The Erosion of Social Trust: A Path to Ruin

Consequences of Lost Social Trust

Social trust can be dissolved by three main factors: 1) the self-promotion of insiders; 2) a decline in competence; and 3) precarity, which is caused by growing inequality and the cost of living, as well as the deterioration of social mobility. These factors undermine our confidence in the social contract - our belief that the system isn't rigged to favor the few at the expense of the many.

Self-Aggrandizement of Insiders

When insiders prioritize personal gain as the purpose and goal of their employment, the value of the institution's service to the public or customers decays. This decay is often hidden behind a thin veil of self-serving PR promoting the successes of the now hollowed-out institution.

Decay of Competence

Even when insiders are committed to serving the public, if their ability to perform necessary work is impaired due to under-competence, the public's trust deteriorates. The real issue here is under-competence, where the organization has lost the core competencies needed to handle anything other than day-to-day processes. This means that those inside the organization believe they have what it takes until challenges arise that they do not fully recognize or understand due to institutionalized under-competence.

Impact of Precarity

When self-interested insiders no longer care about the organization's under-competence, this is harmful to social trust. On a societal scale, this decay erodes the social contract, the unstated but implicit understanding that the system is functional and fair. Rising inequality, the increasing cost of living, and the decay of social mobility all indicate an increasingly uneven playing field and a decline in the value of our work and money.

Declining Social Trust

This reliance on artifice and propaganda is also harmful to social trust. When we sense that we're just marks or chumps being ripped off by corporations and institutions, and the gains are going to the few at our expense, we lose trust in the system. It's no surprise that social trust has been declining for decades, inversely correlated to rising inequality: as inequality increases, social trust declines.

Impact on Higher Education

Consider Higher Education, the vast industry of universities and colleges tasked with imparting higher level skills and knowledge. The emergence of student loans, from near-zero two generations ago to $1.75 trillion in "free money" to higher education, has enabled a vast expansion of new buildings and well-paid administrators. However, the value of the education being offered to students is increasingly being questioned. The recent decline in student enrollment from 18 million to 15 million reflects not just demographics but an erosion of trust in the value of what's being taught.

The Corporate America Effect

The same can be said of what's being sold by Corporate America. The quality, durability, and value of goods and services have declined to the point of parody. This doesn't inspire trust in the status quo, and it's obvious to the many, but the few continue living in their protected bubble, confident that since they're doing well, everyone else must be too.

Bottom Line

Loss of social trust has consequences that are difficult to predict. The first-order effect is precarity, the general sense that life is increasingly precarious on multiple levels. The second-order effects start with the unraveling of the social order and proceed from there. This raises the question: how can we rebuild social trust in a world that seems increasingly rigged against the many in favor of the few? Share your thoughts and this article with your friends.

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