Trust, Poverty, and Mexico
Trust, Poverty, and Mexico
What are the most important qualities of a society that allow economic prosperity to take root? A lust for learning and knowledge? A blistering work ethic? Increasingly, academic research has highlighted a characteristic that may surprise many: Social trust.
Trust and its inseparable counterpart, trustworthiness, are themes that run strongly throughout Scripture. Trustworthy people are continually held in high esteem throughout the Bible (Exodus 18:20, Nehemiah 13:13, Daniel 6:4, Luke 19:17, 1Cor 4:2, 1Tim 3:11). Trust and trustworthiness are fundamental to healthy relationships; they are hallmarks of spiritual maturity. But academic research has only recently begun to grasp why they are so fundamental to economic prosperity.
The importance of social trust has been driven home as my family and I live for six months in a small village in Oaxaca, Mexico. The value of social trust is made salient by its absence, like being oblivious to your mother’s savory cooking until you leave home. Mexico is a wonderful country, rich in resources, history, tradition, art, and culture. But it is not a country rich in trust. Trust in government, in politicians and police, even among one’s fellow citizens is as sparse as water in the Sonora desert. These are not casual observations. Lamentably, they are how the data speak.
For 35 years, social scientists of all stripes have been obtaining data on trust and trustworthiness through the World Values Survey. In this carefully representative survey, 400,000 people across 100 different countries are asked: “Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing with people?” For example, while 74.2 percent of those in Norway affirm the first phrase (most people can be trusted), only 15.6% do so in Mexico, where the second phrase is affirmed (that is, you need to be very careful in dealing with people).
The figure I constructed from the World Values Survey data and World Bank statistics on per capita income illustrates the strong correlation between trust and economic prosperity. Of course one must always be careful with correlations. It may be that people become more trustworthy as they become richer. Or it may be that a third factor causes both trust and economic prosperity to take root. But in a series of papers using fancy econometrics to tease out causality, researchers have confirmed the relationship: social trust has significantly fostered economic prosperity.
It is possible that the level of general trust in a society may have spiritual roots. The clustering of trust, income, and religious belief in the figure cannot help but give one pause. The sociologist Max Webber emphasized the work ethic inherent to Protestant Christianity; perhaps he should have emphasized the trustworthiness ethic.
The very definition of trust is related to the giving of power to others and thus has the potential for abuse. We see this in multiple avenues of everyday life. I trust you by sharing a private thought. You now have the power to hurt me by sharing it with others, but by sharing this with you, I am trusting that you will not abuse this power. But I share with you so that you, and I, and our relationship, may profit from it. Trillions of these simple, trusting exchanges produce the network of human relationships.
We entrust politicians and police with power over us and other citizens. We empower them so that they may govern effectively and protect us. But public officials may harm us with this power by abusing it and using it for their own gain. On the other hand, millions of leaders employ this trust for the common good to create the building blocks of healthy institutions and civic societies.
In a similar way, anyone in business understands that virtually every transaction involves some degree of trust and vulnerability. Do I honor the credit you have extended to me, or do I default on your goodwill? I know the quality of the goods I sell to you better than you do. Do I use this power to misrepresent what I’m selling, and so exploit your trust? The more individuals one can trust, the greater is the potential for business to prosper, for economies to thrive. Billions of trust-based transactions form the atomic structure of economic prosperity.
Where does the general lack of social trust originate in a country like Mexico? In the historical abuse of power at multiple levels: government, business, labor unions, and sadly even the church. But more deeply, its origin lies in a Latin trait that is regarded admirably, even envied by many North Americans: an overarching loyalty to extended family, close friends, and clan. Indeed our family marvels at this aspect of Mexican culture here. In the village in which we live in Oaxaca, extended family and friends gather for baptisms, birthdays, weddings, funerals, quincieañeras (a celebration in honor of a daughter who turns 15), and days that commemorate the family’s patron saint. These gatherings are frequent and expensive; weddings, for example are said to cost up to a year of family income. Gifts are given to guests. (Our neighbors, for example, received the big fat turkey that gobbles in their yard at a friend’s wedding.) The breadth, depth, and regularity of family relations in countries such as Mexico are astounding by North American standards. It creates an extraordinary level of trust within the family network that evolves and strengthens through reciprocal acts of generosity and favor…
(Click to read the remainder of the article in CT online)