The Great Squandering: Institutional Trust in America

False Fact Fixed

The Great Squandering: Institutional Trust in America

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America inherited something more valuable than money.

It inherited institutions.

Those institutions accumulated competence, knowledge, capital, professional standards, public confidence, and reputation over generations. Universities built reputations through decades or centuries of teaching and research. Medical professions developed standards through accumulated experience. Businesses earned customer confidence by consistently delivering useful products and services. Governments depended on infrastructure, productive capital, public order, and civic habits that took generations to develop.

But what happens when an institution begins spending that inheritance?

Attorney and writer Ron Coleman calls the underlying problem the “fallacy of abundance.” The idea is simple: when a resource appears abundant, people begin behaving as though it is unlimited.

Eventually, they discover that it was never unlimited.

That is the central warning behind Coleman’s discussion of institutional trust in America: reputation, competence, capital, and social trust can be consumed faster than they can be rebuilt.

What Is the Fallacy of Abundance?

Coleman’s concept begins with a deceptively simple observation.

An institution can inherit genuine wealth without creating all of that wealth itself.

A university may possess enormous prestige because generations of professors, researchers, administrators, students, and alumni built it. A profession may command respect because previous practitioners demonstrated extraordinary competence. A government may function because earlier generations built infrastructure, legal systems, administrative capacity, and a culture of public service.

Once those achievements become established, however, later generations can mistake the inheritance for something automatic.

The institution begins to believe that it can change its standards, alter its priorities, or pursue unrelated objectives without damaging the underlying asset.

The reputation remains—for a while.

That creates a dangerous illusion.

An institution can appear healthy even after the practices that made it successful have begun to disappear.

Coleman compares this to a tree that looks healthy from the outside while its interior has been eaten away. The tree may stand for years. Then a relatively small event brings it down.

The visible collapse is sudden.

The deterioration was not.

Institutional Trust in America Is an Accumulated Asset

Trust is often treated as though it were simply an attitude.

But trust is also accumulated capital.

People trust a doctor because doctors are expected to possess specialized knowledge and apply it carefully. People trust engineers because bridges, buildings, aircraft, and machines have to work. People trust universities because their names historically represented demanding standards of scholarship.

The institution does not start from zero every morning.

It benefits from the work of people who came before.

That inherited reputation can become extremely valuable.

But it can also create complacency.

Current research confirms that institutional trust has become an important concern in the United States. The Urban Institute notes that trust in major institutions has declined substantially over the long term, while research published through MIT’s Daedalus documents declining confidence across many American political and nonpolitical institutions. (Urban Institute)

Coleman’s argument takes the question one step further:

What if declining trust is not merely a symptom of institutional problems, but also evidence that institutions have been spending the very assets that created their reputation?

The Higher Education Crisis and the Cost of Lower Standards

Coleman first encountered the fallacy of abundance in the academic world.

His argument is not that every person admitted through changing admissions policies is incapable or that every institution has declined in every respect. Rather, he focuses on what happens when an institution assumes that its accumulated reputation gives it room to reduce or alter standards without consequences.

Elite universities possess enormous reputational capital.

Names such as Harvard, Yale, Stanford, Oxford, and Cambridge carry meaning because of generations of academic achievement.

But reputation is not magic.

A university cannot permanently separate its name from the quality of the people it admits, teaches, evaluates, and produces.

If standards change, the institution must eventually adjust other parts of its system as well. Faculty standards, grading, expectations, curriculum, hiring, research, and institutional culture are interconnected.

The danger is that reputation can continue to generate prestige long after the underlying practices begin to change.

That is one version of the higher education crisis: the institution continues spending yesterday’s credibility while assuming tomorrow’s credibility will arrive automatically.

But reputation is not self-renewing.

It has to be earned repeatedly.

Healthcare: When Procedure Replaces Attention

The same problem appears in medicine.

Coleman discusses a personal experience involving a visit to an Amazon One Medical physician. The experience became an example of what happens when institutional procedure begins competing with professional judgment.

According to the interview, the physical examination was limited, yet portions of the resulting medical record described an examination that Coleman says had not actually occurred. He also objected to how he was represented in the record.

The disagreement eventually became connected to a question of trust.

That story matters to Coleman because medicine is supposed to be grounded in reality.

A physician’s job is not merely to complete a process.

A patient has a body.

A medical record is supposed to describe what happened.

An examination is supposed to examine the patient.

And professional judgment is supposed to be directed toward the patient’s actual condition.

When documentation, institutional policy, or ideological expectations become detached from those basic purposes, the institution begins consuming its own credibility.

This is not an argument against technology or administrative systems. Technology can make healthcare more efficient. Electronic records can improve continuity. Artificial intelligence can assist with documentation.

But technology does not eliminate the underlying requirement:

The record still has to correspond to reality.

“Scarcity Is an Information Engine”

One of the most interesting economic ideas in the conversation is Coleman’s statement that “scarcity is an information engine.”

Scarcity forces people to notice reality.

If customers have unlimited alternatives, a business has an incentive to provide something useful.

If a patient can easily choose another physician, poor service creates consequences.

If an employer has genuine competition for talented workers, competence becomes valuable.

But when alternatives disappear, incentives can change.

Coleman connects this principle to medicine and professional regulation. When patients have fewer meaningful choices, institutions can become less responsive because the normal corrective mechanism of competition becomes weaker.

This does not mean every monopoly behaves identically or that competition automatically solves every institutional problem.

It does mean that scarcity and alternatives provide information.

When an institution can ignore dissatisfied customers, patients, employees, students, or citizens indefinitely, it becomes easier to confuse institutional survival with institutional success.

The Government Cannot Run on Yesterday’s Capital Forever

The fallacy of abundance also applies to government.

Modern societies contain an extraordinary amount of infrastructure and productive capacity that previous generations created.

Bridges stand.

Power grids operate.

Airports function.

Factories produce.

Hospitals operate.

Communication networks connect billions of people.

Financial systems move capital around the world.

Much of this appears so normal that it becomes invisible.

That invisibility creates the illusion that these systems simply exist.

But bridges have to be designed and maintained.

Electricity has to be generated and distributed.

Buildings have to be engineered.

Aircraft have to be maintained.

Food has to be grown.

Energy has to be produced.

Capital has to be invested.

Competent people have to perform the work.

The more technologically advanced society becomes, the easier it can be to forget the physical and human effort underneath the system.

Coleman argues that this is one of the peculiar dangers of a highly developed, post-industrial society.

When production becomes distant from everyday life, abundance can begin to look automatic.

It isn’t.

Reality Eventually Audits Every Institution

The deepest point in Coleman’s argument is that reality eventually imposes a final test.

A bridge does not care about ideology.

Gravity does not care about politics.

An aircraft cannot be persuaded to remain in the air through institutional language.

A medical condition does not disappear because a bureaucracy has adopted a preferred terminology.

An economy cannot consume capital indefinitely without eventually confronting the consequences.

Reality is an unforgiving auditor.

This is why competence matters.

Standards matter.

Professional knowledge matters.

Experience matters.

And institutional memory matters.

A society can debate values endlessly, but eventually someone has to build the bridge.

Someone has to diagnose the patient.

Someone has to calculate the load.

Someone has to repair the machine.

Someone has to produce the energy.

Someone has to teach the student.

Someone has to perform the actual work.

The people who can perform those tasks are part of the inheritance too.

Coleman’s argument does not stop at universities, government, and medicine.

It extends into ordinary relationships.

People increasingly divide themselves according to political and cultural identities. Friends become political categories. Family members become representatives of ideological groups. Professional relationships can become harder when people assume that disagreement reveals something fundamentally unacceptable about the other person.

Coleman argues that this reflects another form of the fallacy of abundance.

We assume our social world is large enough that we can continuously eliminate people from it.

One person is excluded.

Then another.

Eventually, the circle becomes much smaller.

The paradox is that every individual exclusion may appear inexpensive. But thousands of exclusions can produce a society with less trust, less cooperation, fewer relationships, and fewer opportunities to work across differences.

Social capital is an asset.

It can be spent.

And it can be depleted.

The Problem With Assuming Abundance Is Permanent

The great danger of abundance is psychological.

When something is scarce, people notice it.

When something is plentiful, people take it for granted.

A farmer understands that food requires work because a failed harvest produces an immediate consequence.

A modern consumer can walk into a supermarket and find shelves full of food without seeing the farmers, truck drivers, processors, engineers, energy workers, warehouse employees, and retailers who made that abundance possible.

The same principle applies to institutions.

We see the university.

We do not necessarily see the generations that created its standards.

We see the hospital.

We do not necessarily see the accumulated medical knowledge behind its procedures.

We see the bridge.

We do not necessarily see the engineers and workers who made it possible.

We see a functioning society.

We do not necessarily see the habits of trust, competence, restraint, investment, and cooperation that sustain it.

That is why inheritance creates a paradox.

The better the inheritance, the easier it can be to forget that it is an inheritance.

America Still Has Enormous Reserves

Coleman’s argument is ultimately a warning about stewardship rather than a declaration that everything has already been lost.

America still possesses enormous reserves of capital, technical knowledge, entrepreneurial energy, scientific expertise, productive capacity, and human talent.

The question is whether those reserves will be treated as permanent or as something that requires maintenance and renewal.

Institutional trust in America cannot be restored simply through public relations.

A university cannot advertise its way back to academic excellence.

A medical system cannot manufacture trust through slogans.

A government cannot create competence through organizational charts.

A profession cannot preserve its reputation by demanding that people respect it.

Trust has to be earned through performance.

Competence has to be demonstrated.

Standards have to mean something.

And institutions have to remember why they exist.

Stewardship Instead of Squandering

The lesson of the fallacy of abundance is not that abundance itself is bad.

Abundance is one of civilization’s greatest achievements.

The problem begins when abundance becomes an excuse for waste.

An institution that inherits wealth should preserve the conditions that created it.

An institution that inherits trust should behave in ways that deserve continued trust.

A profession that inherits prestige should maintain demanding standards.

A society that inherits productive infrastructure should maintain it.

A generation that inherits freedom should understand the institutions and habits that made that freedom possible.

America’s inheritance is therefore not simply a collection of assets.

It is a responsibility.

The great squandering occurs when a society consumes the accumulated capital of previous generations while assuming that the bill will never arrive.

But scarcity eventually returns.

Reality eventually intervenes.

And when it does, reputation alone cannot build the bridge.

Only competence can.

The challenge for America is therefore not simply to preserve what it inherited.

It is to earn the inheritance again—through competence, honesty, standards, production, professional responsibility, and the willingness to let people who actually know how to do the work do it.

That is the difference between stewardship and squandering.

Frequently Asked Questions

What is Ron Coleman’s “fallacy of abundance”?

Ron Coleman’s “fallacy of abundance” describes the tendency to assume that accumulated resources such as wealth, competence, reputation, institutional trust, and social capital are effectively unlimited. Institutions can therefore spend those resources without immediately seeing the consequences.

Why does institutional trust matter in America?

Institutional trust allows people to cooperate with organizations they cannot personally monitor. Universities, governments, healthcare systems, businesses, and professional organizations depend on people believing that those institutions will perform their intended functions responsibly.

How does the fallacy of abundance affect universities?

Coleman’s argument is that universities can rely on reputations built through generations of academic achievement. If standards or institutional practices change while the institution continues relying on its historical prestige, it may gradually consume the reputation that previous generations created.

What does scarcity have to do with institutional decline?

Scarcity creates information and incentives. When people have alternatives, poor performance can produce consequences. When alternatives disappear, institutions may face less pressure to remain responsive, efficient, or competent.

What is the broader lesson of The Great Squandering?

The broader lesson is stewardship. Wealth, competence, trust, reputation, infrastructure, and social capital are not automatically renewable. Institutions survive when they continue performing the functions that originally earned them public confidence.