Why is Everything Broken?: The Decline of a High Trust Society

I’ve lived in America now for over 26+ years. It is a really different place now to say the least. I remember a high functioning, high trust and optimistic society.A place despite some slight dysfunction at the edges, stuff just worked. Boy, has that changed. Especially the high trust piece. I read a great piece by Adam Butler on the importance of trust and probably one of the reasons the West rose: https://thechoiceengine.substack.com/p/the-strip-mining-of-trust

"Trust is lubricant. It is the grease that lets the gears turn without grinding, the oil that prevents the machinery of cooperation from seizing. And because it is lubricant, it is invisible when it works. No one notices the oil until the engine burns out.

What does the market see? Trust does work markets might otherwise intermediate. Friction creates demand for products. When trust disappears, someone must sell its replacement. The lawyer who drafts the contract the handshake didn’t need. The compliance software that monitors the worker who was once trusted to do her job. The credentialing body that certifies the competence that reputation once established. The background check that investigates the neighbor who was once known. The audit that verifies the books that were once taken on faith. Each of these is a profitable service, and each becomes more profitable as trust erodes. There is now an entire industry—call it the friction industry—whose revenues depend on the continued destruction of the commons it has learned to replace.

Trust does not appear in GDP. Its absence does. When neighbors watch each other’s houses, no transaction occurs; when they install surveillance systems, GDP rises. When a handshake closes a deal, no lawyer bills; when contracts replace handshakes, the legal industry grows. The successful destruction of trust registers as economic growth—more services sold, more professionals employed, more activity to measure. A high-trust society looks, to the econometrician, poorer than a low-trust society frantically purchasing substitutes for what it has lost. We have built our measure of prosperity around what can be counted, and trust cannot be counted—only its expensive replacements can. This is how a civilization can impoverish itself while every metric shows it getting richer.

The economists call trust “social capital,” but the name obscures the crucial asymmetry. Trust is not like money. It is more like topsoil—built up over generations through countless small depositions, easily washed away in a single season of careless extraction, and once gone, recoverable only on timescales that mock human planning. The farmer who strip-mines his soil for a decade of bumper harvests will leave his children a desert. The society that strip-mines its trust for a generation of efficiency gains will leave its children something worse: institutions that still stand in their accustomed places but have been hollowed out from within, and a friction industry selling services to navigate the rubble.”

Basically there is a whole new industry that has built up around verification and adopting to the new low trust world we are in. This and continual overfinancialization and PE-ization of the US economy has really been damaging to Americans. The low trust society we have is the result.

“This is the race to the bottom that market fundamentalism calls “competition.” Each firm that defects from trust-preserving practices gains a temporary advantage. Each defection degrades the commons. The tragedy plays out not in a shared pasture but in a shared reservoir of social capital that no one owns and everyone draws down—until nothing remains to draw. And in the aftermath, the friction industry collects its rents: compliance consultants to manage the workforce that is no longer trusted, HR software to monitor the employees who are no longer known, legal teams to paper the relationships that used to operate on a handshake.

Private equity has refined this extraction into a playbook called brand arbitrage. Acquire an institution that has accumulated reputational capital over generations—a regional hospital, a beloved newspaper, a century-old consumer brand. Extract value by cutting the quality that built the reputation while riding the residual trust. The brand will carry the degraded product for years before anyone notices. By the time trust has fully eroded, the fund has exited, returns secured. The shell remains. The commons has been enclosed.

The extraction also triggers arms races that consume what trust would have conserved. Surveillance begets gaming begets more surveillance; credentials that can be gamed demand more credentials; fraud that exploits low trust demands detection that sophisticated actors learn to evade. Each cycle forces greater investment in verification, compliance, and enforcement—resources a high-trust society would have devoted to cooperation and production. 

But these resources do not disappear. They flow to the industries that sell verification, compliance, and enforcement. The arms race is not merely overhead; it is revenue—and because it is revenue, it registers as growth. The econometrician sees prosperity where a society sees decay. An entire sector of the economy now depends on the perpetuation of distrust, and that sector has every incentive to ensure the arms race continues. The extraction machine doesn’t merely deplete trust; it creates the incentives for its own metastasis."

I get it. What Butler describes is at macro economic level. At the political level the same erosion in trust happened too. First, we had Iraq War 2 where we went to war and accomplished what? All due to Bush Jr & his NeoCon moron advisors. Then the Great Financial Crisis in 2008 where Wall Street was bailed out but regular folks were not. Followed by the cultural wars & rise of Woke & DEI garbage. Then add on top the gross incompetence we saw of almost all the global and national institutions in 2020 Covid pandemic lockdowns. The disastrous presidency of Biden (who I voted for embarrassingly enough). No wonder we have so little faith in our institutions. Our corporate and political elites failed us. They have proven to be grossly incompetent and venal. I know the Clintons, Obama & Biden were all corrupt but at least  pretended not to be. Congress is full of crooks. Under Trump 2, the corruption and self dealing has become so open that people call it GAG=The Golden Age of Grifting. It is so obscene. There are some days I feel like BIATFD aka “Burn It All The F-ck Down”, but my pragmatic dad mind takes over and I get back on track.

Add on top the impending AI wave that is coming where there will be many white collar jobs wiped out. Yet Silicon Valley folks say “trust us” AI will be good for you. No surprise most Americans and most regular people don’t buy it. The tech we have built has both lifted and hurt them. 

Understanding the history and how we got here is the first step to fixing our low trust society. Not sure it’s possible but we have to try. I remember it could be worse, despite everything it always can be worse. And there is always hope. 

It starts with getting yourself and home in order first. Get strong. Understand where the world is going and how the economy will look in the Age of AI. Position yourself properly. Get rich by actually making and building stuff, not just by pure financial methods. Build your network. Help others. Build trust. We all need each other in the upcoming storm. 

To sum this up even simpler and better, David Mattin wrote: 

“But I know what I'm doing:

— Own hard assets.

— Find meaning through people and nature.

— Make your family a place of stability.

A harsh wind is coming. You're going to need each other.”