Trust is an essential trait for a vibrant and productive economy, as well as healthy communities in a society. Robert D. Cooter and Hans-Bernd Shafer argue in their book “Solomon’s Knot” that to foster innovation the innovator must trust the investor not to steal his or her innovation, and the investor must trust the innovator not to steal his capital. Innovations are discouraged by distrust; therefore, there are contract laws to facilitate business transactions and innovations. However, corruption in politics, law enforcement and judicial decisions faced by moderate-income Americans breeds more distrust in the political system, its institutions and democracy in general. Contract law is not a perfect substitute for social trust. Transparency International data show that for the corruption perception index score that ranges from 0 (most corrupt) to 100 (very clean), the U.S. score was 69 and ranked 24th in 2022 among 180 countries in the world. The score and rank did not change in 2023. Denmark’s score was 90 in 2023 and ranked 1st.

Fraud in the U.S. has also increased. The Federal Trade Commission‘s early release of data shows that consumers lost more than $10 billion in 2023, about a 14% increase since 2022. The greatest losses were due to investment scams ($4.6 billion). Political divisiveness, mistrust among politicians, mistrust between Americans and politicians who represent them, and influence of money in politics have created a threatening environment in the political system and its institutions.

Professor Mathew Stephenson of Harvard, while discussing the history of corruption, found that even with political corruption in the 19th and early 20th centuries the U.S. had no kleptocracy. Presidents did not take bribes or abuse their power to enrich themselves and their close trusted friends and family members. The federal justice system worked well and civil service was reformed. However, the Trump presidency disregarded traditional forms of separation of public and private functions. Even in the presence of laws and regulations to prevent corruption and conflicts of interests, he relied more on “informal form” to prevent those conflicts. There is a need for more transparency and accountability in the functioning of the government.

According to professor Robert Putnam, lack of social trust amounts to loss of social capital. Social capital represents personal relationships between individuals and communities that facilitate social trust. Putnam presents some of his explanations for the loss of social capital in Vox. He states that, “we were very socially disconnected” in the early 1900s and have become “more socially isolated, more politically disconnected, more unequal” in recent decades. This has heightened mistrust among people in institutions (private and public) and in government, especially the federal government. Hence, it has also led to more fraud, corruption at all levels and certain crimes such as gangsterism and shootings at schools and businesses. It has adversely affected the health of Americans and the economy.

Collective action to solve national problems is being jeopardized due to the prevalence of mistrust between politicians and political parties in Congress. In fact, in the current forthcoming administration of President Trump, some of his cabinet appointees have developed enemies lists of those who may be subjected to prosecution when they are in power. That does not create trust among those Americans who voted for President Trump to solve certain national issues that affect common Americans’ daily lives. Americans would like to see the president and Congress pass laws to minimize the influence of deep-pocketed lobbyists to decrease political corruption and fraud. Americans would rather see the president and Congress solve some fundamental economic, social and political problems such as inflation in food bills, energy prices, immigration reform, family needs and child care.

If President Trump’s administration and the Republican-dominated Congress embark on seriously tackling our national problems, they will cultivate trust in the political system, American voters and democracy. Trust is an essential glue that binds a society and instills confidence in a government.

Vijay Mathur is a former chair and professor in the Economics Department and now professor emeritus at Cleveland State University in Cleveland, Ohio. He resides in Ogden.