Widening wealth gap helps explain the sorry state of trust between elites and common folk
Rich people are more trusting in government, while poor people less so
Trust. Such a powerful word. Such an important concept in civilised societies. And if the chatter at the World Economic Forum in snowy Davos was any guide, it is in serious short supply right now. Most important, most of the world’s population profoundly distrusts the business and political elites that gather cosily in the Davos conference rooms.
I have always distrusted the concept of trust – especially when it arrives in the hands of corporate public relations agencies who are selling their services aimed at building trust. I once worked for a boutique Hong Kong communications group that was taken over by a big US group. The US executive team swept into Hong Kong to celebrate the acquisition, weighed under by proprietary IP-protected investment “trust” products. They were mortified that I was sceptical but I stayed resolute: for me, the US is the very antithesis of a trusting society. Its many tentacled legal and regulatory system is built on the assumption that you cannot trust – that you need binding legal contracts and other safeguards as a precondition for entering or operating in a fundamentally untrustworthy world. Needless to say, the new US proprietors and I did not stay colleagues for long: I could not trust them, and they could not trust me to market with any enthusiasm their trust products.
So I was intrigued to see the global PR agency Edelman brandishing in Davos their newly minted “Edelman Trust Barometer”. Its findings were in part wholly predictable – even though I don’t trust them: social elites trust governments, the media, business and NGOs more than do the unwashed and comparatively less well educated or privileged masses; trust levels have edged upwards steadily since the 2008 crash, as reputations (particularly in the financial services sector) have been repaired; people trust NGOs more than the other groups, and they trust the media and government officials least of all; the gap between trust among educated elites, and trust among the unwashed masses is widening sharply.
But some findings were fascinating: trust levels are highest in China, India, Indonesia, Singapore and the UAE – which perhaps says more about strong government control of business and media than about the intrinsic trustworthiness of their institutions; and they are lowest in Ireland, Sweden, Poland, Turkey (all buffeted by migration and recession), Russia (surprise, surprise), and Japan – this one fascinating, and in need of further investigation.
Edelman perhaps rightly focuses on the widening gap in trust levels between the elites and the ordinary working folk, and concludes that rising inequality is at the root of this trend. And if the report presented in Davos by the (generally trusted) Oxfam is any guide, Edelman’s conclusion may be correct. Oxfam shockingly calculates that the world’s 62 richest business leaders control as much wealth – about US$1.76 trillion – as the 3.6 billion people that count among the poorest half of the world. While the wealth of the top 1 per cent has jumped by 44 per cent in the past five years, the “wealth” of the poorest half of the world has shrunk by 41 per cent. Of the wealth accrued since 2000, half has gone to the richest 1 per cent, and just 1 per cent has gone to the poorest in the world.
“Income and wealth are being sucked upwards at an alarming rate,” says the report, unsurprisingly titled “An Economy for the 1%”: “We live in a world with levels of inequality we may not have seen for over a century.”
The negative consequences of this trend can be felt worldwide, of course not excluding here in China and in Hong Kong. In the past two weeks the Institute of Social Science at Beida in Beijing has calculated that inequality in China as measured by the widely used Geni coefficient, is among the highest in the world, at 0.49, with the poorest quarter of China’s population accounting for just 1 per cent of national wealth. And we are told that Hong Kong is the most unequal society in Asia – with a Geni coefficient of almost 0.54 – not a small factor behind the social unrest we have seen in the past two years, particularly focused on the Occupy movement.
In the face of this widening income gap, and warning of the dire social and political implications of the trend, Oxfam has its own menu of policy responses: raise minimum wages and cap executive rewards; promote the rights of women, who are generally the least well paid; check the influence of powerful business elites (like those meeting in Davos no doubt); change how medicine prices are fixed worldwide; share tax burdens more evenly (and shut down tax havens); and augment public spending.
Take these proposals to Hong Kong’s business elites (where Edelman findings suggest that trust levels are among the lowest in Asia), and you don’t need me to tell you how loud the squeals of horror would be. But squeal as they might, the reality of the social and political stresses rooted in rising inequality is widely recognised, and unlikely to go away.
There are some in the business community – and some in leading business chambers – who acknowledge that action is needed from our business leaders to shore up their credibility as contributors to wealth creation, rather than as kleptocrats enriching themselves at the expense of ordinary people. But what should that action be? On this, there is currently no agreement. At the very minimum, our business leaders need to do a much better job of explaining how their businesses can improve the livelihoods of the many rather than the few. But the task is a greater one than mere spin or PR.
And we should remember from the Edelman work that while business leaders may not be widely trusted, the media and government agencies are even more widely distrusted. It is not just the business community that needs to look to itself – our procrastinating government officials and our flippant filibustering politicos need to look to themselves too. And as for the media – well, I wonder whether you trust a word I have said.