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The Moral Universe

The Moral Universe

Dialogues on the psychology of right and wrong

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

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

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