WATSON … Trust business? Why should we?
Theresa Tedesco reported Tuesday that, as the headline on her FP Street column put it, “Canadians’ trust in corporate leaders drops to lowest level since 2008.” This is based on the “Edelman Trust Barometer,” which surveys the state of trust in 27 countries. Sorry to say I’d never heard of the Edelman Trust Barometer. I’m more familiar with the Edelman Catch Barometer, which registered nine for the New England Patriots’ receiver of that name in Sunday’s Super Bowl.
The trust numbers are not good. “Only 47% of Canadian respondents said they trusted business, down significantly from 62% in 2014, while confidence levels for chief executive officers dropped to 28% in Canada in early 2015, down from 33% in 2014,’” Ms. Tedesco reports.
You never want to, er, mistrust poll data, but whenever I see big drops in a poll number I do wonder if there isn’t something wrong with the survey. The Edelman surveyors look at people’s feelings about NGOs, media, government and business. Next year maybe they could ask how much they trust pollsters.
As to the numbers, did anything so bad happen in Canadian business in 2014 as to justify such a sudden 15-point drop in trust? Gord Nixon did leave RBC but is the new guy really morally reprobate? Burger King took over Tims but are the BK owners truly scoundrels through and through?
That there might be reason not to completely trust the survey results is suggested by a visit to the Edelman website. First, it’s wholly an Internet survey, which can involve problems. But beyond that, one of its key overall conclusions is that, worldwide, “Trust in government increases slightly, driven by big gains in India, Russia and Indonesia ….” You get that? There was a big increase in Russians’ trust in their government. Could the rest of us maybe have a vote on that?
Perhaps Russians really did have their confidence in government renewed in 2014. First Mr. Putin’s administration pulled off the Sochi Olympics and then, swiftly and unopposed, it made a large and unexpected real estate acquisition. But if that’s what’s driving an admittedly small increase in worldwide trust in government, well, maybe we needn’t pay too much attention to the rest of the survey results. I certainly hope no major Can- adian businesses are putting a trust task force together or getting ready to appoint a VP for trust issues.
Trust is a key part of life, of course, at least of happy life. But it’s not at all clear why trust in businesses is important. Adam Smith is probably the most famous advocate of free markets ever. He thought freedom to engage in enterprise was what determined
The Wealth of Nations: Britons had that freedom and were therefore wealthy; other countries didn’t and therefore weren’t.
Yet Smith didn’t trust businessmen (only men in those days) any farther than he could throw them. Probably his second most famous quote is: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
He firmly believed conspiracy among businesspeople kept wages down: “Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate.”
Self-interest is not unvarnished good to Smith. What makes it work in all our favours is competition. If businesses face competition, then they are bound to try to please their clients. If they are monopolies, like the Post Office, they can please themselves.
The Edelman survey and the reception to it seem to assume we should all want to trust business. But trust doesn’t really enter into it, does it? What we want from business is good, reliable products and services delivered at the lowest possible price. In a competitive world, businesses that don’t provide that don’t prosper.
As it happens, based on repeated market interactions over the years, I do trust my barber not to give me an awful haircut or nick me as she snips away. I also trust my dentist to do a reasonable job of caring for my teeth. I trust my local supermarket to sell me food that doesn’t make me sick. Since I was a tyke I’ve been going to the same Big Five bank and so far as I can tell they’ve never misplaced a penny that I’ve, yes, entrusted to them. But if it had been a Big One bank, I’m not so sure that would have been the case.
According to Ms. Tedesco’s report, “the main reason why Canadians are losing faith in the corporate sector is because a 53% majority believe that businesses ‘failed to contribute to the greater good,’ and instead act in their own self interest for profit.”
Well, put me down as one of the 47% (sound familiar, Mr. Romney?) who are happy Canadian businesses have been focusing on profit. That focus, in a competitive environment, is what has given me decent haircuts, good dental care, safe, wholesome food, efficient custody of my financial assets and dozens, probably hundreds of other goods and services that make my life immeasurably better. Forgive me, but I regard that as a major contribution to the greater good.
Canadian “trust” in business is down, says the same survey that found trust in government is up — in Russia