By BOB MARTIN

Contributing columnist

Paraphrasing David Halpern, trust is the “dark matter” of social cohesion. Trust is the glue that holds a society together, promotes bonding between individuals, and is the essence of social capital, all of which promotes a healthy economy. Hence, a positive correlation exists between trust and economic growth across societies. If trust is high, citizens readily engage in voluntary transactions and so, economic growth is high. When trust is weak, citizens make fewer voluntary transactions and growth is slow.

Voluntary transactions are exchanges that create wealth. Involuntary transactions (crime and corruption) reduce wealth. Crime and corruption undermine trust. When corruption permeates government, it is a significant head wind for economic growth. Just as rising government corruption has slowed U.S. economic growth over past decades, it continues to plague third world countries.

Beyond the effect on willingness to transact, trust is at the heart of social capital and social capital is also positively correlated with economic growth. People are hesitant to invest in social capital when trust is low.  Hence, a strong welfare state can persist only if people trust each other.

Trust is higher in homogeneous societies than it is in heterogeneous societies. Therefore, when people can self-select, they choose to live in neighborhoods with similar people. If immigrants persist in living among kindred immigrants, their integration and prosperity is delayed. If they create “no-go zones” (live in enclaves) and refuse to integrate, this undermines trust. As a result, diverse societies are very hard to manage.

Douglas Murray, an English author, spent the last several years traveling throughout Europe in search of truth about the immigration crisis. Leaders in western Europe followed ad hoc immigration policies during the last decade and they declined to allow their citizens a rational discussion of the issue.

The political leadership simply dropped the borders and invited anyone who could get there to come in. This led to an immense tragedy, as thousands drowned in the Mediterranean and others were subject to rape, exploitation and other violent crimes. Had they permitted a rational debate they could have designed plans without such severe travel hazards and unexpected consequences.

It is possible for principled individuals to ask questions about immigration policy and not be anti-immigration.  Being opposed to an immigration policy is NOT the same thing as being opposed to immigrants. Hence, people who oppose an immigration policy do not deserve to be maligned as racists or bigots. Such a response is not a counter-argument, it is a slur that ends the discussion, increases the hostility and reduces trust.

Western politicians used political correctness to prevent anyone from criticizing the immigration policy. One could not ask how many people can be allowed in without destroying the welfare system, is the country able to house the immigrants, how long will it take for immigrants to become productive citizens, how do we provide for security against terrorism, how will we handle the increase in crime, and do the immigrants want to integrate with the existing culture, or do they want to replace the existing culture? In Europe, one could not ask these questions without the risk of being charged with a hate crime and/or risking one’s job.

The European Union made irrational arguments to support the “open borders” policy and applied a heavy hand against any individual or nation state that resisted the policies. This led to the Brexit vote in England and considerable resistance by the eastern EU members. Considerable trust has been lost between the people and their governments and between the EU and its member states. It remains to be seen whether trust can be rebuilt, or if the EU unravels.

Trust will not persist if the EU continues to pursue a hardline policy against its own citizens. The EU is a commercial agreement with ambitions to become the federal government in a United States of Europe. They intend to raise an EU army with sufficient strength to enforce their will. The problem is they must raise this army from the citizens of member states and that seems improbable without the consent of the member states.

The EU is led by unelected people, who may be a little delusional about how much power they have. The best route forward is to stop the politically correct bludgeoning of the opposition and start a rational debate about how to proceed.   

A gradual loss of trust also explains the sorry state of political dialogue in the US. Rebuilding that trust requires rational dialogue between individuals that gradually leads to understanding and then bonding. There can be no posturing or virtue signaling because that immediately shuts the conversation down, ending the communication.  If bonded individuals found organizations that promote rational conversations about important public policies, they are creating important social capital that builds trust.

Bob Martin is the Emeritus Boles Professor of Economics at Centre College.