Academic journal article Journal of the Royal Anthropological Institute

'Widening the Radius of Trust': Ethnographic Explorations of Trust and Indian Business

Academic journal article Journal of the Royal Anthropological Institute

'Widening the Radius of Trust': Ethnographic Explorations of Trust and Indian Business

Article excerpt

Trust has become an important focus of enquiry across the social sciences, particularly in the period since the publication of the volume edited by Gambetta, Trust: the making and breaking of cooperative relations, in 1988. Some of the work that has been done by economists, sociologists, and others was drawn upon by the well-known American writer, Francis Fukuyama, in his book, Trust: the social virtues and the creation of prosperity (1995). This, it is safe to say, has been more influential than any of the more specialist writing upon the subject, and Fukuyama's core argument that 'a nation's well-being, as well as its ability to compete, is conditioned by a single, pervasive cultural characteristic: the level of trust inherent in the society' (1995: 7) has commanded widespread popular attention. (1) Trust, he argues, 'is the expectation that arises within a community of regular, honest and cooperative behaviour, based on commonly shared norms, on the part of other members of that community' (1995: 26). And he finds evidence from a diverse literature, including that of anthropology, to justify the argument that the industrial economies of the United States, Germany, and Japan are more dynamic and successful than those of Chinese societies and of Italy and France because of aspects of their cultures--notably those which have to do with family and kinship organization--that influence the spread of such norms across society as a whole. In the first group of countries there is extensive sociability outside the family, giving rise to generalized trust across community boundaries and facilitating the co-ordination of economic activities, whereas the second group is characterized rather by 'familism', and the restriction of trusting behaviour within relatively small groups. Fukuyama argues, for example, that the sense of duty and obligation to those outside the family was weak in China. His point is not that family-based business organization is always and in all circumstances necessarily inefficient--it clearly is not--but that the development of larger-scale enterprises in the 'familistic' societies has involved extensive state intervention. Thus he suggests, for example, that 'France shares with the typical Chinese society a weakness in intermediate associations between the family and the state that has constrained the French private sector's ability to produce large, strong and dynamic enterprises', with the result that the larger enterprises are mostly in the state sector with attendant inefficiencies (1995: 114). The conservative ideological agenda of Fukuyama's work is apparent here.

The idea of 'widening the radius of trust' is taken from Fukuyama's argument, and the phrase was used in an address given by M.V. Subbiah, the head of one of India's big family business groups, on the occasion of the second 'Family Business Conclave' of the Confederation of Indian Industry (CII), held in Bangalore in 2000. This was attended by about 200 people from business families, including some of the most famous of them; and the holding of these conclaves by the CII is in itself one indication of the sense of crisis that exists in these family businesses in India in the changed circumstances of globalization. The idea of crisis was a major topic in both the formal and the informal discussions that took place at the Bangalore meeting; it was the subject of a presentation by Gita Piramal, a well-known writer on business in India; and it has featured from time to time in the Indian business press. The Economic Times, for example, reported on 21 August 2000, under the headline 'Bourses Signal Gloom For Family Biz', that 'The harsh truth emerging from the floor of the bourses is blowing away the last bit of hope for India's family owned businesses. The New Economy is steadily taking over the mettle [sic] from the Old Economy.'

Subbiah, addressing this sense of crisis in his address, used the notion of the need to 'widen the radius of trust' as a kind of a code for arguing that Indian family businesses and business families have to rethink the ways in which they govern themselves (as I explain below). …

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