Levels of "social trust" more important predictor of GDP growth than human capital, technological advancement/Nudge

I think this is super interesting. This guy who is the head of the UK’s “nudge” unit ( https://en.wikipedia.org/wiki/Nudge_theory ) thinks that social trust is a bigger predictor of gdp growth than anything else. Intuitively it makes sense that theres a correlation between societies being beneficial for all of the people participating in them, thinking things are fair, and them advancing and people thinking they can legitimately move forward and working to better their place in the societies. It also interests me given the fracturing of society and politics that seems to have happened over time, the increasing compartmentalization of social networks with their views, politicians not being willing to compromise, and in my view the increase in income inequality (not causal) and slowing gdp growth (I suspect causal). They think that increasing social trust is how to increase growth and efficiency economically.


Its interesting to note that apparently social trust is decreased by diversity.



i didn’t read this but i believe it whole heartedly as a business owner. the amount of wasted time and energy making sure you don’t get screwed is mind numbing. only beneficiaries are lawyers. Contracts used to be a couple pages (before my time but I’m told), now you need a 30 page agreement to cover every contingency.

Could it also be that countries with growing economies will have happier citizens who are experiencing those gains?

They went into that a bit.


I don’t want to make this political but I’m also reminded by this next piece of descriptions of some real estate developers who won’t go named that have histories of breaking contracts, not paying on time, making contractors bring them to court in order to make the people pay up and then trying to settle out of court for lesser amounts etc.

They also described how levels of social trust do correlate with other things, and though there isnt necessarily a causal link, I do suspect that higher

A big question to me is what can be done to increase “social trust.” These dudes suggest that governments can do some bit to help it along.


They also shit on technology and television, saying that it decreases social cohesion. They apparently think that people should be participating in civic organizations instead with that free time. I think that personally, I’d probably feel more comfortable dealing with a bunch of mormons in general, because I feel like theyd be on the level with stuff and stick to contracts, as opposed to say having to grease palms in NYC real estate. Its a cultural thing. Different norms. I think that social media is, as that dude said recently, compartmentalizing people and making things more divisive and breaking apart the social cohesion of the country, making it harder for politicians to get shit done. It seems like this needs to take place at a personal civic level though.

I get the feeling that its causal both ways. It causes growth, and it also is easier to develop when things are growing (or at least stable). I also suspect that in times when theres less growth on a micro level, when macro growth stagnates, inequality becomes more of a problem because people aren’t seeing the growth and bettered lives. And people are thinking that their kids arent doing better than they did, people getting squeezed and inequality increasing etc, fewer “good jobs,” more people moving to shitty jobs as things become more automated, the world becoming flatter etc.

entities are too big, including government. need to localize. boils down to what people (consumers) value. We’ve been brainwashed into thinking having more cheap stuff = more happiness, so that’s what the system is built to provide.

cw, I agree with your first posts. I’m not sure about the link between more cheap stuff and less social trust though. I dont see them as mutually exclusive, but I may be wrong.

You should post more normal stuff like this. Less of the ufos and the weird shit.

people are willing to deal with the unseen problems with bigness in exchange for being able to consume more, cheaply. Economies of scale requires scale. So businesses get bigger and bigger. Then big entities (think Walmart) transform communities. People no longer buy from people they know, they buy from faceless entities and social trust erodes. I think people are starting to better understand the cost side of cheapness and are reacting appropriately. In any case this dynamic may have little to do w maximizing GDP growth but I think definitely is related to maximizing happiness.

Also aliens are real.

its like when people value companies not based on their profitability, but their ability to gain users aka “user trust” amritie69?

Industrial Society and Its Future?

I knew a famous IBer who said “as trust goes down, costs go up”. True.

However the mistake is the obsession with GDP. If high GDP fixed everything, America would be a wonderland, not a shithole. :grin:

Yup, Ted was right about everything.