Obama at Colgate: Trust as Economic Infrastructure

During former President Barack Obama’s visit to Colgate, he explored how trust underpins economic stability, global markets, and the debate over government regulation.

When President Obama sat down with Colgate President Brian Casey in a packed Sanford Field House during Family Weekend, they covered a range of topics: democracy, leadership, artificial intelligence, and more. A recurring theme throughout much of the conversation was an argument about the economy.

Obama criticized the uber-wealthy who hold onto their money by any means necessary, taking a jab at those who relocate to Florida not for the weather but to avoid state taxes, which he called “a rounding error in their wealth.” He argued that such wealth rested on “a social order and a system that had amazing universities and roads and fire protection and a judicial system that could enforce contracts, all of which cost some money to maintain.”

The remark drew applause from the crowd, but it also made the point that trust in our system serves as a form of infrastructure, something economists have long studied. Contracts, markets and cross-border trade depend on confidence that rules will be enforced and commitments honored. Although that confidence never appears on a balance sheet, nearly every asset on one depends on trust.

Some of Obama’s most consequential observations involved America’s role abroad. He said that the United States, “up until recently, really did underwrite the global order”; citing freedom of navigation, the global nature of the internet, coordinated disaster response, and saying that “even our adversaries often expect us to solve big problems that cross national boundaries.”

For international business, global trust in the United States has functioned as a form of public good. Firms shipping goods across oceans or selling into foreign markets have operated under a security and coordination framework they did not pay for directly. Stable sea lanes keep insurance and freight costs predictable. A broadly open internet lets companies reach customers in dozens of countries from a single platform.

A key part of Obama’s quote is especially important: “up until recently.” This points to a shift. When foreign governments and firms grow less certain that the United States will uphold commitments in place longer than almost any firm has operated, the effects tend to show up in costs and strategy rather than headlines. Companies diversify suppliers to hedge against policy swings. Allies negotiate trade arrangements that route around American participation. Investors demand a premium for uncertainty. 

Obama framed the stakes in moral terms: “when we’re not our best selves, the whole world gets a little dimmer.” For businesses, the more immediate question is practical. If the system's underwriter steps back, who absorbs the risk it used to carry?

Obama also addressed a second form of trust: whether the public can rely on industries to police themselves. He talked about this in the context of AI, but the question applies more broadly across the economy.

He noted that leading AI companies, including two preparing major IPOs, had called for slowing development. He encouraged this restraint. In the same breath, he said it “can’t be a long-term solution,” arguing that commercial pressure to justify massive investment creates a misalignment between what our society needs and the commercial imperatives these companies face.

He contrasted his view with that of a Trump administration adviser who, as Obama described it, argued that companies have every incentive to make their products safe, and that those who fail will face lawsuits and financial liability. Obama responded that “that’s not how we treat airlines, or drug companies, or food companies.” The examples he chose share a common feature: they are industries where consumers cannot easily verify their safety for themselves. A passenger cannot inspect a jet engine, and a patient cannot test a prescription. In those markets, trust functions as infrastructure, a precondition for anyone to participate at all. The two positions differ less on whether trust matters than on how it is built. One relies on firms protecting their reputations and paying for failures after the fact, while the other relies on shared standards established before a product reaches the public.

The exchange reflects a long-running debate in economics. Advocates of market discipline argue that reputation and liability give firms strong reasons to self-correct, and that regulation can slow innovation. Advocates of oversight argue that liability works only after harm occurs, and that in high-stakes industries the public’s willingness to participate depends on confidence established in advance. Air travel, pharmaceuticals and food safety are frequently cited as cases where regulation helped build the consumer trust those markets rely on.

Obama described democracy as “not self-executing,” saying it requires “a certain set of norms, habits, and social trust.” His remarks suggested the same holds for markets, both at home and abroad. Whether that trust is maintained through government, industry restraint, or some combination remains an open question for all people listening, many of whom will spend their careers inside the systems he described.