Trust The Social Virture And The Creation of prosperity

by Francis Fukuyama

In his bestselling The End of History and the Last Man, Francis Fukuyama argued that the end of the Cold War would also mean the beginning of a struggle for position in the rapidly emerging order of 21st-century capitalism. In Trust, a penetrating assessment of the emerging global economic order "after History," he explains the social principles of economic life and tells us what we need to know to win the coming struggle for world dominance. Challenging orthodoxies of both the left and right, Fukuyama examines a wide range of national cultures in order to divine the underlying principles that foster social and economic prosperity. Insisting that we cannot divorce economic life from cultural life, he contends that in an era when social capital may be as important as physical capital, only those societies with a high degree of social trust will be able to create the flexible, large-scale business organizations that are needed to compete in the new global economy. A brilliant study of the interconnectedness of economic life with cultural life, Trust is also an essential antidote to the increasing drift of American culture into extreme forms of individualism, which, if unchecked, will have dire consequences for the nation's economic health.

Genres: Economics, Nonfiction, Politics, Sociology, Philosophy, Business, Political Science

480 pages, Paperback

First published January 1, 1995

About the author

Yoshihiro Francis Fukuyama (born 27 October 1952) is an American philosopher, political economist, and author.

Francis Fukuyama was born in the Hyde Park neighborhood of Chicago. His father, Yoshio Fukuyama, a second-generation Japanese-American, was trained as a minister in the Congregational Church and received a doctorate in sociology from the University of Chicago. His mother, Toshiko Kawata Fukuyama, was born in Kyoto, Japan, and was the daughter of Shiro Kawata, founder of the Economics Department of Kyoto University and first president of Osaka Municipal University in Osaka. Fukuyama's childhood years were spent in New York City. In 1967 his family moved to State College, Pennsylvania, where he attended high school.

Fukuyama received his Bachelor of Arts degree in classics from Cornell University, where he studied political philosophy under Allan Bloom. He earned his Ph.D. in government from Harvard University, studying with Samuel P. Huntington and Harvey C. Mansfield, among others. Fukuyama has been affiliated with the Telluride Association since his undergraduate years at Cornell, an educational enterprise that was home to other significant leaders and intellectuals, including Steven Weinberg and Paul Wolfowitz.

Fukuyama is currently the Bernard L. Schwartz Professor of International Political Economy and Director of the International Development Program at the Paul H. Nitze School of Advanced International Studies of Johns Hopkins University, located in Washington, DC.

Fukuyama is best known as the author of The End of History and the Last Man, in which he argued that the progression of human history as a struggle between ideologies is largely at an end, with the world settling on liberal democracy after the end of the Cold War and the fall of the Berlin Wall in 1989. Fukuyama predicted the eventual global triumph of political and economic liberalism.

What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such... That is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government.

He has written a number of other books, among them Trust: The Social Virtues and the Creation of Prosperity and Our Posthuman Future: Consequences of the Biotechnology Revolution. In the latter, he qualified his original 'end of history' thesis, arguing that since biotechnology increasingly allows humans to control their own evolution, it may allow humans to alter human nature, thereby putting liberal democracy at risk. One possible outcome could be that an altered human nature could end in radical inequality. He is a fierce enemy of transhumanism, an intellectual movement asserting that posthumanity is a highly desirable goal.

The current revolution in biological sciences leads him to theorize that in an environment where science and technology are by no means at an end, but rather opening new horizons, history itself cannot therefore be said to be, as he once thought, at an end.

In another work The Great Disruption: Human Nature and the Reconstruction of Social Order, he explores the origins of social norms, and analyses the current disruptions in the fabric of our moral traditions, which he considers as arising from a shift from the manufacturing to the information age. This shift is, he thinks, normal and will prove self-correcting, given the intrinsic human need for social norms and rules.

Reviews

[Rachel Bayles · Rating 5 out of 5]

Six stars. This book is like the answer to the universe and everything in it. Or at least the last couple of hundred years of history. I can't recall reading a book that so thoroughly clarified why the world is as it is. It should be on everyone's reading list.

[Jay · Rating 4 out of 5]

Trust: The Social Virtues and The Creation of Prosperity by Francis Fukuyama explores the role of social capital in promoting or eroding economic prosperity. The issue of social capital continues to receive excellent scholarship by many notable social scientists, including Robert Putnam and Charles Murray.

While these authors all note the role of religion in providing a framework for championing civic involvement, Fukuyama most explicitly credits leading Christian thinkers (particularly Max Weber) for advancing a common ethical system among its protestant adherents.

In its broadest sense, Fukuyama defines social capital as society’s ability to work together in groups and organizations for common purposes. It is through reciprocity, moral obligation and man’s duty toward community that well functioning commerce markets are created. Fukuyama adopts and elucidates Aristotle’s view that ethical virtue is mostly the product of habit (ethos) and our moral dispositions are formed as a result of corresponding activities. Fukuyama further argues that our habits are informed by local and national culture, which is heavily shaped by religious virtue through repetition and tradition.

Through Fukuyama’s cross-cultural study, societies with high social trust are able to adopt new organizational forms more readily, stimulating entrepreneurship, innovation and job creation.
As was advanced by Weber and has been further confirmed within contemporary society by Putnam, members of voluntary organizations hold a deeper degree of commitment to its values and stronger ties with one another than members of compulsory organizations. Seen globally, countries that have vigorous private non-profit organizations such as schools, hospitals, churches and charities are also likely to develop strong private economic institutions that go beyond the family.

Where communities are unable to come together to organize schools, hospitals, businesses or charities, there is a dependence on external centralized sources of authority such as government or the church. In such a society, people will fear and distrust the government while simultaneously believing in the need for a strong state to control their fellow citizens. Furthermore, low trust societies with weak institutions tend to have higher participation within organized crime.

Social capital has a significant impact on the vitality and scale of economic organizations. Where private firms are small, weak and family based, the state is forced to intervene to maintain employment by subsidizing large, inefficient public sector companies.

Fukuyama cites China as an example where the family plays a central role among social structures with a corresponding weakness of non kinship-based organizations. Within these societies, the industrial structure consists of small family businesses networked together in webs of interdependence.

Fukuyama links the prevalence of the Confucian worldview with its emphasis on five localized social relationships (ruler-minister, father-son, husband-wife, elder-younger brother, friend-friend), along with cultural duties in lieu of personal rights (as emphasized in western societies) as explanatory factors undermining social capital within China. He asserts that traditionally too much emphasis has been placed on a strong family structure which has weaken the bonds among people who are not related to one another and prevented the emergence of associational life based on something other than kinship.

Fukuyama presents a well researched argument to support his view that modern institutions are a necessary but not a sufficient condition for modern prosperity. As leading academics are uncovering 20 years after the publication of Trust, economic and broad-based household flourishing requires certain social and ethical habits if it is to work properly.

[Harooon · Rating 3 out of 5]

Why do some countries prosper while others languish? What predicts whether a society will succeed or fail? Having argued in his first book that liberal democracy was the culmination of human political development, Francis Fukuyama next turned his attention to the issue of trust. Without trust, humans cannot cooperate; without cooperation, they are doomed to economic stagnation.

Classical economics comprehends human beings as homo oeconomicus, self-interested utility-maximizers who calculate their every move to increase their personal advantage. Yet many (most?) of our motives and actions are habitual, a-rational, even irrational. They are the products of cultural or psychological imprints, for which we are often willing to risk everything; Fukuyama identified this aspect of human nature in The End of History as thymos, or the desire for recognition. In Hegel’s master-slave dialectic, it is what the master seeks in dominating the slave.

Most modern economic activity is not of this sort. It is undertaken more-or-less willingly by a multitude of strangers who plan and act in concert for some shared socio-economic benefit. In so cooperating, they demonstrate what Fukuyama calls “spontaneous sociability”, the propensity for members of a society to form new associations on their own initiative. This is easier when people believe in each other’s good-will; it is much easier to do business with someone when you trust them to uphold their end of the bargain. The alternative is to transact through a cumbersome legal apparatus, or a web of unpredictable custom.

Many of the ways in which we associate with each other are culturally-bound. Fukuyama uses the word “culture” in two senses: first as an “inherited ethical habit”—think Christian morality, the Protestant work-ethic, or Confucian filial piety—second to refer to the actual social institutions we participate in. Examples include churches, sports clubs, charity groups, and families. He also includes the particular forms those institutions take, such as the single parent family, the nuclear family, or broader circles of whānau.

Most economic enterprises begin as family affairs, because family members can pool their money together and are also willing to work hard for each other’s sake without the promise of immediate wealth. Beyond a certain size, however, a business can get too big to organise along family-lines. Some industries, such as chemicals, automotives, and semi-conductors, require a lot of start-up capital, which can’t really be obtained without professional contacts. Although the family plays an essential role in socialising the individual and reproducing the surrounding culture, it can also act as a bottle-neck on economic growth in these circumstances when it stifles the development of those broader socio-economic ties necessary for large-scale industry.

China is Fukuyama’s paradigmatic example of a society in which the “radius of trust” is circumscribed by the family. He traces this to the imprint of Confucian values on Chinese culture, which survived even the Communist revolution. Unlike the manorial systems of Europe and Japan, where oaths of fealty produced a fractal of duties linking king to peasant, Chinese families usually owned the land they worked. The ideal peasant household was self-sufficient. Villages rarely organised as collectives, and the state provided few services. The only guarantee of security and welfare was one’s family, which naturally became a “defensive mechanism against a hostile and capricious environment.” (88)

In the modern day, most Chinese businesses remain family affairs. There is a stark dividing line between managers (who are drawn from the family’s inner-circle) and workers, with the two groups sharing little sense of common purpose. A worker typically aspires to own his own business, rather than work hard at his position to advance his career. The preference for family over merit may exclude or alienate talents that otherwise would have helped grow or advance the business. As the founder’s vigour fades, his sons may be more interested in poetry than commerce, leading to a crisis of competency. Family schisms further dissolve the company’s wealth. The Chinese business environment is thus highly cyclical and competitive, with newcomers rising up, burning out, and bubbling away within a generation or two.

Japan was another society deeply affected by Confucianism, but its emphasis of those values was different from China’s. As regards the ideal family, the bond between father and son was always considered more important in Japan, from which developed a strong cultural sense of duty to one’s superior (be they daimyo, emperor, father, or company). Various forms of association beyond the family were also historically prevalent, such as iemoto, groups based around the practice of an art, craft, or martial art, and dozoku, voluntary, life-long obligations entered into for mutual benefit. Fukuyama gives the example of a samurai who vows to protect a village in exchange for a share of its grain.

Although the Japanese corporate model takes inspiration from the family, it is not a literal family like in China. Japanese companies do feel a sense of paternalistic obligation to their employees, but this is not advanced on the basis of kinship. They offer lifelong employment, generous benefits, and compensation based on seniority and need, rather than individual merit or nepotism. If a worker’s job is threatened or superfluous, he may be trained for a different position, or kept on in a symbolic role. This also goes for high-ranking jobs; an organisation can honour its esteemed senior members with ceremonial functions while allowing practical decision-making to pass into more youthful and capable hands.

A noteworthy feature of the Japanese economy has been its dominance by keiretsu networks. These are groups of interlocking businesses and organisations, historically organised around a bank which offers them credit. Those within the keiretsu give preferential treatment to each other, even if that means turning down cheaper offers from outside the network. Such is the degree of trust that organisations will share business secrets and align on internal operations. The most striking example of this was the 1975 restructuring of Mazda on the verge of bankruptcy. It allowed Sumitomo Bank to restructure its affairs, which saved the company without any job losses.

Fukuyama’s other example of a high-trust, economically successful country is Germany. Like Japan, German industrial growth was mostly financed by banks. Each had a relation to a particular sector, such as the Diskontogesellschaft, which loaned money to railway companies, or the Berliner Handelsgesellschaft, which loaned money to companies that manufactured electrical equipment. There was historically a great deal of consolidation in the German economy. Industries tended to coalesce into a few massive firms, such as Siemens AG (industrial automation and electrical generation) and IG Farbenindutsrie (chemicals). There was no equivalent of the Glass-Steagall or Sherman Acts, which the American government used to break up monopolies in the 20th century.

Unlike America, but like Japan, corporations in Germany have a somewhat paternalistic outlook. They fit into a broader social-market economy (Sozialmarktwirtschaft) based on class collaboration, rather than class conflict. Whereas French unions seek to maximise their disruption and intransigence with each strike, German labour representatives sit on the boards of major companies and share in the exercise of power. A network of workers councils arbitrates workplace disputes, while employee associations have an active role in setting the standards, expectations, protections, minimum wages, and othe rbenefits of their sector.

The most celebrated feature of the German system is its extensive use of apprenticeships. This is a hold out from the guild system of the middle ages. Guilds in Germany gained a lot more power than they did elsewhere, due to the granting of privileges within free cities. In the modern day, students are streamed into different kinds of schools. Those who don’t go on to higher education usually take up an apprenticeship, which can cover a far broader range of careers than it does in the Anglosphere (you can do an apprenticeship in hospitality, for instance). Companies take on the responsibility for administering these programmes. Workers are trained to perform multiple tasks, moving from workstation to workstation to learn how the overall business functions, according to the ideal of an intelligent generalist, rather than a dumb specialist.

With the examples of China, Japan, and Germany—and some other smaller ones not mentioned here—Fukuyama highlights the need for trust in an economically successful industrial economy. This requires “spontaneous sociability”, or the ability for strangers to form new kinds of associations in response to social or economic challenges. It also requires the right balance between family and state, and the mediation of intermediate groups, such as voluntary organisations, churches, charities, clubs, and unions. If the institution of family is too strong in a society, it can act as a damper on economic cooperation between strangers, but if the family is too weak, it cannot perform its basic task of integrating individuals into society.

Fukuyama introduces this framework to overcome some of the more simplistic dichotomies of his time, including that of a communal vs. individualistic society, or a statist vs. free market economy. His arguments against these are fair, but by the end of the book I wasn’t entirely sure if high trust/low trust was a valid division either. Fukuyama himself points out that high-trust societies are often mistrustful of outsiders. Indeed, the deeper the bonds of solidarity, the more individuals would lose by their disintegration, so the more fiercely they fight to keep them alive. This at least superficially coheres with the occasional deadly outbursts of xenophobia in German and Japanese history.

Early in the book, Fukuyama claims that China lacked an historical range of intermediate associations between the state and the family; later, he admits the existence of lineage and kinship networks, especially in southern China, which were a major reason for the success of the Chinese diaspora abroad. Next to those were also tong, hui, secret societies, and other kinds of organisations which did provide services to people on the basis of something other than immediate kinship. These all seem to me like clear examples of association.

Perhaps we shouldn’t speak of entire societies being high-trust or low-trust. Trust is always bounded by the social context in which the interaction plays out. Some of those contexts—the craft associations of Germany or the preferential deals within Japanese keiretsu networks—could be tapped into for social and economic benefit, while others—the Catholic church in southern Italy or the street gangs of inner-city America—could not. I think this slightly adjusted way of thinking about it rescues the good, commonsensically obvious truth of Fukuyama’s framework.

I didn’t entirely agree with his characterisations of Japan and Germany. It is true that German social thinking has long valorised quality and craftsmanship and chafed at the divide between planning and execution betokened by the division of labour in an industrial society. This does seem to translate into a great deal of respect between white-collar and blue-collar professions, which you could describe as a certain kind of trust. I wouldn’t describe the German system as flexible though, which Fukuyama gets close to in his comparison to and praise of Toyota’s lean production methods. Japan’s system of worker benefits is generally kept off the books, which does seem like evidence of trust, but Germany’s requires a tangled complex of law and regulation to give it effect. Isn’t that the hallmark of a low-trust society?

With the benefit of hindsight, we can see that some of Fukuyama’s predictions were wrong. Despite scepticism about the long-term stability of the Chinese model, its economy has exploded since 1995, while Japan’s has been more-or-less flat. Germany powered on through the European debt crisis, but it sits at the heart of a political union imperilled by war, energy scarcity, and refugee resettlement. Its economy has been notably slow to recover from Covid, while the overall inflexibility of its automotive industry has already seen it lose potentially significant ground to foreign competitors in the worldwide transition from petrol to electric. Elections in Thuringia one month from now where Björn Höcke, leader of the AfD’s ultranationalist wing, is poised to come second, will realy put the claim to the test. Is Germany still a high-trust society at the end of history? Or is it complacent and sclerotic, an aging society living large on the memories of old before the return of interesting times?

[Lauren · Rating 1 out of 5]

What a long, drawn- out way to say "America is better than everyone else in the world"! This book was endless, drab, poorly- written, and full of overly- broad stereotypes. When I found out that it was written by a former member of the Bush administration, I immediately had my doubts, but I tried to give it a chance, I really did! Having now read the work, I have to wonder if Fukuyama has even spent any time living among-- and getting to know-- the people about whose nations he is so quick to generalize.

I had to read this for a Sociology course, and am still confused as to why, because "Trust" is almost entirely a treatise on the economies of the world, and how they are impacted by the cultural levels of trust and family ties in individual nations. Overall, this book was too long, too dry, and confusingly- written. At first, Fukuyama is all for the successes of, for example, the Japanese economy as superior to others, but then he descends into appallingly closed- minded American nationalism, ending Section IV with this actual quote:

"As this book should have indicated by now, the more one is familiar with different cultures, the more one understands that they are not all created equal. An honest multiculturalism would recognize that some cultural traits are not helpful in the sustenance of a healthy democratic political system and capitalist economy. This should not be the grounds for barring certain people with cultures deemed unacceptable but, rather, grounds for the assertion of positive aspects of American culture like the work ethic, sociability, and citizenship as immigrants move through the educational system" (318- 19).
Read: I'm not saying all foreigners are uneducated, but they don't know what's good for them, so let's assimilate them into the superior Capitalist system of the US. 'Merica!

I am ashamed that any publisher allowed such a statement to be printed in a book intended for public consumption. As an American myself, I am also ashamed that people like the author of this book are elected to represent my nation on the global stage.

[محمد باباعمي]

هو كتاب لصاحب نظرية "نهاية التاريخ"، ينحو فيه منحى إنسانيا مغايرا تماما لما ألفناه من داروينية ونيتشوية وميكافيلية في مؤلفاته الأخرى؛ فهو يدافع هنا عن أن الثقة هو المكون الاقتصادي الأهم، وتأتي بعده الثروة والإدارة وغيرها

[Kuszma · Rating 4 out of 5]

Fukuyama az a fajta gondolkodó, aki nagy eszmei fúziókra törekszik – ezt tette már A történelem végé…-ben is, és ezt teszi a Bizalom-ban is. Ezúttal a kultúrtörténetet és a gazdaságot kísérli meg összepároztatni, meglehetős sikerrel. Könyve némiképp Weber könyvének újragondolása, annyi különbséggel, hogy Fukuyama nem a vallásban véli megtalálni azt a titokzatos összetevőt, ami egy ország gazdaságát működőképessé teszi, hanem a kultúra egészében. Ilyen értelemben fityiszt mutat a neomerkantilistáknak, akik szerint elég az ázsiai módszereket nyugati talajba plántálni, és máris dől a lé – felhívja a figyelmet arra, hogy a kínaival meglehetős hasonlóságot mutató eljárások például Dél-Amerikát konkrétan a gazdasági csődbe taszították, tehát élhetünk a gyanúperrel, hogy ami az egyik helyen működik, az a másik helyen (megfelelő kulturális alapok híján) nem. Arról nem is beszélve, hogy „ázsiai” módszer nincs – egymástól teljesen elütő ázsiai módszerek vannak.

Hadd jegyezzem meg gyorsan: ez a könyv ellenáll az ukmukkfukk leegyszerűsítéseknek*. Pedig már maga a cím is arra csábít, hogy leszögezzük: az emberek közti bizalom a kulcsa a gazdasági sikernek, ennyike, kalap-kabát, mehetünk haza. Ez természetesen igaz, de mégsem ilyen szimpla. Az világos, hogy az állampolgárok együttműködésre való hajlama (ami jellemzően civil kezdeményezésekben és egyesületekben nyilvánul meg**) általában jól jelzi, milyen gazdasági teljesítőképességre számíthatunk egy adott ország esetében. Erről még aligha lehetne 500+-os könyvet írni. Meglepőbb állítás, de belegondolva logikus, hogy a család és a vallás szerepét túlhangsúlyozó államoknak sem terem babér a fukuyamai rendszerben – hisz mindketten könnyen ellenfeleivé válhatnak a rajtuk túlnyúló innovatív szerveződéseknek***. És hát az sem mindegy, hogy egy bizalom horizontális, avagy vertikális. Az első ugyanis az azonos „osztályba” tartozók közötti szolidaritást erősíti, és gyakran a magasabb vezetőséggel való engesztelhetetlen szembenálláshoz vezet, a második viszont együttműködésre késztet vezetőt és vezetettet – mint a japán keirecu-csoportokban megfigyelhetjük. Ugyanakkor – ami szintén jelzi a fukuyamai elmélet összetettségét – ez a fajta bizalom mégsem teljesen egyenlő a toleranciával, vagy az általános értelemben vett segítőkészséggel, hiszen egyik eleme épp a felsőbb szintekhez való lojalitás, ami például a II. világháborús Japán (és Németország) ún. „hősiességében” is komoly szerepet játszott. Mindenesetre a Bizalom új kontextusban mutatja meg azt, amit egyesek elintéznek annyival, hogy zsidó/szabadkőműves/bilderberges összeesküvés – holott egyszerűen csak arról van szó, hogy ha egy közösségben nagyobb a spontán társulási készség (ami jobbára kulturális adottság), akkor lényegesen jobban képes kiaknázni a magas szintű együttműködést feltételező piacgazdaság lehetőségeit.

Nem mindig szórakoztató könyv ez. Ugyanis nagyjából 2345 dolog jut eszembe csak e percben, ami élvezetesebb, mint a csébolok (dél-koreai vállalatkonglomerátumok) működéséről olvasni. Időnként volt olyan érzésem, hogy minek vagyok benne, hiszen már az előszóból világos, mire akar kilyukadni – de mindig kibont egy új témát, gazdagítja az eredeti állítást, vagy egyszerűen csak alátámasztja azt, és ettől az ember azt érzi (ha van türelme hozzá), hogy lassacskán, szépecskén egyre okosabb lesz. Nem minden elemében értek egyet vele (ami nyilván egészséges hozzáállás), a paternalista hagyományok gazdaságra gyakorolt hatásainak negatív hozadékát talán bővebben is kifejthette volna, de összességében példaszerű elemzés, ami számos ponton továbbvihető****. Provokatív, okos, kifinomult. Fukuyama pedig az egyik legérdekesebb kortárs gondolkodó: a társadalomtudomány popsztárja.

* Jelzem, A történelem vége… is ellenállt, de ez nem igazán zavarta az értelmezőket, hogy mégis leegyszerűsítsék.
** E kezdeményezések hiánya, illetve az állampolgári aktivitástól való távolságtartás (ami, jelzem, nem összeegyeztethetetlen a folyamatos pofázással) egyébként elég erős oka annak is, hogy Magyarország miért tart ott, ahol.
*** Ugyanakkor az önkéntes vallási társulások („szektásodás”) paradox módon jó indikátorai lehetnek egy társadalom együttműködésre való hajlamának, mint ahogy a családok vállalkozó hajlama is könnyen felpörgetheti a gazdaságot a kis- és középvállalkozások tekintetében. Hogy még bonyolítsuk.
**** Külön érdekes a másik nagy művel való összevetés, a Bizalom ugyanis számos ponton árnyalja, ugyanakkor továbbgördíti annak megállapításait, és egyben jelzi a róla való leegyszerűsítő gondolkodás tarthatatlanságát.

[James · Rating 4 out of 5]

I do not subscribe to neoliberal economics inasmuch as I understand economic policy (I'm a lit major and the math frightens me), but this book has been recommended to me, and so for the purpose of better understanding the neoliberal argument I shall begin to read it. Before reading it, though, I can cite at least an appreciation for Fukuyama in that he appears more complex than some of his other peers.

Chapter 1:

I'm already hopping mad. I read with an open mind, meaning that I read, but I am aware of my prejudices already.

Page 3:
"end of history." There has been some debate as to the credibility of Fukuyama's claim, namely with regard to his understanding of Hegel. I have not read the book that deals with this quote specifically, though.
Page 4:
1. Fukuyama makes a number of assumptions about public and international assumption of neoliberalism. The world's nations have apparently adopted neoliberal economics and dismissed Keynesianism, he claims. Yes, perhaps this is true, but the world's developing nations have a gun to their head, and that gun happens to be the combined force of the WTF, IMF and World Bank. Each is presently overrun by neoliberals from wealthy nations. These wealthy nations practice protectionism while forcing the developing world to expose themselves to the ravages of free trade.
2. He also claims that the public rejected the Clinton health care proposal. A counterargument here would be rather long, but I can at least begin by pointing out that this has less to do with public perception of socialized medicine, which is extremely popular, and much more to do with an industry-led misinformation campaign.

Rest of Chapter 1

Okay. I can only read 1-2 chapters a day because I'm reading other books simultaneously. This first chapter is obviously meant to be an intro. Fukuyama elaborates, presenting a few case studies, which I imagine he'll cover in later chapters. I wonder whether he and I will draw separate conclusions about the examples he provides? Secondly, at present, I don't feel comfortable about his generalizations regarding Japan, Germany, and (formerly) the US as nations of high "trust." This is like the old fallacy of Star Trek where Captain Kirk lands on a planet and the entire planet is a single homogenous culture.

P.S. Right now, I'm reading Ha-Joon Chang's Good Samaritans, so it is as if two people are in my living room holding a debate.
P.P.S. This is meant to be a reading diary, but I notice a counter telling me that I have X characters left. I may have to provide a link to my diary, which I'll keep elsewhere. But where? Well, we'll figure it out when the time comes.

TTFN

[Nelson · Rating 4 out of 5]

As someone trained in the neoclassical tradition (BA Economics, BYU '05) I must be uber open-minded to read about something hand-wavy like culture in explaining economic phenomena.

This book is great at description, awful at prediction. In fact, which of Fukuyama's predictions have been realized? He prophesied that capitalism and democracy are bound to universally triumph, and here we are fighting the jihadists. Huntington pwned him on that one.

In this book, Fukuyama predicts that countries with high levels of trust (USA, Japan, Germany) are able to create large firms, and large firms are needed in industries such as semiconductors and autos because you can't really operate mom-and-pop semiconductor shops. Countries with low trust (France, Italy, Chinese societies) do not create many firms that extend beyond the family. Fukuyama recognizes that the IT revolution gives advantages to small, nimble firms. So where does the tiebreaker go? It goes to the firms with higher trust, because lower trust equates to a tax you have to pay.

Geez Dr. Fukuyama...people collect cross-national data on trust levels. Why don't you take that, take a country's average firm size, and run a regression. The statistics in your book are nothing but descriptive.

So where are we now? Low-trust societies have already surpassed high-trust Japan in per-capita wealth. Singapore in 1993, Hong Kong in 1997, Taiwan in 2010. Your thesis isn't holding up well.

Nonetheless, Fukuyama does a nice job of explaining why Chinese societies can't create big firms. Learning about how this relationship holds in Taiwan, Hong Kong, Korea, France, and Italy was really really fun.

One final word: Fukuyama is pretty much taking Putnam's
Bowling Alone: The Collapse and Revival of American Community and applying it to economics, the way he took turned Marx on his head.

[Eduardo Santiago · Rating 4 out of 5]

Prosperity (financial, social) is more than just property rights and contract enforcement. Without trust, fundamental human interactions are too costly; that harms human societies. How to measure such an intangible? Fukuyama teaches by example, describing social institutions in high-trust cultures (Japan, Germany, USA) and low-trust ones (China, Southern Italy, France). He analyzes and explains, and warns us -- fifteen years ago! -- of the dangers of relying on trust without building more. He sees the US doing just that ... and that was before Bush II, before Guantánamo and Abu Ghraib, before Iraq/Afghanistan/Libya/whatever is next. Before the current crop of Batshit-Crazy Republicans. And he correctly warns that it's easier to spend trust than to build it. We're in trouble.

Fukuyama holds no punches. He is not afraid to make moral judgments, especially about the tendency of multiculturalists to say that all societies are equally valid. They're not, and good on him for stressing that. To my dismay, though, he defends religion -- especially Protestantism -- as a force for good, in the sense that it is strongly linked to building a work ethic in developing cultures. Ouch. It hurts me to consider that, and I don't know if this "good" is enough to justify the rest of the evils brought on by religion ... but clearly I need to evaluate the possibility.

Sadly, Fukuyama doesn't touch on issues near and dear to me: the effect of urban mobility on trust; reputation management; or biological/evolutionary components of trust (his analysis is historical/cultural, i.e. recent). I'd love to see followup writings taking those into consideration.

[Kevin J. Rogers · Rating 1 out of 5]

It didn't take me long to figure out why I tossed this aside in the first place. Broad simplifications, sweeping generalizations, incessant hedging, and a lot of fuzzy thinking add up to a boring read.

[Karthik · Rating 5 out of 5]

The author talks about social capital's (ability to form social bonds that spans beyond family or kinship) ability to reduce transaction costs in a market economy. Free market economy is based on ability of free willed individuals to enter into contracts with fellow individuals and one of the main functions of the government is to maintain a judiciary that can bring swift justice and offer compensation when such contracts are violated. But free markets in a society endowed with high degree of trust does not need an external force like the government enforce contracts since it comes from within individual members of the society. Hence markets operates like a well oiled machine under such conditions. The book explores several low-trust (France, China and Korea) and high-trust societies (Germany, Japan and US) and shows how the ones with high trust are able to create huge multinational corporations and achieve prosperity better than the low trust society. High trust societies are also better at creating a stronger safety net for individuals. Fukuyama also shows that social capital is not something that can be manufactured through social engineering by governments but has to be cultivated by strong civic societies. Hence social capital takes a long time to build and easily depleted by short sighted governments. Another fascinating observations is around how companies achieve scale in a high trust society like Japan. What's distinct about Japan is that their large corporations are not vertically linked entities. Instead it's a series of small companies integrated tightly. These small companies are independently operated businesses (sometimes owned one governing board). This gives the agility of small companies (in decision making) while also giving financial stability available in big corporations.

Fukuyama concludes by warning about dangers of eroding social capital in the US and also points out that network model that mimics small information sharing nodes as the ideal model to scale corporations!

Fascinating book that will go into my "continuous reading" bookshelf!

[Julio Pino · Rating 5 out of 5]

"You risk your life for family, not strangers. Never forget it".---Sonny Corleone, talking to Michael, THE GODFATHER

"You know, there are times I don't even trust myself".---Josef Stalin, speaking to Nikita Kruschev

After THE END OF HISTORY AND THE LAST MAN, predicting (or so he thought) the eternal victory of liberal capitalism, Francis Fukuyama turned his attention to an equally challenging question, why are some capitalist economies more successful than others and stay on top of the global food chain? (The failed capitalist states do not interest Fukuyama. As he wrote in THE END OF HISTORY, "what happens in Albania or Burkina Faso does not matter to the course of history".) As an Asian-American and State Department flunk he wonders why East Asian capitalism (China, Taiwan, Japan, Singapore, South Korea) has produced prosperity but still cannot overtake the West, particularly the United States, in income per person, delivery of goods, fast service, minimum of corruption or a social safety net. His answer, long on delivery (this book requires patience) is that these are still family-oriented societies where trust in strangers is low. This means smaller investments in the stock market, businesses that cannot grow beyond a small size (compared to the U.S.), nepotism(yes, even in Communist China; maybe especially in China), and worse, clinging to tradition rather than putting your money on innovation. Capitalism to function at full speed requires trust in others, from business partners to whom you are not related to the government bureaucrat. The twenty-first century is not and will not be "the century of Asia" even if China were to over the U.S. in GDP. Rest assured, America. Thus far, F.F. has been proven right. But, is another capitalist power lurking about? Or, might one of the losers in this global game, much like Germany and Japan in the twentieth century, risk conflict to take down the winners? Stay tuned.

[Jukka Aakula · Rating 5 out of 5]

This book is important for understanding trust as one basis of the economy.

Having laws optimized for a free market, having mechanisms (like the environmental tax) to solve negative externalities (like pollution) etc. is not enough. Trust is not something which can be created through law or social construction just like that. Creating trust takes time.

Fukuyama goes through interesting case studies of high trust societies and low trust societies. Every society is different and the differences matter.

[Sam Weinstein · Rating 3 out of 5]

A cool central argument but over -riddled with jargon and gives too many counters. Stands the test of time

[Zoltán · Rating 5 out of 5]

Ez a könyv bizonyos tekintetben egy újabb lépés azon az analitikus gondolatösvényen, amin a szerző A történelem vége és az utolsó ember című elemzésével indult útnak. Míg abban a munkájában olyan kérdések boncolgatásával, mint például az embernek a hegeli értelemben vett "elismerésért folytatott küzdelme", azt a tételt igyekezett megalapozni, hogy eddigi tapasztalataink szerint a kapitalizmus és a liberális demokrácia az emberi társadalmi fejlődés lehetséges legjobb - vagy inkább legkevésbé rossz - és éppen ezért végső fázisa, addig az említett alapokon nyugvó jelen teória legfontosabb célkitűzése annak bemutatása és igazolása, hogy a társadalmak közötti kulturális különbségek milyen mértékben és főleg mely mechanizmusokon keresztül befolyásolják a kiépülő gazdasági rendszer típusát, annak sikerességét, eredményességét, és végső soron az így létrejött nemzetgazdasági berendezkedés kihatását a politikai fejleményekre.
Azon nyugodtan el lehet polemizálni, hogy Fukuyamának miben van igaza vagy miben téved a részleteket illetően, no meg persze kritikával lehet illetni bizonyos rövid távú prognózisait, melyekre az élet maga ugyan rácáfolt, de melyeket ezen a világon senki sem volna képes pontosabban megjövendölni. Amiért mindenkinek ajánlanám elolvasni a könyvet, az két, egymástól elválaszthatatlan, félig-meddig ok-okozati viszonyban álló kulturális körülmény szerepének megértése: az adott társadalmat alkotó emberek közötti kölcsönös bizalom fokára illetve az emberek társas készségének mértékére gondolok. Fukuyama néhány, szinte lábjegyzetszerűen rövid és mellékesnek tűnő megállapításából minden különösebb nehézség nélkül kiolvasható, miért, milyen tényezők hatására vált kudarccá (és szinte szükségszerűen azzá kellett válnia) a rendszerváltás a posztkommunista országokban, miért mozdult el Magyarország egy személyi kultuszon alapuló, vezér-elvű, túlcentralizált, teljes egészében felülről vezérelt, marakodó és széthúzó ellenzékkel megáldott, abszolút fejletlen és lényegében hiányzó civil társadalmi szervezetekkel "megáldott" társadalommá, de cseppnyi továbbgondolással azon kérdés megválaszolásához is közelebb juthatunk, hogy miért futott vakvágányra az "Arab Tavasz" néven emlegetett társadalmi átalakulás a Közel-Kelet egyes államaiban.
Készséggel elismerem ugyanakkor, hogy Fukuyamát olvasni nem könnyű. Elsősorban nem azért, mert roppant összetett elképzeléseket bonyolult nyelvezeten vetett volna papírra, hanem sajátos stílusa okán, melyre leginkább a "szájbarágós" jelző illik. A legfőbb argumentumok vagy a végkövetkeztetés premisszái úton-útfélen előkerülnek, itt is és ott is felütik fejüket, többször is kibontásra kerülnek, mintha a szerző az imprinting módszerével akarná biztosítani, olvasója nehogy véletlenül elkalandozzon vagy legalábbis szem elöl tévessze a lényeget. Mindez egy kissé tankönyvízű eszmefuttatásba torkollik, mely azonban csekély ár azért az intellektuális izgalomért, amit Fukuyama meglátásai kínálnak az értő olvasó számára.

[TarasProkopyuk · Rating 5 out of 5]

Взрыв мозга в самом лучшем смысле этого понятия! Невероятно качественная работа автора, которая настолько насыщенна данными и экспертной оценкой Фукуямы, что среди них практически не осталось места для того, чего можно было бы назвать лишним. Книга один сплошной концентрат! Обожаю такие! Готов поставить 10 балов из 5!

Эта книга невероятно интереснейшее обозрение предпосылок и принципов которые заложенные в фундаменте самых экономически развитых регионов мира и их народностей не только в экономической плоскости, а и в социальном, политическом, культурном и антропологическом срезе. Такой угол автора не только очень интересный, а и ещё показывает как на на всю эту сложную картину смотрят и должны смотреть подлинные эксперты.

Самое главное, что автор не просто сделал свое обозрение. Френсис Фукуяма показывает, и я даже бы сказал доказывает, почему аспект тотального доверия должен в скором будущем плотно войти в жизнь каждого народа и мира в целом.

Это была моя первая книга Фукуямы. Но после такой книги осознаешь, что не успокоишься, пока не прочитаешь все остальные его книги!

[Lily Borovets · Rating 5 out of 5]

Трудовий контракт - це добре, ви знаєте, що робота буде виконана, але якщо між вами є довіра, то робота буде виконуватись більш якісно.

Довіра - змазка соціального механізму. (Кеннет Ерроу)

В маленькій команді людям важче симулювати, ніж у великій. Та коли цінності й інтереси групи стоять вище ніж власні економічні інтереси, тоді все ок. (

Чим більше людям потрібні правила, тим менше вони довіряють одне одному.

Ситуація, коли у громадян немає інтересу до публічних справ, прямий зв'язок із встановленням деспотичного режиму.

Чи є корпорації в державі залежить від втручання держави

Одна з найважчих проблем Польщі, Росії, України в намаганні утворити демократичні інститути не беручи до уваги переваг капіталістичної економіки.

[Mark Isaak · Rating 3 out of 5]

Although the book is about the ability to form trusting relationships in economic contexts, most of it is background information about specific economies and their historical and cultural contexts. Some of that context is valuable, but probably not as much as is given. In many places, I felt like the purpose of the book got lost in the details.

[Shawn · Rating 5 out of 5]

A multi-disciplinary masterpiece! Modern economies are not solely influenced by capital and infrastructure as technological determinists argue, but also structural peculiarities of families, religion and ethnic interaction as cultural determinists posit.

[Javier Castillo · Rating 5 out of 5]

Impresionante analisis de el impacto de los valores y el comportamiento social en la economia. Las aristas son multiples,y terribles...

[Jeff Cliff · Rating 2 out of 5]

3.5-1 star for still being under copyright=2.5 stars

* Would be good to read along side The Managed Heart and after an econometrics book.
* it provides an explanation for why two very different looking peoples with vastly different cultures might find themselves natural allies (germans, japanese), both in the 1930s-1940s and going forward. And it suggests where to look for other where weird-looking alliances could be formed.
* it provides another perspective of Henry Ford. Ford on the disabled is something that would make sense to anyone in saskatchewan: he put something like SARC together for his employees. This is something missing in discourse about meritocracy and ablism - he was able to somewhat internalize the costs of injuring his employees in this way, and this has lots of consequences for modern debates about things like Long Covid.
* it has a remarkably honest discussion of the guy who started Shell, although Fukuyama's interpretation of events is...kind of naive (consider: perhaps entry to the gentry class was worth the sale to Samuel's broader group)
* it provides a 'just-so' description of lean manufacturing that is worth another look today, amid covid-era pessimism.

Generally when you read studies about how pandemics reduce social trust this is the book that should be the first go-to for describing what that actually means in practice. It's well thought through (at least for the time it's written in), builds on top of about 80 pages of other sources, and has an index which will be useful for later. Well put together, well thought through exposition of a spark of insight. It's been awhile since I read the last Fukuyama book and I wonder if re-reading it it would make even more sense in retrospect.

It is longish and kind of scatterbrained, and perhaps Fukuyama could have made his argument in a less verbose way : but this was clearly a work of exploration, the first attempt at wrapping one's head around these ideas in a world that was only just ready for them. While it might not be a must-read for people who want to make a career in government/public policy, you should probably ensure someone in your circles has read this book.

[صالح · Rating 4 out of 5]

حول دور الفضائل الأخلاقية التعاونية بين أفراد المجتمع في إزدهارهم اقتصادياً
هذا الكتاب يكشف الضوء عن خطورة المبالغة في العقود القانونية حول التعاملات اليومية حيث تؤدي تدني الثقة بين أفراد أي مجتمع إلى صعوبة و تعقيد التنمية الاقتصادية و كثرة التكاليف المادية الغير ضرورية في صياغة العقود و المستندات بينما يؤدي مستوى الثقة العالي إلى سلاسة في التعاملات الحياتية و من ثم قدرة تنموية مميزة في المؤشرات
الاقتصادية

الثقة كما عبر عنها المؤلف لا تُفرض من الحكومات على المجتمع بل هي تتشكل عبر قرون من خلال التعاليم الدينية الغير مادية و مايراه البعض غير عقلانية و للاسف هذا المخزون من الثقة قد ينفد بسرعة في حالة الاضطرابات و الحروب و استعادته تتطلب وقت طويل

في الكتاب تحليل رائع لتطور اليابان و ألمانيا الاقتصادي و كيف كان مؤشر الثقة في هاتين البلدين بعكس فرنسا و ايطاليا

أعجبني نقاشه المعمق حول فردانية المجتمع الامريكي و جوانبها مع وجود حالات ظهر فيها بشكل جماعي خلافاً لنموذجه الفرداني

كنت أتمنى أن أقرأ رأيه عن المجتمعات العربية و الاسلامية لكن يبدو أن انعدام الاحصاءات و المعلومات لم تجعله يكوّن تصوراً معتبراً أو ربما تجاهلها

[Logan Streondj · Rating 5 out of 5]

An excellent book on how relationship to family, civil society and state mold societies and what kind of organizations they can form. The author has a pro Japan and anti China bias, but otherwise is pretty good overall.

Basically it seems the ideal format is people with strong families that also worship God, and can thus trust other worshippers of God, as was the case in traditional America. Makes a good contrast between individualism, familyism, communitarianism and statism. And also points out that states that destory the smaller organizations end uplong term weakening their whole nation, where it devolves to either individualism or familyism, the state and nothing in between.

High trust societies give some of the best results.

[Octa · Rating 2 out of 5]

Takes ages to make a point that can be summarised in 20 pages. The observed economic differences between cultures are there but the "why" that Fukuyama gives to explain said difference hasn't entirely convinced me. Just to illustrate what I mean, I don't see why you couldn't put all that down to different ways of trading capital, taxation, or economic constructions for example, and then infer cultural values from the economic.

[Alex Rauket · Rating 4 out of 5]

Very interesting discussion on the forming of trust in various societies. Extends into the impact on economic development and contrasts a number of examples. Recommended read for those involved with groups of people trying to accomplish things together - many generalizable ideas. Some discussions are a little dated but still relevant.

[Umesh Badole · Rating 4 out of 5]

Trust is very important in personal life. Our all personal relation are on solid foundation if mutual trust exist between us. But here Fukuyama tells us how trust is also important in commercial tranction and cold economic decision. A different perspective. Intersting reading.

[Ela Ünler · Rating 5 out of 5]

Bugünü anlamak için düne bakmak, bugünü değiştirmek için dün neyi hatalı yaptığımızı fark etmemiz gerekir. Eski bir kitap ama kaynak kitap niteliğinde okunup bugün yaşadığımız toplumsal ve ekonomik sorunlara çözüm yolları bulmaya çok yardımcı olabilir.

[Stacy · Rating 2 out of 5]

Skimmed through this over a few weeks and found it wasn't really what I was looking for (but I'm not sure what I was looking for). A bit dated, a bit dry....to be expected but I didn't want to invest any more time on it.

[Mohammed Anas · Rating 4 out of 5]

اول كتب فرانسيس فوكوياما التي اقرأها ، بداية مشجعة
الكتاب فوق متوسط الصعوبة ، جميل به الكثير من المعلومات المفيدة والجميلة . ويطرح العديد من التساؤلات حول الكثير من المواضيع في مجالات الادارة والاقتصاد والمجتمع .

[Mike Koltsov · Rating 3 out of 5]

The only interesting things for me were conclusions, which are in the last 3 chapters. Everything else is historical and cultural analysis.