Trust: The Social Virtues and the Creation of Prosperity

Trust: The Social Virtues and the Creation of Prosperity by Francis Fukuyama

Different cultures have different degrees of trust. Some have a very narrow trust network, with trust primarily in family members. Others have a larger level of trust to an organization, the entire culture or beyond. The level of trust influence the structure.

Low levels of trust are shown in places like Southern Europe and China. In Southern Europe, with primarily familial trust, family business is important. Organized crime, like the Mafia is based on family units. In China, the family trust is shown in many small, family run businesses. This trust levels can continue to be reflected in some degree in the immigrant populations.

High trust levels are more present in Northern Europe and Japan. This influences formation of larger corporations. In Germany, the guild system has influenced corporate structure. In high school, people are routed to professional or vocational paths. Vocational employees spend significant time in training on the job. They also have the opportunity to move on to more professional level roles. The government tightly regulates the workplace rules. In Japan, the corporations typically provide lifelong jobs. The company is dependent upon the school one attends. Organizations have relationships with each other that help influence deals. Most of the workplace rules are "unwritten".

Trust levels don't dictate how the economy will evolve. However, they are strongly influential. Low trust countries have produced large companies, and high trust ones have family owned businesses. This book has significant description of companies and trust levels, yet identified few absolutes. Somebody with a different trust level than a population may have challenges in doing business - but may also be able to succeed where natives cannot.

The End of History and the Last Man

The End of History and the Last Man created quite a stir when it was published shortly after the end of the cold war. The book is primarily a response to Marx's belief that history would end with the Communist revolution. This didn't happen. Instead, Fukuyama argues that a modern system with democracy and capitalism as the base has emerged as the primary system in the world.

The book is quite dense and explores many different forms of political rule and economy. War and territorial aggrandizement are no longer preferred means of growth. In past times people were willing to risk death to become rulers. Those that wanted the easier life became servants. Now things have moved more economical with people choosing what to do and optimizing for it. Economies where the government pretends to pay people have workers that pretend to work. Included in the afterward is time looking back at the decades following the publication. 

Liberalism and Its Discontents

In the classic sense, liberalism has very different meaning than politically liberal of today. Liberalism involves a role of law, freedom and free flow of ideas. The modern left and right have taken parts of it to extremes to the detriment of society. 

The left has become excessively focussed on "marginalized group identity." Past oppression is used to favor certain groups. Others that are deemed "in power" are lessor, regardless of the individual's actual state. The left actively seeks to shut down debate that may be deemed offensive. (However, this target is subject to change. Some groups, such as Muslims can find themselves on both sides. The left protects figures such as Salman Rushdie that publishes books that many Muslims deem hateful, yet it protects Muslims from anti-Islam rhetoric from the right.) The left would like to force everyone to adopt new values that it deems appropriate.

The right has focussed on economic freedom. Regulations on business should be kept to a bare minimum. As many functions as possible should be outsourced to the public sector with as little as possible maintained as part of the state. The state should be protected from those that don't share the same values.  The right would like everyone to have the same classical values that are deemed appropriate.

Both sides attack liberalism as not being relevant for today. However, many of their attacks are based on the perversion that they see from the other side. Classic liberalism requires a rule of law and a system of equality for all. Evolution is a slow process built on uncensored debate. Different people may have different values. That is ok. One side should not force values on others. Gradually values may change as everyone continues to work together.

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy

Democracy leads to corruption and clientelism. Politicians will grant favors to get votes. This is especially challenging with states with a democracy before having a strong culture. The US had a really bad case of various types of corruption and clientelism, but managed to escape the worst of it, in part through wars. Japan had the strong culture before democracy and didn't have as much corruption. Many African countries were just carved out with arbitrary lines and are often basket cases. A group will tend to favor others in their group rather than the country as a whole.

The number of different veto points can influence a country. The British system with a powerful house and strong party system is a democracy that can get things done. China's one party state is even more effective. The United States has many different veto points. This makes things much slower and also enables many influencers to get their special favors. The United States has also deferred excessively to the legal system. Anyone willing to bankroll a lawsuit can exercise a form a veto power.

With a large country, bureaucrats are needed. The best systems let independent experts exercise autonomy in their area of expertise. Unfortunately, politicians like the meddle. Micromanagement or conflicting mandates make for a worse and inefficient government. A system is most effective if the government is run by employees chosen and dismissed based on merit. Letting a new ruler replace all the employees is bad as is letting government employees protect their positions with civil service unions. (Though the type of union can make a difference - cooperative unions like those in Northern Europe are beneficial.)

The book can be repetitive as it traces the examples of many different countries and how they have effectively (or not so effectively) developed political systems and how those systems have decayed. Countries are often heavily influenced by the system that was in place when they were formed as a modern entity. Latin American countries continue with the Spanish heritage that steer them in certain directions. There are also independent decisions that help make one country progress at a different speed than another. A stable rule of law may mean less short term gain for individual rent seekers, but will provide better long term outcome for all. 

Identity: The Demand for Dignity and the Politics of Resentment

Politics today tend to focus on identity, often at the expense of issues. Countries are put together with people that share a common identity. Political parties group people with different identities and attempt to meet the needs of these identities. People get involved with these identities. These identities can include country of origin, race, language, religion, sexuality or any other "group" that can be used. This culture of identity has superseded that of class.

Poor white people have "lost out" on the quest for identity. Blacks, immigrants, Hispanics, Native Americans and other groups have their associated identity. They can seek to advocate for their historical religion and culture. They also advocate for social justice and favored position. Whites are viewed as the "dominate" culture. They are not permitted by society to advocate for their culture. Their culture is viewed as imperialistic. Even advocating their positions is viewed as racist. While people would be shunned for using slurs for other groups, using slurs for poor whites is encouraged. The "elite" whites are primarily in control of culture and institution. They are the ones that also encourage the political correct views that shun "white" culture. The poor whites have been turned into persona non-grata. They are viewed as controlling imperialists, even though they have no power. Their culture, religion and institutions are mocked. They seek somebody to represent them. This is the situation that enabled Trump and Brexit. Trump finally spoke freely in a why that made these people feel they had an advocate.

The domination of "Identity" could eventually lead to the downfall of our multicultural society. Could this be the way in which a "unified" China easily dominates the United States?