In his bestselling The End of History and the Last Man, Francis Fukuyama argued that the end of the Cold War would also mean the beginning of a struggle for position in the rapidly emerging order of 21st-century capitalism. In Trust, a penetrating assessment of the emerging global economic order “after History,” he explains the social principles of economic life and tells us what we need to know to win the coming struggle for world dominance.
Challenging orthodoxies of both the left and right, Fukuyama examines a wide range of national cultures in order to divine the underlying principles that foster social and economic prosperity. Insisting that we cannot divorce economic life from cultural life, he contends that in an era when social capital may be as important as physical capital, only those societies with a high degree of social trust will be able to create the flexible, large-scale business organizations that are needed to compete in the new global economy.
A brilliant study of the interconnectedness of economic life with cultural life, Trust is also an essential antidote to the increasing drift of American culture into extreme forms of individualism, which, if unchecked, will have dire consequences for the nation’s economic health.
Customer Reviews
I thought this was dazzlingly brilliant…:
Fukuyama outlines how the “intermediate social organizations” of society, under the Protestant ethic, permitted the development of modern capitalist structures; whereas in low-trust societies (where you cannot depend on the corresponding person to trust you, or you to trust him), only family oriented businesses could grow, and inevitably collapsed after the second or third generation. He links the development of these intermediate organizations–guilds, PTAs, unions, volunteer activities–to the social fabric that engendered trust. He comments that a country can “spend” this hard-to-develop social capital and eventually become a rigid, non-trusting, and economically backward state. Furthermore, Fukuyama points out that the United States probably is doing just that, in nearly all intermediate social organizations, which are now surrounded by litigious critics–the educational system, Boy Scouts, union-management conflicts, the Catholic Church (which has never trusted its parishioners to have other than the standard orthodoxy, and now has suffered enormous scandal), and so forth. The lack of trust in our country is seen as pointing to our economic future, whether for good or bad.
Fukuyama is a genuinely interesting and informative writer. In his sense of fairness, he also points to examples where trust is generated, and cites them as necessary for a country to make both social and economic progress. I really enjoyed the multiple perspectives that the author brings to his task of explaining how some countries are prosperous, and some are not. He is truly an innovative thinker.
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This book was written ( I bet)by unpaid graduate assistants. I borrowed it from the library to read before mr Fukuyama’s arrival to speak at a university.
The book was “written to order” to appeal to American conservatives. If Mr Fukuyama had really wanted to write about the construction/maintenance/increasing/decreasing of TRUST he could not have pointedly ignored the European Union. Nations and peoples with a thousand or more years of organised warfare are now at peace and trying to work together now that’s an exercise in TRUST BUILDING.
I asked Mr Fukuyama why, as the book doesn’t have America in the title, did he only mention distrust in medieval Italy and not the phenominal TRUST required to bring Germans, Brits and the French together. His reply “Oh .. people always want me to talk about their country. Next question.” well!….
I feel that this book is a dis service to Americans because as with so many political/cultural and economic books from the USA what is left out of the book adds to the hurly burly spiral of disinformation accepted as the truth about the world by many Americans and esp. uncrital conservatives. I am, of course by my own reckoning, a conservative - a mixed economy democratic christian from the U.K.(OK OK New Labour) So I am not hostile to the US, but this type of book and the supportive reviews sadden me. Good luck America and PLEASE read wider and TRAVEL!
Racism and religious bigotry masquerading as science:
Fukuyama trots out stereotypes that he must have picked up at his Japanese-Protestant father’s knee, under a thick veneer of impenetrable sociological jargon that can fool the occasional reader into believing that this is an impartial scientist at work. Like all stereotypes, Fukuyama’s are a blend of breathtaking overgeneralizations, and huge blind spots. And, like all stereotypes, they are utter nonsense.
The book attempts to update Max Weber’s “Protestant ethic” story to include some non-Christian societies. The basic argument of the book is that Catholics are unable to trust people outside their immediate family, and so unable to form associations that are not based on family ties. The same is true of the Chinese, claims Fukuyama. These are the Catholics of the Orient.
The Japanese and Protestants are able to transcend family ties and therefore form a vast range of associations that do not have a genetic basis, especially large professionally managed corporations.
The feckless Catholics and Chinese however are doomed to form business enterprises that can never be more than over-grown Mom and Pop operations. Fukuyama therefore has a gloomy prognosis for the economic miracles of China or Taiwan or Singapore–however brilliant a businessman Pop or Mom may be, sooner or later Paris Hilton will be minding the store.
There is an interesting chapter on Korea, where Fukuyama is at pains to show that however like wannabe Japanese/Protestants Korean business organizations may seem, they are really Chinese/Catholic at heart.
The book’s thesis is obvious nonsense. Dramatic counter-examples exist, such as the Chinese Communist Party or the Jesuits. Also, the broad idea that Catholicism or Chinese-ness contributes to poverty lacks a statistical basis.
I saw a recent article about thousands of Japanese orphans in China who were taken in and looked after by Chinese families after Japan’s World War II defeat. Rather surprising behavior in this “low-trust” society! Perhaps these Chinese had been somewhat civilized by the high-trust ways of the occupying Japanese.
underrated despite being an oversimplification:
I live in Europe close to the fault line between (in Fukuyama-speak) low-trust-land and high-trust-land and I have rarely read such an interesting book. In some ways the book is the successor to Max Weber’s magnum opus, The Protestant Ethic and the Spirit of Capitalism (published in 1905) about the impact of protestant religion and culture on economical success in Germany.
Rather than compare Protestantism with Catholicism and their economical impact on German citizens, Fukuyama divides the world into high and low trust societies. Within Europe low trust societies largely coincide with Catholic countries and high trust societies coincide largely with Protestant countries, hence some of Fukuyama’s work will sound familiar at times to a reader of Max Weber. Still, Fukuyama’s categorisation is not based per se on religious affiliation. Fukuyama is at pains to attribute the low trust of Italians or French to historical events or situations. At times it seems he goes out of his way to avoid attributing any causal role to religion. But the advantage of his approach is that his methodology in theory works in any culture outside the European Christian context. Fukuyama also applies his trust criterion on societies such as the US, Japan, Korea, Taiwan and China. The Middle East and Africa are conspicuous in their absence, possibly because there are few if any examples of so-called high-trust cultures in these parts of the world.
There are a few shortcomings to the book :
Fukuyama only draws economical consequences from the presence or absence of trust, for instance, he claims high trust cultures such as Japan and Germany find it easier to form very large companies, whilst low trust cultures such as Taiwan or Italy feel more at home in family companies. It is a pity he does not extend the field of study of consequences into areas such as corruption (low trust countries generally score higher on corruption), the law (for instance perjury is not regarded as a big deal in low trust countries), demographics (intermarriage, such as consanguineous marriages, is much more common in low trust cultures such as in the Middle East), etc…
The division of the world by Fukuyama into low and high trust cultures is very binary. Some studies by others into trust have first segmented the environment of individuals in concentric layers, starting with the immediate family, then friends, then the extended family, then the local community, then the country and then his or her civilisation. In such a scenario trust typically decreases with each layer which is further removed from the individual (although there are exceptions, such as in failed Islamic states where more trust is put by individuals in the Umma - all Muslims - than in the nation.), but the slope of the curve differs between low and high trust cultures. Still, as a simplification, the division into two extremes of trust is an interesting start.
Like all human phenomena, economic organisation can never be explained by one variable. But even if trust turns out to be only one of the variables which have a high correlation with economic structure, it remains a valid subject for a book like this.
Finally, some reviewers have accused Fukuyama of explicitly arguing that economic development is hampered by low trust, whilst I think he actually argues economic structures are merely different in both categories. Nobody will argue Belgium, a typical low-trust culture, is poorer in GDP per capita terms than - say - the neighboring Netherlands, a typical high trust culture that even shares its language with the majority of Belgians. But it is true that Belgian multinational companies are even rarer than famous Belgians.
Despite the simplifications this is still a very interesting book for those interested in the compatibilities or incompatibilities of cultures in the workplace. One of Fukuyama’s underrated books.
Trust!:
Summary:
The author claims in his chapter, Friction-Free Economies, that it is necessary to turn to a cultural characteristic like spontaneous sociability to explain the existence of large-scale corporations in an economy, or prosperity more generally. The question of spontaneous sociability is particularly important because we cannot take the older ethical habits for granted. A rich and complex civil society does not arise inevitably out of the logic of the advance of industrialization. On the contrary, Japan, Germany, and the United States became the world¡¯s leading industrial leaders in large part because they had healthy endowments of social capital and spontaneous sociability, and not vice versa. Also, the author emphasizes on the economic function of trust and spontaneous sociability. If we presume that if legal institutions exist, the presence of a high degree of trust as an additional condition of economic relations can increase economic efficiency by reducing what economists call transaction costs, incurred by activities like finding the appropriate buyer or seller, negotiating a contract, complying with government regulations and enforcing contracts.
In conclusion, traditional sociability can be said to be loyalty to older, long-established social groups. By contrast, spontaneous sociability is the ability to come together and cohere in new groups, and to thrive in innovative organizational settings. Spontaneous sociability is likely to be helpful from an economic standpoint only if it is used to build wealth-creating economic organization. Traditional sociability, on the other hand, can frequently be an obstacle to growth.
Critique 1:
In the article, the writer talks about the free rider problem. It is said that when a country which has communal solidarity, people will get resources without contributing to society as much as others. The solution, suggested by the writer, is to designate the work in unit base. And, the writer cited a successful example of Mao¡¯s policy, a famous Chinese leader, towards peasants. However, nowadays, it seems that it is more difficult to prevent such problems as the relationship between people become more and more indispensable. It is difficult to delimit the job by unit clearly as what was done in agricultural society in the past.
Moreover, there is no perfect government policy in the world as it is impossible to balance all the interests equally among people. For example, the free rider phenomenon is serious in some countries. In some cases in Hong Kong, the free riders are getting the government¡¯s subsidy without contributing to the society. Especially, during the economic depression, people are in hard time and the government tries to help them by providing subsidy to the public. However, in some cases, the subsidy fund for a family provided by the government is similar to the salary during an economic depression. Therefore, many people select not to work which can be said to be a kind of free rider. Even through it is known by the government, it is unpreventable. Therefore, nowadays, the free rider problem is not easy to combat with.
Critique 2:
In this article, author mentions about the economic function of trust and spontaneous sociability. It is right that a high degree of trust can increase economic efficiency and reduce transaction costs comparatively. But, in my point of view, it doesn¡¯t mean the companies can get great benefit and guarantee from the high degree of trust, their gains are very limited. In economic activities, we should take a minimal level of trust and honesty for every economic partner, even the companies which have good relation and cooperative experience with us. Business is business. When you choose high trust in appearance, actually, you are also taking high risk in disappearance stealthily. Because all the economic activities only focus on one goal-benefits.
As the author mentions, societies manifesting a high degree of communal solidarity and shared moral value should be more economically efficient than their more individualistic counterparts. This is due to the ¡°free riders¡± problem. This kind of problems cannot be avoided. The greater organizations become, the greater the tendency of ¡°free rider¡± is. Why it happens? One reason is those organizations¡¯ benefits or efforts are most influence or control, and in the organizations, his or her individual benefits or efforts are ignored. We can see, in a small group, because the group members are highly dependent on one another, and, also when a single partner slack off, which will be noticed immediately by colleagues. So, I think, it needs kinds of high degree of trust and solidarity in a group. Moreover, it would be helpful to put the organization and an individual interest together, create member¡¯s self-motive, and enact proper roles are also good methods to limit free rider in the group.
