In conversation with a friend last week I was discussing my new partnership with a big German pottery manufacturer. I said that we were starting the business before all the legal agreements were finished because I felt sure that I could trust them and with trust we can work through any difficulties we encounter. She mentioned a favorite book of hers called “Trust: The Social virtues and the Creation of Prosperity” written by Francis Fukuyama. The gist of the book is that when you have a society with “high trust” culture there is less friction in the economy and the ability to create large productive organizations. Societies with “low trust” cultures have a far more difficult time building organizations outside of the family. The low trust countries and cultures, no surprise, have lots of systemic corruption built into their societies. I have always believed that, more than any other single factor, social corruption causes poverty.

I have not yet read the book but went to Amazon.com and read the reviews written by readers (say that ten times fast). Some people hated the book as craven and solicitous to conservative protestant values. I found the criticism odd as I have not noticed that non-protestant liberals in our society as being any less honest than protestant conservatives. Fukuyamas’ point is about social heritage and a long culture of trust that has been at the foundation of American society and is a great part of the foundation of American success and wealth.

I am not arguing that we can trust everybody we encounter, that would be silly. But we can trust a lot of people we interact with. We all reassure our individual reputations as trust worthy people, weather we are or not. Trust is a judgment based on experience. Trust is not blind. I have a friend who is incapable of negative judgment about people and has on more than one occasion fallen in with crooks and been thoroughly fleeced. I have observed that the most successful horticultural buyers are not the ones with the greatest product knowledge. The most successful buyers are the ones who exercise good judgment about who they could trust. Once a buyer trusts a vendor things are much easier. That trust must be constantly earned in order to be preserved. Once trust is broken it will be just about impossible to get back.

Many reading this would say that I am an optimistic dreamer and just look at Enron and Tyco if you want to see the real America. What about all the people that trusted them? Okay, it’s true that I am very optimistic about our society and our industry. Sometimes dreams, along with effort and execution, become visions of a better world that can be realized. Dreams and visions are good things. The real lesson of Enron and Tyco are that if you cheat big you will get caught and you will pay dearly. Even if you don’t go to jail to be ostracized by your peers is an enormous personal price to pay for any transgression. The consequences to all of the transgressors in this case all ranged from severe to extreme.

I have done business in many countries and know from personal experience that we are very lucky to have inherited this fundamentally honest society. It is also our obligation to hold to the values that we have been blessed with. This means that when confronted with situations where we can make money by crossing the foul line even just a little, we must step back. I have confronted, as do all of us in business, ethical decisions where easy money was available. All I have to do is look at one of the pictures of my children that populate my office and know that I want them to inherit the America that I received and not the Venezuela that we could create. We owe it to the next generation to preserve and extend this cultural treasure of shared trust.