Paul Holmes 27 Jun 2016 // 8:30AM GMT
The 2016 Edelman Trust Barometer found that "a yawning gap has opened between Britain’s haves and have-nots in Edelman’s annual survey of how much trust we place in the institutions that dominate our lives." Perhaps someone in power should have been paying attention. There might not have been time to repair the damage before this week’s disastrous “Brexit” vote, but that vote might have come as less of a surprise.
Because this is what inevitably happens when business leaders and financial services companies behave as though they have no moral or legal obligations, as if the impact of their cynical self-interest on ordinary people is of no consequence. And it's what happens when the political institutions meant to act as a check on the worst corporate excesses are instead complicit in their malfeasance.
I doubt whether many of the ordinary working men and women across the UK who voted for Britain to leave the EU have seen The Big Short. They may not have a particularly sophisticated grasp of just what the big banks did to screw them out of their jobs, their pensions, and their financial security. But they know there was something seriously corrupt in the City of London and in Westminster—and they were right.
And so a good number of them saw the EU vote as an opportunity to stick it to the bankers and the politicians—an establishment overwhelmingly in favor or remaining in the Union—regardless of the consequences for themselves (and this is not likely to be the first recession in history that inflicts more suffering on the wealthy elite than it does on the ordinary working person).
As one Londoner told The Wall Street Journal after the vote: “They were the ones who drove this country into recession, and are still getting millions in bonuses! They want to stay in the EU because they are making money. But where I live, there’s a lot of unemployment. I can’t afford things. Everything’s gotten worse.”
An even greater number may not have been motivated by anger to punish the architects of the global financial crisis, but they did listen to the experts—many of them employed in the service of politicians and business leaders who had lied to them about the causes of the housing bubble and the necessity for and efficacy of austerity—and decide that there was no reason to believe them when they warned of dire consequences if the UK left the Union.
The bankers might have believed they had gotten away with bringing the global economy to its knees nine years ago—none of them are in jail, and most of their personal fortunes are still intact. The same may be true for the leaders of News Corp, Barclays, HSBC, Sports Direct, BHS and more. But last week’s vote in the UK—and rising populism in other parts of Europe and the US—suggests that there may still be a price to pay.
"What we’re seeing is a rise in the number of people who are dissatisfied, disapproving, distrusting of political institutions, political parties, the establishment, the media and, wrapped up with that, the experts," Joe Twyman, head of political and social research at YouGov, told The Washington Post before the vote. "A certain proportion of people don’t believe a word of what they hear from those they consider part of the metropolitan elite."
In this environment, it is essential that a broad-based effort to restore trust and credibility should become a top priority for business leaders. That will require not just words but actions. Corporations will need to demonstrate that they are contributing positively to the societies in which the operate, and not simply exploiting them. For some, that will require entirely new business models.