Joseph Stiglitz on Trust

Joseph Stiglitz has an excellent essay on the value of trust, and the lack of it in today's society.

Trust is what makes contracts, plans and everyday transactions possible; it facilitates the democratic process, from voting to law creation, and is necessary for social stability. It is essential for our lives. It is trust, more than money, that makes the world go round.

At the end, he discusses a bit about the security mechanisms necessary to restore it:

I suspect there is only one way to really get trust back. We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators to enforce them. We did just that after the roaring ’20s crashed; our efforts since 2007 have been sputtering and incomplete. Firms also need to do better than skirt the edges of regulations. We need higher norms for what constitutes acceptable behavior, like those embodied in the United Nations’ Guiding Principles on Business and Human Rights. But we also need regulations to enforce these norms ­ a new version of trust but verify. No rules will be strong enough to prevent every abuse, yet good, strong regulations can stop the worst of it.

This, of course, is what my book Liars and Outliers is about.

Posted on December 30, 2013 at 9:55 AM • 53 Comments

Comments

selfDecember 30, 2013 10:34 AM

trust? how can there be trust when we have this United Stasi of America?

Spiegel has this article about a catalog of surveillance gear available to NSA's targeted operations.

Shopping for Spy Gear: Catalog Advertises NSA Toolbox
http://www.spiegel.de/international/world/catalog-reveals-nsa-has-back-doors-for-numerous-devices-a-940994.html
Some of the equipment available is quite inexpensive. A rigged monitor cable that allows "TAO personnel to see what is displayed on the targeted monitor," for example, is available for just $30. But an "active GSM base station" -- a tool that makes it possible to mimic a mobile phone tower and thus monitor cell phones -- costs a full $40,000. Computer bugging devices disguised as normal USB plugs, capable of sending and receiving data via radio undetected, are available in packs of 50 for over $1 million.

Gizmodo talks about another Spiegel article according to which NSA actually intercepted packages to put backdoors in electronics.

The NSA Actually Intercepted Packages to Put Backdoors in Electronics
http://gizmodo.com/the-nsa-actually-intercepted-packages-to-put-backdoors-1491169592

tomDecember 30, 2013 10:49 AM

Interesting in the article's comments how many people think religion restores trust. Does not compute, really. Many religious people have proven quite untrustworthy.

One of the comments also points out the distinction between trust and trustworthiness...

'When love is gone, there's always justice.
When justice is gone, there's always force.
When force is gone, there's always Mom.
Hi Mom!!"

-- Laurie Anderson, "O Superman," ca. 1982

wumpusDecember 30, 2013 11:09 AM

Trust who and verify how?

This site has had a long focus on what the NSA has been up to, I don't think it is remotely possible to either trust or verify them (slashing the NSA's budget is beyond the comprehension of our congresscum).

If the issue is trusting the privileged class (be they politicians or the bankers they shower money on), I can't see them acting any different as long as a privileged class exists (and the moment you allow a politician to win and have his vote count for millions of people, he is by definition highly privileged). Note that a direct democracy would not require such privileged people who will naturally be biased toward the banks. Once you create a privileged class, who watches the watchmen?

selfDecember 30, 2013 11:27 AM

Joseph Stiglitz as quoted by Bruce:
We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators to enforce them. We did just that after the roaring ’20s crashed;

Strong regulations? Embodying norms of good behavior? Appoint bold regulators?

Is he talking about Germany under Adolph Hitler in 1930's?

Because those are among the features that made Herr Fuhrer popular in that country.

Did they do similar stuff in USA back then?

John CampbellDecember 30, 2013 11:27 AM

Trust is what makes "money" possible, the trust that someone else will accept its value.

Civilizations cannot function without trust.

One microcosm to consider is driving... and your stress (and desire to NOT shoot someone in front of you) is if they drive like *you* would, so you can trust them to behave the way you would given equivalent situational awareness. (Think of this as ONE of the lead-ins to road rage...)

In talking about corporations... well, their lawyers exist to bring the practices of the company right to the hairy edge of the "letter of the law" while doing their best to dance on the broken bits of the spirit of the law.

For a long time we've been taught to extend trust to other before they have earned it, to bring us closer together, but, as more and more people-- usually corporate executives-- have done their best to violate the trust of those doing the actual work, basic trust is needing to be earned.

I'm not sure whether a world where we all have to earn the trust of those around us will be all that comfortable.

Frankly, if you look at many Christian teachings in a more secular fashion, the "Do unto others as you'd have done to you" worked well when the currency of trust was not degraded by the number of jackals we now find within what passes for our civilization. I've no idea where the tipping point currently is, but an MBA Apocalypse will likely be far nastier than a Zombie Apocalypse.

Trust is where people agreed on the SPIRIT of the Law; The focus on the LETTER of the Law is undermining any ability to return to a trust-worthy state.

AlanSDecember 30, 2013 11:41 AM

Stiglitz, like a lot of modern economists, is a little confused about Adam Smith.

Equilibrium theory is a modern invention that has nothing to do with Smith.

Stigltz confuses self-interest with selfishness. For discussion see:
http://adamsmithslostlegacy.blogspot.com/2011/11/difference-between-selfishness-and-self.html
http://adamsmithslostlegacy.blogspot.com/2013/10/adam-smith-never-believed-that-greed-is.html
For a discussion of the role of trust in markets see:
http://adamsmithslostlegacy.blogspot.com/2009/10/october-lost-legacy-prize-won-by-kieran.html

And Adam Smith understood that the pursuit of self-interest wasn't always beneficial. Bubbles and speculation were already well-known in the 18th C. and for this reason he believed in the regulation of the banking industry:

"To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum whether great or small, when they themselves are willing to receive them, or to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law not to infringe, but to support. Such regulations may, no doubt, be considered as in some respects a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments, of the most free as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty exactly of the same kind with the regulations of the banking trade which are here proposed" (WoN 2.2.94).

AnuraDecember 30, 2013 12:03 PM

Unfortunately, we have seen for the past 30+ years as our politicians represent us less and less and money more and more. Since the age of TV mass marketing and the televised debates, elections have required more and more money, and the media has been used to effectively brainwash more and more people. As long as the elite can continue to capture more and more of the economic growth to their estates, there is no incentive for them to support change, and if there is no incentive for the elite to change, there is no incentive for the politicians they have purchased to support change.

One part of the solution, and I know this is going to sound really really strange, is more politicians. The more politicians you have, the less influence any single politician has, the easier it is for third parties to get elected, the less return you get from your investment in a campaign. However, it's more complicated than that; it's not just more politicians we need, it's more politicians and a better electoral system. Plurality voting is basically one step above having entirely appointed leaders, and the two-party system that results mean that the two parties have complete control of the conversation. While they pretend to be political opposites, they are actually very close ideologically, and agree on which subjects should not be discussed at all. Furthermore, the two party system is great for entertainment news, meaning the people don't get to see all sides of the debate.

So the solution is not just more politicians, it's more politicians and proportional representation. Instead of having one candidate per district elected by pluarality, you can implement a system like single transferable vote, in which you have multi-winner districts, which means if you had 5 seats, then candidates who can get at least 16.7% of the votes get a seat, and the rest of the seats are filled in a way to minimize wasted votes; I like this system because it allows you to weed out individual candidates you don't like, while still providing proportional representation. Another option is to use a party list system, in which you vote for a party, and nation-wide seats are filled by proportion of total vote (this provides the best proportionality by party, except that it doesn't allow independent candidates, which I don't like). Consider this, if just 1% of our country prefers a third party, e.g. Green or Libertarian, shouldn't they have at least 4 seats in our 435 seat congress?

So, if you had implemented a system like Schulze-STV, and increased the number of representatives five-fold, what would happen? Well, congress would have to reorganize as a series of working groups to actually work efficiently, but more importantly the barrier to entry for a candidate goes down, campaign contributions as an investment gives you much less return, gerrymandering becomes incredibly difficult, third parties in office are able to challange the mutual beliefs of the major parties, and the major parties lose a lot of their hold on the media. More importantly, the people are more accurately represented; everyone deserves a voice, not just Democrats and Republicans.

But, of course, reform is not easy; reform that is not in the best interest of the two major parties is impossible as long as they hold a combined majority, so before we can get to the real solutions, we need to first stop voting for them. If we are going to have any hope of restoring trust, we need to start voting for independents and third parties, start getting them into congress and state legislatures. We can't expect overnight change, but if we are going to fix this country for the future, it is going to require tossing the status quo out the window.

On top of all of this, another problem remains: income inequality. As income inequality grows, the general public has less and less influence, and the elite have more and more influence. That's an incredibly dangerous balance of power, one that is not only economically unstable, but that has led to violent revolutions in the past, and that is the last thing I want to see. Unfortunately, if something doesn't change, if the public can't take back the government, it may not be tomorrow, it may not be 10 years from now, but I don't see how things will continue without a violent revolution and/or civil war.

jacksonDecember 30, 2013 12:17 PM

Don't trust religious leaders.
Don't trust people who don't trust religious leaders.

Don't trust law enforcement.
Don't trust people who don't trust law enforcement.

Don't trust the government.
Don't trust people who don't trust the government.

Don't trust banks.
Don't trust people who don't trust banks.

Feel better???

Nuts!

Matt DrewDecember 30, 2013 12:36 PM

Bluntly, he's wrong. We have strong regulations, including a Constitutional amendment that bars precisely this sort of behavior. It was ignored. The naive hope that a few changes to the law and adding additional government bureaucrats is going to have any impact is part of the problem. These people believe they are above the law, beyond it, separate from it - and they are right.

If this problem is going to be solved, it is going to be solved by all of us, refusing to tolerate this kind of violation of our lives and persons at every level. It will require changing our own lives in every respect - social, political, and technological. Nothing short of that is going to finally drive the idea home for these arrogant apparatchiks that they don't own us, can't control us, and are the least worthy to lead us.

DBDecember 30, 2013 12:37 PM

All this talk about "rebuilding trust"... has anyone thought of actually "being trustworthy" again? The President wants to restore people's faith in the system, yet he refuses to stop lying every single time he opens his mouth. You know how to tell when he's lying, right? His lips are moving. Why restore people's faith in lies? How about some truth-telling... then trust will naturally be restored over time, you don't have to "do anything" to restore it, when you come clean and start telling the truth.

But I fear that today's politicians are incapable of truth-telling. It's essentially impossible to ever get elected by it, nor hold office with it. So only the biggest pathological liars can possibly be elected.

DanielDecember 30, 2013 1:07 PM

Unfortunately, the essay isn't excellent. Very little fact and mostly political propaganda. Come on Bruce....

AnuraDecember 30, 2013 1:11 PM

@DB

You are correct, politicians who don't play the game can't get elected, at least, not to the extent in which it would actually make a difference. Trying to get them to be trustworthy is impossible without the public rejecting the current shenanigans in favor of reformists. We need to shake up the system so that we can replace our electoral system with something that will be significantly more difficult to subvert than what we have now.

Unfortunately, while I think it's possible to get the public to kick out enough politicians to put people before money and/or power today, it's significantly more difficult to convince a population that for the most part is not familiar with other electoral systems to support one (especially a population where so many believe that the founding fathers where omniscient, infallible, and relavent).

DRDecember 30, 2013 1:42 PM

From the essay: "I suspect there is only one way to really get trust back. We need to pass strong regulations, embodying norms of good behavior, and appoint bold regulators..."

Can anything be more inherently contradictory? Trust must be created through the threat of state political violence? The Orwellian state would then create the maximum amount of trust.

I could just as easily argue that trust is completely overrated, and should be replaced with an awareness that people behave not through benevolence, but through self-interest. In that sense, an increase of skepticism rather than an increase in trust could create more social stability.

Instead of "trusting" your car salesman, mortgage broker or politician, if you realize that he is operating through a narrow window of self-interest, you can more accurately predict the outcome. It was magical thinking that lead people to "trust" their mortgage brokers in the pre-08 recession, assuming that the banks had the borrower's best interest in mind rather than the bank's own self-interest.

It seems to me that "trust" is an emotional state rather than some object or process. It is essentially a suspension of reason.

Increasing the number of laws and "appointing bold regulators" to induce people into the emotional state of "trust" seems like a 1-way road to the police state.

Teach skepticism rather than trust, read the terms and conditions of all contracts, and ensure that there is always access to a court system or alternative dispute resolution venue, and you'll do a whole lot better than increasing state power in the pursuit of the ephemeral notion of "trust".

quicheDecember 30, 2013 1:48 PM

Bruce,

How can you to expect those you want to influence with your writings that trust in society has eroded when they can see, plain as day, that the financial system hasn't collapsed, that people are still making friendships, that many people still have a basic level of trust in the Government?

You need more concrete proof to refer to rather then conjecture.

AnuraDecember 30, 2013 2:15 PM

@DB

People are neither purely selfish nor purely selfless, and reenforcing the idea that people are purely selfish is the problem, but what's more is that we have bastardized the very foundation of society and what it means to be selfish. Humans naturally formed communities and worked together because they found that what is best for the group is best for everyone, however the problem is that we have been teaching people that what's best for them personally, through the magical free market, is by-definition best for everyone. This is the dynamic that needs to change, because a society in which everyone is taught to get to the top by cutting throats and stabbing backs is a really really shitty society to live in. It's not selfishness that breeds mistrust, it's a failure to see yourself as a part of the community, a failure to see that screwing over a part of society ends up screwing over all of society.

NickDecember 30, 2013 2:30 PM

"only one way to really get trust back....regulations to enforce these norms..."

He's got it completely backwards. You have regulations and enforcement instead of trust.

I used to live in Switzerland. When you go to the dentist in Switzerland, the dentist works on your teeth, and then a few days later you'll receive the bill mailed to your home. That's because Switzerland is a society where people generally trust each other.

When you go to a dentist in the USA you pay by credit card before they let you walk out the door. That's because the USA is a society where people generally do not trust each other. It has nothing to do with enforcement. Actually, enforcement of debts is probably more effective within many US states than it is in Switzerland.

I don't know what it is, in a society, that nurtures trust. Americans used to trust each other - but that was a long time ago. What caused the change?

MingoVDecember 30, 2013 5:59 PM

I strongly disliked this essay. It included too much left-wing propaganda, cherry-picked examples, unfounded claims of cause and effect, and completely invented conclusions.

The decline of trust in America is not due to a widening gap between Americans or to differences between the wealthiest 1% and everyone else. We had much bigger gaps a century ago when trust was greater. The decline of trust is not due to inequalities of wealth, education, or health.

A major contributor to lack of trust is (surprise, surprise) a massive increase in lying. Our school textbooks (especially history and civics) are filled with lies. Many of the news stories we read or see are filled with lies. Politicians seem to be comprised of lies. Our government agencies continually lie. Far too many law enforcement agents lie, even on the witness stand. Some lawyers, including district attorneys, often lie. Even scientists lie, as we have seen with climatologists.

Another major contributor to lack of trust is that individual trustworthiness is not deemed to be important. Honor is a has-been concept. I believe this is a baby boomer phenomenon. The baby boomers were wealthy and pampered (when compared to previous generations). When baby boomers had kids, they parented using the doctrine of moral relativism. Lies were OK if they weren't about something important or if the child could invent a halfway good justification. The baby boomers and their children aren't honest and don't expect honesty from others.*

The major impact of the decline in trust is that our default setting is distrust. Trust cannot be assumed; it must be earned. That's why eBay asks everyone to evaluate every transaction: buyers and sellers can build up a record of trustworthy behavior. Craigslist is the opposite: no ratings are provided. Transactions are very different: sellers and buyers are wary and are alert to scams. Sometimes we have to hope and trust: We get injured while traveling and need ER care. We trust the staff to give us good care and hope that the hospital isn't careless with our personal info. This isn't a great state of affairs, but it will take very long to fix (assuming that enough people care).

*I'm making sweeping generalization, but they probably are correct, on average. I'm a baby boomer but not a typical one. I don't like not trusting those in my generation.

Tim LDecember 30, 2013 6:27 PM

Trust isn't a primary, it depends on something else, honesty.

It represents a conceptual failure to confuse an effect with a cause, but that is what happens when the emphasis is placed on trust rather than honesty.

A single person on a desert island needs the virtue of honesty in order to survive. Failure to do an honest days work results in starvation.

In a social context the same condition applies, but with the added dimension of being able to exchange the products of each individual's labor to mutual advantage. Specialization and division of labor leads to more efficient production. Thus there is a natural harmony of interests between honest men.

Trust is an emergent relation that depends on demonstrating an evidence of honesty. To trust blindly or without reason is actually evidence of intellectual dishonesty.

And money doesn't depend on trust. There is among Thomas Jefferson's personal effects a small coin balance. He used it to weigh gold and silver coins to measure their weight, and by this means he avoided having to trust the statements of other people he traded with.

timDecember 30, 2013 6:52 PM

@MingoV

It included too much left-wing propaganda, cherry-picked examples, unfounded claims of cause and effect, and completely invented conclusions.

So just like your entire post? Except coming from the right?

AnuraDecember 30, 2013 7:04 PM

@MingoV

If you have scientists on your short list of distrustful parties, I think you have been hit a little too hard by the propaganda stick. There are three main places eroding trust that I see:

1) Politicians seeking power and relying on marketing to get votes rather than developing a platform. Since they have discovered that it's easier to get votes by selling themselves as a product to their customers than by being honest and running because of their beliefs, their focus has been on keeping campaign contributors happy rather than worrying about the needs of the voters.

2) Businesses that have shown time and time again that they do not care about the long term stability of the company, or the quality of their products, but short term profits; if they go under, it doesn't matter because by that time they have already gotten rich, and they can still gut it and sell it for parts

3) Entertainment news using fear to gain ratings (see "The Knockout Game"), making us distrustful of our neighbors, making parents living in constant fear for their kids. Fear breeds mistrust, but it is oh so profitable.

John CampbellDecember 30, 2013 7:24 PM

Actions speak louder than words when it comes to trust.

I suspect the best way to restore honorability -- which leads to trust-worthiness -- is to re-legalize dueling.

How do you negotiate in good faith with someone whose concept of honor does not approach your own?

Unless honor means roughly the same thing-- or meets, at least, a reasonable lowest common denominator-- you cannot expect trust in either direction.

Given the number of organizations these days that treat most of us as criminals (think RIAA, MPAA, etc, and the number of devices that "phone home") I don't see trust as being something these organizations will be given.

The Six Forms of Falsehood: Lies, Damn Lies, Statistics, Performance Benchmarks, Microsoft Schedule Announcements and Presidential Testimony.

SonnyDecember 30, 2013 7:25 PM

The current #1 cause of societal breakdown is the corporate-owned opportunist sitting in the White House. The #2 cause is the liberal bigotry that insulates him from most criticism and therefore enables him to run amok - that includes not only the media, of course, but also the endless stream of liberal dweebs (such as many of those who comment on privacy sites) who still insist on criticizing idiot Bush while never mentioning idiot Obama.

Kyle RoseDecember 30, 2013 7:34 PM

I agree with most of the criticism of this essay here. Bruce is making the classic mistake of thinking that adding another layer to the onion of regulation will somehow give us better results than every previous attempt. At this point, after so many failed attempts to regulate away the bad behavior of those who are de facto above the law—by which I mean the political class—I am skeptical that any more laws will help.

Regarding surveillance abuse and the NSA specifically, what we probably need is a much smaller and weaker government that cannot hide such a nefarious operation in the first place. The total state is uncontrollable because its rules are created and enforced by those it exists to benefit: the political class itself. There are no solutions in that direction.

ssolid71December 30, 2013 8:03 PM

Quis custodiet ipsos custodes? (Who watches the watchers)

I'm sure vigilance will be proposed as the answer. However, there is something contradictory about such a solution. The idea that the people can rise up and depose their subjugating enforcer implies that people could solve the problem of trusting each other without the enforcer, for certainly the enforcer will not enforce the contract people signed to overthrow it! In other words, they hold that we need an enforcer to solve the problems presented by not being able to trust each other when undertaking collective action. But then they tell us that, should this enforcer get out of hand, we can collectively agree to overthrow it, and trust each other to adhere to that agreement. So, is there a problem with collective action or isn't there?

MoofDecember 30, 2013 8:21 PM

This isn't a liberal or conservative thing. Folks on both sides of the isle in about equal numbers have been against the NSA spying bullshit. Get off your partisan high horses and realize that this is a human rights thing. Everyone's freedom is at stake. Your freedom, my freedom, the freedom of conservatives, the freedom of liberals, everyone.

AnuraDecember 30, 2013 8:24 PM

@Sonny

If you think Obama is a liberal, I've got a bridge to sell you. This is the problem with media I mentioned, spread the false dichotomy of Democrats being Liberals and Republicans being Conservative, pretend like one party is going to destroy the country while the other is going to be the savior, get everyone to fight, and all because it's entertaining. It's good for the major parties themselves since it keeps third parties from gaining traction.

In reality, they are both really close in economic and foreign policy, with the only major difference being some contention on social policy (but not a lot); on economic policy it's "You want slightly higher taxes than me!" and "You want slightly less regulation than me!". The debates between Romney and Obama were about who supported coal more, and how much they agreed on foreign policy. You basically have two right wing parties, differing only in how far right they are.

AnuraDecember 30, 2013 8:26 PM

Reabuclishbama's policies have been the same for thirty years, and they aren't going to change any time soon.

DanielDecember 30, 2013 9:12 PM

The biggest cause of the lack of trust is diversity. I agree with the educational philosopher John Dewey that trust is based upon the "likemindedness of the community." This is to say that trust-building is bottom to top and not as Bruce seems to think top to bottom.

TanukiDecember 31, 2013 3:04 AM

To my way of thinking, trust is all about branding. Life's too short for us to do full due-diligence for every interaction we have with others, so we use 'the wisdom of crowds' to support our interactions. Things like Consumer Reports, Tripadvisor, the NHTSA/EuroNCAP car-crash statistics, credit-ratings, P/E ratios, UL certification. You go and look at the numbers.

Trust-reputations are hard to earn and easy to lose: but the originally-referenced article seems to think you can regulate trust into existence through test- and inspection-regimes etc. which is to my way of thinking fundamentally flawed.

Example: 30 years ago Hyundai cars were universally horrid though they met all the legal requirements for being driven on highways. It wasn't through regulation that they upped their game to the point where now they're equal to the likes of GM or Ford. What was a brand that had little credibility has evolved that credibility. They could have failed to do so and had to pull out of the market. They could have gone bust entirely if nobody trusted the product.

Top-down single-source governmental regulation can't impose trust, specially when the regulators are nominated/controlled/steered by those most-untrustworthy creatures known as politicans, or they've suffered 'regulatory capture' by various commercial lobby-groups or NGOs.

To implement the Reagan-doctrine of "Trust, but Verify" we need multiple parallel competing sources of trust-verification branding. And we also need to accept that the untrustworthy - whether businesses, countries, governments or individuals, should be left to wither and die.

Anonymous CowardDecember 31, 2013 3:57 AM

Take a look at the documentary "The power of nightmares". A lot is explained there.

The main problem IMO is that they get away with it.

For example, Bush, Cheyney and Rumsfeld are mass murderers. Bush himself started 2 wars, killing at least 100,000 people.

Why? For hunting a ghost? Al Quaida doesn't even exist. It's made up!

The same goes for Tora Bora. And for Saddams chemical weapons. It's made up! It are all lies!

And the funny thing is, they wanted to empeach Clinton for lying about some cigar... He wasn't even lying.

How come Bush is still a free man?

As long as he is a free man, nothing is really gonna change.

Instead, they rather prosecute whistle blowers.

Talking about trust...

SonnyDecember 31, 2013 7:26 AM

@Anura: I very clearly said that Obama is insulated from criticism by the liberal press. Try to reply to what I'd said, rather than in a knee jerk using your canned criticisms inappropriately against what I never said ("Obama is a liberal").

The press should be raising a firestorm against the trampling of rights done by Obama, but instead they still attack Obama's critics (while still calling them 'racists', of course). The job of the press should be to oppose the tremendous power of the president, not to be the propaganda arm for Obama. I think your bridge is best sold to yourself.

This is a time when every person of good conscience should be united aganst the attacks on the Constitution. But the population is instead focused on Kardashians and tv sports.

And the fact remains: commenters on privacy blogs criticize just about everybody but the snake at the center, whch is Obama.


MoofDecember 31, 2013 7:32 AM

@Sonny

Both Bush and Obama are culpable for getting to the place we are today. Whatever hatred you have for Obama is not pertinent here. We need to focus on the true enemy here, which is mass collection of all of our private information by the NSA and other agencies.

AlanSDecember 31, 2013 7:42 AM

The Brandeis dissent in Olmstead versus US (1928) foresees what is to come and concludes with a paragraph that addresses the trust and government issue. Where's the Brandeis for our time?

"Subtler and more far-reaching means of invading privacy have become available to the government. Discovery and invention have made it possible for the government, by means far more effective than stretching upon the rack, to obtain disclosure in court of what is whispered in the closet. Moreover, 'in the application of a Constitution, our contemplation cannot be only of what has been, but of what may be.' The progress of science in furnishing the government with means of espionage is not likely to stop with wire tapping."

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficent. Men born to freedom are naturally alert to repel invasion of their liberty by evil-minded rulers. The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding..."

"Decency, security, and liberty alike demand that government officials shall be subjected to the same rules of conduct that are commands to the citizen. In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy."

SonnyDecember 31, 2013 8:11 AM

Moof leaps forward to prove my point, attempting to say that criticism shouldn't be focused on Obama - while making the false claim that my criticism of Obama is based on some hatred of Obama which isn't based on Obama's acts. (Will you make the "racism" claim now, Moof?)

Moof, in his defense of Obama, also conveniently ignored that I had criticized both Bush hand Obama. (Bush isn't in power anymore, Moof, if you hadn't noticed.)

Liberal bigotry dies hard, and that's why Obama gets away with whatever he does.

MoofDecember 31, 2013 8:15 AM

@Sonny

I am not going to take part in your strawman accusations. I am trying to get you to stop being so confrontational as you're turning away people who may otherwise support anti-surveillance views.

SonnyDecember 31, 2013 8:29 AM

@Moof: You are trying to get me to stop being "confrontational" by including your little "you're a racist" taunt, Oprah-style? Sure, Moof. Sure. People like you are part of the problem, not part of the answer. Don't kid yourself.

AlexDecember 31, 2013 8:38 AM

This was very interesting. Thanks. It helped to clarify some things I've been trying to think through on my own.

I apologize for the misuse of the ideas from the SICP lectures here. But trust is essential if you want to solve complicated problems.

This is true because we manage complexity by breaking hard problems into easier small problems, then gluing the solutions together. When you pass a smaller problem to someone else, you have to be able to trust their solution. If you can't, you won't feel comfortable gluing it to other pieces of the puzzle.

Let's take climate change as an example. We have to split the problem out into the theoretical parts, descriptions of possible practical solutions, analysis of the economic effects of implementing various solutions, the political problems involved with getting everyone on the same page, etc.

I understand the science in a very basic, hand waving sense. But really, I don't understand the models or the super computer simulations. I'd be easy to dupe. So I have to trust the scientists. And there's the rub.

Deniers don't trust them -- they think that they're being driven by a political agenda, so they reject their work. In a very direct way, this lack of trust is making it impossible for us to solve the problem.

We don't trust doctors who advise us to take vaccines. We believe that diplomats who understand Islam and speak Arabic have "gone native" and are more loyal to the countries they study than to our own. We believe that climate scientists are driven by a pathological hatred of large cars and the American lifestyle they represent. Economists who use models are grinding axes if we don't like their conclusions. Generals who tell us that a mission needs more troops than we want to send are simply afraid to fight.

"We report, you decide" is a slogan rooted in a lack of trust. Everyone has to look at all of the raw data and interpret it for themselves. It implies that if I can take a look at the facts and apply a little common sense, I'll be just as good as a General at estimating troop levels. It's crazy.

The main problem with this mentality is that it limits the universe of solvable problems to the ones that will fit inside of a single person's head. The only way to attack hard problems is to pass off the various parts of those problems to specialists and trust their answers.

If you look at many of our problems now, they boil down to a failure to manage complexity properly. Calling for bombings is easy, diplomacy is complicated. Deciding the deficit is the source of all of our economic problems is very simple. Slinging Bible verses around is easier than traditional theology.

Time and time again we're failing by being reductive.

I started to think about this in terms of blocks of code. I get lost in the complexity if a method fills too many lines, I have to break the thing into pieces.

Sanjay VermaDecember 31, 2013 12:30 PM

Trust is a very important issue,as there appears to be trust deficit in all walks of life.Regulations,and their enforcement will build up trust,but more important is behavioural change,which can come from within.In India,rule-enforcement mechanisms are weak,and the system is not transparent,so distrust creeps in.

Sanjay Verma
www.trust-is-the-key-sanjay-verma.blogspot.in

Dave FDecember 31, 2013 12:47 PM

Stiglitz lost me at the UN Declaration on Human Rights. Mention of the UN in an article on trust should be used only as a bad example.
Stiglitz then lost all hope with the idea that the remedy for loss of trust is regulation. Regulation written by people we don't trust and enforced by people we don't trust. I'm trying to avoid an ad hominem here, but this is just stupid. Not even sophmoric, maybe freshmanic.
The answer to loss of hope is proper behavior by those who are no longer trusted. It is not more lies, it is not more laws, it is not more enforcement. It is honesty and only honesty. The American public has now come to realize that they can no longer trust Obama, just as they came to realize that they did not trust Bush. For Obama, just as for Bush, the answer is to accept that you are damaged goods and very limited as to what you can accomplish. Anything else just pushes the distrust beyond Obama to the progressive/communists and eventially to the Democratic Party. Personnally I think that this is a good thing. The Republican Party is discredited and work is afoot to rebuild it into something workable, but not McCain/Romney (Boenher/McConnell). I think that that is also a good thing. Trust cannot be enforced, it can only be earned or given. All ideas to the contrary are the basis of despotism.

Mike AnthisDecember 31, 2013 6:17 PM

Golly, regulations for getting trust back. tl;dr

Trust is a local thing. Ligatures are more necessary for distant actors.

Trent, the trusted authority, doesn't exist. Either Trent owns motivations, or Trent is owned by someone with motivations.

Never mistake the government for Trent. Governments are ligatures.

Trust comes down to a cost/benefit balance.

John CampbellJanuary 1, 2014 8:59 AM

Hmmmmm...

We all have two basic modes: Competition and Cooperation.

In competition, we do not want to be dependent upon others (even though, in a technological society, we are dependent upon people cooperating... odd, that) and, as individuals, will not trust others.

In cooperation-- i.e. "in a team-valuing environment", the very thing that makes anything more than subsistence farming with nothing more advanced than rocks a sustainable option-- trust is an essential.

M$ had "stacking". I'm not sure if IBM still has the "high performance workplace", but that's probably been driving their attrition. These things undermine any sense of teamwork 'cuz they are focused on "washing out the dead wood" and leaving only the highest performing workers... and "highest performing" usually is poorly defined, though, IMHO, this is usually "best advertised as productive" within a bureaucratic structure, so those supporting the "high performers" (because they are stupid enough to STILL be caught in "there is no I in team" teachings) get flushed out from under those who are left.

Competition-- especially when it comes to job security-- undermines trust.

Trust is related to "honor" being that you trust those who share values with you (gawd, I'm starting to sound like John Ringo in "The Last Centurion"); "Every man for himself" narrows each person's self-interest and any shared sense of values is lost.

Some people I've worked with are "good team players"... and, it's funny, but you'd be surprised how much I trust their opinions and their work... while there are others for whom I won't *ever* want to connect with again because they proved themselves unworthy of my trust.

Friends may come and go but enemies accumulate... and "friends" will fall somewhere on the "trust-worthy" end of the spectrum.

YOU CANNOT REGULATE TRUST. YOU CANNOT DEMAND TRUST.

Brands-- in business-- is a form of "honor", saying "we stand behind the quality of our product"... so, over time, you can "trust" products with a brand-name over an extended length of time. Given that trust is an intangible, the bean-counters driving corporate profits do not see it as valuable since it does not improve share-holder value this quarter. If you, as a provider, do not back your "brand" and maintain it, well...

Trust is fragile and must be earned; Distrust, however, is corrosive and contagious; Be very very careful where you spill distrust.

Snarki, child of LokiJanuary 2, 2014 6:29 AM

@John Campbell:

It can take a generation to establish a valuable "brand", but just a year or two to destroy it.

Case in point: HP. Previously known for very high quality test equipment, now known for crappy printers.

"Cashing in" on long-established trust is a typical move by a greedy MBA, but has more in common with looting a business than running a business.

John CampbellJanuary 2, 2014 5:31 PM

@Snarki, child of Loki:

Agreed, like the Attaboy/Awsh!t balance sheets...

You make deposits of trust slowly but can burn a sh!tload of them in an instant...

Brands aren't about maximizing profits this quarter, it is looking forward several quarters into the future; Only a myopic bean-counter would think that liquidating such assets... once... is a good idea.

[VOICE SOUNDS_LIKE="Jeff Foxworthy"]"If you think the best reason to have a swimming pool in your back yard is to lower your fire insurance rates... you just might be a bean-counter for a major publicly traded corporation"[/VOICE]

vas pupJanuary 3, 2014 9:36 AM

@Alan S posting on December 31, 2013 7:42:
Thank you! Agree with every word in it.
@Self: Adolf's Nazi Party came to power through general election in Germany having republic form of government. I think you agree that dictatorship not equal democracy, and democracy not equal republican form of government.
@Anura and MingoV: you may find interesting reading on human motives of behavior 'Civilization and its Discontents' by Z. Freud (just 40 pages - 1929 - free on Internet).
@Stizlitz: agree that self regulation is not productive in banking sector in particular. Oversight should be independent (either/and Governement or/and NOGs not affiliated with banks) rules/regulation developed in such way protecting interest of the customers first, banks - second. I guess banks having their own capital and deposits of their customers should apply different level of risk taking on transactions/investments involved own capital (high risk) and customer's deposits (low risk).
General remark: reciprocity is the core for trust, commitment, loyalty as all of them two-way street. Trust of intentions does not exclude verification of actions (human error, etc.). In order to election work properly, choice should be not less of evil (two parties with similar agenda, but existence of real good option - may be independent candidate with sane platform.

AlanSJanuary 3, 2014 11:59 AM

@vas pup:

The entire Brandeis dissent in Olmstead is here:
http://www.law.cornell.edu/supremecourt/text/277/438#writing-USSC_CR_0277_0438_ZD

Olmstead was overturned in Katz 1967:
http://www.law.cornell.edu/supremecourt/text/389/347
Katz gave us the "reasonable expectation of privacy". What's reasonable is what's at stake now.

A key subsequent case is Smith versus Maryland 1979:
http://www.law.cornell.edu/supremecourt/text/442/735
This gave us the third party doctrine. Pen register data voluntarily shared with the phone company doesn't meet the reasonable expectation of privacy standard.

It's on basis on the 1979 case that Judge Pauley (ACLU versus Clapper) decided a few days ago that the NSA's metadata program is legal. Earlier in the month Judge Leon came to the opposite conclusion (Klayman versus Obama). Leon basically says that Smith is irrelevant as the circumstances and the nature of the technology are completely different now compared to what was at issue in Smith 1979. Leon cites the Jones 2012 GPS case, maybe one of the more important recent Supreme Court decisions, to support his argument.

name.withheld.for.obvious.reasonsJanuary 3, 2014 1:37 PM

I've identified two things that are important for consideration about trust, and I add, honesty. Let me first put a wrapper around my argument(s).

With near unanimity, the framers understood that over time governments are transmogrified by people changing both the basis and rational argument for specific policy or socio-political ideals. History is quickly tossed aside for convenience and relevance when specific agendas/agency drive political decision processes. We as the polity, are less informed that would be allowable in a healthy democratic republic--the evidence is more than obvious. Failure seems to be the honest/true objective of the political class and intelligentsia or there would not be the embrace of failed ideas, policies, thinking, and reason. Nowhere else in society is the absolute and abject failure of action, or inaction, continues or is allowed to maintain itself without being answered.

One:
As political science is more art than science, it is easy to discern that the "art" is less art and more ideological and dogmatic practices foisted by the party system(s). Only dogma can maintain ideas centered around absolute failure--this is where totalitarianism lives--without answering or countering dogmatic practices, socio-political outcomes become deterministic. Thus, we lack the political, moral, ethical, and societal honesty to maintain trustworthy institutions. We want to be lied to.

Two:
The 18th century is a revolutionary time by all practical measurements. Today we have lived on the largess of these movements and have not done the necessary work to maintain these ideals. Both Thomas Paine and Jefferson spoke eloquently of the basis of much of the bill of rights. The United States of America Declaration of Independence is the formal response to tyranny as expressed by the rule of King George. Paine's treatment of mis-use of the colonies and colonists is reflected in the publication "Common Sense" and continues or has become more relevant as in anytime in our history. This is the recognition that "honesty" is a victim when exercised by tyrants such as King George. Here be the results of believing the lie(s)--rest in peace dear citizen.

I mention this because I believe the courts to reflect much of the aforementioned, forgetting history (the ability to derive a new theory) and exercise abstract and irrational thinking in order to support some political agenda. This is the intellectual dis-honesty (ourselves) that makes the institution(s) un-trustworthy (United States government).

vas pupJanuary 3, 2014 2:52 PM

@Alan S: Thank you for the links.
We all lie: as Judge O'Scannlain tell us in
US v. Alvarez. I just start thinking may be trust is not just digital category: total trust or no trust at all and level of trust depends on area of interaction under consideration. Let say, you can trust somebody as professional (expertise), but knowing his weakness not be happy if your daughter is going to work as aide for him.
We all are not angels. That is why Government exists. But level of trust to political institution (President, Congress, Supreme Court, LEO, NSA, CIA, etc.) or/and business (banks, hedge funds, insurance/pharm industry, medical/lawyers community) depends on statistics of their activity towards general population, i.e. we should distinguish distrust to institution as a structure (unrepairable damage) and to particular 'actors' of those structures.
If statistics of actions displays trend that any person/actor being in charge of such institution or majority of particular business type can do nothing to restore trust into institution (takes time), then institution required substantial changes in functions, policies, authority etc. That should be done in civilized way. You know 'role behavior' in psychology (Milgram, Zimbardo). If institution is good in a core, role behavior of those inside should map this. Taking into consideration 'Laws of Immitation' by G. Tarde: subordinates immitate behavior of superiors, not vice versa, meaning to restore trust in institution, as very first step, top officials should be example of integrity (their good words, goods thoughts and good deeds are all in sync at least on subject of activity of particular institution - no generalization) to be trusted.

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