The Limits of TrustIssue: Fall 1995
Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (Free Press, 1995).
One of the standard put-downs of economists maintains that "about half of what economists say is right--the trouble is they don't know which half." In the same vein, Nobel Laureate Paul Samuelson, with a mixture of derision and contrition, has observed that "economists have correctly predicted seven of the last four economic recessions." In Trust: The Social Virtues and the Creation of Prosperity, Francis Fukuyama is, ostensibly at least, more generous, conceding that neoclassical economics is "80 percent correct." The "missing 20 percent of human behavior" is the concern of his provocative, insightful, and deftly-written book.
The central thesis of Trust can be summarized in the following syllogism:
Premise I: High economic performance--i.e. the "creation of prosperity" (and sustaining it)--is substantially helped by large, private economic organizations.
Premise II: The establishment and progress of large economic organizations (e.g. corporate giants such as IMB, AT&T, Toyota, General Motors, Mitsubishi, Siemens, and Daimler-Benz) is substantially helped by what Fukuyama variously refers to as "social capital," "spontaneous sociability," and "trust."
Conclusion: Therefore, high economic performance is substantially advanced by the prevalence of social capital, trust, and cultural values that sustains these qualities.