Losing Our Faith

By PETER GUMBEL / PARIS

For a world leader, it must have set some sort of miserable record: in a poll in December, just 1% of French voters said they wanted President Jacques Chirac to stand for re-election in 2007. For Chirac, that capped a terrible year of economic torpor, electoral setback and, in November, a fiery eruption of social unrest in the suburbs of Paris and other major cities. Trying to restore his authority, the French President gave his customary televised New Year's address to the nation. "We must believe in France," he told his compatriots in a pathos-filled speech quickly lampooned by the nation's cartoonists and columnists.

Some of Chirac's peers may be smirking at his plight, but perhaps they should take note. For the French President's rock-bottom ratings are an extreme example of a corrosive trend in public opinion that poses just as much of a threat to President George W. Bush, British Prime Minister Tony Blair and their colleagues in dozens of other countries, as well as to the heads of global institutions and corporations from IBM to the International Monetary Fund. As political and business leaders ready themselves for their annual trek to the World Economic Forum in Davos, Switzerland, they do so at a time when the mistrust of authority--and an increasingly vocal disrespect for it--has gone global.

Deference is dead, replaced by sniping, cynicism and an outpouring of open protest. Thanks to the Internet, every individual's gripe can now be amplified and diffused to a mass audience, whether the gripers are retired Americans whose pension benefits have been slashed or Chinese peasants who have lost their farmland to the nation's torrid industrialization. A recent World Economic Forum poll of more than 20,000 people in 20 countries revealed that public trust in national governments, the U.N. and multinational companies has dropped significantly over the past two years and is close to the lows recorded after the terrorist attacks of Sept. 11, 2001.

To some extent, that public hostility is well deserved. The bankruptcies of Enron and WorldCom in the U.S. and Parmalat in Italy have focused attention on corporate sleaze on both sides of the Atlantic. Revelations about how Washington lobbyist Jack Abramoff allegedly bought influence in Congress have made a mockery of claims to clean government. The U.N. is struggling to recover from its own high-level corruption scandal relating to the oil-for-food program in prewar Iraq.

And at a time when stock markets are booming, the global economy is growing at its fastest clip in three decades and chief executives are cutting themselves huge paychecks, ordinary people the world over have cause to complain about being locked out of the party. "The top of the house shouldn't continue to award itself when the folks on the lower end of the ladder suffer," says C. William Jones, a retired telephone-company worker in Easton, Md., who was so incensed that Verizon cut his pension and health-care benefits that he helped start a protest group called the Association of BellTel Retirees. It now has more than 100,000 members and communicates mainly online.

Yet however easy it may be to understand, the global culture of disdain is one fraught with risk. To be sure, it gives a voice to people run over by the people who run things. But taken to an extreme, distrust gnaws away at some of the fundaments of modern society. Why vote, if all politicians are charlatans? Why work, if all companies are crooked? Today "anyone with a beef can start a conspiracy theory," says Frank Furedi, a sociology professor at Britain's University of Kent, who argues that deference to traditional authorities is being replaced by reverence for new ones. "We don't trust politicians, but we have faith in the pronouncements of celebrities. We are suspicious of medical doctors, but we feel comfortable with healers who mumble on about being 'holistic' and 'natural.'"

Trust matters. If the world habitually distrusts authorities that are accountable, however inadequately, we may find ourselves ill prepared to meet the huge challenges posed by globalization. "In periods of great economic and technological change, trust can reduce the political, social, economic and emotional friction that often locks systems and organizations solid," says John Elkington, founder of a nongovernmental organization (NGO) called Sustain Ability that focuses on corporate responsibility and sustainable development. NGOs such as Greenpeace and Amnesty International have led the attack against companies and governments, and the World Economic Forum poll shows that NGOs today are the organizations most trusted by the public. But distrust is growing even of NGOs, particularly in such countries as India, Brazil and South Korea. "People will ask, Who are these people, and to whom are they accountable?" says Elkington.

Many trace the erosion of trust back to the counterculture 1960s with its clarion call, "Never trust anyone over 30." But Kate Watts, a London-based marketing expert, says a turning point in the deference offered to those in traditional positions of authority could have come as early as World War I, with its senseless slaughter of a generation of European men. She quotes two lines of a poem by Rudyard Kipling: "If any question why we died,/ Tell them, because our fathers lied." Whatever its roots, today's disdain has implications for companies beyond their corporate image. Watts points out a big conundrum for firms today: traditional forms of advertising and marketing are proving far less effective than in the past, as skeptical consumers stop believing what the ads tell them. "We appear to be spending more and getting less," Watts concludes.

So, what's the solution? Companies everywhere are looking for new ways to regain credibility. Greater transparency combined with money spent on good works is one way. Oil giant Shell, for example, excoriated in the 1990s for its pollution of the Niger Delta, is plowing money into projects to help indigenous people in Africa and elsewhere who are affected by oil exploration, including funding local initiatives to combat malaria and AIDS. Other firms rely on more cynical marketing trends, including the latest-- "buzz marketing," in which people are paid to tell their friends and anyone else they meet how good a product is, from Vespa scooters to Lucky Strike cigarettes. But that doesn't work for governments. Just this month revelations that a group close to the Republican Party has been planting news stories in Iraqi newspapers, and allegedly paid off some prominent imams, caused an uproar in Washington. Simon Anholt, an international consultant based in Britain who advises governments on how to improve the brand image of their nations, thinks the answer lies in moving away from obsessing over polls and focus groups. "Most governments provide second-rate customer service rather than leadership," he says. "Governments are popular when they have real problems and deal with them well."

Clarity of purpose can help with political leaders, just as it can with companies. Frustrated by constant blockage of his plans to reform the country's financial system last year--including by members of his own party--Japanese Prime Minister Junichiro Koizumi appealed to the public over the heads of the naysayers and won a landslide election victory. Only trouble is, sometimes, clear leadership engenders not too little trust but too much. In the tiny Himalayan kingdom of Bhutan, the reformist King Jigme Singye Wangchuck is so popular that he is having trouble persuading his people to replace his feudal monarchy with a parliamentary democracy. That's not the sort of popularity that is likely to give Jacques Chirac problems anytime soon. [This article contains a table. Please see hardcopy of magazine or PDF.] Countries with steady or declining trust in companies '04 -- '05 net change* Argentina 1 S. Korea -4** Mexico -5 China -6 Indonesia -6 India -7 Britain -7 Brazil -9 Germany -11 Turkey -13 Canada -18 U.S. -19 Spain -36

Negative -- 0 -- Positive *Percentage points **Based on 2002 value

With reporting by Kathleen Kingsbury/ New York