Trust

...It makes considerably less sense to place China and France in the low trust category...

...One of the best known Arab proverbs is, "I and my brothers against my cousin, I and my cousins against the stranger" (or "against the world...

...He weakens his own argument about the centrality of social capital, however, by constantly referring to China and France as low-trust societies and contrasting them with high-trust Japanese and German societies...

...the enterprise to institutionalize itself and carry on beyond the lifetime of the founding family...

...In a society characterized by such a high degree of distrust one would expect political office-holders to surround themselves with brothers and cousins, and to gouge out the eyes of as many non-relatives as possible...

...Since the 1960s, however, America's "social capital" (defined by Fukuyama as the ability to engage in that sociability) has begun to decline...

...Members of "low trust" societies like China and France can build small organizations based on family or kinship, but because they distrust all nonrelatives they "have great difficulty...

...Hence large-scale, professionally managed economic organizations are relatively rare in China and France, and where they do exist they are creatures of the state, not the private sector...

...Banfield discovered that in southern Italy there are villages where even cooperation within families is highly limited...

...In fact, both high-trust Japan and low-trust China have made enormous economic strides, and for the moment, at least, China is the much faster growing of the two—rendering the stark contrast he draws between them to appear to be little more than a distinction without a difference...

...Rather, he meant that the great debates that had dominated the political discourse of the modern era over history's final goal—whether towards communism, fascism, socialism, monarchy, capitalism or democracy—were over, and that democratic capitalism had trounced all of its rivals...

...They were deposited on the side of a hill and told to build a road...

...I don't know whether Francis Fukuyama has ever read Hoffer, but his latest book can best be understood as an attempt to examine and extend Hoffer's insight: What accounts for a Joseph Shattan is a writer living in Silver Spring, Maryland...

...On the contrary, Fukuyama argues, "there are in fact two economic cultures arising in Asia—one Japanese and the other Chinese...

...Then I saw something fantastic take place," Hoffer recalled...

...What difference does it make to a nation's economic prospects if it has a high or low fraternization capacity...

...Such villages, Banfield demonstrated, suffer from terrible poverty not because of "exploitation" (the standard explanation), but because of a culture that discourages virtually all forms of collective endeavor...

...A ccording to Fukuyama (who popularized the phrase "the end of history" in one of the most widely-quoted and least-read essays of recent times), a society's capacity for, as he puts it, "spontaneous sociability" depends on the level of trust between its members...

...For if trust is asimportant as Fukuyama claims, one would expect high-trust societies to prosper and low-trust societies to languish...

...Differences will remain, and culture—not political or economic institutions—will account for those differences...

...Fukuyama's central insight—that a nation's competitive position is determined not only by conventional economic factors like land, labor, and capital, but also by its culture—is new and important...

...As for the United States, Fukuyama argues that for most of its history it has been, as Hoffer rightly saw, a high-trust society capable of prodigious feats of spontaneous sociability...

...in making the transition from family to professional management, a step that is necessary for 74 The American Spectator November 1995 economy won't be facing a new Chinese challenge on top of the already severe Japanese challenge...

...CI The American Spectator November 1995 75...

...As he writes, "Now that the question of ideology and institutions has been settled, the preservation and accumulation of social capital will occupy center stage...

...F ukuyama would have done better to distinguish between high, medium, and low trust societies, with China and France falling into the middle...

...A "rights culture" fostered by an ever-more intrusive state, and underpinned by a liberal ideology that exalts rebellion and subverts authority, has made Americans increasingly wary and distrustful of each other—so that, if the incident Hoffer recalled were to recur today, the result would be not a road but a class-action suit brought against the construction company for all the indignities suffered by the workers...

...Another problem with Fukuyama's book is his focus on East Asia, Western Europe, and North America, to the exclusion of other parts of the world...

...It makes a great deal of sense to call southern Italian villages(or urban underclass communities, the subject of another famous Banfield study, The Unheavenly City) low-trust societies...

...That, as it happens, is precisely the strategy Iraq's Saddam Hussein and Syria's Hafiz alAsad have followed, and it suggests that, far from being monstrous aberrations, these men are typical politicians operating in a rather low trust environment...

...A great virtue of Fukuyama's book is that it disabuses us of the notion that the West faces a unified "Confucian challenge" from the economies of East Asia...

...Members of "high trust" societies like Germany and Japan can cooperate easily and have relatively little difficulty forming large and efficient economic organizations...

...One of us, who had a pencil and notebook, took down the names, and we started to sort ourselves out...

...The good news is that, in the foreseeable future, key sectors of the American TRUST: THE SOCIAL VIRTUES AND THE CREATION OF PROSPERITY Francis Fukuyama Free Press/457 pages /$25 reviewed by JOSEPH SHATTAN society's "capacity for fraternization...

...Fukuyama's book, therefore, contains both good news and bad...

...One morning, a construction company sent two trucks over, and everyone who could climb aboard was given a job...

...High-trust societies like Japan, capable of building large, privately owned economic organizations, have moved into capital-intensive areas of the global economy that compete directly with American industries: automobiles, consumer electronics, and semiconductors...

...The bad news is that our ability to fend off the Japanese challenge will erode as our transition from a "trust culture" to a "rights culture" imposes all sorts of heavy "transaction costs" —complex bureaucratic rules, detailed job contracts and endless legal wrangling—on our already beleaguered corporations...

...It happened during the 1930s, when Hoffer was a migrant worker living on skid row...

...But it also reflects a wider trend—a belief shared by many thinkers that, with the end of the Cold War, culture has displaced politics as the central arena in which the fate of nations is decided...

...S cattered throughout the writings of the late Eric Hoffer—the self-educated longshoreman who became one of America's most distinguished social thinkers—are references to an incident that obviously made a lasting impression on him...

...To Hoffer, the fact that "a shovelful of slime scooped off the pavement of skid row" could successfully carry out a complicated engineering feat illustrated some of the great strengths of American society: "A genius for organization and teamwork, a flexibility which makes possible an easy adjustment to the most drastic change, an ability to get things done with a minimum of tutelage and supervision, and unbounded capacity for fraternization...

...A truly low-trust society was described by Edward Banfield in his classic work, The Moral Basis of a Backward Society...

...Low-trust Chinese economies can compete in labor-intensive sectors where flexibility rather than scale is important, such as textiles, computer components, and banking...

...Some of the most interesting examples of the effects of low trust on a society's institutions are to be found in the Arab world...

...We had so many carpenters, blacksmiths, bulldozer and jackhammer men, so many cooks, first aid men, and even foremen...

...At the end of history, culture becomes the crucial determinant of a nation's place in the global economic order...

...We put up the tents, cook shack, toilet and shower bath, and next morning we went out to build the road...

...But Chinese culture, with its "apotheosis of the family . . . as the social relationship to which all others are subordinate," places real limits on China's ability to compete in areas of the global economy that depend on large, professionally managed corporations exploiting economies of scale...

...All over the world, it seems, it's the culture that counts...

...Do different societies and cultures have different capacities...

...It was an expert job...

...F or Fukuyama, a concern with the economic consequences of culture flows naturally from his earlier speculations about the "end of history," a phrase with which he did not mean to suggest that wars and revolutions, coups and countercoups, were things of the past...

...But the fact that the whole world, more or less, agrees about the desirability of free markets and democratic institutions doesn't mean, according to Fukuyama, that in the future all societies will look increasingly alike...