Trust - New Findings from Neuroeconomics
Minessence eZine #25 13 Dec, 2005

Keeping you Up-to-Date with Values R&D and Events—Paul Chippendale, Editor.



Last eZine I emphasised the importance of basing human development/intervention programs on principles that have been established through sound research (traditional academic or experiential) which has credible evidence to support it. This eZine, I give an example of deriving guiding principles from research, and then using the principles to guide behaviour/action and policy making.

Before launching into the example, let's recap how principles relate to behavioural choices.

Figure 1 - The Relationship Between
Values, Ethics & Principles

With reference to Figure 1. If we know what a person's priority values are, we will know in a broad sense what behaviours will be important to them. However, we cannot know specifically how they will behave in any specific situation. For example, if a person's highest priority value is research/knowledge/insight it would probably come as no surprise if you found the person in a laboratory somewhere doing medical research. However,  you cannot know from their values alone whether or not they are likely to carry out harmful experiment with animals. This is where codes of behaviour (ethics, morals, laws, norms, etc.) come in. If we know the code of ethics guiding this medical researcher, we will know how he/she is supposed to behave in terms of conducting the research.

There are many ways in which we can live out any particular value. We live in a society, therefore, we cannot live our values any way we want. That's why ethics, morals, etc. exist. - as Mackie (1977) says, "Even thieves have values, but they don't behave ethically." Johannesen (cited Shockley-Zalabak 1999, p. 437) gives further examples to help distinguish between values and ethics:

Concepts such as material success, individualism, efficiency, thrift, freedom, courage, hard work, prudence, competition, patriotism, compromise, and punctuality all are value standards that have varying degrees of potency in contemporary American culture. But we probably would not view them primarily as ethical standards of right and wrong. Ethical judgments focus more precisely on degrees of rightness and wrongness in human behaviour. In condemning someone for being inefficient, conformist, extravagant, lazy, or late, we probably would not also claim they are unethical. However, standards such as honesty, truthfulness, fairness, and humaneness usually are used in making ethical judgments of rightness and wrongness in human behaviour.

Clearly our values influence what we determine as ethical; "however, values are our measures of importance, whereas ethics represent our judgments about right and wrong" (Shockley-Zalabak 1999, p. 438).  An easy way to remember the difference between values and ethics is to memorise the phrase: Values motivate, ethics constrain. The close relationship between importance and right and wrong is a powerful influence on our behaviour and how we evaluate the behaviour of others.

We've covered values and ethics, now where do principles fit in?

Principle is defined in Nuttall's Concise Standard Dictionary of the English Language as, "n. the source or origin of anything;...a general truth or law comprehending many subordinate ones;...tenet or doctrine; a settled law or rule of action;... v.t. to impress with any tenet; to establish firmly in the mind". Ideally, we formulate our codes of behaviour (the constraints on how we live our values) from sound principles - i.e. from our best knowledge and understanding of the "way things work".  Based on an understanding of the principles that underpin an action, we know with a reasonable certainty what the outcome and consequence of the action will be.

There are two main benefits of taking a principle centric approach to guide human action: (1) knowing a set of principles concerning "the nature of things" enables us to make informed choices and judgments, as we know the likely outcomes of our actions, (2) knowing even a few principles helps us avoid information overload. On the latter point, Birch (1999, p. 44) says:

One way in which drowning in information is overcome is by the discovery of principles and theories that tie up a lot of information previously untied. Prior to Charles Darwin, biology was a mass of unrelated facts about nature. Darwin tied them together in a mere three principles of evolution: random genetic variation, struggle for existence, and natural selection. So we do not need to teach every detail that was taught to nineteenth century students.

Let's now look at a more specific example of how principles can guide how we live our values - and perhaps a value we may choose to place more priority on once we have a clearer understanding of its role in human interaction. The value chosen for this example is trust.

Trust Defined1

One dictionary tells us that trust, derived from the German word Trost, meaning "comfort", implies instinctive, unquestioning belief in and reliance upon something. It is very much like love, and its presence or absence can make a powerful difference in our lives.  As trust ebbs, we are less open with each other, less interdependent, less interbeing - not into each other in deep and meaningful ways; we look for strategies in dealing with each other; we seek help from others; or we look for protection in rules, norms, contracts, and the law. My defences are raised by my fear that I do not or cannot trust you. The ebbing of trust and the growth of fear are the beginning of alienation, loneliness, and hostility. In a very real sense, we can say that trust level is the thermometer of individual and group health. With it, we function naturally and directly. Without it, we need constraints, supports, leaders, managers, teachers, interveners, and we surrender ourselves and our lives to them for guidance, management, and manipulation.

Understanding Trust

Until the late 1990s we had to rely on the experientially gained knowledge/wisdom of people such as the late Jack Gibb (1914 -1995) to guide us in effectively living the value trust. Now, new advances in neuroscience are discovering what is really going on when we trust people. Neuroeconomist, Paul Zak,  has found that the hormone oxytocin influences trustworthiness. When we sense someone trusts us, the level of oxytocin in our body rises:

Oxytocin rises when someone trusts you, and facilitates trustworthiness. This finding shows that we trust others because it "seems" the right thing to do, activating social attachment mechanisms (Zak 1993, p. 23).

Oxytocin is the hormone associated with the physiologic attachment mechanism that has evolved in mammals to ensure they care for their offspring. Oxytocin is released during orgasm, breast-feeding and childbirth:

For humans who are not breast feeding or giving birth, every time oxytocin spikes, besides when a stranger shows they trust you, is when you have sex. So at some level it's sexual reproduction that has enabled the growth of oxytocin - there's a bonding mechanism that's important in monogamous species which humans mainly are. (Zak in Horstman 2005)

The findings of neuroeconomists are causing other economists to rethink theories that have been based on the assumption that people act in pure self-interest. We now know that our brains are wired to guide us towards both socially and individually beneficial behaviour and that this motivation to cooperate happens on an unconscious level (Zak in Horstman 2005):

So somehow, this little simple brain chemical [oxytocin], is not only telling us what's good for society, be cooperative, trust other people, allowing us to live in big cities, it also tells you what's good for you as an individual.

Through oxytocin being released when other people's actions unconsciously lead us to feel we can trust them, trust levels in a community become culturally determined. This is graphically illustrated in Figure 2 which shows the percentage of affirmative responses, by country, to the question "Generally speaking, would you say that most people can be trusted?"

This question seeks to capture "generalized trust", which is whether two randomly selected individuals can trust each other. The surveys were done in person in 1996 using the native language, and the questions correspond to impressions of the respondents' own countries. Strikingly, the data vary by an order of magnitude: while only 3% of those surveyed in Brazil and 5% in Peru say their compatriots are trustworthy, 65% of Norwegians and 60% of Swedes believe this to be so. The United States comes in at 36%, down from 50% in 1990; the U.K. has been holding steady at 44% for the past decade. (Zak 1993, p. 19)

Figure 2 - Trust Level by Country
(Source: Zak, P. 1993, Trust, Capco Institute Journal of Financial Transformation, p.18 - used with permission)

Why should we be concerned about trust at the cultural level? Well it turns out that our that wealth is correlated to trust levels and there is a simple explanation for this. When trust levels are high, financial transaction costs are low and efficient - there's no need for elaborate contracts to protect the parties involved - "a simple handshake will suffice".  Whereas, in low trust contexts, elaborate, inefficient means are necessary to protect parties, therefore, transaction costs are high (Zak, P. 1993, pp. 19-20):

Our analysis shows that a 15% increase in the proportion of people in a country who think others are trustworthy raises income per person by 1% per year for every year thereafter. For example, if trust in the U.S. increased from 36% to 51%, the average income for every man, woman, and child would rise by about U.S.$400 per year thereafter due to the additional business investment and job creation. You can see that the impact of trust on living standards is quantitatively large: U.S.$400 per year corresponds to an additional U.S.$30,000 in lifetime income.

Our analysis also shows that if trust is sufficiently low (below 30% for the average country in [Figure 2]), then the investment rate will be so low that income will stagnate or even decline. Economists call this a "poverty trap", and we show that the primary reason for a poverty trap is ineffective legal structures that result in low levels of generalized trust, and therefore little investment. Further, the threshold level of trust necessary for positive economic growth is increasing in per capita income; that is, the poorer a country currently is, the more trust is required to generate sufficient investment to raise living standards. This makes the low-trust poverty trap difficult to escape from. These predictions of the model are strongly supported in the data, and illustrate the spectacular effect of trust on growth.

If personal income rises 1% for every 15% increase in the proportion of people in the country who think others are trustworthy, the reverse must be true - a 15% reduction in trust suggests a 1% reduction in personal income - i.e. trust reduction equates to standard-of-living reduction. This raises some interesting government policy questions in respect of the so called "war on terror". If a government promulgates policy that encourages people to distrust strangers, the country's trust level, and hence its people's standard of living, must decrease!

The late Jack Gibb believed, "Trust begets trust; fear escalates fear." We now have scientific evidence to support this belief and elevate it to a principle underpinning the trust process. In the next two paragraphs I have adapted/paraphrased some of Gibb's views on trust which, I believe, are as relevant today as when he wrote them in 1970.

Trust is a Catalytic Process1

Is the world dangerous? Can people be trusted? Should we try to maintain our childlike trust and help our children to do so? Or should we develop caution, be "appropriately" wary, be realistically prepared for danger?

I remember an experience in an elevator in Washington, D.C. Feeling good, I said "Hi!" to a girl, about five, who was wearing a swimming suit and carrying a towel on her way to the hotel swimming pool. She was so haughty and chilling that a friendly elevator operator, the only other person present, said to me: "I'm sure her mother has told her not to speak to strangers." I understood that too, and appreciated the man's concern and empathy. But I couldn't help feeling that multitudes of tiny experiences like this escalate into the loneliness, alienation, and unconnectedness of modern life, and I felt sad that the learning of distrust should start so early in life. (Gibb 1970, p. 17)

Dangers do exist. Children and adults are ignored, rebuffed, punished, kidnapped, or raped. Just three weeks ago [1970] the papers reported the discovery in Los Angeles of the murdered bodies of two little girls, and as I write, the Hillside Strangler remains at large in Los Angeles. Some city streets are dangerous, especially at night. Teachers and students do get beaten up in the schoolroom. Offices and factories are filled with dangerous, life-draining tension. We may be cheated by a dishonest car repair shop, or even by a bank. Watergate did happen. Hitler and his minions did murder millions of Jewish people. How do we prepare ourselves, or our children or students, to live wholly and  fulfillingly in such a world in which they confront so many dangerous possibilities? Do we take our children to school or hire guards to take them? Put extra locks on our doors? Increase the number of policemen? Make tougher laws? Tighten the security at the airports? Increase the number of crimes that get the death penalty? How much to trust and distrust, and how to handle our fears and distrusts are dilemmas that face consumers, voters, managers, parents, teachers - all of us.

Trust begets trust; fear escalates fear. Trust catalyses all other processes, is contagious, softens our perceptions, breeds trust in others, makes us less dangerous, and is self-fulfilling. Fear and distrust over-perceive the danger, trigger defensive behaviour in others, escalate the tension, and are self-fulfilling - that is, fear creates the danger.

I have a friend, Pat, who at seventeen hitchhiked alone through Africa for about a year. Listening to her tell of her experiences, and fantasying dangers for a beautiful young woman hitchhiking in Africa in the early sixties, we asked if she were ever molested, cheated, robbed, or raped. She said that things like that just don't happen to her. She is trusting, gives out non-defensive signals, and creates her own environment.

Trust and fear are keys to understanding persons and social systems. They are primary and catalytic factors in all human living.

When trust is high, relative to fear, people and people systems function well. When fear is high, relative to trust, they break down.

Trust enhances the flow of mind-body-spirit processes. Energy is created and mobilized. All the creative processes of the person or the system are heightened. Feeling and thinking are both more focused and energized. People act in more direct and effective ways. Consciousness is awakened. When trust is high enough, persons and social systems transcend apparent limits - discovering new and awesome abilities of which they were previously unaware.

When fear levels are high, relative to trust, individual and social processes are impaired. The life forces are mobilized defensively, rather than creatively. Consciousness is restricted. Perceptivity is reduced. Perspectives are narrowed. Feelings and emotions become disruptive and disabling. Thinking, problem solving, and action become unfocused, displaced, or dysfunctional. The processes of the mind-body become segmented and discordant. When fear levels are high enough individuals and the social systems become immobilized, psychotic, or destructive

Trust is an integrating and wholizing force. It is a property of the whole mind-body-spirit. Trust brings integrity.

Fear constrains and blocks. Fearing, I become congested, inhibited, and restricted. I retard all of my processes: my feeling, my imagination, my play and sense of adventure and fun, my courage, my vision, the flow of energy in my mind-body, my intuition, my awareness - all of my processes. An optometrist told me once that he could tell from seeing persons in the waiting room whether or not they would be able to relax enough to wear contact lenses. The people who tried to control their bodies while sitting in the chair and who tried to control their children while waiting would be too "frightened" to wear such lenses. Golfers use the same expression: the person doesn't have courage enough to make the putt!

Trust is a releasing process. It frees my creativity, allows me to focus my energy on creating and discovering rather than on defending. It releases my courage. It is my courage. It opens my processes, so that I can play, feel, enjoy, get angry, experience my pain, be who I am. The full life is a spontaneous, unconstrained, flowing, trusting life. Some holistic studies of cancer are relevant here. Researchers discovered that people who could free themselves to image their cells as actively and flowingly resisting toxic substances were able to retard the carcinogenic processes. I have discovered a similar phenomenon after about an hour of jogging. When I get into my flow, all of my processes are heightened: my energy and breathing, creativity and imagery, awareness of sights and sounds and smells, courage. I become available to me and to others.
Trust gives me my freedom and my fear takes it away. Freedom comes from my own flow. It is not given to me or taken away from me by others. I create my own mind-body trust, which is my freedom. I
create my own fears and my own bondage, which is my fear. Freedom is not out there. It is in me.

Trust provides an environment that nourishes personal growth, holistic health, spirituality, and the discovery of the soul. Trust level is a diagnostic cue to the understanding of individuals and groups: to the creation of a fulfilling home environment, an effective classroom, a healing therapy session, a redemptive ministry, a productive workplace, or a nurturing neighbourhood.

Trust level is a key to the understanding of the larger system. As a consultant or as a manager I have an option to focus my "theory" on one or more among many "realities": energy systems, power relationships, role formation, interfaces among sub-units, barriers to productivity, profitability. The possibilities are endless, and there are theories for each. I prefer to start by looking at the trust level. Everything else fans out from there. Social systems can present a bewildering array of symptoms. Recently, a company presented me with massive data gathered from surveys, observations, complaints, interviews, and impressions. One of the most perplexing items for them was the fact that the workers, in a company-wide election, had turned down an obviously beneficent stock-purchase plan. This had previously been available only to members of management, but was now to be open to all employees of the corporation on a voluntary basis. We planned new data collection around trust-theory hypotheses. The employees who were interviewed gave many different responses, but they centred on this theme: "If it looks like those guys are giving you something for nothing, watch out! There'll be a ringer in the small print someplace!" A latent and not-easily-visible state of general distrust and fear had been produced by fear-induced management role-taking, covert strategy, persuasion techniques, and efforts to control. Management practices were unintentionally escalating fears and distrusts, which were retarding productivity and creativity.

Trust is the Process of Discovering1

To trust with fullness means that I discover and create my own life. The trusting life is an inter-flowing and interweaving of the processes of discovery and creation. These processes have four primary and highly-interrelated elements:

  1. Discovering and creating who I am, tuning into my own uniqueness, being aware of my own essence, trusting me - discovering my True North.

  2. Discovering and creating ways of opening and revealing myself to myself and to others, disclosing my essence, discovering yours, communing with you - sharing my True North and understanding yours.

  3. Discovering and creating my own paths, flows, and rhythms, creating my emerging and organic nature, and becoming, actualizing, or realizing this nature - following my True North.

  4. Discovering and creating with you our interbeing, the ways we can live together in an inter-depending community, in freedom and intimacy - co-creating our world.

The Underpinning Principles of Trust

To summarise then, some guiding principles in relation to trust are:

  • We become more trustworthy when we sense others trust us - in Gibb's words, "trust begets trust".

  • The standard of living in a country is directly related to the degree to which people in the country trust each other.

  • Men become aggressive if they perceive they are not being trusted.
    (I have not covered the research in relation to this one here. I just thought I'd throw it in anyway! To read about current research into distrust and sex differences, see: The Neuroeconomics of Distrust: Sex Differences in Behavior and Physiology By PAUL J. ZAK, KARLA BORJA, WILLIAM T. MATZNER, AND ROBERT KURZBAN at )

Concluding Comments

In this eZine I introduced a model to illustrate the dynamic relationship between values, ethics/morals, principles and behaviour. The value trust was then taken as an example to illustrate this dynamic relationship - specifically, how guiding principles can be developed to inform choices we make on how we live the value trust.

Understanding and internalising the principles that comprise "the nature of things" is perhaps the single most powerful determining factor in the shaping of the society in which we live. For civilisation to advance, it is vital that we maintain a continual dialogue around principles so those we internalise and institutionalise are up-to-date and are our current best shot at truth.


Birch, C. 1999, Biology and the Riddle of Life, University of New South Wales press, Sydney.

Gibb, B.,1970, Trust: A New View of Personal and Organizational Development , Tutors Press, Los Angeles. (Reprinted in 1991 as: Trust: A New Vision of Human Relationships for Business, Education, Family, and Personal Living. Trust is now available for reading on the web at:

Horstman, M. 2005, Catalyst: Trust - ABC TV Science, ABC Online,

Mackie, J. 1977, Ethics:  Inventing Right and Wrong, Penguin, Harmondsworth.

Shockley-Zalabak, P. 1999, Fundamentals of Organisational Communication: Knowledge, Sensitivity, Skills, Values, Longman: New York.

Zak, P. 1993, Trust, Capco Institute Journal of Financial Transformation, Vol. 7, pp. 13-21, accessed 25 November 2006 at:


  1. This section adapted/paraphrased from Gibb, 1970, Chapter 1.

To comment on this, or any other Minessence eZine, please go to our eZine Blog .


Copyright © 1988-2024 Minessence Group
Ph: 61-(0)7-3803-5809 - Fax: 61-(0)7-3803-5819 - eMail: