Diving into Trust and the Economy: Part 1

Unemployment is going to go up to 40% in South Africa. Many countries in the Sub-Saharan region suffer from desperately high numbers as well. Informal sector aside, the burden of unemployment is a boiling cauldron of a lot of social problems for any nation. A witches brew mixed with political strife, staggered industrialisation, and a struggle to educate the populace.

The chat has been the same for ages. Invest in the private sector, improve skills, and other practical matters like that. These actions certainly do help the individual, but I think there are social and psychological issues lurking under the surface. To me, that is the lack of trust in our networks and institutions. When trust is low everything becomes subject to complicated checks and clannish behaviour from people. Punishment for unethical and criminal behaviour is inconsistently applied. Once bitten, twice shy. We will just operate in our silos, not unlike a massive bureaucratic environment with lots of complex rules.

No sharing of information, resources, and funds. Your clan wins, but the outside world operates like a Mad Max dystopia. You end up spending more time protecting yourself from losses than getting out there for some wins; that is the endgame when there is a breakdown in trust.  South Africans are not big on trusting the media and the government - key shapers of society. The extreme defensiveness is evident in the comically overdrawn 5 step interviews and jobs that require experience to get experience. The older generations often say that they used to walk in and shake the manager's hand for a job. I can’t verify how often that happened, but the narrative has changed. Has the standard risen or is there less appetite for risk? The risk goes hand-in-hand with economic expansion.

A high-trust society is seen as a place where people are predictable. People share ethical values and they have a high degree of interpersonal trust. Typically this shows in a lot of self-governance and high accountability. Low trust societies lack belief in one sticking to their 'word'. The lack of shared ethical values often creates an environment where the deceitful can operate with fewer roadblocks. The people cluster into their own "safe" groups to stand a chance. Bureaucrats enter the scene to deal with the problem of trust at scale. I always think that the more the government is involved in every little thing, the more room for stiflement. Don't forget corruption. Our governments in Africa love to touch everything.

Disputes are often filled with bad faith actors so the regulation comes in heavy. Corrupt labour unions and dodgy business owners deserve each other, but they create a hostile environment for the rest of us. Siding with one over the other will keep us in an unhappy place. That kind of tension brings about hesitancy in the capital-wielding class to invest further in the already small economy. No investment; no growth; no growth, no jobs. Merely making the population more educated (for the sake of productivity) can create a country like Italy; still dealing with a low level of trust and a high youth unemployment rate.

We do not place high trust in institutions. A lot of people do well to build up their own trust networks. The network encourages a model of great self-governance. Those networks shouldn't become clans that shield one from the consequences of their misdeeds. We will want to get out of our bubbles. That is true from big corporations to the street vendor. Our hesitance won't be cured if the citizenry chooses to model the corruption of our institutions. The issue of trust won't be solved without accountability in the long term. Only then may we not need unnecessary regulations to facilitate businesses. Less adversarial outlooks and minefield employment contracts. More alignment between workers and business.