The World Values Survey (WVS) asks many different questions about trust. Their most general question asks: “Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing with people?” Possible answers include “Most people can be trusted”, “Do not know”, and “Need to be very careful”. [...]
In Norway and Sweden for example, more than 60% of the survey respondents think that most people can be trusted. At the other end of the spectrum, in Colombia, Brazil and Peru less than 10% think that this is the case. [...]
The question of trust and its importance for economic development has attracted the attention of economists for decades.
In his 1972 article “Gifts and Exchanges,” Kenneth Arrow, who was awarded the Nobel Prize in Economic Sciences in the same year, observed that “virtually every commercial transaction has within itself an element of trust, certainly any transaction conducted over a period of time.”1
Most of us have likely experienced this in our own lives — it’s challenging to engage in dealings where trust in the other party is lacking.
The following chart shows the relationship between GDP per capita and trust, as measured by the World Values Survey. There is a strong positive relationship: countries with higher self-reported trust attitudes are also countries with higher economic activity.
When digging deeper into this connection using more detailed data and economic analysis, researchers have found evidence of a causal relationship, suggesting that trust does indeed drive economic growth and not just correlate with it.2
I think this conflates high trust in the sense of economics (that you won’t be cheated) with high trust in the sense of not being emotionally (or whatever) betrayed. In the sense of economical trust it’s obviously correlated—every now and then I’m struck with wonder at e.g. self checkout or in general that you can pick up a bunch of products and it’s assumed you’ll pay for them. This is really valuable and often unappreciated. Credit cards are both terrifying and wonderful—you use a bit of plastic to say that at some point you’ll give it back and pretty much everyone takes you at your word. To the point that there are places that prefer this to hard cash! This is amazing! If someone does take your money, you let the bank know and they basically just give it back to you? How does this still work?!
That being said, I think Duncan is pointing at something else. Or maybe an extension? That if you can have this kind of trust in other areas, the equivalent of credit cards becomes possible. But by default this doesn’t happen. In places where you have to continuously be on guard against people cheating/stealing from you, you have to invest a lot of resources in mitigating the downsides of this happening. When you can safely assume no one will steal from you, those resources can go to more productive areas. This generalizes.
This is indeed generally thought to be the case:
I think this conflates high trust in the sense of economics (that you won’t be cheated) with high trust in the sense of not being emotionally (or whatever) betrayed. In the sense of economical trust it’s obviously correlated—every now and then I’m struck with wonder at e.g. self checkout or in general that you can pick up a bunch of products and it’s assumed you’ll pay for them. This is really valuable and often unappreciated. Credit cards are both terrifying and wonderful—you use a bit of plastic to say that at some point you’ll give it back and pretty much everyone takes you at your word. To the point that there are places that prefer this to hard cash! This is amazing! If someone does take your money, you let the bank know and they basically just give it back to you? How does this still work?!
That being said, I think Duncan is pointing at something else. Or maybe an extension? That if you can have this kind of trust in other areas, the equivalent of credit cards becomes possible. But by default this doesn’t happen. In places where you have to continuously be on guard against people cheating/stealing from you, you have to invest a lot of resources in mitigating the downsides of this happening. When you can safely assume no one will steal from you, those resources can go to more productive areas. This generalizes.