Despite deceit, greed, and incompetence on
a previously unimaginable scale, people are
still trusting too much.
by Roderick M. Kramer
FOR THE PAST TWO DECADES, trust has been touted as the
all-powerful lubricant that keeps the economic wheels turning and greases the right connections – all to our collective
benefit. Popular business books proclaim the power and virtue of trust. Academics have enthusiastically piled up study
after study showing the varied benefits of trust, especially
when it is based on a clear track record, credible expertise, and
prominence in the right networks.
Then along came Bernie. There was “something about this
person, pedigree, and reputation that inspired trust,” mused
one broker taken in by Bernard Madoff, who confessed to a
$65 billion Ponzi scheme – one of the largest and most successful in history. On the surface, Madoff possessed all the bona
fides – the record, the résumé, the expertise, and the social
connections. But the fact that so many people, including some
sophisticated financial experts and business leaders, were
lulled into a false sense of security when dealing with Madoff
should give us pause. Why are we so prone to trusting?