Abstract
This paper suggests that personal trust is best understood as a discursively constructed social relation that arises when interaction between people is governed by the norm of reciprocity (according to which one good turn deserves another and that people should treat others as they themselves would like to be treated). It is argued that trust enables people to deal with their ignorance of the future and so act in a purposeful, goal-driven fashion even in the face of radical uncertainty. However, where there are imbalances of access to economic and cultural resources and to positions of authority, there may arise an imbalance of reciprocity, so that what appear to be relations of genuine trust may in fact be no more than a façade of trust that conceals a relationship of domination.
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Notes
This is not to say that earlier generations of Austrians have not recognised the importance of moral rules of conduct of the type which, as we shall see, underpin trust. Hayek of course set great store by the existence of such rules, writing that, ‘It is indeed a truth, which all the great apostles of freedom outside the rationalistic school have never tired of emphasising, that freedom has never worked without deeply ingrained moral beliefs and that coercion can be reduced to a minimum only where individuals can be expected as a rule to conform voluntarily to certain principles’ (Hayek 1960: 62). My point is rather that this awareness of the importance of moral rules did not lead on to a detailed analysis of the particular moral phenomenon of trust.
For a recent exception, see Ikeda (2006).
‘What, then, are the essential characteristics of true individualism? The first thing that should be said is that it is primarily a theory of society, an attempt to understand the forces that determine the social life of man and only in the second instance a set of political maxims derived from this view of society. This fact should by itself be sufficient to refute the silliest of the common misunderstandings: the belief that individualism postulates (or bases its arguments on the assumption of) the existence of isolated or self-contained individuals, instead of starting from men whose whole nature and character is determined by their existence in society’ (Hayek ([1945] 1948: 6).
The question of what that range of activities actually is will be addressed in a later section.
The point that a full appreciation of the nature and role of trust in contemporary socio-economic life requires an acknowledgement of the importance of radical uncertainty is a specific instance of Mises’s general claim that, ‘The uncertainty of the future is already implied in the very notion of action. That man acts and that the future is uncertain are by no means independent matters. They are only two different modes of establishing one thing ... If man knew the future, he would not have to choose and would not act. He would be like an automaton, reacting to stimuli without any will of his own’ (von Mises [1949] 1966: 105). In addition, indeed, in keeping with this Austrian position, recent years have seen economic sociologists argue that a focus on social structures (like relations of trust) in economic analysis is justified on the grounds that the latter play an indispensable role in informing and hence facilitating purposeful human conduct in the face of radical uncertainty (Beckert 1996; DiMaggio 2002; Dequech 2003; Bibow et al. 2005).
This is consistent with experimental evidence suggesting that subjects are more likely to contribute to the provision of a public good if they are allowed to communicate with one another (Ledyard 1995).
At one and the same time, each participant in such relations is also striving to develop a sense of personal identity, in this case, a sense of his or her self as being trustworthy (Lewis and Weigert 1985b: 466; Sabel 1993: 107–115; Hargreaves Heap 2000: 155–159; Khalil 2002: xxiv-xxvi; Seabright 2004: 91–93).
More specifically, the general category of ‘resources’ includes: material resources such as money, property and financial assets, authoritative resources, such as access to positions of formal power, which provide their occupants with the authority to make decisions and to exercise a measure of control over the actions of others, and discursive (cultural and symbolic) resources (such as information, knowledge, skills and educational qualifications’ and accumulated prestige, respectively), which enable one to legitimise one’s position and actions in public discourse (Pettigrew 1981; Pfeffer 1981; Astley and Sachdeva 1984; Hardy 1985: 388–395; Layder 1997: 80–81, 122–123; Thompson 1990: 150–154; Fairclough 1989: 43–108).
Consider, for example, how the power of orthodox economists—stemming, for example, from their control of appointments committees, editorial boards and curricula—enables them to exert considerable control over the meaning of ‘theory,’ ‘rigour’ and ‘science’ within the discipline of economics, to the detriment of heterodox economists of all hues (Strassman 1993, 1994; Garnett, Jr. 1999; Lewis 2003).
In the case of the workplace, low-trust employment relationships involve the use by employers of authoritarian, coercive control mechanisms such as direct supervision, harsh discipline and the threat of redundancy, while a high-trust, commitment-based environment is found in workplaces where high levels of job discretion, behavioural autonomy and career progression and security are found (Fox 1974; Reed 2001: 208–209). Workers enjoy countervailing power through their access to information and their control over labour and capital on which management depends for the achievement of its goals (Hardy 1985: 384–385).
We have seen that, according to the perspective outlined here, trust relations are based on, and reproduce, the norm of reciprocity, and that they facilitate purposeful human conduct in the face of uncertainty by underpinning a framework of (diffuse) shared obligations and expectations in which people can invest their commitment. However, because participation in relations of (genuine) trust is a risky business, involving people placing the responsibility for the performance of tasks which are significant determinants of their welfare in the hands of others, it should not be surprising if people sometimes prefer to use power to achieve the necessary coordination of activities instead. Dominant partners may prefer to use power rather than trust to ensure cooperation because the greater predictability associated with the former offers more immediate and calculable benefits than the uncertain rewards associated with genuine trust and reciprocity.
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Acknowledgement
I am grateful to the participants at the 2004 meeting of the Society for the Development of Austrian Economics and at the New York University Colloquium on Market Institutions and Economic Processes and to Emily Chamlee-Wright and Jochen Runde for their helpful comments. The usual disclaimer applies.
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Lewis, P. Uncertainty, power and trust. Rev Austrian Econ 21, 183–198 (2008). https://doi.org/10.1007/s11138-007-0038-9
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DOI: https://doi.org/10.1007/s11138-007-0038-9