Trust: Imagining Mutual Futures in Global Uncertainty

The financial crises and the years of economic malaise that followed represent profound failures of the economy and of policy. Above all, they were failures of understanding.” Martin Wolf, Financial Times, 3rd September, 2014

We live in a society that’s lacking sense, lacking fathers. We’re lacking sense because we no longer believe in politics, we don’t believe in finance. Humanism has difficulty restructuring itself. There’s solidarity, more or less but we can’t manage to enact it.Julia Kristeva, Euronews, 18th March, 2013

When the recent financial crisis, compounded by more recent, apparently ongoing, revelations of malpractice within parts of the financial sector (LIBOR, EURIBOR, FOREX…) steamed off the press and into the broader media flurry and popular consciousness, business at-large suffered a degree of reputational contamination and resulting trust deficits impacted the economy at the macro level. Contagion in the corporate sector, however, seemed to find concrete justifications as major businesses such as Vodafone, Starbucks, and Amazon were spotlighted by the media for their opaque tax and transfer pricing practices. Ongoing negative press and NGO scrutiny beleaguers the extractive industry for its impacts on local communities and their environs. 

Following the crash, not only was there a sense of populist cynicism and distrust of the profit-margin per se but corporations have been left tentative and in doubt as to the safety of their own assets and investments. Such general distrust of business – and within business – is viewed as hurting not only companies but indeed all participants in the global economy. 

This crisis of trust sits within a broader escalation of uncertainty and mistrust most crudely understood as a consequence of an ongoing process of globalization which feels at once exponential, rife with possibilities, always unchartered, and yet also unsustainable. The effects of this are multifarious and exert pressure on a wide range of relationships including those between nation states and in particular major (and some receding) global powers, between governments and citizens as well as between corporations and customers. For big business, the technological proliferation, which aids the onward path of corporate globalization, leads to ever greater decentralization. Technological sophistication and its facilitation of powerful global social-media platforms (to give but one example) has also lead to smaller time-windows for corporations to act effectively on reputational risk factors as they emerge. Thus we see that increasingly “managers are concerned with building trust among team members to maximize group potential. Market researchers learn about consumer loyalty and trust in brand names” (Khodyakov 2007: 115). 

Trust as investment in imagined returns

Investment in corporations and other institutions involves an act of imagination in which we anticipate an imagined – and often uncertain – future payoff. Costas Douzinas articulates this pay-off in terms of assisting the postmodern project that is the careful construction of the self. For example on investing in branding he writes that the “[m]arket in prestige is imaginary…supported by our fantasy, which projects in[to] signs and marks the status or success it expects to receive back” (2013:72). Less abstractly however, the consumer’s imagined return, when entrusting a bank with his or her finances, is monetary. As Susan Shapiro puts it,

Investment in corporate securities, participation in pension and retirement funds, membership in credit unions, and the like represent aggregative strategies to increase the value of personal property while minimizing risk. [Such agencies]...demand that commitment be conferred far in advance of payoff without any necessary confirmation during the interim that the return on investment will eventually be honored (1987: 628).

Shapiro’s comments describe the investment of trust and anticipated return on investment as it is experienced by ‘layman’ customers of financial services. But this gives rise to another point: the relationship between trust, the imagination and the future as far as financial investment is concerned is not equivalent on the ‘other side’ of the institutional walls. In banking and investment management, feelings of trust are bolstered by mathematical models used in the pervasive practice of “risk management” - such as Value at Risk (VaR) or the newly (post-crisis) proposed Expected Shortfall (ES) - which are felt to somehow off-set the risks of an ever increasingly pervasive and voracious risk appetite (how effective these numerical models actually are is another matter). The average financial services customer on the high-street applies no such devices on his or her own imagined risk and reward evaluation.

Financial institutions treat the future as a sort of commodity in its own right whose uncertainties can be played with, used for speculative purposes, manipulated, monetized, hedged or checked by premiums. Traders of instruments such as “futures” and “options” deal in uncertainty through monetizing different levels of commitment to imagined futures, generating capital on either an appetite for certain obligation, or a desire to purchase the right to options in an uncertain future. 

What became increasingly apparent, when the crisis lead to revelations of the highly complex workings of the financial institutions and their transactions, is that the relationship between investment and imagining the future was taking place on a profoundly uneven playing field. Even the language used – the names for the derivatives for example – expresses a sort of brazen linguistic authority in imagining/anticipating the future and in rebuffing its threats of the unknown or that which was not understood. 

Transparency as reparation?

Recent unforeseen crises made a mockery of “imagining the future” and hence of the investment of trust. Where there is cynicism there was first a flash of earnest disappointment. Public trust-deficits might be the result of undesirable imagined outcomes but they could also be due to a faltering imaginative-decision-making process, a crisis of confidence -or a nagging uncertainty. Macro-level uncertainty begets micro-level uncertainty which in turn feeds instabilities and uncertainties on the macro level. Transparency, on the other hand, sounds like a promise to leave nothing uncertain, nothing to the imagination (though in fact the future can never be elucidated in advance). One can soon see how transparency’s vaguest allusions (to certainty, clarity, fairness…) can fast become very seductive and a choice rhetorical term. If trust is about imagining the future then the relationship between banks and their stakeholders is pivotal. The investment of trust in the economy fell far short of the ideals of mutual clarity and communication. The public felt they had been left in pitch-darkness about the “real” nature of the money-markets and the economy in which everybody had a vital stake. This was commonly put down to two (similar but crucially different) sector-wide traits: opacity and obscurity. 

When it came to talking about the imperative for mending trust in the banking sector, Mark Carney advocated the five “C”s: Capital, Clarity, Capitalism, Connecting with clients and Core values (2013) and Gillian Tett wrote in the Financial Times (2012) of the three “S” words: Stewardship, See-through (or ultra-transparency) and Silos (which need more permeable borders and better communications according to Tett). Legislators have also tightened their focus on ‘transparent’ practice. Banks, as well as other corporations, have been quick to heed to advice on language. Barclays, for example, has asserted “Stewardship” as one of its five publicized, post-crisis core values (along with respect, integrity, service and excellence). The new language of contemporary CSR has been stressed by the corporations, regulators and media alike. As Mark Fenster (2010) argues, “transparency” has come to act rhetorically as a metaphor for democracy, apparently promising democratic access to knowledge. 

A culture of increased Transparency may be useful for fostering accountability, trust, and democratic engagement. However, as recent critiques point out, we must be careful not to treat Transparency as an universalisable, unassailable good. We have to be attentive to the ways in which Transparency can lead to new regimes of power and control (Birchall 2011a, 2011b). 

Global sustainability policies - a driver of trust, yet?

While, in Shapiro’s account, trust involves the imagination and anticipation of a future personal financial reward, contemporary concerns about the sustainability of current economic trends necessitate an expansion of our analytic lens beyond the desire for personal profit and into the collective consequences of environmental degradation, community cohesion, and national and global wellbeing among other factors. In other words, we must think of trust in corporations not only in terms of their ability to deliver on their promises of individual financial or material/lifestyle return, but also in terms of their impact on collective wellbeing factors that exceed and are irreducible to monetary figures. If investing trust is about anticipating the future, then one might argue that the ways in which people trust corporations is inseparable from their concerns about the future, not only of their personal security but also for that of their community, nation and the planet. Transformation of people's values and hopes for the future are crucial here because they shape corporate policy and corporate responsibility, which in turn feeds back into the relationship between businesses and investors/consumers. In this vein, Alberto Corsin Jimenez (2011:183) points out that trust depends on people's concerns – what matters most to them – and that such concerns structure the relationship between “corporations” and “society”. The question is how far people’s concerns about the future have taken on broader and more long-term concerns than personal, financial ROI? Has that which was traditionally considered remote (applying to others either because of temporal, geographical or class distinctions) become personal and part of the western consumer’s personal anticipation, imagination and anxiety? Malcolm Bull, writing for the London Review of Books in 2012, points out that “public policy debates are rarely concerned with possibilities so remote in time and uncertain in outcome [as the climate change and sustainability debate], and when they are, the policies that result are correspondingly tentative.” Bull goes on to suggest that desire or indeed a sense of urgency to act, on an institutional and on an individual level, on matters of climate and sustainability, are failing to gather sufficient momentum in any quarters precisely because they concern the future in the longer term. Nevertheless major corporations have started to recognize that the crucial task of attracting the best talent may suffer if corporate social responsibility policies and core values don’t match up to the more discerning requirements of today’s top graduates. In other words there are indicators of a shift here. 

Trust as a relational matter

But trust is based not only on imagined (expected) payoffs, but also on relationships. Human beings live in webs of relationships. They depend on these relationships to establish confidence in the continuity of their personal existence and the practicality of their plans. This suggests the risk that chaotic disruptions pose, but also the challenges created by opacity and the inability to understand ones relationships with confidence. This is true with regard to family and community, but also social institutions including those created by the government and also corporations. Part of the current crisis is a crisis of trust in institutional relationships (Calhoun 2014).

Establishing stable relationships is key to being able to plan, undertake actions with confidence, and invest optimistically in the future. This is as important for institutions like corporations as for ordinary people. However, it becomes problematic when firms themselves have shorter lifespans because of mergers and acquisitions, or when new legal instruments make it difficult to discern who the real counterparties to transactions are, and when markets are revealed to be susceptible to manipulation by invisibly privileged inside traders (Calhoun:2014). 

This is not just a matter of external relationships, like those established between businesses and their customers. It also, even more potently, involves the relationships of employees at all levels to each other and to the firms that employ them. Whatever the supposed gloss of ‘professionalism’, people invest their emotions and their identities in such relationships. This is familiar in the challenges that retirement poses, but it is multiplied dramatically when it is not the planned departure of a single individual from an otherwise stable firm but the instability of all relationships in the firm at the same time – as in a major restructuring or merger. This is one reason many cling to old institutional structures, even those not working very well, in the face of disruptive change. 

Craig Calhoun writes:
Because emotional investments in such relationships are so significant, they are not readily made transparent – and transparency may not even be precisely the relevant goal. The psychoanalytic concept of transference, or the “treatment alliance” is relevant. This is most familiar from psychoanalyst’s accounts of how patients establish relationships to their analysts. Emotionally powerful relationships full of projection, attachments, cathexes, and other dynamics can be interpreted to understand not just their interaction but also the deeper emotional life of the analysand.

This dynamic is not limited to individual psychoanalysis. It is part and parcel of the way consultants work with corporations. It is also embedded in a host of other relationships including the complex relations between employees and CEOs – which are full of investments of hope, resentments (often transferred from other experiences), and unconscious defense mechanisms. In individual analysis, the transference of patient onto analyst makes the analytic session a sort of camera obscura revealing how the patient’s thoughts and emotions work. But the same phenomena are apparent in various ways with those 'artificial persons' corporations. First, corporations may engage in transference like relations with others: consultants or major investors. Second, individuals in corporations engage in similar psychic projections not only onto CEOs but onto the firms themselves. Firms are shaped - in members' minds but through them in reality - by these projections, by the emotional investments made in them. People seek security, meaning, love, appreciation, discipline from corporations - and it becomes alarming when corporations themselves are reduced to commodities bought and sold in the market. This renders transparent their ultimate market basis, and in doing so denies all the other meanings they have for people who work in them. The emotional response thus often exceeds and distorts directly instrumental economic issues (Calhoun 2014).

This is one reason that instability in economic life is linked to what Richard Sennett (2000) has called a “corrosion of character”. Without stable, knowable relationships and the capacity to think of a long-term future, strength of individual personality can be undermined (Calhoun 2014). The subject of western capitalism is heavily dependent upon the corporation as employer – a patriarchal figure (bestowing daily structure, instructions, regulations paychecks, titles and protocols) - but also as nurturer, a maternal figure delivering goods and services in return for a bond which is enacted by financial transaction. The emotional investment in the corporation is part of the fabric of the late capitalist self. When the child first perceives weakness and fallibility in the parent he is enraged. So too is he enraged when the corporation’s ‘ultimate market basis is rendered transparent’ and invested meaning is suddenly denied to the subject. Thus we may think of a populist call for Transparency as a sort of reaction-formation, arising in a state of rage at what comes to light when things go uncontain-ably, unconceal-ably wrong, when darkness felt better. 

Boundaries between state, market and society

The relationship between transparency and privacy is a matter of blurry and contested boundaries. The metaphysical transparency, the clear screen, or the “window on info” often inhabits one or several dividing lines, most crudely perhaps, the line between public and private. Governments fiercely defend the sanctity of state secrets, companies build brands on trade secrets and trade in IP, citizens want to be allowed some privacy too. All of this is a breeding ground for well-argued double standards. Being spied on, tracked, recorded and archived, for reasons of “security” as well as corporate profit is difficult to separate and delineate from the Transparency that governments and corporations ought to adhere to as a means of preventing abuses of power (Draper 2012). The line between invasion of privacy and democratic Transparency becomes blurred. If, at the level of the subject, privacy and secrecy help sustain a sense of psychic stability, agency and creativity (Salecl 2002, Birchall 2011b) then, does a culture of Transparency risk spilling over into a violation of privacy and what are the implications of this? In fact it is in the dual outcry over transparency demands on the one hand, and threats to security and privacy with increased surveillance etc. on the other, which bring into starkest relief the problems with rendering Transparency a sweeping ideology viewed as a force for good. It seems that what is needed is a nuanced account of the difference between how and why Transparency applied to corporations/governments is, and ought to be, different from Transparency applied to private citizens.

As Craig Calhoun (1993, 1999) makes clear, the concepts of “civil society,” or “society,” or “the people” are each blurry and defined by contested and unstable boundaries. These terms are usually defined in opposition to “the state” (another problematic concept) but also in relation to “the market” and corporations. Market and corporations are sometimes claimed for civil society and seen as key exemplars of its capacity for self-government. At other times they are seen as challenges to or even enemies of “society” because they bring disruption and other negative externalities. Wherever these apparently blurred boundaries may be drawn, they are necessarily the potential sites of transparency and the delineators of privacy and thus the specific nature of these boundaries is called into question when we want to think about the real, concrete forms of transparency and privacy which can exist between societies, corporations, governments and nations.

Part of the issue derives from the opacity of both corporations, whose internal operations may be more or less closed to public scrutiny and markets that operate on such an enormous scale and with such complexity that they cannot readily be “viewed” by ordinary people. While some things may be outright secrets, others are hidden only by the fact that grasping them depends on the use of mathematical tools and data sources that are not readily available. Much obscurity exists through complexity. While we have an image of buying and selling as a transaction between concrete, knowable persons in fact most of the relationships established by modern markets are indirect, often with innumerable intermediaries between initial sellers and ultimate buyers (Calhoun 1992). 

The position that businesses and corporations hold in relation to the public – the way they are perceived by ordinary people, the extent to which they are trusted, the extent to which they engage in mutuality – has consequences for democracy and wellbeing (see Moore and Mayo 2001), as well as for subjectivity and the “fantasy structure” of people's anxieties, desires and aspirations (see Salecl 2004: ch.1). The quantified self may not only hold promise of the optimum self, perhaps more significantly it acts as an antidote to the anxiety-inducing uncertain self. The existential anguish over being a physical and mental subject with unquantifiable and inexplicable urges and drives can, it seems, be placated or forestalled, through image-making and number-crunching. Rendering the self as knowable, through imagined structures, which the internet facilitates so well, we belong to groups on Facebook or Linkedin, we follow a band or a writer on twitter, we know ourselves through our stats and feel worthy according to the number of ‘likes’ or ‘endorsements’ we receive. These platforms have woven themselves into the self-formation of contemporary citizens and trust is not so much earned as it is emotionally bestowed and, in a sense, narcissistically blind to risk. 

The quantified self: personal data and (in)secure subjects

If social media showed the private individual’s ready willingness to go public, then publicness – or even publicity- on the internet has now arguably become crucial to the subject’s own formation of his or her identity. Being the person one is seen to be is a constant (if inconsistent) and in-exhaustive project on the internet. It reveals and nurtures a tendency away from privacy almost as though the task of establishing the boundaries and delineation’s, which create personhood or identity, is now dependent on removing boundaries. As the person becomes a brand it is natural that he or she requires exposure. Enthusiastically we edit ourselves into ‘optimum’ selves who are only ever worth what others perceive them to be worth and therefore we need to be marketed. And yet we feel outrage when we are told that these apparently qualitative acts by apparently autonomous selves translate into masses of quantitative ‘personal’ data sold to corporations who are then better armed to facilitate the aspirational lifestyles we have gladly flaunted, and generate revenue in the process. However, as phenomena such as “the quantified self”, “biobank” or “life-logging” reveal, we too are now eager to translate qualitative states and bodily function into quantitative data and measurable value. The passage from personal bodies to corporate/government databank has perhaps never been shorter. Believing that the quantified self could assist the project of creating the optimum self we elect to don wearable technology which in many cases send the data to an external body. Indeed if being is being seen by the other why should that ‘other’ not be a seductive, PR-powered business or government body? 

A diminishing cultural preference for traditional privacy does not of course mean that data privacy laws will diminish or go away. On the contrary it means that they will proliferate, complicate and this is set to become increasingly complex and convoluted legal terrain. The simultaneous desires to both expose and conceal, to blindly trust and furiously protect, and the legal rights attached to these desires or freedoms, are shifting within a significant cultural sea-change. 

Honesty and the phantasy of transparency

In light of such cultural, economic and political shifts and uncertainties, how can or should the boundaries between “society,” “state” and “market” or “corporation” be renegotiated to everyone’s mutual benefit? If, as Calhoun implies, solid, “knowable” relationships between individuals (as consumers, citizens and employees) and institutions underpins the capacity for thinking long-term or imagining and hence investing in the future, then it stands to reason that nurturing relationships within institutions and between governments, corporations and society may go a long way towards containing feelings of uncertainty and instability. Taking the psychoanalytic concept of “transference” as the template for relationships between corporation and client or consultancy and corporation it soon becomes apparent that the crucial “basic trust” which facilitates a productive alliance and allows for thinking is construed of a complex mixture of honesty and opacity – a central feature of the analyst’s duty to uphold the boundaries which maintain the cultivation of trust. Whilst analyst and analysand strive towards mutual honesty, the transference and countertransference (feelings felt by the analyst towards the analysand) are, in part, made up of the struggle to accept that transparency in its full sense will never come to be more than a powerful phantasy. The risk which must be carefully considered is that Transparency dogmas, and even heavy regulation, foreclose the possibility of trust-relations. This may be an indication that honesty can no longer be expected to feature in these relations but it is perhaps worth considering whether it also creates a dynamic within which rebuilding cultures of ethical practice, honest communication and customer service is profoundly stifled before it can begin. 

Julie Scrase and Nikolay Mintchev for Zamyn

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