THE headline on this piece overpromises. I don’t know how exactly to flip a low-trust society to a high-trust state. No one does, sadly. The question is one of the most important in economics, however. Poor societies are mostly poor because of a lack of trust. The laws and institutions that facilitate market transactions and long-run investment survive and work because of broad public buy-in: the common belief that rules should generally be followed because others will generally follow rules.
This week’s Free-exchange column looks at how new technologies are affecting trust relationships. The topic is a hot one at the moment; Tim Harford and Tyler Cowen recently wrote on similar themes. It seems to me that technology affects the role of trust in society in a few different ways. Technology can breed familiarity where it had not been…Continue reading