Trust is the foundation of a functioning society, enabling cooperation and facilitating interactions. However, research indicates that Americans’ trust in institutions and each other has declined over the past few decades, driven by the spread of misinformation and partisan division.
This erosion of trust has substantial economic consequences, increasing the costs of transactions, elections, and everyday interactions. It also leads to additional friction, second-guessing, and uncertainty.
As a professor who has studied trust for over two decades, I believe we can begin to repair it by addressing the economic incentives that encourage the spread of mistrust and misinformation. Those who profit from sowing mistrust rarely bear the costs, but we can change that.
Fake News (Credits: New York Magazine)
A 2023 Gallup poll revealed that Americans’ confidence in 15 institutions is at or near historic lows, with Congress and big business at the bottom.
Partisanship and misinformation have also damaged trust in media, and we’re losing faith in each other. A 2019 Pew Research poll found that two-thirds of Americans believe trust in each other is shrinking, and half say people are less reliable than they used to be.
This decline in trust has real consequences, making it harder for leaders to govern effectively and harming economic prosperity. Researchers have found that a lack of trust can reduce a country’s GDP. We need to change the incentives for those who contribute to the “social tax” of mistrust.
While we all play a role in nurturing or eroding trust, a small number of actors produce a disproportionate amount of mistrust. For example, a 2021 study found that 12 online influencers were responsible for most Covid-19 misinformation and conspiracy theories. Media outlets, social media platforms, politicians, and public figures fueling mistrust profit from clicks and attention while we all pay the cost.
Fake News (Credits: Internet Matters)
To address this, we can change economic incentives to restore trust. We should reduce opportunities to profit from actions that create mistrust and division, provide more information to the public about who is fueling mistrust, and hold those profiting from misinformation responsible for the costs they create.
We can also create a nonpartisan, independent trust rating agency to evaluate the trustworthiness of key actors in our information ecosystem.
Lastly, we should hold those profiting from misinformation accountable through legal action or fines, forcing them to pay some portion of their earnings back to the public to cover the social costs. By viewing mistrust through an economic lens and addressing its real social and financial costs, we can start to repair trust and promote cooperation in our society.
