2013-11-30

Diversity + Negative Social Mood = Collapse In Trust

The social science is clear that increased diversity reduces trust in a society. The run-up into peak social mood created the conditions for peak diversity and the turn into negative social mood has now created a collapse in trust.

In God we trust, maybe, but not each other
We're not talking about the loss of faith in big institutions such as the government, the church or Wall Street, which fluctuates with events. For four decades, a gut-level ingredient of democracy - trust in the other fellow - has been quietly draining away.

These days, only one-third of Americans say most people can be trusted. Half felt that way in 1972, when the General Social Survey first asked the question.

Forty years later, a record high of nearly two-thirds say "you can't be too careful" in dealing with people.
Society ceases to function at a very basic level if trust collapses. Most of the modern world is built on trust, especially the West and most especially the Anglo-Saxon and Northern European nations that are highly trusting of strangers. A collapse of trust is therefore a serious social and economic problem.

Does it matter that Americans are suspicious of one another? Yes, say worried political and social scientists. What's known as "social trust" brings good things.

A society where it's easier to compromise or make a deal. Where people are willing to work with those who are different from them for the common good. Where trust appears to promote economic growth.

Distrust, on the other hand, seems to encourage corruption. At the least, it diverts energy to counting change, drawing up 100-page legal contracts and building gated communities.
Along with the collapse in trust comes the collapse in morality. Religion is also ebbing in the West after decades of decline. The reason why there are 100-page legal contracts, is that same reason that Bill Clinton asked, "It depends on what the definition of is, is," why investment bankers (and Enron executives) don't ask what is moral, but ask their lawyers what is legal. Legality has replaced morality, but now the law itself is under attack.

Speaking of corruption, there was this story in the Washington Post this week: Nonprofit groups often seek restitution, not prosecution, when money goes missing
Three years ago, the Progressive Policy Institute realized that a senior manager had quietly used unauthorized checks, credit-card charges and cash withdrawals to drain about $100,000 from the Democratic think tank’s accounts, pushing the nonprofit group to the edge of insolvency, interviews and documents show.

Officials at the institute didn’t call police and didn’t alert donors, said Lindsay Mark Lewis, now executive director of the Washington-based organization. Instead, they took what charity governance specialists call a distressingly common approach for a nonprofit group: They agreed to forgo legal action in exchange for restitution.
The rot is deep and it is being covered up at all levels by all institutions.

What is the ratio of credit money to fiat money in the U.S.? It is still over 5 to 1. Credit comes from the Latin credere: believe, trust. Is it any surprise there is an ongoing financial crisis?

Pennsylvania farmer Dennis Hess is one. He runs an unattended farm stand on the honor system.

Customers pick out their produce, tally their bills and drop the money into a slot, making change from an unlocked cashbox. Both regulars and tourists en route to nearby Lititz, Pa., stop for asparagus in spring, corn in summer and, as the weather turns cold, long-neck pumpkins for Thanksgiving pies.

"When people from New York or New Jersey come up," said Hess, 60, "they are amazed that this kind of thing is done anymore."
People from NY and NJ live in diverse urban areas. As of 2000, Lilitz, PA was 97% white; about as undiverse as one gets in the United States.

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