THE CRISIS OF GRIEVANCE. HOW GOVERNMENT, BUSINESS AND THE RICH BECAME SOCIAL ENEMIES OR SOCIAL FEARS CAN MORPH INTO RESENTMENT

Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 9 THE CRISIS OF GRIEVANCE. HOW GOVERNMENT, BUSINESS AND THE RICH BECAME SOCIAL ENEMIES OR SOCIAL FEARS CAN MORPH INTO RESENTMENT Radu GHEORGHE, PhD Lecturer Athenaeum University, Bucharest, Romania radu.gheor[email protected] Abstract: The Edelman Trust Barometer signaled at the beginning of 2020 the development of a huge sense of institutional distrust, a feeling amplified by the perception of the unprecedented proliferation of social inequities and inequalities. Most citizens, especially in the most developed countries, have sent an unequivocal message: not only do social inequalities give rise to great concerns, but the invalidation of the belief that sustained work leads to social advancement makes the hope for a better future unrealistic, even in conditions of economic growth or moderate unemployment. Shaped also by an unprecedented fragmentation of trust, the new paradigmatic landscape invited at the beginning of 2020 to intransigence regarding the way that trust should be granted, namely taking into account the respect of at least two criteria: competence (the ability to fulfill promises made) and ethical behavior (the ability to act correctly, contributing to changing society for the better). After only five years, at the beginning of 2025, the Edelman Trust Barometer signals not only the preservation of the same construct regarding the crisis of institutional trust among citizens. Moreover, the belief that both the government and business people serve the interests of the rich, to the detriment of ordinary people, seems to have taken root in public perception. It is a perception that, however, fuels a high level of resentment towards the government, the business environment and wealthy individuals, and which develops an essential question: Could it be a signal that in recent years society has traveled a path from fears to polarization, and now to resentment? Moreover, have the economic fears of the early 2020s already transformed into resentment within just five years? Keywords: competence, economic growth, economic fears, ethical behavior, fragmentation of trust, institutional distrust, moderate unemployment, polarisation, resentment, social fears JEL Classification: A10, A13, A14, Z10 DOI:10.5281/zenodo.17102717 Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 10 2020 – A world of two different realities of trust The effects of the economic crisis at the beginning of this century were much deeper. One of the facets seems to have been the sudden increase in inequality or the reversal of convergence in living standards, which led to a fueling of a big individual fears. In fact, the signs of generalized uncertainties were also felt in the Edelman Trust Barometer, with distrust in institutions reaching alarming levels at the beginning of 2020. All over the world, but especially among the populations of the most developed countries, including those of the EU, there have been growing concerns since 2020 about the increasingly non-inclusive nature of economic development. Concerns that practically derive from the fact that the growth of the Gross Domestic Product is no longer favorable to inclusion. Because there is rightly no longer any specific correlation between the growth of a state’s GDP and the individual income of citizens (GDP per capita), more and more attention is being to the way in which income earned in an economy is distributed unevenly across the population or to the gap between the richest and poorest members of society that is a significant factor in economic and social well-being. Both have profound meanings in the area of equal access to the goods and services produced in a national economy. And this attention was increasingly transformed into social signals that seemed to send governments and decision-makers an invitation to change the way they approached the problem of inequality. The increasingly categorical message of a part of the population in the most developed European countries has more than ever the vocation of a final warning: the huge level of inequality undermines not only trust in institutions, but also social equity. As part of the current mechanism of wealth distribution, the current dimension of inequality is increasingly seen as an unfortunate accident of history that must be corrected, as it has already significantly eroded social cohesion and a shared sense of belonging. In addition to the huge level of inequality at the beginning of 2020, there is also a very large gap (14%) between the informed public (65%) and the general public (51%). Thus, for the informed public, three of the four institutions under consideration are trustworthy (government, media and business). For the general public, no institution passes the trust test (government, NGOs, media and business), for all of which the population’s trust was below 50%. A very large number of countries record a huge fragmentation of trust, the most significant being in generally highly developed countries such as Australia (23 points), France and Saudi Arabia (21 points), Germany (20 points), the United Kingdom (18 points), Spain (17 points). If in terms of skills, the business environment ranked best, being 54 points behind government as institution that is good at what it does (64% / 10%), in terms of ethics, NGOs had Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 11 a fairly large lead compared to the government (31-point gap) and the business environment (25-point difference). However, it should be emphasized that at the beginning of 2020, no institution (government, business, NGOs, media) was seen as both competent and ethical, only businesses being considered competent or NGOs being seen as ethical. Some statistical data are relevant to underline the importance of the message sent by a large part of the populations that calling for the urgent launch of a strong mechanism to combat poverty and social exclusion, designed for a Europe that seems to have forgotten that the benefits of development must be present in all its regions, thus strengthening the process of economic, social and territorial cohesion: - For 61% of respondents, the pace of technological change is too fast; - A higher percentage (66%) expresses fear that technology will make it impossible to distinguish between what is real and what is fiction; - A cohort of 61% believe that governments do not understand emerging technologies enough to regulate them effectively; - Approximately 57% believe that the media they read is likely infected with contaminated (unsafe) information, while approximately 76% are concerned that fake news will be used as a weapon; - 66% do not trust that current leaders will be able to successfully solve current problems; - 57% are worried that they will lose the respect and dignity they once enjoyed in their countries (the highest values in European countries are: Italy - 67%; Spain - 64%; France - 62%; Germany - 52%). The Edelman Trust Barometer highlighted at the beginning of 2020 the start of a serious trust institutional crisis, with no institution seen as both competent and ethical (government, business, NGOs, media). 2025 - Polarization and felt inequalities. Political and economic systems under pressure According to the Edelman Trust Barometer, at the beginning of 2025 more than 60% of respondents reported a feeling of dissatisfaction, from moderate to high, especially targeting governments and the business environment. Such a perceptual construction is not accidental, however. A closer look at the data reveals an undeniable truth: in the last decade, society has traveled a path from fears to polarization, then to a deep dissatisfaction, similar to the transformation of fears into resentment. The Edelman Trust Barometer 2025 also records a lack of confidence among leading economies, with five of the ten largest global economies among the least confident nations in the trust index: Japan (37%), Germany (41%), Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 12 the United Kingdom (43%), the United States (47%) and France (48%), while developing nations are more optimistic: China (77%), Indonesia (76%), India (75%) and the United Arab Emirates (72%). From a political perspective, we are already seeing major changes in the US, UK, France, Canada and even South Korea, amid the discontent of voters who have lost their jobs due to globalization and inflation. Shaped by a zero-sum mentality (according to which in such a situation there can only be a winner and a loser, one’s gain being equivalent to the other’s loss), the current functional paradigm certainly lacks several variables willing to work within the development equation: cooperation, trust, tolerance. The zero-sum mentality can rather lead to hard competition, lack of collaboration and difficulties in building positive relationships, indirectly legitimizing extreme measures such as violence and disinformation as tools for change. Four key factors appear to underlie the new construction: - Lack of hope for the next generation and huge distrust that things will look better than today for the next generation, - Fragmentation of trust based on income (respondents with low incomes have less trust in institutions than those with higher incomes), - Huge lack of trust globally in institutional leaders (government representatives, business people and journalists) seen rather as individuals willing to deliberately mislead, - Generalized confusion around credible information (major uncertainties around routes leading to credible sources of information). A mixture of fears and a decline in institutional trust unprecedented in human history somehow shapes the beginning of 2025, indirectly signaling possible paradigm shifts at a global level. Globalization, economic, and technological fears worsen job insecurity Figure 1. Percent of employees who worry, 2025. Source: Author Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 13 Low income mired in distrust Figure 2. Trust Index (average of business, government, media, NGOs, %, 2025). Source: Author Fear that leaders lie to us at all-time high Figure 3. Percent who worry that those purposely mislead people (2025) Source: Author Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 14 In most developed countries, less than 1 in 5 say next generation is better off Figure 4. Compared to today, the next generation better off (%, 2025) Source: Author Fear of being discriminated against surges to all-time high (an average increase of 10 percent in a single year) Figure 5. Percentage of people who express concern about experiencing prejudice, discrimination, or racism Source: Author Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 15 6 in 10 Hold Grievances Against Business, Government, and the Rich Concerning 2025 Edelman Trust Barometer, they hold a sense of grievance because: - Business and government serve select few, - Business and government actions hurt they, - The system favors the rich, - The rich are getting richer. Figure 6. Percent who hold a low, moderate, or high sense of grievance Source: Author Majorities Hold Grievances in Nearly All Countries Measured Figure 7. Majority hold moderate or higher grievance. Source: Author Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 16 Your Gain is My Loss: Grievance Instills a Zero-Sum Mindset What is interesting is that there is a very big percent who say, by sense of grievance: “I have a zero-sum mindset: what helps people who don’t share my politics comes at a cost to me”. In these conditions social contract is at risk: with high grievance, there are 2x more likely to have a zero-sum mindset than low grievance. Figure 8. Your Gain is My Loss: Grievance Instills a Zero-Sum Mindset Source: Author Grievance Imposes a Trust Penalty Figure 9. Percent trust, by sense of grievance. Source: Author Internal Auditing & Risk Management Year XX, Supplement No. 71, May 2025 17 NGOs: Fight Divisiveness and Repair the Social Fabric Non-governmental organizations have regained trust (53% of those moderately dissatisfied, 52% of those very dissatisfied and 43% of those slightly dissatisfied trust NGOs), being seen as the only institution with a unifying force among those with a high sense of dissatisfaction and the institution with the greatest trust among this group. Figure 10. NGO’s regained trust Source: Author Conclusions 1. In the last decade, society has evolved from fear to polarization, and now to resentment, fueled by at least four perceptions: - Lack of hope for the next generation, - There is a difference in trust conditional on income (fragmentation of trust), - Unprecedented global lack of trust in institutional leaders, - There is general confusion about credible information. 2. Economic anxiety grows globally - Globalization, technology, and the threat of recession all drive up fears of job insecurity 3. Grievance undermine trust - Majority worldwide feel a sense of grievance against business, government, and the wealthy