Do you think other people can be trusted?

This is some material from a recent Freakonomics podcast. It seems relevant to our recent discussion about whether having a uniform society is a precondition for democracy. In that discussion, we concluded that you needed trust in the system, critical thinking and economic stability as preconditions for successful democracy. So let's look a little more deeply into 'trust in the system' today. What exactly does that entail?

“Social trust” is what, exactly?
HALPERN: It’s just one of those things. It’s sort of like the dark matter of the economy and society, it matters very greatly and yet we don’t seem to focus on it very much.
HALPERN: Social trust is an extraordinarily interesting variable and it doesn’t get anywhere near the attention it deserves. But the basic idea is trying to understand what is the kind of fabric of society that makes economies and, indeed, just people get along in general. It’s clearly so critical for a whole range of outcomes.
HALPERN: This is a more powerful predictor of future national growth rates than, for example, levels of human capital or skills in the population.
HALPERN: Basically, having someone or feeling that other people can be trusted or people you can rely on in your life is worth a great deal. It’s roughly the same positive effect in a series of studies as giving up smoking. And smoking is really, really bad for you so, you know, social isolation, essentially, is incredibly bad for your health.

“Do you think other people can be trusted?”
HALPERN: That’s the question we’ve been asking, in fact, for decades.
There’s very big national differences in this. Countries range from, you know, many countries like Brazil where less than 10 percent of people would say that most others could be trusted to countries like Norway where more than 70 percent of people would say most others can be trusted. Countries like the U.S. and the U.K. are sort of halfway in between, typically in the range 30-40 percent of people say others can be trusted.

So to what extent is it an advantage in terms of your economic growth or your health outcomes to live in a country or a place where people say most others can be trusted. And the answer is it turns out some really quite large numbers indeed.

Italian politics
PUTNAM: Some parts of Italy are way more efficient than any state in America, and other parts of Italy are way more corrupt than any place in America. And the question is why? Why are some places better governed than others?
The answer, Putnam concluded, didn’t have to do with economic development, or education level, or politics.
PUTNAM:It was the degree to which there was a dense, civic network in a community. If there was a dense, civic network, so that people in those places behaved with respect to one another, in a trustworthy way, their governments worked better. And I dubbed that concept “social capital.”

Bonding vs Bridging Social Capital
Social capital is about social networks. But not all social networks are identical, and one important distinction is between ties that link us to other people like us, that’s called bonding social capital.
HALPERN: Bonding social capital often refers to your closeness to your friends, your relatives, those that are immediately around you. It’s particularly important, it turns out for, things such as health outcomes.
PUTNAM: Because, empirically, if you get sick, the people who are likely to bring you chicken soup are likely to represent your bonding social capital.
So bonding social capital is plainly important – but it’s primarily about our ties to people we’re close with. When it comes to how our broader society gets along – that’s where bridging social capital comes in.
HALPERN: Do you trust, not just your immediate neighbor, but those people in your community more generally or, indeed, even relative strangers who you meet in everyday life in your country or your society?
PUTNAM: So my ties, my friendships to people of a different religion or a different race or a different economic class or a different occupation or a different age, that’s bridging social capital.
HALPERN: That tends to be really important…
PUTNAM: …really important especially in a modern, diverse democracy like ours. And therefore, what worries me most about trends in America is the decline in bridging social capital.

“when social trust and social capital are low, why are they low?”http://freakonomics.com/podcast/trust-me/
PUTNAM: The short version is that in the short run, increases in diversity seem to be correlated with decreases in social capital.
Glaeser and his colleagues set up an experiment. Not that experiments are perfect, either.
GLAESER:  So we took a bunch of Harvard undergraduates, because what could possibly be more representative than that?
They tried to measure trust in a variety of ways, including a game where students were paired with each other, with one sending money to the other without being sure whether they’d get the money back.
GLAESER: It’s basically meant to mimic the idea of an investor giving money to a firm, and the firm then chooses whether or not to cheat the investor or not.
Some students treated their partners fairly; others, however, essentially cheated, keeping most or all of the money for themselves. When did that happen? It happened when the two players didn’t look alike.
GLAESER: A lot of the cheating was across racial and ethnic lines. And this was primarily white on Asian, meaning the whites were cheating the Asians. And I think there are lots of cases in the world in which we’ve seen racial fractionalization be related to less-than-perfectly functioning social relations.
DUBNER: Do you think that more ethnically homogenous societies — you know, one argument behind Scandinavian economic and social successes is that they tend to produce better social outcomes, and do you think there’s evidence for that?
GLAESER: I do. It is true for example, that welfare states are both more generous in ethnically homogenous places, and it’s almost assuredly true that they’re also more functional. They function better in more ethnically homogenous places. It’s just easier in lots of ways. There are downsides to that. I mean, I happen to love Stockholm. It’s a great city, but certainly one can argue that small, homogenous places are not necessarily as creative as they might be.
HALPERN So I think there are lots of benefits for being in an ethnically and culturally mixed society.

PUTNAM: Diversity, in the long-run, is a big advantage.
But, he warns:
PUTNAM: It’s not easy to do diversity. That diversity brings out the turtle in us. That, that in a more diverse setting, everybody kind of pulls in and disconnects from their neighbors.

What works to build social ties?
What strategies I would want to emphasize for moving in a positive direction would be more contexts in which people connect with one another across lines of race or economics or gender or age.
Some classic examples of that – sports teams; the military; and university:
HALPERN: People that go to university end up trusting much more than those who don’t, particularly when they go away residentially. It doesn’t look like it’s explained by income alone. So there’s something about the experience of going off as a young person in an environment where you have lots of other young people from different backgrounds and so on, hopefully, and different ethnicities. You learn the habits of trust because you’re in an environment where you can trust other people; they are trustworthy. And you internalize these habits and you take them with you the rest of your life. So we tend to not think of going away to university as being the reason why you’re doing it is to build social capital and social trust, we think about learning skills and so on, but it may well be that it has as much, or even more value, in terms of culturing social trust going forward. The question is: do you have to do that in university, can you do it another way? So in the U.K., following partly an American lead, the government has championed a national citizen service. And what this means is for every young person, essentially a 17-year-old, increasingly, starts off with a — not everyone does it alone, but more and more every single year, goes and does voluntary experience, community service. This deliberately includes a couple of weeks which are residential and deliberately includes mixing with people from all different walks of life. Look, it’s only limited data, but in terms of before-and-after data, we see significant impacts in terms of higher levels of trust between groups and individuals, as well as instantly higher levels of life satisfaction and well-being too. So it looks like we can do something about it.

What causes a decline in social ties?
And what role does technology play in social capital, especially the “bridging social capital” that people like Halpern and Putnam say is so important? In his book Bowling Alone, Putnam found that social capital was relatively low in the U.S. in the early 1900s and rose fairly steadily through the 1960s. But that’s when the decline began.
PUTNAM: I looked hard to find explanations and television, I argued, is really bad for social connectivity for many reasons.
“More television watching,” Putnam wrote, “means less of virtually every form of civic participation and social involvement.”
HALPERN: As Bob sometimes put it, I think, rather elegantly, when we were looking forward in terms of technology or the Internet and of course, even pre-Facebook and so on, would it be, in his words, a “fancy television”? In other words, it will isolate us more and more. Or would it be a “fancy telephone” and would connect us more and more?  Because technology has both those capabilities. So when I played video games when I was a kid, you basically did them mostly by yourself or with a friend. When I look at my teenage kids playing videos, they’re actually talking to each other all the time. To some extent it looks like, to me, that we get the technology that we want, and even this is true at sort of a societal level.

What do we use our wealth to buy?
So one of the arguments you can make, in my view is true anyway, by explaining some of these differences in the trajectories across countries is in Anglo-Saxon countries, we’ve often used our wealth to buy technology and other experiences. That means we don’t have to deal with other people — the inconveniences of having to go to a concert where I have to listen to music I really like, I can just stay at home and just watch what I want and so on and choose it. And even in the level of, if I think about my kids versus me growing up, I mean when I was growing up we had one TV and there were five kids in the household. You know, had to really negotiate pretty hard about what we were going to watch. My kids don’t have to do that and probably not yours either. There are more screens in the house than there are people. They can all go off and do their own thing. To some extent, that is us using our wealth to escape from having to negotiate with other people, but that isn’t necessarily the case. Some people and some countries seem to use their wealth more to find ways of connecting more with other people. And the technology has both these capabilities and we can’t just blame it. It’s the choices we’re making and how we use it and the technology which we’re, kind of, asking and bringing forth.

Perception affects reality
DUBNER: It reminds me a bit of — we once looked into the global decline of hitchhiking, for instance.  One of the central reasons being that people no longer trusted strangers to not kill each other, really, is what it boiled down to, even though there was apparently very little killing involved, but just the fear of one. And yet now, Uber is a 60-some billion-dollar company that’s basically all about using technology to lure a complete stranger into your car. Which, I guess, argues, if nothing else, the fact that technology can be harnessed very much in either direction. 

What is the actual prevalence of bad behaviour?
HALPERN: That’s right. Indeed, so, as you say, there’s actually two points here, and there’s a really important behavioral one, which I think we’ve only figured out in recent years to bring together these different literatures, how does it relate to behavioral scientists versus those people studying social capital? We look like we have certain systematic biases about how we estimate whether we think other people can be trusted. And in essence, we overestimate quite systematically the prevalence of bad behavior. We overestimate the number of people who are cheating on their taxes or take a sickie off work or do other kinds of bad things. This doesn’t seem to be just the media, although that may reinforce it. It seems to be a bit how we’re wired as human beings. So why is that relevant and why does this have to do with technology? Actually, technology can help you solve some of those issues. So when you’re buying something on eBay or you’re trying to decide where to go using, you know Trip Advisor, you’re actually getting some much better information from the experiences of other people as opposed to your guesstimate, which is often systematically biased. So it turns out it’s a way we can sometimes use technology to solve some of these trust issues. Not just in relation to specific products and “Should I buy this thing from this person?” but, potentially, more generally in relation to how do we trust other people because, ultimately, this social trust question must rest on something. It must be a measure of actual trustworthiness. 

Social Capital as the Unifying Force for Functional Democracy?