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.