Inequality - is it driving the breakdown of trust in society?

Surveys taken in the US show that from 1958 to 2014 trust in government fell from 73% to 24%. From 1972 to 2014 trust in each other fell from 46% to 31%.

These statistics are indicative of a wider international problem.

Since the 1980’s we have seen the liberation of finance, the deregulation of banks, and the globalisation of labour. This has resulted in massive inequality with those in the top 0.01% tripling their wealth share.

But why is this important?

Numerous studies have shown that the erosion of trust falls in proportion with levels of equality. Trust is correlated with desirable social variables including; political participation, giving to charity, tolerance of diversity, volunteering work and engagement with civic institutions. It also plays a much more fundamental role in our lives, one which is outlined eloquently in Yuval Noah Harari’s book ‘Sapiens’. A collective vision - a shared belief in the myths and stories of our culture - underpin all our social interactions. Without trust we cannot form the relationships required for a prosperous and equitable future.

So how are inequality and trust linked?

The relationship between unfair distribution - manifest as income and wealth inequality - and levels of trust has been widely studied in the social sciences, with the level of economic equality posited as the strongest predictor of generalised trust (trust in strangers).

The relationship is driven by two main mechanisms. The first being overall economic inequality, that is, the gap between the rich and the poor, and the second being equality of opportunity, or how optimistic people feel about their chances of economic progress.

High levels of economic inequality lead to social polarisation. Economic stratification results in clear class divisions and the breakdown of the vision of a collective fate amongst members of the community. Adam Seligman, author of ‘The Problem of Trust’, questions whether hierarchal cultures can promote trust due to the undercurrent of belief that personal achievements are a product of unfair advantage. This is reflected in more unequal societies where we see higher levels of ‘particularised trust’, or trust in an ‘in group’. This reinforces social segregation leading to exacerbated divisions in heterogeneous communities, and intolerance of diversity.

Research by Eric Uslaner shows that the link between trust and subjective well-being is more pronounced than objective economic circumstance. This is interesting as it implies that perception of social status is a stronger predictor of trust than actual income disparities. It makes sense therefore that optimism, as mentioned above, is a very strong predictor of interpersonal trust. Large levels of inequality resulting from unfair distribution are rightly perceived as a hindrance to social mobility. Therefore, inequality breeds pessimism, with economic progression deemed as a luxury of the higher social classes.

The negative effects of reduced optimism are apparent when looking at the issue of political participation. Mistrust driven by inequality results in decreased voter turnout. This creates a vicious cycle in which those who are already under represented, relinquish more political power. This makes it unlikely that redistributive policies will be proposed by those running for office.

To add to this, if we look at the underlying cause of such high levels of inequality, we find an ideology which promotes individualism. Neoliberalism calls on personal responsibility to justify the socioeconomic position of the rich and the poor. This denigration of the “have nots” decreases the probability that redistributive policies will receive public approval, and further reinforces social divisions.

It therefore seems that unfair distribution erodes trust in multiple ways. It creates a chain of corrosive feedback loops which undermine the relationships on which our society is constructed. Unfair distribution is reinforced by ideology, and the resulting breakdown in trust creates a social and political situation in which trust cannot be restored.

So what’s the solution?

The obvious solution to the problem is redistributive policy.

The evidence suggests that the current means-tested welfare system could potentially be part of the problem. Such systems encourage the development of social segmentation through denigration of those on welfare.

The solution therefore appears to be in universal programs. Services such as free education promote equality of opportunity, and are part of the reason for such high levels of trust in countries such as Sweden and Finland. The result of these programs is an elevated feeling of social solidarity and a reintroduction of a shared fate for those at varying ends of the income distribution. In my opinion the most effective of the universal programs would be the introduction of a basic income. This proposal counteracts both mechanisms by which inequality erodes trust. It is simultaneously both redistributive and empowering – with more income being diverted to those who need it most, whilst instilling citizens with a sense of optimism that comes from a life of autonomy.

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