Thursday, March 26, 2009

University of Pennsylvania Professor Comments on Survival of Public Trust

In my Penn Arts and Sciences Magazine, Fall/Winter 2008. Professor Cristina Bicchieri addressed the issue of public trust. "When you deposit your money in a bank, you trust the bank not to fail. When you vote, you trust the system to be fair and efficient, this is what we call 'impersonal trust.' Reciprocating trust means doing what you're expected to do--following the agreed upon rules." When these implicit agreements fail, she warns, says author B. Davin Stengel, societies may face systemic collapse.

Bicchieri: "Public trust is a cultural phenomenon that takes a long time to emerge and as we're seeing now, it can be very fragile.

In response to a question asked by interviewer Stengel, Bicchieri said, "I have done several computer simulations of the evolution of impersonal trust and what they show is that impersonal trust can only survive in a society of punishers; that is, if a society includes a majority of people who punish those who do not reciprocate, than trust and reciprocation will be quite common. In terms of that's happening now in the United States, the lesson may be that people must be sure that somebody will be punished. Americans who are facing foreclosures or shrinking 401 k (s) feel very bad when they hear their government saying that they don't really know what happened, that they are bailing everybody out and so, I think in cases like this a good way to rebuild confidence is through a big show of punishment of those individuals who violated public trust."

In my opinion, Bicchieri's credentials and credibility lend support to the growing public pressure to see indictments of the handfull of AIG executives who facilitated innumerable risky loans, of buyers who lied about higher incomes, of mortgage representatives who encouraged them or looked the other way, of appraisers who caved under pressure to produce inflated property appraisals and of escrow agents who packaged and sold loans without confirming buyers' stated credit profiles.

Public trust and the waning of it, may only seem like some issue for philosophical debate, not directly relevant to the specifics of what our legislators are doing (or not doing) for us. Not so. Public trust or the loss of it, can be seen on a regular basis currently, in peoples' frowns, worry lines, cynical scoffs, crabby negative attitudes, and refusals to part with their money.

Until there is some show of punishment of those who violated the public trust the malaise will continue.