Between US and European re-regulation of the banking sector and the rise of China’s capitalist autocracy, we have clearly entered an era in which the state will exert ever more power. So it’s surprising that the chattering classes still trust business more than government. That’s the key finding from the 2010 Edelman Trust barometer, which was unveiled today at the World Economic Forum in Davos, Switzerland. The survey tracks the opinions of well educated, highly paid households in a number of major economies, including the United States, France, Germany, China, India, the United Kingdom and Russia. Last year, in the midst of the Great Recession, trust in business had sunk to record lows. Now, it’s sharply back up, fueled by a rise in the stock market (which has reignited confidence in business) as well as the end of the celebrity CEO culture. Wall Street aside, no-name leaders who hit their numbers and don’t demand enormous bonuses now rule the boardroom.
Of course, not all industries are equal. Banking took a hit, with trust plummeting 39 percent in the United States, and high double digits in most European countries. Media lost out too – survey participants were more likely to trust social media or stock or industry analyst reports or even conversations with their friends than TV news coverage or newspaper articles. Technology, on the other hand, is on fire. People perceive it as being the answer to the world’s problems, and a way of kick starting the global economy.
China, as ever, was the notable exception in the survey. It’s the only major economy in which people believe that government is more likely than business to make the right decisions. There, 74 percent agree with that statement, versus only 46 percent in the United States (by contrast, 54 percent of Americans believe businesses are trustworthy, up 18 points from last year). Why does government lag business, when politicians are the very ones that bailed out all those feckless executives? “Business is still perceived as the world’s wealth creator,” says Edelman. By contrast, people see government as merely the “referee of the game.”
How the fouls get called going forward is the big question. A big topic this year in Davos was how to revamp global capitalism. Yet, as economist Nouriel “Dr. Doom” Roubini pointed out, even as flows of people, capital and goods have become ever more global, “politics is becoming more and more national.” The disconnect between the two could make it even harder for politicians to build trust in the coming year.