In this chapter, the authors argue that income inequality erodes social trust. They claim that, historically, white citizens in the United States enjoyed a relative equality, and that this fostered trust between them. They cite Alexis de Toqueville, who visited the US in the 1830s and claimed that in white society, people had similar incomes and lifestyles and behaved in a trusting and neighborly way with each other. The authors use these observations as evidence that income parity creates social cohesion. On the other hand, they argue, income inequality promotes social division by encouraging people to create “in-groups” and “out-groups” based on their social class. Once people categorize others as belonging to an “out-group,” they struggle to feel empathy for them or relate to them.

The authors cite a study by the European and World Values Survey, which shows a moderate correlation between income inequality and a lack of social trust. A study on only American states had a similar finding, with relatively equal states like Utah and New Hampshire enjoying more social trust than unequal states such as Alabama and Mississippi. In the United States, social trust was higher in the 1950s and 1960s, and has since dropped significantly.