Conventional wisdom says that trust is on the decline in America, especially trust in institutions. Then why is there so much growth in social media and online business, both of which require trust? There is a difference between sentiments and actions.

The decline in trust

Pew Research has conducted studies on Americans’ thoughts on trust. (See here and here.)

• The percentage of Americans believing that the federal government can be trusted always or most of the time fell from 73 percent during the Eisenhower administration to 17 percent now.
• The biggest falls in trust in government came during the Johnson, Nixon, and George W. Bush administrations. The lowest point was 10 percent, during Obama’s first term.
• Americans trust elected officials the least of any group (around 39 percent), and scientists and the military the most (around 84 percent and 85 percent respectively).
• Americans largely trust each other to respect laws (about 75 percent) and reputable norms (about 70 percent expect others to help those in need).
• We trust much less when it comes to political conduct: About half expect others to not accept election outcomes or not to change their minds even when presented with new evidence.
• 69 percent say the federal government intentionally withholds important information that it could safely release, and 61 percent say the news media intentionally ignores important stories.

The rise of new trust machines

Paradoxically, during the steepest decline in trust in government — from 60 percent after the terrorist attacks of 9/11 to 17 percent seven years later at the outbreak of the Great Recession — there was also the launch of new trust machines: e-commerce and social media. (See here, here, and here.)

• E-commerce in America
  nearly tripled its share of US retail from 2007 to 2018, increasing from 5.1
  percent to 14.3 percent.
• Amazon’s revenue grew from $8.5
  billion in 2005 to roughly $13 billion around the start of the Great Recession,
  experienced some of its greatest growth years while the economy languished, and
  is now at about $265.5 billion, for an overall growth of 3,000 percent.
• The total number of social
  media users in 2004 was about 1 million. By 2018, Facebook alone had more than
  2.2 billion users. YouTube was close behind at 1.9 billion and WeChat had 1
  billion users.
• Social media is used by
  one-third of the world’s population, and by two-thirds of those that are
  online.
• The total number of hours
  spent on digital media in the US has increased from 2.7 hours per day per adult
  user in 2008 to 6.5 hours in 2018.

And much of this time is spent engaging with complete strangers. Not just in e-commerce, but even on Facebook: Studies in 2007 and 2011 found that 35 percent to 40 percent of Facebook users would accept friend requests from fake accounts. (See here and here.) (The point here isn’t about Facebook’s security — indeed at the times of these studies it ranked high and has since improved — but that humans engage readily with strangers online.)

Making sense of the paradox

How can we make sense of the paradox that people have a
sense of falling trust and yet act as if trust is quite high? In part the
answer is in the question itself. In survey responses, people articulate sentiments:
The falls and lows in people’s survey responses followed news patterns during
the Vietnam war (Johnson and Nixon administrations), Watergate (Nixon
administration), Iraq and Afghanistan wars (G.W. Bush administration), and
political division (G.W. Bush, Obama, and Trump administrations).

People’s actual behavior aligns more with their economic and social opportunities. Consumer confidence was around 97 when the Great Recession hit, but rose to 100 by October 2014 and has been around 101 throughout the Trump administration. (See here.)

And as Adam Smith observed more than two centuries ago, trust and understanding grow as people engage: Pew reported a weak correlation between people’s social media use and “higher levels of trust, larger numbers of close friends, greater amounts of social support and higher levels of civic participation.” (See here.)

Relative to other issues, Americans don’t see trust as that important, perhaps meaning that it doesn’t greatly influence behavior. (See here and here.)

• Confidence in government
  ranks as the 13th most important issue for Americans, although ethics in
  government ranks as the third most important issue.
• Americans’ confidence in
  each other ranks as the 19th most important issue.
• According to a 2019 study
  by IBM, only about 45 percent of people had recently updated their social media
  privacy settings despite awareness campaigns by social media providers.

What’s the bottom line? People’s online activities show that trust isn’t as low as surveys say. As authors M. Todd Henderson and Salen Churi point out in their new book The Trust Revolution, the internet provides new opportunities for trust building, which came just in time. This blog benefited from their insight.

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