Goodwill Capital and Feedback Inversion: How Reputational Assets Destabilize Institutions

This paper introduces the concept of goodwill capital as a finite but spendable asset accumulated through trust, reputation, and moral signaling. It further describes feedback inversion, a failure mode in which institutions insulated by high goodwill begin to misinterpret negative feedback as noise or hostility, accelerating collapse rather than preventing it. The framework explains sudden institutional failures that appear disproportionate to their triggering events.