Is Trust Only for the Winners?
Inequality in income and wealth in developed countries has been increasing since the 1980s, but only in recent years, since the publication of Thomas Piketty’s Capital in the Twenty-First Century, has the phenomenon become widely understood and acknowledged.
The growing gap between the haves and the have-nots has fueled the rise of populism in the U.S., U.K., France, Italy, Poland, Hungary, and elsewhere. As innovators and shareowners in the technology and financial services sectors accumulated wealth, demagogic politicians have weaponized the discontent of those left behind. We have become well aware of this discontent, but the rising confidence of the “winners” has been less widely noted. The 20-year retrospective on the Trust Barometer provides new evidence of the growing divide between the elites and the rest.
The annual survey has tracked the opinions of the informed public for 20 years in the U.S. and an average of European countries, adding France, Germany, the U.K., Canada, Brazil, China, Japan, Italy, Spain, and South Korea around 15 years ago. The “informed public” is a sample of college-educated 35-64-year-olds who are in the top 25 percent of household income per age group in each market and who report significant media consumption and engagement in public policy and business news it works out as about 15 percent of the population. This is a broader group than the one-percenters we hear about in presidential debates, but it is reasonably categorized as an “elite” relative to the general population.
As the elites in developed countries have become relatively better off, their trust in institutions (business, government, media, and NGOs) has increased markedly. If we take a country by country look, we can compare the first three years of survey data (variously 2001-03 to 2005-07) with the last three (2018-20), trust in institutions has risen by 11 points in the U.S., by 19 in France, 20 in the U.K., 23 in Canada, and 27 in Germany. In Japan, where inequality has not grown as markedly as in the West, trust among elites has increased by only five points. In some developing countries, such as Brazil, trust among elites has actually declined, although in China trust has increased by 32 points. Current levels of trust among the informed public in G-7 countries range from 68 in Canada to 49 in the U.S. Among developing countries, China and India are higher at 90 and 86, respectively; Brazil and Russia are lower at 54 and 39.
Edelman’s survey of developed countries shows a notably different picture: trust is at lower levels and particularly among the mass population has risen more slowly than among the informed publics. Across the entire sample, the Trust Barometer rose from an average of 45 in 2012-14 to an average of 49 in 2018-20. In the developed economies, while trust among elites has grown dramatically, trust among the general population has been significantly slower to improve: increases have ranged from zero in Canada to six points in France. Consequently, there is now a substantial gap between the trust levels of elites and those of the general population. Averaging over the past two years, the gap is now five points in the U.S., 11 in Japan, 14 in the U.K., 15 in Germany, and 16 in both France and Canada. And while the gap has remained roughly constant in the U.S., it has widened dramatically elsewhere in the G-7 in recent years. From 2012-13 to 2019-20 the gap between elites and the rest has widened by six points in Germany and Japan, seven in Canada, and 11 in both the U.K. and France. The pattern looks the same whether we look at trust in all institutions or at trust in each institution (business, government, media, and NGOs) separately.
There have been a few notable deviations from trend, but these have disappeared quickly. Trust among elites in France and Germany dipped markedly during the eurozone crisis of 2011, and trust in the U.S. declined precipitously in the year following the election of Donald Trump. In both cases, trust among elites rebounded immediately, while trust among the general population dropped less and remained low even after rebounding.
The gap between the elites and the rest reveals itself strikingly in a survey question added only recently. Globally, 50 percent of the informed public currently believe that they and their families will be better off in five years, while only 41 percent of the general population share that belief – a 9 percent gap in expectations. In 2019, there was a comparable gap of 14 percent in the U.S. despite more general optimism: 62 percent of elites and 48 percent of the general population believed they would be better off in five years. Levels of pessimism are≈high in G-7 countries. Only 15 percent of the general Japanese population believe they will be better off in five years, and things are not much better in France (19 percent), Germany (23 percent), and the U.K. (27 percent).
The survey does not provide direct evidence on whether elites in developed countries are aware of how widely their trust, hopes, and aspirations diverge from those of the general population. There is, however, one piece of indirect evidence. In 2018, the data show for the first time that elites have lower levels of trust in government in countries where income inequality is highest. The 2019 Democratic presidential debates suggest that policies for addressing inequality are likely to be prominent in public discourse in the years ahead. How greater awareness of inequality will affect our trusting elites remains to be seen
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Rick Levin is an economist and former President of Yale University