish the free riders were so often simply punished back—something most Swiss and Danish subjects, for instance, refrained from doing.  Those subjects seemed to recognize the justice of being penalized for failing to do their parts, and instead responded to penalties by joining the cooperators.  The differences in the behaviors displayed by individuals from different countries, in these experiments, mirror closely corresponding differences in the quality of public institutions in their countries, measured by prevalence of corruption and other indicators.

My colleagues’ and my experiments on theft and respect for property rights in several countries has an even more directly relevant message on the connection between the trust between us and our ability to make use of government as a tool for the general good.  In these experiments, groups of five players were confronted with a dilemma in that each was privately tempted to forgo a large amount of wealth creation because it became privately less rewarding on the margin than simply stealing wealth from other group members.  This problem could have been addressed by reaching and observing a pact to refrain from stealing, and in the study’s subject pools with strong social capital—Austria and the U.S., especially—subjects indeed attained high levels of efficiency in those treatments that allowed them to communicate with each other by sharing messages in a chat room.  In another of the experimental treatments, there was no such means of communication, but subjects could effectively address the theft problem by voting to create an administrative mechanism that could impose a modest tax to pay for protection against theft.  The cooperatively inclined subjects tended to do this and achieve relatively high levels of wealth creation, whereas subjects in our least cooperative research site—Mongolia—generally voted against the mechanism, leaving themselves exposed to high levels of theft from one another and achieving low levels of wealth creation. 

The administrative mechanism in our experiment is of course a simple representation of a government that provides some security of property by hiring policemen and operating courts and prisons.  The lack of trust in government displayed by the subjects in Mongolia could be related to the fact that that country lacked centralized administration through most of its history and that for only a few recent years out of those it has spent with a government have there been democratic institutions in place.  The Mongolian subjects’ lack of trust in government was also probably related to their generally low levels of trust in one another: among our five country subject pools, those in Mongolia were by far the least successful in achieving cooperation in the treatments in which agreements could be reached by exchanging messages.

If we Americans come to trust each other so little that our only response to gun violence is to arm ourselves still more, and if we distrust our own government so much that we treat it as a beast to be starved, then we just might be on the road to becoming the kind of society that performed so poorly when facing social dilemma problems in the laboratories of Herrmann, myself, and our collaborators.  If, instead, we want to repair and strengthen the kind of social fabric that permits us—among other things—to use government as a tool for our collective benefit as well as the protection of our individual rights, we had best turn our attentions back to how to choose trustworthy leaders, be trustworthy in our own dealings, and raise trustworthy children.  Only through such trustworthiness, and the commitment to work together, can we have a society of high social trust.  And only through such efforts can we support trustworthy and well-functioning institutions that allow us to be productive and to enjoy a high quality of life.

Louis Putterman, Ph.D is an economics professor at Brown.

 

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