The (Honest) Truth About Dishonesty

And thus the Simple Model of Rational Crime (SMORC) was born. According to this model, we all think and behave pretty much as Becker did. Like your average mugger, we all seek our own advantage as we make our way through the world. Whether we do this by robbing banks or writing books is inconsequential to our rational calculations of costs and benefits. According to Becker’s logic, if we’re short on cash and happen to drive by a convenience store, we quickly estimate how much money is in the register, consider the likelihood that we might get caught, and imagine what punishment might be in store for us if we are caught (obviously deducting possible time off for good behavior). On the basis of this cost-benefit calculation, we then decide whether it is worth it to rob the place or not. The essence of Becker’s theory is that decisions about honesty, like most other decisions, are based on a cost-benefit analysis.

The SMORC is a very straightforward model of dishonesty, but the question is whether it accurately describes people’s behavior in the real world. If it does, society has two clear means for dealing with dishonesty. The first is to increase the probability of being caught (through hiring more police officers and installing more surveillance cameras, for example). The second is to increase the magnitude of punishment for people who get caught (for example, by imposing steeper prison sentences and fines). This, my friends, is the SMORC, with its clear implications for law enforcement, punishment, and dishonesty in general.

But what if the SMORC’s rather simple view of dishonesty is inaccurate or incomplete? If that is the case, the standard approaches for overcoming dishonesty are going to be inefficient and insufficient. If the SMORC is an imperfect model of the causes of dishonesty, then we need to first figure out what forces really cause people to cheat and then apply this improved understanding to curb dishonesty. That’s exactly what this book is about.^*

Life in SMORCworld

Before we examine the forces that influence our honesty and dishonesty, let’s consider a quick thought experiment. What would our lives be like if we all strictly adhered to the SMORC and considered only the costs and benefits of our actions?

If we lived in a purely SMORC-based world, we would run a cost-benefit analysis on all of our decisions and do what seems to be the most rational thing. We wouldn’t make decisions based on emotions or trust, so we would most likely lock our wallets in a drawer when we stepped out of our office for a minute. We would keep our cash under the mattress or lock it away in a hidden safe. We would be unwilling to ask our neighbors to bring in our mail while we’re on vacation, fearing that they would steal our belongings. We would watch our coworkers like hawks. There would be no value in shaking hands as a form of agreement; legal contracts would be necessary for any transaction, which would also mean that we would likely spend a substantial part of our time in legal battles and litigation. We might decide not to have kids because when they grew up, they, too, would try to steal everything we have, and living in our homes would give them plenty of opportunities to do so.

Sure, it is easy to see that people are not saints. We are far from perfect. But if you agree that SMORCworld is not a correct picture of how we think and behave, nor an accurate description of our daily lives, this thought experiment suggests that we don’t cheat and steal as much as we would if we were perfectly rational and acted only in our own self-interest.

Calling All Art Enthusiasts

In April 2011, Ira Glass’s show, This American Life,¹ featured a story about Dan Weiss, a young college student who worked at the John F. Kennedy Center for the Performing Arts in Washington, D.C. His job was to stock inventory for the center’s gift shops, where a sales force of three hundred well-intentioned volunteers—mostly retirees who loved theater and music—sold the merchandise to visitors.

The gift shops were run like lemonade stands. There were no cash registers, just cash boxes into which the volunteers deposited cash and from which they made change. The gift shops did a roaring business, selling more than $400,000 worth of merchandise a year. But they had one big problem: of that amount, about $150,000 disappeared each year.