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Economists and other fans of the market economy often talk in near-ecstatic terms of the benefits that competition and free enterprise have conferred on humankind. Most of our ancestors lived in a world of relative shortage and drudgery during the millennia of agrarian societies until the early 19th Century, whereas almost a sixth of the people alive around 1970 lived in societies that had achieved a comparatively comfortable standard of living for most members. Since that time, another sixth or more of the world’s still growing population have transitioned from near subsistence to lives made considerably less stressful by an ample food supply and creature comforts, and perhaps over half of today’s 7.5 billion people have living standards superior to most Europeans in 1800.
But many economists celebrate with equal gusto the miracle of the mixed economy—a mostly market-mediated economy complemented by a relatively stable and lawful society, with space for both for-profit and socially-driven ventures, and supporting a government able to provide a wide range of benefits including basic security of person and property, a stable money supply, workable legal institutions, and relative safety of food and pharmaceuticals. These economists suspect that without the successful emergence of the mixed economy and the welfare state, the market economy as we know it might not have survived into the current century. Going forward, survival of an economic system capable of earning widespread acceptance very likely depends on a synergy between government and economy which perpetuates and reinvents itself as society is buffeted by technological, climatic and geo-political shocks.
The erosion of trust in government in recent years is concerning because of its potential to undermine government effectiveness and thereby the viability of the entire mixed economy system. Stresses on the system are taking many forms, including temptations in some quarters to abandon democracy or civil rights, and idealization of extreme alternatives including both the efficient dictatorship many believe China to represent, and its polar opposite, an imaginary entrepreneurial economy with a bare minimum of government. The stagnant income of the large majority of people in the United States, over recent decades, is symptomatic of how the concentration of power in the hands of individual companies profiting from their first-mover advantage (think of Amazon or Walmart) intersects with a world of vast inequality still holding hundreds of millions of near-subsistence wage workers able to perform factory and service tasks for U.S. consumers from twelve thousand miles away at a fraction of the cost. Despite the clear role of diminishing economic power for most working people and of rising economies of scale in positioning individual companies to suck wealth out of the marketplace, voodoo ideological sloganeers have succeeded in convincing large segments of the pinched populace that their problem lies with government, the entity that had done more than any other to make the market economy a livable place for most for the past few generations. The buying of anti-government ideology by so many whose real interest this hurts has allowed policies to be put in place which both reduce government’s scope and increase the share of the tax burden falling at lower rungs of the income distribution.
Given the crisis of the mixed economy, many social scientists, economists included, are undertaking research aimed at understanding public trust and government efficacy, in part to find ways to strengthen or perhaps reinvent the economic system that had improved life for so many. A project calling itself TrustLab of which I am a part, has been carrying out surveys of representative samples of countries’ populations to better understand the state of public trust in government and what determines its variation among individuals. One component of TrustLab’s initial trial surveys, conducted in 2017, was an Implicit Association Task (IAT), a psychometric tool using differences in the speed of associating words with positive or negative attributes at a computer keyboard is used to measure attitudes that might not be well revealed by answers to conventional survey questions. IATs initially earned their reputation as a method for measuring the discrepancy between asserted lack of prejudice, in survey responses, and apparent latent prejudice with respect to race in the United States. TrustLab applied a variant of the method to trust in government. But our suspicion was that the difference between the IAT indicator and the survey indicator might run in the opposite direction for trust in government versus for race. While emerging social norms lead white Americans to declare that they are unprejudiced yet privately and even unconsciously hold negative stereotypes, we suspected that it might be fashionable these days to declare low trust in government even while having little doubt that your next social security payment will be correctly calculated, that the statement will reach you and the amount will be readily accepted by your bank, that the airplane you are about to board will not be directed into an oncoming plane’s flight path, and that if the government allows Advil or Tylenol to be sold over the counter, they are safe to take at the dosages listed.
Our conjecture that IAT-measured trust in government would appear on average to be higher than survey-measured trust in government proved to be correct. But the survey and IAT measures are highly correlated, suggesting that implicit trust in government is not quite as low as surveys suggest, but that one may fairly well estimate trust from survey responses with an appropriate upward adjustment. Reassuringly, TrustLab finds that perceived quality of government services is the strongest predictor of both survey and implicit association based trust in government. More analysis is required on which components of government service are most important to overall trust in government, and to trust in specific parts such as the courts, public services, and schools. How objective indicators of government service delivery correlate with respondents’ perceptions of government performance also requires further study.
The TrustLab surveys, thus far conducted in seven countries including the United States, France and Germany, will make possible considerable further research into why some people have a much more positive view of government than do others. With survey respondents representing most regions, age groups, genders, ethnicities, incomes, education levels, and political views, and with survey questions covering a wide range of topics, relationships between a variety of factors can be explored. The survey includes questions about employment status, views of inequality, elicitation of preferences about which income groups to tax at what rates, and questions about attitudes towards minority groups, immigrants, and international trade.
The most novel dimension of the TrustLab survey may be its inclusion of experimental decision “games” such as the trust game and the voluntary contribution or public goods game which have both been discussed in my posts. This is the largest scale study of how people play these games which includes a highly representative set of people, and its collection along with a considerable amount of demographic and opinion data from the same individuals provides a trove of information that remains to be explored more fully. Some findings are likely to appear in my future installments.
The TrustLab survey has been initiated by the Organization for Economic Cooperation and Development (OECD), a sort of “club of nations” based in Paris that is best known for its dissemination of statistical information about the economies of member and in some cases non-member countries, and for other subjects including education and social services. Unfortunately, the OECD’s operating budget depends on the member governments, and one of the myriad small effects of the downsizing of government budgets across so much of the developed world is that OECD’s budget is limited and the scaling up of TrustLab into a regular instrument for measuring trust across population segments and over time in the OECD member countries remains in doubt. The far-sighted philanthropy of some non-government actor might be required to help this Rx for the mixed economy realize its full potential.
