Thursday, January 15, 2009


Just because something can't be measured doesn't mean it's not vital. I'm going to talk about trust, for which there is no unit of measurement. But like the air we breath, trust is usually most noticeable when it is absent. We have just been through a long period where trust has been present at many different levels in our society in sufficient strength to allow very elaborate and abstract structures to arise. Now we are passing out of that epoch, and this will force us into different set of social arrangements. How thoroughgoing this change will be and how pleasant or unpleasant life will be afterwards depends to a large extent upon which parts of our society experience a loss of trust and how deep this loss goes.

At the moment the world financial system is suffering a credit crisis. The word credit comes from the Latin credere, whose meanings include to believe, confide and entrust. Because banks don't trust each other or any institutions holding assets of doubtful value, the free flow of finance which is essential for big business and world trade has dried up. The banks don't trust each other because each knows of its own dire capitalisation problems due to holding doubtful assets. How has this problem of doubtful assets arisen? Because the people giving loans thought they could avoid the risk of defaulting debtors by passing the loan on and simply skimming a commission for setting up the loan. The economists and advisors from rating agencies who oversaw the trade in these loans made major errors of judgement: in other words, they were trusted and that trust has turned out to be misplaced. So we now have a loss of trust in the banks and in the experts who advise banks and other institutions. Talking of which, here's Shaun Micallef's interview with Tony Froth of the Reserve Bank of Australia.

But loss of trust in and between banks is just part of a general loss of trust in many of the higher levels of our system. The Chinese milk contamination scandal might be dismissed as symptomatic of a system which hides its endemic corruption, but what about the ramming of GM foods down the throats of consumers in Australia in the face of widespread public disquiet about the safety of GM products, where GM advocates so often engage in ad hominem attacks instead of addressing public's legitimate concerns? And when it comes to sources of objective information, more journalists are employed in public relations now than in conventional news outlets, which in any case are dominated world-wide by a few major players such as our Rupert, who are very obviously playing political games of their own.

At a personal level, many of us have had unpleasant experiences dealing with large institutions in everyday life. Dealing with our two largest phone providers is a case in point. Whatever the personal virtues of the human being one deals with over the phone, you know that they are prisoners of an amoral, sociopathic corporate culture which has as it's raison d'ĂȘtre the provision of the least possible service for the maximum possible return and powerful players in this corporate culture will use whatever resources are at their disposal to bend the public and legislators to their will.

And speaking of legislators, what about John Winston Howard, Australia's former Prime Minister, receiving the Presidential Medal of Freedom from outgoing President Bush? When reality gives us such theatre, no place is left for satire. But it also an excellent example of how the currency of trust has become debased at the political level. Two of the architects of a failed aggressive war which was launched on lying premises and who have each worked assiduously to undermine basic democratic freedoms in their respective countries in a quest for untrammelled power play a cynical game of mutual congratulation. Each leaves a legacy of weakened respect for the institutions of which they were a part. My attitude to Kevin Rudd, John Howard's successor as Prime Minister is held by many of my friends who voted for him, which is we hold little real hope for him doing any good, just as long as he is not as bad as Howard. And as for President Bush, his legacy is likely to be a greatly diminished respect for the Presidency which will translate into an important loss of legitimacy and power for successive presidents.

Loss of trust in the financial industry, in big business and in politics are necessary precursors for collapses in these systems. If the collapse is not to go further it is necessary that we act in ethical and moral ways in community, family and personal life. To the extent that we have become ensnared in immoral or unethical conduct in the pursuit of a career, we are complicit in the collapse of the current system at a higher level. But societies can survive and rebuild after collapses in the economy and in political systems. They cannot survive a corrupted community, family and personal life.

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