Posted by: Ray Brescia | December 24, 2013

On Inequality and Trust

In Nobel-prize-winning economist Joseph Stiglitz’s wonderful op-ed from the New York Times, published earlier this week, he traces the connection between rising inequality and decreased trust.  He’s certainly on to something.  In his 2002 work, The Moral Foundations of Trust, Eric Uslaner compared the level of trust in the United States in recent years against the level of inequality, and found a negative correlation: as inequality has increased, trust has decreased.

 

inequality

 

I explore these connections in greater depth here and here.  Bottom line: inequality erodes trust because it increases social distance.  An increase in social distance, in turn, tends to lead to more predatory conduct and rent seeking, exacerbating inequality.

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