…a well-established statistical pattern is that countries in which people report higher levels of trust in their neighbors are also wealthier. However, to give that information meaning (and to provide well-founded policy recommendations), we need theory: do higher levels of trust among citizens cause countries to get richer, or do people start to trust one another more as their country gains wealth? Or maybe some third, unrelated factor causes increases in both trust and wealth. - Benjamin Ho, Why Trust Matters
Benjamin Ho is as normie of an economist as you can find. In one interview he laments the difficulty of his former job at the White House: everyone knows a gas tax would be good for the environment, but how to convince skeptical Republicans to trust the newly raised funds won’t be squandered like all other government funds. A PhD-worthy trust conundrum!
But I appreciate his meditation on how trust relates to the economy, and his work on apologies is also very interesting. At least it’s nice someone is taking all these topics seriously.
I myself am actually undiceded about the directional causality of trust, wealth, and good money. Here’s a passage from When Money Dies that seems to credit hyperinflation with a breakdown of trust in German society:
There were few in any class of society who were not infected by, or prey to, the pervasive, soul-destroying influence of the constant erosion of capital or earnings and uncertainty about the future. From tax-evasion, food-hoarding, currency speculation, or illegal exchange transactions — all crimes against the State, each of which to a greater or less degree became for individuals a matter of survival — it was a short step to breaching one or other of the Ten Commandments. Whereas the lower classes with the further goad of unemployment might turn to theft and similar crimes (the figures up by almost 50 per cent in 1923 over 1913 and 1925) or to prostitution, the middle and upper classes under a different kind of strain would resort to graft and fraud, bribing, bribable. Once bribery was the norm, by definition normal people resorted to it, the more so in the months of abject scarcity. No people could be expected to remain unconcerned while huge profits and riotous luxury were ostentatiously being enjoyed by the few. Corruption bred corruption, and the Civil Service caught the infection even in the war years. Counterfeiting was widespread.