Francis Fukuyama garnered national attention with his book THE END OF HISTORY AND THE LAST MAN (1992), which argued that the demise of communism ended an age-old dispute over the proper ordering of society, and that liberal democracy was both the culmination of this historical process and the face of the future. With TRUST, Fukuyama once again courts controversy by challenging economic orthodoxy. He believes that a simple confidence in the power of markets and the “rational man” economic model may ultimately be as self-defeating as the socialist ideal. For Fukuyama, culture is the ultimate determinant of economic life, subtly molding the choices people make. Men and women have needs that transcend the desire for gain. As members of societies, they are enmeshed in webs of understanding and obligation. These cultural ties inform every economic decision.
Trust, according to Fukuyama, is the cultural key to prosperity. The level of trust in a society shapes the nature of its economic transactions and institutions. High-trust societies are marked by a high degree of spontaneous sociability. Individuals in these societies are able to build strong relationships outside such structures as the family. High-trust societies are able to generate the large corporations that form the cutting edge of modern industry. People in low-trust societies are disinclined to trust people outside their family or clan. They tend to form smaller family-run firms. Traditionally, nations such as Italy and China have been low-trust societies, and nations such as Japan, Germany, and the United States have been high-trust societies. Fukuyama warns that an erosion of trust in the United States during...
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