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By Steve Kelman

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The miracle of social trust

Shutterstock image: executive handshake.

The Economist, the wonderful newsweekly that is the fount of so much useful information and insight, ran an article recently about the growth of LinkedIn. That business-focused social networking site is apparently expanding into a sort of generalized employment platform that is starting to include nonprofessional jobs as well.

What really caught my eye in the article, however, was a discussion of a French LinkedIn knockoff called Viadeo, which recently had an IPO in France and is trying to make a presence in places where LinkedIn does not yet dominate, including China.

Unfortunately, Viadeo has been having trouble getting Chinese employers to use its site to find job candidates, according to the article.

The question for you as a blog reader is: Why?

I quizzed a number of people, and all gave the same answer: In China, connections (guanxi) are extremely important in getting jobs, and employers would never think of going to some anonymous list of candidates they don't personally know or have friends who know.

That would have been my response, too. But it turns out it's the wrong answer. In fact, maybe you can guess the correct answer by looking at the title of this post.

The reality is that Chinese employers don't use the site because they don't trust the veracity of anything people post there about themselves. "Viadeo has had trouble getting Chinese businesses to pay for its services because no one trusted the profiles that members posted," according to the Economist article.

Reading that story reminded me again of something everyone in the United States -- and in some lucky other countries, such as Japan and most of Western Europe -- takes for granted: a very high level of social trust, or the belief we can generally take the representations of strangers for granted.

When I first visited India many decades ago, I was told that if I went to a post office to mail a letter (I'm dating myself!), I should always make sure the postal employee cancelled the stamp in front of me. Otherwise, the risk was too great that the employee would take my money for the stamp, put the stamp on the envelope and steam it off after I left so he or she could pocket the money and resell the postage.

Think of all the representations we take for granted in the U.S. without normally bothering to verify them. We don't re-weigh preweighed packages of fruits or vegetables in a supermarket. A university admissions committee generally believes what's written in letters of recommendation from a student's former professors -- something we do not do for applicants from China, where letters are often forged or purchased. If a restaurant says it is serving us beef, we don't worry that it might actually be serving us donkey meat -- another problem China has.

The costs society saves by not having to verify everything are enormous. In fact, if you had to verify everything before you engaged in any transaction, society would grind to a halt.

We see how bad things can get when trust breaks down. For example, the falsification of performance measures at Department of Veterans Affairs hospitals will create vast new costs and inefficiencies in checking data. Contractors complain about oppressive government audits, but what would things be like if the government felt it needed to have outside audits to recheck every invoice?

The level of social trust we have is a miracle we usually fail to fully appreciate. Behind it, though, must be a well-functioning government and legal system that, by reducing the ability of the untrustworthy to exploit the credulity of the rest of us, makes it possible to live our everyday lives without worrying that letters of recommendation are phony or stamps will be yanked off letters.

That is yet another hidden benefit of good government that, like trust itself, we should be careful not to take for granted.

Posted by Steve Kelman on Aug 26, 2014 at 11:02 AM

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Reader comments

Wed, Sep 3, 2014

Sorry Steve but you've only discussed half the equation. The other side is the lack of social trust in the govt itself. Every time the president bashes the other party (when does he not??), it is clear he is twisting things to somehow set himself apart form all those evil politicians on the other side. He's a politician too and the most partisan president in my 61 years. Therefore, I trust very little he says like, "if you like your health insurance plan you can keep it. Period." Well we learned the hard way that wasn't true. Executive orders delaying the healthcare law as if the Executive Branch is above the law, when everyone really knows he's holding off the really bad parts until after the election. We all know this. The people don't trust the govt to an extent I've never seen. And daily I see blogs blasting federal employees as scum. And it's because of association, not because fed employees are bad people. Politicians are ruining the trust of the people in govt. To be fair to the subject, I'd suggest you write an article on that. Since you state you're dating yourself, as have I, take us back on a trip where folks trusted the govt more and that will show we've come a long way in the wrong direction.

Tue, Aug 26, 2014 KP Shanghai

Big companies like McKinsey and others are beginning using LINKIEDIN searching for candidates in recent years, several of my friends are spotted by the HR in those companies via linked in, so it is growing, but just may not be as developed as the linked in usage in other countries. It is a new business for connection and takes time for HR to transform traditional way of recruiting people. The information on Linkedin webpage, at least in my feel, is very near true. Also, some HR told me that since Linkedin is quiet new stuff, many people do not know how to write out the key words in their linkedin so as to improve the chance of being searched. Thus, I think Linkedin is becoming a complementary screening tool for HR in China to recruit candidates. It is still in developing. It is also a story about supply and demand. HR, already get a lot of paper application every day, so they do not have the incentive to search actively online for candidates. The supply is quite high compared to the company demands. After all, linkedin requires HR extra work for screening.

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