MEGAN MCARDLE: Growth Is Not An Easy Solution For Europe’s Woes. “For one thing, the euro itself is a major contributor to the lack of growth. Italy and Greece, especially, used to rely on serial devaluation to keep their relatively low-productivity tradeable sectors competitive. Do we have a way to dramatically increase productivity in their small, family-owned farms and firms? Keep in mind that a preponderance of such firms is not simply a historical accident; it’s generally thought to be a symptom of fairly low trust levels which make it problematic to hire strangers or invest your money in them. Greece, Italy, and Spain also have terrible demographics.”

It’s very costly to be a low-trust society. That’s something some of our political leaders should keep in mind, as they pursue policies likely to lower social trust and cohesion.

UPDATE: A reader emails: “Who benefits from a low trust society? And why would they care if such an outcome imposed costs on others?”