SONG BY BOB DYLAN
Social trust manifests in all sorts of ways, and it’s often amorphous and difficult to measure. We sense its presence or absence, but exactly what is it? Is it our trust in strangers, or our trust in institutions, or a warm and fuzzy feeling that our society isn’t falling apart?
BY CHARLES HUGH SMITH ON SUBSTACK
There are three solvents of social trust: 1) the self-aggrandizement of insiders; 2) decay of competence, and 3) precarity, generated by soaring inequality / cost of living and the decay of social mobility, all of which erode confidence in the social contract, i.e. our confidence that the system isn’t rigged to benefit the few at the expense of the many.
These are of course related, but let’s tease them apart. Once insiders focus on maximizing their personal gain as the purpose and goal of their employment, the value of the institution’s service to the public / customers decays behind a flimsy screen of self-serving PR promoting the successes of the hollowed-out institution.
Even if insiders are devoted to serving the public, if their ability to perform the necessary work is impaired due to under-competence, the public’s trust decays. Rather than look for incompetence, which presumably could be fixed by replacing the incompetent with the competent, the real problem is under-competence, a subject I addressed in The Catastrophic Consequences of Under-Competence (subscribers/patrons only).
The basic idea here is the organization has lost the core competencies needed to handle anything other than day-to-day processes. In other words, those inside the organization think they have what it takes, until challenges arise that they do not fully recognize or understand due to institutionalized under-competence. Here is an excerpt from my essay:
We all understand human error: someone was tired and misread the situation, or they were impatient. We also understand incompetence: the individual simply didn’t have the knowledge and experience needed to make the right decisions and take corrective action.
Author Charles Perrow studied organizational weaknesses that generate flawed responses to what he calls “normal accidents,” responses that made the situation far worse. In other words, the system itself increases the risks of normal accidents becoming catastrophic accidents.
In other words, as organizations become more complex, the staff no longer has the competence required to manage challenges and crises that were previously considered part of the job.
When self-interested insiders no longer care about the organization’s under-competence, this is toxic to social trust. On a society-wide scale, this decay erodes the social contract, the unstated but implicit understanding that the system is functional and fair, i.e. a level playing field, and we “get what we pay for,” i.e. we will receive fair value for our work and money.
Soaring inequality, the rising cost of living and the decay of social mobility are all indicators of an increasingly unlevel playing field and a decline in the value of our work and money, even as we’re constantly assured that we have the best of everything.
This reliance on artifice and propaganda is also toxic to social trust. When we sense that we’re just marks / chumps being ripped off by corporations and institutions, and the gains are going to the few at our expense, we lose trust in the system.
No wonder social trust has been declining for decades. This is inversely correlated to rising inequality: as inequality increases, social trust declines.
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The widening gap between the the few and the many is reflected by this chart: those who find the system works very well for me have great trust in the institutions that employ and enrich them, while the rest of us, i.e. the marks and chumps being stripmined, have very little trust in our elites or the institutions that empower them.
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Consider Higher Education, the vast “industry” of universities and colleges tasked with imparting higher levels skills and knowledge. That the emergence of student loans–from near-zero two generations ago to $1.75 trillion in “free money” to higher education–enabled a vast expansion of shiny new buildings and well-paid administrators is beyond question.
This chart shows federally backed student loan debt–$1.48 trillion–out of a total (federal and private-sector debt) of $1.75 trillion. Note that Higher Education managed to expand for decades without any federally backed student debt. In 20 years, federally backed student debt rose from $87 billion to $1.48 trillion. How did the “industry” survive all those postwar decades as it expanded at an unprecedented rate?
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Two generations ago, critics inside and outside the “industry” were already questioning the value of the education being offered to students, for example Ivan Illich’s Disabling Professions and Deschooling Society , and Donald Schon’s The Reflective Practitioner: How Professionals Think In Action, in which Schon, a professor at M.I.T., explored how little was understood about how students learn real-world skills in management and other professions.
That student enrollment in the Higher Education industry has plummeted from 18 million to 15 million in the past few years reflects not just demographics but an erosion of trust in the value of what’s being taught. The real test of the value of what’s been sold as a valuable education lies ahead, when extraordinary challenges will reveal that what’s been taught largely qualifies as under-competence.
The same can be said of what’s being sold by Corporate America, as the quality, durability and value of goods and services has declined to the point of parody: in effect, Corporate America’s “party line” is: our products and services are garbage, but if you upgrade to Premium, you’ll suffer less.
That this doesn’t inspire trust in the status quo is obvious to the many, but the few continue living in their protected bubble, confident that since I’m doing so well, everyone is doing well.
Loss of social trust has consequences which are difficult to predict. The first-order effect is precarity, the general sense that life is increasingly precarious on multiple levels. The second-order effects start with the unraveling of the social order and proceed from there.
Social Trust: It’s Not Warm and Fuzzy, It’s the Money, Honey
That most of us live in a low-value, low-trust economy of shoddy goods and services hidden beneath high-tech frictionless, faceless transactions is not recognized.
Social trust manifests in all sorts of ways, and it’s often amorphous and difficult to measure. We sense its presence or absence, but exactly what is it? Is it our trust in strangers, or our trust in institutions, or a warm and fuzzy feeling that our society isn’t falling apart?
In several critical ways, social trust isn’t warm and fuzzy, it’s all about the money, honey. In high-trust societies, transactions are frictionless and low-cost. In low-trust societies, transactions must go through multiple levels of verification, trusted third-parties, etc., each of which is costly.
Correspondent Bruce H. illuminates the differences between high-trust and low-trust transactions:
“There must be a high degree of social trust in order to make business transactions. If you think the other person is likely to take the goods and not pay, you are not likely to engage as freely, and the “shadow work” of ensuring that a transaction is honored drains the economy.
In cultures where cunning and deception are seen as laudable, business transactions are slow, proceeding only carefully, in a time-consuming way because both parties have to ensure the other’s compliance at every phase of the arrangement. This is costly.
In cultures where personal honor take primacy, a quick handshake is sufficient and work can begin immediately, confident that payment or the exchange will proceed to both parties benefit.
That, in essence, is what my father told me about his experience of doing business around the world.
There are places where you just discuss what is needed and agree on a price shake hands and write it down, there are places where you make sure the paperwork is in order and signed before you work, there are places where you make sure they have the money they claim they have and do all the paperwork and get some up front, and there are places where you make sure the money is in the hands of some secure third party (which, of course costs money) before you sign any agreements.
This also absolutely correlates between the relative wealth of these places. The places with the least trust are the poorest, those with the highest levels of trust are the wealthiest, all other factors being equal.”
It’s the money, honey: low-trust = poor, high-trust = wealthy as cumbersome, time-consuming costly transactions suck the life out of an economy.
There are other financial aspects of high-trust / low-trust societies. In high-trust economies, transactions are the core of the economy. The vast majority of transactions occur online or with complete strangers. In low-trust economies, trusted relationships are the core of the economy, and so business is conducted in much smaller circles which are connected by trusted go-betweens, often related by family or other close social ties.
This relationship-based economy was the model used in the ancient world, and it works well when trade and communications took months or even years. It works well on high-value transactions, for example, ships carrying luxury goods long distances. It works less well in a globalized, commoditized economy where the volume of transactions and business is enormous and covers a range of goods and services.
We can understand the U.S. economy as bifurcated into high-trust / low-trust segments which are difficult to tease apart unless we analyze the society and economy through the lens of class, an unpopular analysis in our supposedly classless culture.
High-value goods and services still tend to function on the level of relationships, while the shoddy, low-value goods and services are strictly transactional. The wealthy have connections, the rest of us get automated customer-service apps.
The wealthiest few reap fortunes from the low-value automated transactional economy that they don’t have to endure.
Consider the “value” of an elite university education. The cost is higher than a standard-issue university, but not that much higher. Compare the student who spends $100,000 obtaining a diploma from a second-tier “good” university, and one that spends (or gets scholarships) $150,000 to graduate from an elite university. The difference is in reputation, of course, and entree to elite institutions, but also in the relative ease of making connections.
On rare occasions, outlier institutions such as Black Mountain College (1933-1957) offer unique opportunities for commoners to make valuable connections with luminaries, but as a general rule the “high value” goodies are reserved for the elite, which is why the top 1% has great trust in the same institutions that the bottom 99% have lost trust in.
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That most of us live in a low-value, low-trust economy of shoddy goods and services hidden beneath high-tech frictionless, faceless transactions is not recognized, much less understood as a manifestation of wealth-income inequality. Yes, we trust institutions: we trust them to rip us off, ignore our queries, mess up simple transactions, sell us rubbish that falls apart or is “no longer supported,” stripmine us with hidden fees and burden us with endless shadow work to keep all their kludgy apps and digital services functioning.
This raises a question: what happens in a society of intertwined high-trust and low-trust when polycrisis starts applying great pressure on social coherence and institutions?
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Those living in a high-trust circle of relationships and connections will do just fine, the rest of us in steerage will be on our own. It’s a good idea to start forging our own network of trusted, high-value connections because “when you’re thirsty, it’s too late to dig a well.”
How Do We Fix the Collapse of Quality?
Every product now has an “extended warranty” admission of the collapse of quality and durability.
There’s a great uplifting hope swirling around the potential to fix what’s broken, and so here’s my question: how do we fix the collapse of quality and durability that we now take for granted? What do I mean by the collapse of quality and durability? Here are a few examples of many.
1. Appliances that were once built to last 70 years now fail in 7 years (or less). A reader recently shared the story of a GE chest freezer his parents bought 70 years ago–not a fancy freezer, or a top of the line unit, just the standard model everyone bought. That freezer is still running great, 70 years later.
Compare that to the anecdotal accounts we hear all the time of costly new refrigerators failing after a few years. The repairperson is called in, they check it out, and inform the owner it’s not worth repairing. So the three-year old fridge is hauled off to the landfill.
Let’s say the fridge lasts a grand total of 7 years. That’s a 90% decline of durability. Under what sort of bewitchment do we declare this something other than a complete collapse of quality and durability? Think about it: we now have to buy 10 appliances over three generations, where we once could buy one appliance that would last three generations.
2. Off-the-shelf shoes from Costco that now literally fall apart long before they wear out. For the past 30 years, I’ve bought whatever shoes Costco is stocking as work shoes–for yard work, light construction repairs, etc. Now the Costco shoes literally fall apart before I can even put much wear on them. Please examine the following photos.
First, the soles detached from the toe of the shoes. I re-attached the soles with epoxy glue.
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Then the rest of the soles detached.
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Note the paucity of adhesive. The manufacturer scrimped on perhaps 25 cents of adhesive and 75 cents of extra labor (if that–how much time does it take to apply more adhesive?), in effect guaranteeing obsolescence / failure. Meanwhile, Costco profits are soaring.
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How much would it have cost Costco to demand some actual quality control and pay an extra dollar for a product that wasn’t designed and manufactured to fail? Would I have paid an extra dollar for a product that was assembled to last long enough to wear out? Yes. After all, what’s the difference between $29 and $30? Not enough to matter, but the difference in quality does matter.
I often mention shadow work, the work we consumers have to do to keep the crapified products and services Corporate America sells us functioning. So Costco profits from selling products designed to fail because I’m supposed to throw these rubbish shoes in the landfill and dutifully go to Costco to buy a replacement pair of planned obsolescence.
But being irksomely frugal, I did the job that Costco’s manufacturer was supposed to do, which was apply sufficient adhesive so the sole of the shoe would actually stay attached to the rest of the shoe. In other words, I had to perform this shadow work at my own expense, enabling Costco’s profits to swell because I did their work for them.
Like the slowly boiled frog, we’ve habituated to the collapse of quality and durability, as the cartels and monopolies only sell a dizzying array of planned obsolescence.
3. The app is crap. It takes an endless amount of shadow work to keep all the digital devices and systems we now depend on running, as the devices and software are KPO kludgy planned obsolescence. I laid all this out in recent posts: Is Anyone Else’s Life as Stupidly Complicated by Digital “Shadow Work” as Mine Is? (5/22/24)
Digital Service Dumpster Fires and Shadow Work (2/14/24)
If AI Is So Great, Why Is Managing the Digital Realm Eating Us Alive? (3/1/24)
4. The extended warranty admission of the collapse of quality and durability. A friend recounted a telling experience when he and his wife bought a new car, the Japanese brand always listed first in quality and durability. My friend passed on the costly extended warranty and the salesperson guffawed. “So you want to roll the dice?” In other words, buying the highest rated vehicles is now a gamble that nothing breaks down after a year, and so you better pay extra for an extended warranty as you’ll probably roll snake-eyes and be handed a repair bill for thousands of dollars.
Every product now has an extended warranty admission of the collapse of quality and durability, a profitable admission that look, we both know this product/service is designed to fail, so pay us more now or pay us more later, but this extended warranty is cheaper than the outrageous repair bill or replacement cost.
How is this not another example of Addiction Capitalism, in which the consumer has a monkey on their back? We can either get the nickel bag of smack (extended warranty) or the dime bag (Limited Edition, Premium, Elite, paying more for the quality that was once standard).
Move Over, Disaster Capitalism–Make Room for Addiction Capitalism
That monkey on your back comes in many forms.
We’ve all heard of Disaster Capitalism: the Powers That Be either initiate or amplify a crisis as a means of granting themselves “emergency powers” which just so happen to further concentrate the nation’s wealth and power in the hands of the few at the expense of the many.
Naomi Klein described the concept and cited examples in her 2008 book The Shock Doctrine: The Rise of Disaster Capitalism, and summarized the core dynamic: “Disaster capitalism perpetuates cycles of poverty and exploitation.”
Move over, Disaster Capitalism–make room for Addiction Capitalism.
Addiction Capitalism is my term for the last-ditch / desperation method of guaranteeing sales and profits when everybody already has everything: reduce the quality so everything fails and must be replaced, and addict your customers to your product or service which–what a surprise–only you or your cartel provide.
And since you’ve bought up all the competition and moated your monopoly via regulatory thickets / regulatory capture, consumers must continue paying–or suffer the consequences. Addiction Capitalism is capital’s last best hope when the essentials of life and novelties are both over-supplied. So the only ways to juice demand and maintain profits are 1) lower the quality of goods so they must be constantly replaced (Cory Doctorow’s “ensh**tification”) and 2) addict consumers to services such as social media and products such as smartphones, or create dependencies which are equivalent to addiction, such as dependency on weight-loss medications.
Just as the addict is dependent on a drug, patients are dependent on medications that must be taken until the end of their lives.
Jonathan Haidt’s new book offers a scathing indictment of the intentionally addictive–and destructive–nature of social media and smartphones The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness.
For another example of how Addiction Capitalism works, consider how tech companies sell a basic accounting software system for a small sum until it becomes a standard for households and small businesses. Then they eliminate outright purchase of the software and switch to a high-cost subscription model. Nice little history of all your financial records you got there; it would be a shame to lose all that by refusing to pay our monthly fee.
Put another way: going cold turkey and refusing to pay the subscription / prescription is going to be painful. That monkey on your back comes in many forms: checking your phone 300 times a day, obsessively counting “likes,” binging on streaming TV and snacks, junk food, fast food, and other addictive glop–the list is long indeed.
Addiction Capitalism is neatly summarized in this scene from Bruce Lee’s 1973 martial arts film Enter the Dragon, where the villain Han reveals his opium empire to martial artist Roper, played by John Saxon:
Han: “We are investing in corruption, Mr Roper. The business of corruption is like any other.”
Roper: “Oh yeah! Provide your customers with products they need and, uh, charge a little bit to stimulate your market and before you know it customers come to depend on you, I mean really need you. It’s the law of economics.”
That’s Addiction Capitalism in a nutshell: “customers come to depend on you, I mean really need you.” That presents us with a choice: “and you want me to join this?”
Anti-Progress, Breakdown, Reset
The indicators of breakdown and collapse are all around us, but we don’t dare name them because then they’d become a problem we can’t bury.
A reality doesn’t exist in the human experience until it has a name. If it doesn’t have a name, we don’t recognize it, and can’t discuss it. We may think we’ve already named everything under the sun but new things arise and need to be named to be fully experienced / grasped / understood.
I have a name for The Collapse of Quality: Anti-Progress, which is the subject of my new book The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century. Anti-Progress is the opposite of progress, the reversal of progress, yet it’s presented as “progress” to mask its true nature.
So we’re told the new appliance is “progress” because it now has WiFi, but the decay of quality and durability hidden behind the facade of “progress” is Anti-Progress in its most virulent form. We’re told ours is the finest and most prosperous system ever, yet 75% of the adult populace is now at risk of metabolic disorders–an unprecedented collapse of public health that can only be described as Anti-Progress.
Three-Quarters of U.S. Adults Are Now Overweight or Obese, with the inevitable result being over half the adult populace is diabetic or pre-diabetic, with catastrophic consequences for health and well-being:
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Is the collapse of the birthrate a positive indicator of social-economic health? No, it’s an indicator of Anti-Progress. When young people can no longer afford to have children, it’s an indicator of collapse, not prosperity.
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Are soaring disability rates a positive indicator of social-economic health? No.
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Are health insurance costs quadrupling in one generation a positive indicator of social-economic health? No.
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Anti-Progress generates breakdown. Consider this though experiment. Let’s say the landfills are all shut down, and we each have to store all our trash in our backyard or in multi-family buildings, piled in the parking lot, not for a day or two, but indefinitely. How long before the entire complex of civilization breaks down not from a natural disaster but from choking to death on overconsumption / “waste is growth”?
Breakdowns erode buffers and our ability to kludge a fix. Duct tape works for a while, but the next breakdown moots the duct-tape fix, and the entire machine grinds to a halt.
Anti-Progress generates breakdowns which cascade into collapse. This process is greased by optimization, which strips out redundancies, buffers, spare parts availability and in-depth repair capabilities as needless expenses that reduce profits. So when the breakdowns occur, they quickly snowball into collapse because the system was optimized to function as if nothing truly untoward could possibly happen.
The apparent robustness of “normalcy” fosters a detached-from-reality faith that the system is unbreakable, and we brush aside all the indicators of Anti-Progress and breakdown with magical thinking: AI will fix that. This faith and breezy confidence it will all work out without us having to do anything other than what we’re doing today is the dynamic driving collapse:
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After breakdown comes the opportunity to reset the system. There’s never any need for a reset until the system breaks down completely, i.e. collapse. Only after the failure of the status quo optimization is complete will we accept the reality that things have to change in some fundamental fashion.
All the “solutions” have consequences which must be literally buried or pushed out of sight, lest the Anti-Progress become undeniable. Quick, fire up the diesel-fueled dozers and bury the non-recyclable wind turbine blades. Oh yeah, AI is gonna fix this, so no worries–silly us!
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AI is gonna clean up the Great Pacific Garbage Gyre the size of Texas, too. This isn’t the only floating mat of plastic garbage in the seas, of course; it’s just one of several.
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The indicators of breakdown and collapse are all around us, but we don’t dare name them because then they’d become a problem we can’t bury. We could do something different, of course. We could recognize Anti-Progress and start discussing what kind of reset might be possible and what kind of reset might be sustainably serve human well-being rather than “growth for growth’s sake.”
Or we can keep burying all the evidence of Anti-Progress and shout, but look at the stock market–it’s going up! It’s hitting new highs! Everything’s great! Excuse me, but the banquet of consequences has been served. Best not to let it get cold.
