The (Honest) Truth About Dishonesty

But that’s only part of the story. Just as creativity enables us to envision novel solutions to tough problems, it can also enable us to develop original paths around rules, all the while allowing us to reinterpret information in a self-serving way. Putting our creative minds to work can help us come up with a narrative that lets us have our cake and eat it too, and create stories in which we’re always the hero, never the villain. If the key to our dishonesty is our ability to think of ourselves as honest and moral people while at the same time benefitting from cheating, creativity can help us tell better stories—stories that allow us to be even more dishonest but still think of ourselves as wonderfully honest people.

The combination of positive and desired outcomes, on the one hand, and the dark side of creativity, on the other, leaves us in a tight spot. Though we need and want creativity, it is also clear that under some circumstances creativity can have a negative influence. As the historian (and also my colleague and friend) Ed Balleisen describes in his forthcoming book Suckers, Swindlers, and an Ambivalent State, every time business breaks through new technological frontiers—whether the invention of the postal service, the telephone, the radio, the computer, or mortgage-backed securities—such progress allows people to approach the boundaries of both technology and dishonesty. Only later, once the capabilities, effects, and limitations of a technology have been established, can we determine both the desirable and abusive ways to use these new tools.

For example, Ed shows that one of the first uses of the U.S. postal service was for selling products that did not exist. It took some time to figure that out, and eventually the problem of mail fraud ushered in a strong set of regulations that now help ensure the high quality, efficiency, and trust in this important service. If you think about technological development from this perspective, it means that we should be thankful to some of the creative swindlers for some of their innovation and some of our progress.

Where does this leave us? Obviously, we should keep hiring creative people, we should still aspire to be creative ourselves, and we should continue to encourage creativity in others. But we also need to understand the links between creativity and dishonesty and try to restrict the cases in which creative people might be tempted to use their skills to find new ways to misbehave.

BY THE WAY—I am not sure if I mentioned it, but I think that I am both incredibly honest and highly creative.

CHAPTER 8

Cheating as an Infection

How We Catch the Dishonesty Germ

I spend a lot of my time giving talks around the world about the effects of irrational behavior. So naturally, I’m a very frequent flyer. One typical itinerary included flying from my home in North Carolina to New York City, then on to São Paulo, Brazil; Bogotá, Colombia; Zagreb, Croatia; San Diego, California; and back to North Carolina. A few days later I flew to Austin, Texas; New York City; Istanbul, Turkey; Camden, Maine; and finally (exhausted) back home. In the process of accumulating all those miles, I’ve sustained an endless number of insults and injuries while grinding through security checkpoints and attempting to retrieve lost baggage. But those pains have been nothing compared to the pain of getting sick while traveling, and I am always trying to minimize my chances of falling ill.

On one particular transatlantic flight, while I was preparing a talk to give the next day on conflicts of interest, my neighbor seemed to have a bad cold. Maybe it was his sickness, my fear of catching something in general, sleep deprivation, or just the random and amusing nature of free associations that made me wonder about the similarity between the germs my seatmate and I were passing back and forth and the recent spread of corporate dishonesty.

As I’ve mentioned, the collapse of Enron spiked my interest in the phenomenon of corporate cheating—and my interest continued to grow following the wave of scandals at Kmart, WorldCom, Tyco, Halliburton, Bristol-Myers Squibb, Freddie Mac, Fannie Mae, the financial crisis of 2008, and, of course, Bernard L. Madoff Investment Securities. From the sidelines, it seemed that the frequency of financial scandals was increasing. Was this due to improvements in the detection of dishonest and illegal behavior? Was it due to a deteriorating moral compass and an actual increase in dishonesty? Or was there also an infectious element to dishonesty that was getting a stronger hold on the corporate world?