BOOKS: Breach of confidence

TRUST: The Social Virtues and the Creation of Prosperity by Francis Fukuyama Hamish Hamilton pounds 25

THIS is a fat book: it sags and bulges; it waddles about and is short of breath; it perspires and sits down heavily in chairs. Its colour and complexion are bad. A decent editor (are there any left?) would have put this one on a celery diet and the exercise machines until it had the sinew and definition to face its readers.

I suspect that the editors did not do their duty because they were over- impressed. Fukuyama is a genuine, certified big thinker in America, and big thinkers are allowed to indulge themselves. In The End of History and the Last Man, his previous book, he gained a good deal of celebrity by stating the obvious: that the death of Communism had removed the last systematic challenge to the triumph of the capitalist system. What made this truism seem portentous and interesting was a lot of Hegelian dry- ice about the death of the struggle between systematically different social and political systems. In fact, of course, History continued, not least because there is not one capitalist system but many, and the reckoning between them was far from over. Trust History. If there are many forms of capitalism about - American, Asian and European to mention only three - why are they so different, and which of these is likely to win out? In America, these questions have created a sub-genre - the competitiveness debate - and in this sub-genre, essential reading in the Business Class sections of aeroplanes, the fattest book usually wins.

Like fat people, fat books have something to say. But how is one to persevere through a chapter which begins with a sentence as lacking in muscle tone as this one:

"The low trust, family oriented societies with weak intermediate organisations we have observed have all been characterised by a similar saddle-shaped distribution of enterprises."

"We have observed" is a bad sign. Here is a book about trust which trusts its readers' intelligence so little that it reminds them, at every turn of the chapter, of what it has just argued.

More's the pity, since inside the fat book there is a thin and interesting book struggling to get out. The thin book makes the fuzzy but intriguing claim that social trust has something to do with economic success. Capitalism, Fukuyama argues, does not function at its best in societies of isolated individuals, but in cultures which teach strangers - through churches, clubs, organisations, pubs and bowling alleys - to trust each other and work together. America, Japan and Germany are successful economies because the habits of social trust that are necessary for economic co-operation are taught in the voluntary associations of civil society.

The trust that Fukuyama is talking about is between strangers, not between kin. Amid all the braying about "family values", Fukuyama makes the useful point that societies like China or Italy which place intense emphasis on family values find it difficult to generate anything other than family businesses. In a "familist" culture, you only trust kin: strangers pay cash. This inhibits the capacity of family businesses to turn into modern corporations. Wang Laboratories was a phenomenally successful family computer business, run by a brilliant Chinese American, An Wang. But when he retired and handed the business to his son over the heads of more qualified managers, the son quickly ran it into the ground. The moral of the story is that a family has to learn to trust strangers if the business is to survive. Family values, it turns out, are the death of social trust.

None of this emphasis on trust is especially original. Most of it was anticipated, as Fukuyama acknowledges, by the grand thinkers of classical social theory; by Montesquieu, Tocqueville and Durkheim. All three argued that a capitalist society of pure individuals related to each other solely by the division of labour and the laws of the market would be a monstrosity. Social cohesion depended on what Montesquieu called "the intermediary bodies", the voluntary associations of civil society, which protected the solitary individual from the potentially overbearing despotism of the state; Tocqueville worried that individuals without protecting associations might be tyrannised by electoral majorities; while Durkheim worried that individuals stripped of the protective tissue of social ties would become "anomic", rootless and selfish. Fukuyama echoes these concerns and adds the familiar one that capitalism is cannibalistic: it eats into the reservoirs of social trust necessary to its own success.

The problem with the Fukuyama thesis is that measuring social trust is difficult; correlating it with economic performance even harder. Americans go to church less often than they did; the Boy Scouts, 4H Clubs, bridge and bowling circles are not what they were in the bright summer days of the Eisenhower presidency. There is much more crime, and when Americans are in dispute with each other, they bring in the lawyers. The lawsuit seems to have replaced argument in American society.

All of this can be taken as anecdotal evidence of the erosion of trust, and it certainly imposes costs on the economy: lawyers' fees, security and anti-crime prevention devices, and so on. The difficulty with the Fukuyama thesis is that the American economy is booming. As Fukuyama himself admits, after faltering in the face of Japanese and Asian competition between the late 1960s and early 1980s America has regained pole position in computers, soft-ware, semi-conductors, bio-technology, even automobiles. Anomic, rootless, violent, mistrustful America may be, but it is also ferociously competitive.

There must be something to the Fukuyama thesis. Trust is a virtue in itself, and it is obviously a cheaper way of regulating an economy than rules, penalties and litigation. But America may just indicate that if you invest in plant and machines, educate people and manage them hard, you can still beat the kindlier and gentler economies. Britain - which does not figure in Fukuyama's pages - would fit his picture of a "high- trust" society: large-scale industrial structure, low crime, unarmed policemen, long historical traditions of sociability. It has trust; what it has lacked is adequate economic performance.

The key implication of Fukuyama's thesis is that trust is like family silver - it is an inheritance to be conserved or frittered away. It cannot be purchased or created anew. In passing, he observes that capitalist development does create new forms and institutions, like the Internet, which encourage or reward trust. But by and large, the story of trust is a story of loss. It is a pre-capitalist inheritance which modern society lives on and, mostly, squanders. The implications are gloomy and fatalistic, especially if one considers how difficult it is to recover trust, once lost.

Fukuyama will not endear himself to American blacks with his argument that the reason why they lag behind other ethnic minorities is that their communities have lost trust with each other. The black American underclass does less well than American immigrant groups who have also experienced discrimination, because slavery destroyed black community self-help: the inner city is the Hobbesian war of all against all. Blacks do not lend to blacks; do not buy from blacks. Black entrepreneurship, therefore, is stifled by the collapse of solidarity within their own community, not by the prejudice of white bankers and white consumers. By contrast, Korean, Chinese and Pakistani shop-owners are able to rise out of poverty because they can count on their families to work long hours, rely on their own ethnic group to patronise their shops and be certain of loans, favours and services from their own people.

The implications will not delight inner-city blacks. If the real obstacles to economic success are not institutionalised racism but lack of trust, and if lack of trust is a centuries-old heritage of slavery, then teenage blacks might as well get on with selling crack to each other.

Fukuyama's celebration of the convivial virtues turns a particularly cheerless visage towards those languishing beyond the bright circle of trust. It may seem curious to tax a book this long with sins of omission, but it signally fails to be helpful. If we need trust, how do we get it back when we lose it? This is a question which might have led to some interesting and useful answers, but, like a fat man trying to get a glimpse of his shoes, Fukuyama was unable to see it.