India: A “Low Trust” Society

Why is it that Indians find it difficult to trust beyond their family circle?

Why is it that most discussions and negotiations in India commence on the common premises of suspicion and lack of trust? Why is lack of trust so deep-rooted in the Indian culture? It prevails at all levels of the Indian society – among individuals, in employer – employee relationships, between individuals and social structures like neighborhood communities, clubs and charities and between the relations of citizens with the Indian State.

“Trust but verify”, the famous phrase often used by Ronald Reagan, using an old Russian proverb, in his meetings with Soviet President Mikhail Gorbachev during 1985 and 1988 has been completely turned around on its head by Indians to  say “Verify then Trust” 

The lack of trust that exists between the Indian State and its citizens has even been acknowledged by our Prime Minister. During his speech at the “Make in India” initiative in September 2014, Mr. Modi said “The biggest need is trust. The Government has been run in a way wherein it has not trusted its own citizens. I want to change this. My Government will operate in a manner wherein it trusts its citizens rather than doubt them”. He further added “the environment of trust can change a lot of things”.

The current Government has been taking some positive steps over the past two years towards reducing this trust deficit eg self-attestation of documents, direct subsidy transfers etc. However the recent act of demonetization may have moved the needle in the reverse direction; widening the trust deficit that exists between the two. The Indian Government surely needs to do much more innovative work to reduce this deficit for the sustainable economic and social growth of the country.

Lack of trust holds back the economic and social development of societies; prevents formation of large scale global corporations and social organizations, as is witnessed in India.  India continues to largely be a “familial” society where each person looks after his personal interests and his family’s and does not trust anybody beyond the family circle. Majority of the Indian organizations – business, social and political – whether big or small, continue to be family dominated, with all key decisions being taken by the owners / promoters, who do not have sufficient trust in outside managers. Centralization in decision making has restricted Indian organizations from growing beyond a certain size and has handicapped them from becoming world size players.

Why is India such a “low trust society”? Is it part of its cultural inheritance?  Francis Fukuyama in his book Trust: The Social Virtues and the Creation of Prosperity writes that “Social capital, the crucible of trust and critical to the health of an economy, rests on cultural roots (of a society)”

The low trust culture of the society can historically be traced back in India to the multiplicity of warring monarchies, who for centuries ruled the region leading to a highly divisive Indian society, followed by two centuries of the British colonial rule. For their quest for absolute control and power, the British rulers further divided the society by strengthening the prevailing conflict ridden caste system, for their own administrative benefits.

Apart from the cultural inheritance, two factors further contributed to the low trust culture prevailing in contemporary India – post independence, Indian politicians have constantly polarized the society across religious and caste lines, with the narrow prism of electoral gains. Coupled with this has been the high level of corruption associated with the functioning of the Indian State – at all levels, which further disenchanted the relationship of the citizens with the State.

To India’s solace, it is not the only large nation which can be classified as a low trust society. Even China is a relatively low trust society where unrelated people have no desire to trust one another; one of the key teachings of Chinese Confucianism being the elevation of family bonds above all other Society loyalties. Years of rapid economic growth has created a new middle class in China which relishes the opportunity of becoming rich but is distrustful of everything around them. In both these countries families continue to play a central role in business and other organizations, consequently limiting their growth potential. A good indicator is the dearth of home grown “brand names” emanating from either of these counties on the global platform.

Besides intense family networks, some other common features noticed in low trust societies are – importance of the male child to carry forward the family business; reluctance to adopt outsiders in the family either thru marriage (eg daughter’s husband) or legal adoption –  lack of charitable generosity shown by society at large and feeble voluntary or community organizations

In contrast to familial oriented societies, there are societies with high degree of social trust like Japan, Germany and America.  The high degree of trust prevailing in these societies has led to the growth of large associations and relationships – both economic and social. These societies were quick to move from family businesses to large professionally managed hierarchical global business organizations. It is no accident that most of the international brand names eg Apple, Amazon, Uber, Sony, Mitsubishi, Siemens emanate from these countries.

Francis Fukuyama in his book further states all societies can be located somewhere along a continuum that stretches from “Individualistic” societies on one extreme to the “Group oriented” on the other end. The culture of trust can be observed in societies regardless of their positioning on this continuum eg America, in spite of being the epitome of an “individualistic” society, has a rich network of voluntary associations and community structures to which individuals are willing to subordinate their own personal interests. Japan, on the other hand a “group oriented” society, is extremely high on social trust, where interest of the group, social or economic, is paramount over that of any individual member. “Life time employment” is a distinctive feature of the Japanese employer-employee relationship wherein the Japanese employers show a high degree of paternalistic concern for their employee and the employees reciprocate by sticking to the same employer. The high trust culture prevailing in societies has led to their rapid economic and social development and advancing the lives of their citizens.

While India is currently on its trajectory of economic and social growth, it still has a long way to go in availing its full potential and more importantly ensuring that the benefits of growth are inclusive. In order to speed up this journey of social and economic development, the Indian society needs to sensitize itself on the shortcomings of its “low trust” culture and make efforts to significantly reduce the trust deficit that exists among each another – individuals, groups and with the State.

While human beings are creatures of their cultural environment; a “culture” or “habit” is relevant only till the time it serves a useful purpose. Once it starts to become a handicap to the society’s development, appropriate collective steps must be taken by the society to alter the same. It usually takes a couple of generations for a culture so deeply embedded in a society to change; all parents must therefore start inculcating the right values of “trust” in their children, where trusting each other and giving up individual interests for larger societal good does make sense.

All Indians, and also the Indian State, must consider their responsibility; individually and collectively to push India up on the scale of “trust” by showing higher social cohesiveness and solidarity. India needs to build not only strong economic capital but also huge social capital, both of which are critical for a society’s prosperity and development.

Mukulism : A Point of View