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The problem with rich people and ethics


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The main problem with rich people and ethics, has nothing to do with them per se; it has to do with us, and the fairly well developed stereotypes we hold about what the ethics of the rich are.  Unlike, say, people who repair laundry machines, or Aleut musicians, or female cricketers (about whom we do not hold well established stereotypes) we have a fairly consistent view of the rich, and it is not good.  We perceive the rich to be untrustworthy and cold to the point where we even take joy in their misfortunes (such as when a businessmen gets soaked by a taxi driving through a puddle–admit it, you laughed).  Rich people elicit jealousy and envy, and not the type that leads us to aspire to be more like them.

Recently, a confluence of events have led me to wonder whether–regardless of the stereotype’s accuracy–its existence is problematic.  The first event is personal.  Just this week, classes have officially started at Northwestern University’s Kellogg School of Management, where I am a professor.  When classes begin, I am reminded of the primary purpose of my job, which is to teach.  When people ask me what I teach, and I reply, “I teach a class about ethical decision-making to MBA students,” I typically get amused responses.  “They need it!” people say, or they follow with a sarcastic “Good luck.”  I hold my students in very high regard, believe they uphold the highest ethical principles and am never certain how to respond to these remarks.  They feel a bit offensive.

On the other hand, I am not so naive as not to understand where these snickers about my teaching come from.  A major article that circulated amongst my corner of the internet was the New York Times’ case study on issues of gender inequity Harvard Business School that depicted as many of the male students as not dissimilar to Bradley Cooper’s character in Wedding Crashers, and the follow-up article that described the issue of lavish wealth at Harvard as on par with the issue of gender.  Then, there was the article that made the rounds last week in Forbes, in which Harry Binswanger made the case (to much jeering) that the 99% of income earners should actually give back to the 1% and that we would be better off heaping moral praise on Goldman Sachs’ Lloyd Blankfein than on Mother Theresa.  Add that to the recent remarks made by AIG CEO, Robert Benmosche, comparing the criticism of AIG for their executive bonuses to lynchings of African Americans in the South, and it becomes clear where such views about the rich develop.

Lloyd Blankfein, Chairman and CEO of Goldman Sachs

My favorite empirical demonstration of anti-rich/anti-business sentiment comes from a series of studies by Amit Bhattacharjee, Jason Dana, and Jonathan Baron.  These authors asked participants not to evaluate people, but to evaluate different firms and industries (some real and some hypothetical).  Specifically, participants reported how much they perceived these firms and industries to be profitable and also how much they perceived these firms and industries to be socially harmful.  Consistently, participants linked profit with social harm.  The more profitable people believed a company to be, the more evil they considered it, and the same pattern was true of conservative and liberals.

So it is clear that people hold anti-profit views, but what is the reality?  Following up on a compelling article last year by Paul Piff and colleagues demonstrating a strong link between higher socioeconomic status (SES) and  more unethical behavior (everything from lying, cheating, stealing, to breaking traffic laws), Stefan Trautmann and colleagues recently examined this relationship in a large-scale Dutch population sample of approximately 9,000 people.  They present results that often agree with Piff’s findings (e.g., the wealthy say that it is more acceptable to cheat on one’s taxes than the non-wealthy), but not always (no SES differences emerged on instances of betrayal in a trust game), and are very contingent on the measure of social status being employed.  This more complex relationship between SES and ethics, leads Dan Ariely and Heather Mann to conclude in a follow-up commentary that the relationship between wealth and ethical behavior is likely situation-contingent and may hinge on different standards for ethics.

Now why does all of this matter?  For the simple psychological fact that stereotypes become self-fulfilling.  People come to confirm the behaviors that are expected of them (we live up to and down to others’ stereotypes of us), and if rich people and businessfolks are assumed to behave with the same scruples as Bernie Madoff, these views will likely elicit unethical behavior from them.  For all of its hilariousness, Binswanger’s Forbes article does something linguistically useful, which is that it toggles back and forth between describing the 1% and wealth earners and wealth creators.  I suspect that these two labels are likely to have vastly different effects on the ethical behavior of the rich.  Wealth earner is rather self-focused whereas wealth creator is other-focused.  In fact, this distinction makes me wonder whether the use of the term, 1%, which definitionally refers to the earning (versus creation) aspect of wealth has undermined the cause of Occupy Wall Street (and similar others).  Focusing on the earning power of the rich might in fact be self-reinforcing, whereas focusing on their capacity for wealth creation might engender them to adopt a more prosocial focus.  It’s a nice thought anyway.  If anyone out there knows of research on this point, let me know.

Photo courtesy of Wikimedia Commons

Adam Waytz About the Author: Adam Waytz is a psychologist who studies the attribution and denial of mental states to other agents, and the moral and ethical implications of these processes. Follow on twitter: @awaytz

The views expressed are those of the author and are not necessarily those of Scientific American.





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  1. 1. Mike from Ottawa 12:24 am 09/28/2013

    I suppose if “wealth creators” could be expected to move the wealthy to a more pro-social focus, then “job creators” would do so and even better. Afterall, while one person can amass stupendous amounts of wealth, one person can only hold so many jobs, so “job creators” is even more other-focused than “wealth creators”. And yet, in the late American presidential election, “job creators” was pushed to justify lowering taxes for the wealthy even further than Bush2 had done and at the same time to justify savage cuts to the social safety net so that those taxes could be lowered. Near as I can make out, the wealth enjoyed the term “job creators” and didn’t stand out as particularly opposing the program it was designed to further. That doesn’t seem very “other-focused”, except perhap in the way kicking someone is “other-focused”.

    Now, I’m sure it takes time for language to shift folks’ thinking, but it is passing strange that someone suggesting “wealth creators” would engender a prosocial focus in the wealthy doesn’t so much as mention “job creators” and its political use in the 2012 presidential elections in the USA, with its implications for the success of his suggestion.

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  2. 2. rkipling 1:43 am 09/28/2013

    Reported rates of cheating at the high school and college level are high. My expectation is that ethical behavior probably doesn’t typically change after that age. Based on the level of cheating, I doubt that the general public is more ethical than the rich. The rich have a higher profile.

    Are there studies of ethics by economic class or level of education?

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  3. 3. ultimobo 3:11 am 09/28/2013

    I suspect most peoples perception of the rich as money-grubbing would come from observations of typical small-business people – often focused on the bottom line – money, money, money – and cash transactions to the detriment of normal human relationships

    e.g. Moe from the Simpsons – I think is an exemplar of such – I’m a small businessman so give me the money or get out – oh sorry that’s Apu Nahasapeemapetilon from the Kwik-E-Mart – ‘get out ! and – come again … !’

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  4. 4. sjfone 8:10 am 09/28/2013

    We all can’t be college football coaches.

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  5. 5. Realist1953 9:26 am 09/28/2013

    Really? US?? Are you TWELVE??
    Yes, as a general rule, behavior can be a “feedback loop”; do something a little, it gets pointed out a lot, so you do MORE.

    But the rich are disliked because the System is RIGGED. Insider trading, break laws [the latest 'Broke the World Economy'], their corporations break laws and pollute land, water, air, but also are not convicted – in fact they are CONSTANTLY allowed to “pay a small fine, settle the lawsuit, but do not admit any wrongdoing.” And they do this time and again, with paying “fines” that are a small percentage of the profits; if you knew you could steal $1,000 a week from work, but pay a fine of $100/yr and still keep the job – well, you’re a crook, and of Course you will stay there and do it again, and again.

    Essentially, they ARE “ABOVE THE LAW” and they KNOW IT.

    Pay is controlled by a ‘Board of Directors’ – essentially buddies that also want huge pay — THERE is your “Feedback LOOP” that is doing the MOST HARM. “Our CEO did good, we want to keep him, and ‘Competitor X’ gave a 20% raise to their CEO, so we better give a 25% raise, even though we LOST money last quarter.” THAT is how the business is run.

    Wow – I could go on for another hour about how [naive? foolish? ignorant? stupid?} you are. But if you don’t figure it out after this, anything else is more waste of MY time.

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  6. 6. randgalt 12:39 pm 09/28/2013

    The problem here is that your ethical premises are never questioned. What should we value and why? In today’s culture, selflessness is preached as the highest moral value. This is why business people are persecuted. Individualism and achievement should replace selflessness as the moral ideal.

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  7. 7. frankblank 2:44 pm 09/28/2013

    An article from a business “ethics” prof on all those mean stereotypes? Wow. Maximize quarterly results (=bonuses). Maximize shareholder value (=bonuses). Nothing else in the way of “ethics” or even patriotism matters.

    And I don’t even have to mention the recent derivatives fraud (most massive in history) to bear this out. See here: http://www.pcworld.com/article/2050328/how-your-identity-gets-swiped-even-if-youre-careful.html and contemplate in tranquility the twenty-year-long refusal of most companies to spend the money to do anything about this. Most companies won’t even report data losses until forced to by leaks – just to avoid a hit on the stock price (=smaller bonuses). And that there, football fans, is business ethics in a nutshell.

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  8. 8. Mike from Ottawa 2:00 pm 09/29/2013

    “The main problem with rich people and ethics, has nothing to do with them per se; it has to do with us, and the fairly well developed stereotypes we hold about what the ethics of the rich are.”

    Yes, in the author’s view, the real problem of rich people and ethics isn’t that the only ethic that unites the rich is that “greed is good”. The real problem isn’t that the rich resist with all means possible (buying politicians principally) anything that gets in the way of greed, like regulation and taxation. No, the real problem is that some of the non-rich actually realize the rich have been waging class warfare on everyone else in the USA (and to a lesser extent in Canada and elsewhere) for the past 3+ decades and, worse they have the effrontery to point out this class warfare. The wealthy have rigged the system to take the lion’s share of increases in productivity over that period while most people have had virtually no share of that increase – a major change from the pattern of the 40s through the 70s – but that’s not the problem. The problem is that somebody has pointed out that that rising tide did not lift all boats.

    Certainly the children of the wealthy and those who have put accumulation at the centre of their lives, the folk who are in B school at a pricey private university, will find it more palatable to believe the problem with the ethics of the rich has nothing to do with the rich and is down to their stereotyping by the non-rich. However, it’s a bit shocking to see such a denial of reality in a blog post at _Scientific_ American. What next? A post on how the problem with global warming is the bad press global warming gets from people who aren’t getting rich making money off fossil fuels?

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  9. 9. TTLG 12:11 am 09/30/2013

    I think there are a number of areas of psychological research which support the idea that the rich are less ethical, at least from the point of view of ordinary people.

    First is that simply thinking about money can have bad influences such as making a person more selfish and less considerate. So if a business leader is focused only on maximizing profits rather than satisfying the customer, I would expect that person to become much less ethical over time than he would be otherwise.

    Another is that the privileges associated with wealth, such as being allowed to bypass waiting lines quickly becomes an assumed entitlement. For example, studies have shown that drivers of luxury cars are more likely to be inconsiderate than those who drive ordinary cars.

    One last item I will mention is that psychologists claim that much of our cognitive thinking is actually rationalizations of what our emotional/intuitive brains have already decided. One aspect of this is that intelligence is inversely correlated with honesty. Apparently better cognitive thinking helps rationalize doing what we want.

    I once read about a business ethics class taught at some Ivy League school where they gave the students an ethics test both before and at the end of the semester. On the average, the students did worse on the test at the end. So I wonder if trying to teach ethics in an intellectual fashion at such a late stage in a person’s education is actually helpful. Perhaps it is something that needs to be addressed much earlier in life. Or maybe it needs to be taught in a very different way than most other college courses.

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  10. 10. Jerzy v. 3.0. 3:18 am 09/30/2013

    Dear Adam,

    You overlooked that humans may not be the only entity here. A dishonest CEO is answerable not to shareholders, strictly speaking, but to a corporation. Shareholders demand profit not strictly from a human being, but from a corporation.

    Corporation is a strange entity. It has privileges of a human being, for example can accumulate wealth, buy and sell things, hire or sue persons etc. But it has far less responsibility than a human, for example cannot be killed or put to jail, and has no morals.

    To understand morals in economy, you need to model two kinds of entities with quite different behavior: humans and corporations. Start with imagining game theory where half od players are normal people and half are psychopaths.

    The result is, that we need to watch, punish and eventually break up and destroy corporations much heavier than people, or lots of bad things will happen to the society.

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  11. 11. Jerzy v. 3.0. 3:32 am 09/30/2013

    Ah, and before somebody accuses me of being a communist: a corporation can scr*w not just its customers or outside people, it is just as likely to scr*w it’s CEO or shareholders.

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  12. 12. sparcboy 10:19 am 09/30/2013

    Then there’s the other scenario where everyone has a similar earnings and lifestyles.

    John and Joe work in a factory and get paid the same. They live in similar neighborhood’s, houses, drive similar cars, etc. The difference is John turns out 100 gadgets everyday while Joe only turns out 50. John eventually becomes resentful (who wouldn’t) because he works twice as hard but get’s paid the same as Joe. Over time John only turns out 50 gadgets a day. Everyone is dragged down to lowest level.

    So who is unethical? Joe because he knows getting paid for doing less work than John is wrong? Or eventually John because he no longer works to his potential?

    The problem is that the system ignores human nature. Where humans are involved, a system that doesn’t reward effort and sacrifice will never compete with one does.

    Capitalism isn’t the problem. Crony capitalism is the problem. And crony capitalism is defeated with fair and ethical regulation, and that is the responsibility of the government, which is a dismal failure.

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  13. 13. HeavyElements 10:48 am 09/30/2013

    Does anyone have any clue where this rich person = cold-hearted person originates from?

    Ayn Rand’s fiction novels.

    Jeez. Please get a clue here, people.

    Ayn Rand’s fictional novels about perfect Prime Movers are The Bible for rich people. Alan Greenspan, who presided over two crashes of the US economy and did NOTHING about either of them, was one of her devotees. He is a perfect example of a ‘Prime Mover’ who watched everyone suffer and could have cared less. Ayn Rand was cold, unemotional, and stupid – just like Alan. Yet, she’s seen as the original PRIME MOVER and the person to emulate the most to get to the top. Not one Wall Street banker who orchestrated the near collapse of the entire world’s economy has been prosecuted. They are devotees of Alan Greenspan. So, there is a VERY GOOD REASON for people to see the richest as cold, distant, unemotional and ruthless.

    There are a handful of people who did not use Ayn Rand as the foundation for their life’s philosophy, such as Bill Gates and others. If they had, they wouldn’t be using their riches for humanitarian purposes. Anyone who doesn’t is an Ayn Rand devotee.

    History, people. HISTORY!!!!

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  14. 14. kwall 2:24 pm 09/30/2013

    I think we’re focussing on the wrong thing here.

    We live in a society that fosters rampant inequality based on the false premise that merit and hard work will result in success, which is often associated with wealth.

    Not true.

    The resentment you speak of is the direct result of systemic inequalities that are extremely harmful and nearly impossible to overcome.

    By accepting positions of wealth as well as receiving the numerous benefits of being born to a higher class, one is complicit in reinforcing an unsustainable and harmful economy.

    So, yeah, I consider those who are wealthy – myself included – to, by definition, be unethical. Particularly as I type this comment using a macbook built by slave labourers and wearing clothing, produced by children in Bangladesh.

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  15. 15. mikesm 7:55 am 10/1/2013

    What’s not touched on here, in an experimental or statistics-gathering setting (the portions alluding to betrayal, breaking traffic laws, etc…) is the behavior of wealth holders when in groups. Group mindset is a game changer. When you are in a room full of 11 other stock traders, you may be the least conniving of that coterie, therefore you may see yourself as a relatively ethical person and not ensue to cheat on taxes or spouses or driving norms. You may even sponsor a Lost Boy. But someone from down under (income-wise) points out that you work for a company that just constructed a new building, right where Public Park Z used to be, all hell breaks loose.

    It’s sort of like my college experience. None of the alpha-delta-alpha-theta-delta squad guys were ever that terrible to be around, to talk to for an hour during the day. You could grab a cup of coffee, hear good ideas, shift your perspective, talk to a worthy human being. But come nightfall/weekender time, and you get 15 of those guys together and you’ve got a neanderthal party, funded by, ahem, their parents indirectly.

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  16. 16. kit123 3:36 pm 10/19/2013

    I am speaking from the Medical community. Actually there is good data that people who must acclimate to economic challenges have developed greater empathy. That is a cultural and a practical skill. It may also account for the fact that many children of highly creative “intrapreneurs” don’t retain that skill. First these coddled kids have suffered regression to the mean. Second these coddled kids have not needed to use their empathic powers as much. So a vibrant working class and middle class are essential for creative prowess to flourish… If you doubt this ask yourself why this country has so few PhDs in congress… Certainly not an optimal condition, but one that is generated when “legacy college admits” and “prep school priming” prevail in the beltway…

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  17. 17. rshoff2 12:36 pm 01/31/2014

    I believe that the “Anti profit view” the article mentions is actually the activation of an Anti-hoarding instinct in those that don’t/can’t hoard. Hoarders are not perceived well, be it an individual or a corporation. Using the ‘hoard’ to wield power over those that haven’t or can’t hoard is where the perception of ‘evil’ comes in.

    So, aren’t the rich and the poor victims of circumstance? The rich are individuals that have been put into a situation where they have no balance to the hoarding instinct whereas the poor do not have the opportunity to hoard much (they would if they could). The rich lose touch with their humanity and the meaning of their life. They must face the reality that the hoarding doesn’t provide relieve from the human condition. The poor lose hope as they struggle day in and day out with no relief in sight. They get tired of scavenging and tired of the vulnerability and powerlessness that comes with it.

    The middle class have the luxury of a healthy balance. The middle class has both hope and sense of security. Everyone should want to be middle class! It’s the best position to be in.

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