Fukuyama’s Trust

1. Fukuyama’s Trust The role of trust and trust networks in the society

2. Overview • Brief review of the books of Fukuyama • Key concepts • Derived ideas • Conclusions

3. The End of History and the Last Man • the end of communist and fascist dictatorships in many countries (East and South Europe, South America, Far East); • Hegel’s concept of ‘end of history’; • original state (Hegel, Hobbes, Locke, Rousseau) and social contract; • foundation: Jewish-Christian tradition of egalitarianism and original personal freedom; • forces: • a. the evolution and accumulation of rational science; • b. the personal pride (the ‘thumos’);

4. The End of History and the Last Man • the best is the liberal capitalism = free market + individual freedom rights; • the liberal capitalism: • a. allows and supports the development and accumulation of rational science; • b. channels the personal pride into non-destructive forms and the people focus on economic well- being; • c. allows regular change and refreshment of the social leadership; • this is the end of history in the sense of Hegel.

5. Trust: the social virtues and the creation of prosperity • the neoclassical economic theory explains up to 80% extent the economic events, the rest depends on the role of the state and of the social organization of the society; language of good and bad; • family centred societies: • a. China and the Confucianism: big families; • b. South-Italy: isolated small families; • c. North-Italy: family networks; • d. France: the family as the counter pole of the strong state

6. Trust: the social virtues and the creation of prosperity • common characteristics (family centred societies): a. the trust ends at the border of the family; • b. family based companies, which are usually small; • c. strong state, dream carrier: state bureaucrat; • institution centred societies: Japan, Germany, US • common characteristics (institution centred societies): • a. they have customs to extend the trust beyond the limits of the family; • b. large companies with the involvement of non-family members at high positions; • c. extensive civil society and strong bounds between group members

7. Trust: the social virtues and the creation of prosperity • advantages of high trust: • a. lower administration costs, higher institutional reliability; • b. large and efficient organizations; • disadvantages of low trust: • a. corruption and trade with influences; • b. small and inefficient organizations; • objective: reproduce the trust system of the society

8. The Great Disruption: human nature and the reconstitution of social order • particularly well documented with statistical tables; • how to measure the social disruption: • a. criminality; • b. family disorganization; • c. reduction of trust in social/political institutions; • effects of social disruption: • a. reduced family socialization; • b. higher juvenile delinquency; • c. decreasing trust in social/political institutions;

9. The Great Disruption: human nature and the reconstitution of social order • the disruption is culture-dependent; • how to stop the disruption and restore the order ? • the humans evolved to cooperate and to organize themselves; • homo hierarchicus; • the limiting factors of spontaneous organization: • a. trust radii; • b. transparency; • c. justice / equitability; • d. long standing bad choices;

10. The Great Disruption: human nature and the reconstitution of social order • what to do: • a. decentralized religion; • b. civil society networks; • c. self-regulation and self-organization to reduce crime; • effects of capitalism on the social capital: • a. destruction: new technologies, freedom of dissidence; • c. construction: freedom of self-organization, free market competition; • past experience: moral revolutions, well-founded modernization, integration of immigrants;

11. Key concepts • Trust in individuals and institutions: • expresses the beliefs about the predictability of actions; • Economic, social and leadership efficiency: • how efficient are in handling problems, specially problems of growth; • 3. The role of the state: • to what extent should the state intervene in the development of spontaneous economic and social order

12. Key concepts 4. The role of culture and religion: the language of good and bad 5. Family socialization: cultural value transmission if exists 6. Delinquency and crime: decreases the trust, special attn: juvenile delinquency 7. Homo hierarchicus: evolutionary determination of humans to cooperate and organize;

13. Key concepts 8. The evolution of science: the rational science accumulates and fuels the social evolution; 9. Networks of interaction: the personal and institutional networks are means of trust generation; 10. Integration of immigrants: essential to solve growth problems

14. Derived ideas • Information transmission: • the behavior of individuals and organizations transmits implicit information by the rules to which they conform; • 2. Predictive stability: • if a society is able to process the information originating from its environment and itself and predict the problems and their solutions it can stay on its desired path of development; • dynamic and static stability;

15. Derived ideas 3. Levels and circles of trust: the belief about the predictability of actions varies in steps and each step has its associated trust radius; 4. Optimal level of trust and efficient organizations: the organization is efficient if the overall trust level within itself and within its connectional context is high enough; having high trust sub-networks with low inter-network trust level can be very disturbing;

16. Derived ideas 5. Integration of scientific advances: those societies have higher predictive stability, which are able to integrate fast the scientific and specially technological advances in their organizations; 6. Simple, transparent, coherent rules applied with consequence: the cultural and legal rules are better if they have these qualities, otherwise their support to the predictive stability of individuals and organizations is reduced;

17. Derived ideas 7. Networks of individuals and organizations are sources of trust: their trust producing ability depends on their rules; 8. The legal system: extends the trust by the belief that the rules of it will be respected and applied as announced;

18. Derived ideas 9. Value selection of cultures: critical to have expandable trust systems and to create trust generating organisms and mechanisms; 10. Integration of dissidents and immigrants: provides the intra- and inter-social mobility necessary for the growth and channels the sources of delinquency into non-disturbing outcomes;

19. Conclusions • Those societies can build efficient economy and social organization, which have wide and efficient trust networks, sustain and integrate scientific development, and manage their internal and external dissidents. • The humans evolved to form hierarchical organizations in order to increase their individual and group predictive stability. This does not guarantee that they necessarily build efficient societies. • The choice of cultural values and procedures has a strong influence on the ability of a society to become efficient in the sense of predictive stability. The societies may survive for long time without being efficient. • The regeneration of trust resources is a key issue for the current western societies