Evidence from The Berlin Wall shows government surveillance undermines trust and economic performance

Of once primarily academic interest, the ongoing decline in trust in countries like Australia and the US could be an overlooked symptom of the ongoing crisis in neoliberalism.

The annual global Edelman Trust Barometer survey has for several years shown declining trust across Western countries. The newly released 2018 survey shows a stagnation in trust levels globally, but it is the data from specific countries that is of greater interest.

In the US, trust in government has collapsed 14 points since 2017 to 33%, trust in business has fallen by 10 points, in the media by five, and in NGOs by nine. In Australia, trust in all four “institutions” also fell, albeit by smaller amounts, but from already low levels: trust in government fell two points to 35%; in media and business by a point to 31% and 45% respectively, and by four points, to 48%, for NGOs.

Australians are some of the world’s least trusting people: we’re 10th globally in terms of distrust of government, 11th in distrust in business, and we have the second highest level of distrust in the media after the Turks. The report distinguishes between trust in media platforms and trust in journalism, which, on average, is significantly higher, but even then Australians distrust journalism more than most: at 52%, we’re less trusting of journalism than anyone except the Japanese and the Russians.

Globally, government officials or regulators are, along with journalists, the least credible voices on issues, while technical and academic experts remain the most credible.

It’s clear that, as one would assume, major political events in each country affect trust in government. The bungling and incessant lying of the Trump administration has evidently played a role in undermining Americans’ trust in government. In Australia, trust in government is back to where it was under Julia Gillard and Tony Abbott, after briefly jumping to 45% in 2016 after Malcolm Turnbull became Prime Minister. The disappointment with his performance has resulted in 10 points being hacked off trust levels in two surveys.

In contrast, in France, the election of President Emmanuel Macron appears to have reinvigorated trust in government there, with trust rising eight points off a lowly 25%. In the UK, where the May government continues to bungle everything it touches, trust levels are completely unchanged over the last three years.

But what is alarming about the numbers is that democracies fare significantly worse than dictatorships when it comes to trust. The world’s most brutal dictatorship, China, is also the world’s most trusted government, according to the survey; other authoritarian or repressive regimes also perform well: the UAE, Singapore, Turkey, Malaysia and Russia are all seemingly trusted more than governments in most western countries.

Trust — at both a personal level and in major institutions — is important in a successful economy. Without interpersonal trust, many transactions would either not happen or take much longer and be more expensive. Without trust in institutions to behave fairly, treat people equally and punish those who act maliciously, investment and spending are deterred. Economic reforms that may benefit the community become harder if people don’t trust governments. Without trust, we have to create other mechanisms to enable the basic activities of an economy, diverting resources.

There’s growing evidence that inequality undermines trust, something that the International Monetary Fund — in its born-again role as scrutineer of the growing inequality caused by the policies it has long imposed on countries — has examined. One key reason why inequality undermines trust is that we’re less likely to trust people who are unlike us, whether racially, ethnically — or economically.

Other things undermine trust. Evidence from the former East Germany shows government surveillance undermines trust and economic performance, courtesy of anti-terrorism laws and relentless monetisation of our personal digital data, we now live in a surveillance state that makes East Germany look like a privacy haven. And regular misconduct, inevitably, undermines trust: the long string of banking scandals has wrecked consumer trust in banks in Australia, while the willingness of multinational companies to avoid tax has badly eroded trust in Australia’s tax system.

Both of these latter examples go to a broader point. In both cases, governments have apparently been unwilling to take action to stop large corporations from engaging in unconscionable or outright illegal misconduct (in the case of tax avoidance, the current Coalition government is actively collaborating with large corporations to give them a massive tax cut). Such action — significantly tighter regulation, or dramatically stronger tax laws — has until recently been resisted by both sides of politics under the neoliberal mantra that governments should only deregulate, and should only think about making life easier for corporations and their shareholders. 

Just as constant outsourcing and privatisation has stripped governments of the basic skills of service and infrastructure delivery, the neoliberal ethos has stripped them of a willingness and capacity to intervene in economies, and deliver for citizens rather than corporations. When crises erupt, as with energy on the east coast, they have to play catch-up, and do it clumsily.

In that context, distrust in our government makes sense. Why trust a government that won’t work in your interests or has to be dragged kicking and screaming to do so? And the apparently greater levels of trust in brutal, but highly interventionist and regulatory regimes like China, Russia, Singapore and Turkey start to make more sense.