Time That Trust Triumphed
Trust is the lubricant that smoothens and speeds up business transactions, accelerating economic growth. It is social capital, of immense value; far more important, in many ways, than financial capital. Whether in an organisation or in sports, trust in team-mates is an essential pre-requisite for success. Like the trapeze artist who leaps into empty space, tens of metres above the ground, with full faith that her partner will swing across in time to catch her, team members need trust in each other. In cricket, the batsman often takes a quick single without knowing whether a fielder has pounced on the ball, based purely on trust in the call from his team-mate.
Traditional institutions like “angadias”, precursors to contemporary couriers, are purely trust-based. They are known to be entrusted with deliveries of even cash and diamonds, and decades of doing so have reinforced their reliability, credibility and trustworthiness. Similarly, when you give a piece of household equipment for repair to the local handyman or shop, it is on a mutual trust basis. No paper is exchanged: leave alone a legal agreement, there is not even a receipt. Much of this is based on “community”: even if the person is not one who is personally known (like the neighbourhood ironing-man), the fact that she or he is part of the local community is an implicit guarantee or safeguard, ensuring against any form of cheating.
In most business transactions, though, companies inevitably follow at least one part of Shakespeare’s advice: “Love all, trust a few, do wrong to none…”. However, even for the few whom they do trust – and, of course, for the many that they may not–there is the safeguard of legal agreements. The adage of “trust, but verify” is modified to “trust, but hedge” (through legal contracts). With formalisation and impersonalisation of business operations, legal agreements have become essential. On the positive side, they have enabled expansion of supplier and customer base into new geographies and to unknown entities.
Contracts do help, but the importance of trust has not diminished. One aid to this are organisations which serve as trusted intermediaries. Banks, for example, play this role in many a transaction. So do platforms like Flipkart or Amazon, which facilitate remote (on-line) buying and selling, or connecting customer and provider (like Ola, Uber or Airbnb). In the financial world, products like bank drafts (banker’s cheques) serve as trusted instruments, providing confidence to customer and buyer.
Trust in institutions is key for businesses, but also for all other areas of life. In a strong democracy, it is critical that people have trust in the government, judiciary, banks, business, media, and civil society organisations. Interestingly, one survey (Edelman Trust Barometer) indicates trust in societal institutions (NGOS, business, government and media) is the highest in India, as compared with other major countries. India scored 79 points in 2020, and 77 in 2021, against global averages of 54 and 56. Surprisingly, in 2021, US was at the bottom of this group (with 48 points). On trust in government, India was ranked fourth in 2020, with 79 points (behind front-runners Saudi Arabia and China, with 82 points, and UAE, with 80). The United States and the United Kingdom were at the low end with 45 and 42 points. A special report in May 2022 (again by Edelman) showed India as the top ranker, amongst 14 countries, in domestic trust in business companies.
Such surveys are, of course, questionable, given their small sample sizes and limited geographical coverage. Some researchers have claimed that trust in institutions is decreasing globally. There is also a view – based on anecdotal inputs – that in India business is not really trusted: neither by people, nor by the government. For long, NGOs have been viewed with a degree of suspicion by both government and business. Of late, many feel that media (mainly television) has lost their trust. If this is true, such mutual lack of trust in vital institutions signifies an erosion of precious social capital. India has been strong on social capital, thanks substantially to its family bonds, social structure and traditionally cohesive communities. Decrease in trust is, therefore, a cause for deep concern. Are we heading towards a situation where – to quote Shakespeare again – “There’s no trust, no faith, no honesty in men; all perjured, all forsworn, all dissemblers”?
On the other hand, there are interesting examples of strong trust. Development Alternatives, an NGO, set up a “Inamdari ki Dukan” (Shop of Trust) in a village near Orchha in Madhya Pradesh, with no cashier or vendor. A rate list was put up of available items (daily need items like vegetables, etc.) and people picked and weighed what they wanted, depositing the amount due into a box. Similarly, a network of 15 “honesty shops”, with payment based on trust, operate in schools in Ernakulam, with the first having opened in 2008. These, and many other instances (like theangadiaswe began with) show that trust is yet a strong characteristic in India. Yet, these are instances at the individual level. The challenge is in building and growing trust in institutions, which, by definition, are impersonal.
Trust can, of course, take a different form – especially in innovative, “beat-the-system” India, where reward is desired, but risk and retribution is not. Those in this camp may well favour the US’s “In God we trust” or Omar Khayyam’s thought: “I am going to commit every kind of sin because I trust God is compassionate – he will forgive.” Let us hope that people continue to trust other people – not just the compassion of God – and, in turn, evoke their trust.
Trust is a two-way street. Both institutions and people need to act with this in mind, and enhance India’s USP: its social
The author loves to think in tongue-in-cheek ways, with no maliciousness or offence intended. At other times, he is a public policy analyst and author. His latest book is Decisive Decade: India 2030 Gazelle or Hippo (Rupa, 2021)
