The Semantics and Study of Trust

This post isn’t quite as wonky as the title would suggest. Bear with me.

Most of us would agree that ‘trust’ is a complex concept. But few of us, I suggest, have any idea how sloppily we think about it.

The Semantics of Trust

Consider some obvious grammatical usages of ’trust’:

  • Trust as a verb, as in “I trust James.”
  • Trust as an adjective, as in “James is less trustworthy than Jane.”
  • Trust as a noun, as in “trust is less common in Russia than in Denmark.”

Now ask yourself: what is the meaning of the sentence, “Trust in banking is down”?

Does it mean:

  1. that people are less inclined to trust banks these days? or
  2. that banks have become less trustworthy than they used to be? or
  3. that the customer-bank relationship is less based on trust than it used to be?

Why is that important? Because if you don’t know what problem you’re trying to solve, you’re just going to spin your wheels.

Is that a real issue? You betcha. It goes to whether we need more bank regulation, better bank PR, or a rebirth of spiritual values.

For an analogy, consider the fact that serious crime in the US has been declining for about two decades – and the mistaken belief held by majorities that it has actually been rising.  That’s a PR problem.

Now consider that Wells Fargo consistently and consciously incented its employees to sell unnecessary products for years. That’s a trustworthiness problem.

In the aforementioned link, from the Edelman Trust Barometer, you can find hints of all three meanings.  Which suggests, first of all – we have a semantic problem. What the heck does Edelman mean by ‘trust’?  Because if that answer isn’t clear, then how can we meaningfully talk about how to create trust (by smarter consumer risk-taking? by better regulation? by broader social change?).

Biases of Trust Researchers

Psychologists who study trust are, as a group, fixated on trust-the-verb. This is hardly surprising; their view of the world is from an interior perspective, the mind looking out, hence on issues of perception.  They focus on the decision to trust, and thus on the attitudes toward risk-aversion and risk-seeking. Trustworthiness as an adjective is dealt with as an issue of perception by the trustor, not as an attribute of the trustee – trustworthiness is all in the eye of the beholder.

Sociologists are concerned with trust the noun, and with questions like why southern Italy is a lower-trust society than Sweden. When they say ‘trust is down,’ they are talking about the  likelihood of a surveyed population to have a more suspicious outlook on strangers than they used to. They’re interested in herd behavior, not in the perceptions of individual cattle.

Business writers on trust are the most confusing of all.  They pay about as much attention to trust-as-adjective (trustworthiness) as they do to to trust-the-noun. Unlike the academics, however, business writers use the word ‘trust’ to refer to institutions, as opposed to most academic talk (and most talk on Twitter, for that matter), which is about interpersonal trust.

Unfortunately, business writers are often unclear about the distinction (if banks are untrustworthy, is this because bankers are venal, or because ’the system’ is amoral? And is my trusting JPMorgan Chase really not qualitatively different from my trusting Susie?).

Definitions: A Simple Trust Ecosystem

Here’s a simple, five-factor description of the trust ‘ecosystem.’

Trust (1. the noun) is a relationship, between a trustor who trusts (2. the verb) and a trustee, who is or is not trustworthy (3. the adjective). The trustor initiates the relationship by taking a risk (4. the driver of trust); and continues when the roles reciprocate (5. the sustainment of trust).

At the risk of grammatically complexifying what isn’t all that complicated in practice: trust is an asynchronous bilateral relationship initiated by risk-taking and sustained by reciprocation.

If all who wrote about trust simply referred to these five factors, and were clear about what meaning they intended, the trust literature would be much clearer, and recommendations more cogent.




Social Trust: Revisiting Francis Fukuyama

Francis Fukuyama's Book TrustTrust is a hot topic these days. We sometimes forget how many flavors it comes in.

But there’s one sense of trust that we don’t talk enough about. I’ll call it “social trust,” and the person who arguably Wrote The Book on the subject is Francis Fukuyama. The book, published in 1996, is titled Trust: The Social Virtues and The Creation of Prosperity. The book is well-known in academic circles, but not enough in business and public dialogue.

I often hate it when people say this, but: if you’re going to talk about trust, you need to have read this book.

A Definition of Trust

Fukuyama defines trust this way:

The expectation that arises within a community of regular, honest, and cooperative behavior, based on commonly shared norms, on the part of other members of that community.

He takes the definition in breathtaking directions:

Although it involves an exchange of information, trust is not reducible to information.

The greatest economic efficiency was not necessarily achieved by rational self-interested individuals but rather by groups of individuals who, because of a pre-existing moral community, are able to work together effectively.

One of the most important lessons we can learn from an examination of economic life is that a nation’s well-being, as well as its ability to compete, is conditioned by a single pervasive cultural characteristic: the level of trust inherent in the society.

The entire imposing edifice of contemporary neoclassical economic theory rests on a relatively simple model of human nature: that human beings are “rational utility-maximizing individuals.”… But everyone of the terms of the neoclassical premise is subject to significant qualification or exception… between 40 and 60% of those [in an experiment] contributed altruistically to the groups well-being. The only exception was a group of entering graduate students in economics.

The greatest economic efficiency was not necessarily achieved by rational self-interested individuals but rather by groups of individuals who, because of a pre-existing moral community, are able to work together effectively.

If you think this sounds like dry stuff, then read on to the part where he talks about high-trust in low-trust cultures. And he names names.

Trusting Economies and Cultures

The French, for historical reasons Fukuyama explains, have trouble trusting peers: but they are very good at trusting central authority, hence have very competent national institutions and companies.

The Chinese, on the other hand, have a largely familistic society, which stresses family bonds over other social loyalties. This explains not only why there are few Chinese companies with global brand names like Wang laboratories, but also the reason for Wang’s dissolution–An Wang’s inability to break the chain of family management.

In contrast to familistic trust in countries like China, Italy, and parts of France, Fukuyama highlights high trust societies like Holland, Sweden, and Switzerland–small countries without classical economic scale, which nonetheless host major global corporations.

Thinking this way leads to Fukuyama to talk about trust as social capital. “ There is no necessary trade-off, in other words between community and efficiency; those who pay attention to community may indeed become the most efficient of all.”

Trust and the United States of today

Much of the book rebuts the surface idea that individualism in the United States was responsible for the US economic success. Going back to 19th century Toqueville’s work, he makes the distinction between a government-focused society (which the US never was), and a collaborative society–which the US historically always has been.

These same Americans who are against state regulation, taxation, oversight and ownership of productive resources can be extraordinarily cooperative and sociable in their companies, voluntary associations, churches, newspapers, universities, and the like Americans say they feel a strong distrust of “big government,” but they are good at creating and maintaining a very large, cohesive private organizations; they pioneered the development of the modern hierarchical (and later multinational) Corporation, as well as the huge labor unions spawned by them.

The real challenge for us today–and he identified it 15 years ago–is whether US society still maintains that collaborative instinct, or whether it has been washed away by greater levels of divorce, economic inequality, assertion of individual rights, business ideologies built on competition, and a press increasingly dependent on sound bites.

I read this book many years ago, and have gotten even more out of it on re-reading recently. My Kindle software supports digital yellow highlighting, and this is one book which is now half-yellow.

Trust: The Social Virtues and The Creation of Prosperity
by Francis Fukuyama
Free Press, 420 pages., $13.50