Preamble to the 2025 Compendium

The Importance of Trust

All modern economies and democratic political systems run on an intangible quality called trust. Trust is confidence you have that other people in your society will be honest, reliable, and do the things they’ve committed to do. It builds on certain virtues that constitute “social capital,” which allow people to work together easily and are the necessary basis for common efforts of all sorts.

In an economy, trust can be seen as a kind of lubricant that can dramatically reduce transaction costs for businesses. You can make people cooperate through formal mechanisms — contracts, hierarchies, detailed rules, and formal authority. But, with trust, this is less necessary. And the same is true for firms: when there is trust in the organization, you don’t need to rely on lawyers and a large compliance department to get people to work together efficiently.

Trust is critical for entrepreneurship. You have to be able to trust people to try new things, experiment, and not necessarily punish them if their ideas don’t work out. Risk-takers need to know that someone has their back. This is especially true in the present age of technological acceleration, where innovation often precedes institutional adaptation, and where a tolerance for informed risk-taking is critical to progress.

In a modern democratic political system, trust and social capital are necessary for democracy to work properly. Trust is the basis for what we call civil society, that is, a dense layer of groups that can organize for common purposes. Individuals by themselves are weak and isolated; it is only by banding together that they can serve their own common interests, and exercise agency within the broader political system.

Trust and social capital are necessary for democracy to work properly

The great French observer of American democracy, Alexis de Tocqueville, noted when he visited the US in the 1830s that the young country had an “art of association” that allowed Americans to work together to a much greater extent than people in his native France. Associations, in his view, became the schools through which people were instructed in democratic participation.

Needless to say, we are in a crisis of trust today. It was once common to say that the United States was a high-trust society, but few people would now characterize it as such. Pollsters and social scientists have taken surveys over the decades, measuring the degree of trust in society, trust in government, in institutions of various sorts, and in other members of their own society. The results of these surveys are very troubling and show that levels of trust have been declining steadily over the past 50 years.

As Richard Edelman recounts herein, this includes both the vertical trust that people have in their governments, but also the horizontal trust in fellow citizens. This decline has occurred in many societies around the world, and it has been particularly steep in the United States. That downward curve has been especially pronounced in the early decades of the 21st century.

In the United States, the lack of trust is most evident in politics. The country has been polarized for several decades now, a polarization that has deepened with

every passing year and election cycle. It has evolved into what social scientists call “affective” polarization, meaning that people don’t just disagree with their fellows over policies. Rather, they question the motives and good intentions of their opponents.

This distrust has extended to the electoral process itself, where people make accusations of fraud if their side doesn’t win. Politicization and distrust have been seeping into the economy, where certain brands have become associated with one side of the divide or another. No modern economy is going to thrive in which consumers make purchasing decisions on the basis of their political views.

Needless to say, we are in a crisis of trust today

One of the most dangerous manifestations of distrust lies in the spread of conspiracy theories. A conspiracy theory is built around the assertion that things are not what they seem: that events or facts are being manipulated by shadowy elites who are pulling strings behind the scenes. Democracy and deliberation depend on a shared belief in factual information; conspiracy theories undermine that common understanding and make deliberation impossible. The rise of algorithmically amplified media ecosystems has further compounded this effect, allowing tailored disinformation to flourish, and reinforcing the erosion of common evidentiary baselines.

Trust is important not just between citizens, but also with respect to the country’s government and institutions. The rule of law depends on trust. Authoritarian governments rely on harsh punishments to make people obey the law; in a well-functioning democracy, by contrast, citizens are law-abiding because they see that the law is working on their behalf.

But they will comply only if they believe that their institutions are fundamentally legitimate and fair — a government that is for, by, and of the people. Especially as we enter an era when institutional behavior is increasingly mediated by digital systems and AI, their continued legitimacy rests on these systems being viewed as fair and procedurally sound.

Americans, when compared to Europeans or Asians, have always had a high residual level of distrust of their own government. This has been true of many on the right, who feel that most bureaucrats have left-wing sympathies and are hostile to conservatives. But it is also characteristic of many progressives, who feel the bureaucracy has been captured by corporate interests.

The loss of social trust constitutes one of the greatest weaknesses of modern liberal democracies.

Distrust of the government has naturally deepened with recent rhetoric about the “deep state,” and assertions by high officials that the government is actively working against the interests of ordinary people. These perceptions have been further weaponized by personalized, data-driven political messaging, which fragments the electorate and undermines shared civic narrative.

The loss of social trust constitutes one of the greatest weaknesses of modern liberal democracies, and above all of the United States. Trust is far easier to destroy than to build up. The latter can only happen over time, as people begin to regain confidence that the law will be respected, that institutions will perform as they promise, and that their government is working on their behalf. It requires that our institutions evolve: not only to be seen as trustworthy, but also that they behave in ways that are intelligible to those they serve.

The recovery of trust requires virtues of ordinary people as well: that they practice a certain moderation in their dealings with fellow citizens, and act with reciprocity and openness towards others. We need to replace the sand in the gears of our democratic orders with a lubricant once again.

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Francis Fukuyama is the Olivier Nomellini Senior Fellow at Stanford University’s Freeman Spogli Institute for International Studies (FSI), and a faculty member of FSI’s Center on Democracy, Development and the Rule of Law. He is also Director of Stanford’s Ford Dorsey Master’s in International Policy, and a professor (by courtesy) of Political Science. He has authored many books, including Trust: The Social Virtues and the Creation of Prosperity.