FinConf

The fragility of trust

During the Asian Banker’s Retail Excellence conference that I attended recently, my friend Emmanuel Daniel posed the question:

Who do you trust more: Facebook or the Government?

Bearing in mind that this was in the week of the Cambridge Analytica leaked data storm, where everyone was screaming to #deletefacebook and Mr. Zuckerberg had to come out and say I’m really, really, sorry about this, honest, you would have thought the room would have overwhelmingly voted for the latter. But instead, they voted for Facebook. WTH?

I then realised that we were having a meeting in Malaysia where 1MDB has been in the news non-stop for the past year. Equally, several other countries have rather dubious government operations in the region and so maybe it’s understandable.

However, what concerned me is that if a group of bankers, including several central bankers, cannot trust their government then who can? After all, in most economies, the banks are in collusion with the governments, not against them.

I then wondered: who do you trust more, with what?

I trust Facebook not to lose my memories, as that’s the one thing they store and seem to store well. That’s why 2.2 billion people allow them to keep our photographs and videos, our stories and experiences, because we trust them not to lose it. But do we trust them not to lose our life savings? Do we trust them to be ethical? Do we trust them to protect our data? Do we trust them to not abuse our privacy?

I don’t think we trust them with any of that. Now if I apply the same question to the government: do I trust them to regulate banks to ensure they don’t lose my life savings? Do I trust them to be ethical? Do I trust them to protect our data? Do I trust them to not abuse our privacy?

Hmmm … actually I don’t trust them with any of that, except that they will regulate. They will regulate banks to ensure they protect my money. They will regulate hospitals to ensure they don’t kill me. They will regulate cities by ensuring that they have police forces. They will regulate the press to be or to not be spreading propaganda.

It kind of leads into another debate: what do we trust governments to do? It’s not that we trust the politicians or the governments, but can we trust these people to do their job which is to create a civilised and peaceful society that can prosper?

This then led back to my regular mantra which is that most people are inherently good, but they are often led by an idiot. The question is how extreme is the idiot? The more extreme, the harder it is for the people, as the ever-moaning Americans realise right now with the Donald.

This leads to the extremes of either radical libertarianism that defies all authority or radical dictatorships that defies all questioning. I’m happy that I believe I live in a country, Britain, that lies somewhere in the middle of these extremes. In fact, I believe most of Europe, America and parts of Asia and Africa enjoy the same. For example, I didn’t realise until recently how progressive Rwanda has become until recently: ne of the safest countries in the world, one of the easiest to do business with, and one of the best places to be a woman. But then two-thirds of Rwanda’s political leadership are female because, after the atrocity of the genocide in 1994, they don’t trust men so much.

So the real question here is back to the themes of trust. Trust in banks is NOT the same as trusting banks; in the same way, trust in governments is not the same as trusting governments. I don’t trust the government to always do the right thing, but I do trust our media to name and shame them when they do the wrong thing.

And there’s the critical point: freedom of speech and a free press are critical to an accountable government. In countries like Russia, Turkey and China, the press is controlled and so the governments are not accountable. This is why Putin has been in power for almost twenty years, Erdogan is trying to do the same and Xi Jinping has just given himself a literal lifeline.

This is where trust in governments does not work, and is why I think the audience of bankers felt that Mark Zuckerberg is more trustworthy than Najib Razak, the Malaysian Prime Minister embroiled in the 1MDB scandal.

Trust. It’s a really fragile thing. Do you trust me to say that?

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