More generally, these results show how crucial other people are in defining acceptable boundaries for our own behavior, including cheating. As long as we see other members of our own social groups behaving in ways that are outside the acceptable range, it’s likely that we too will recalibrate our internal moral compass and adopt their behavior as a model for our own. And if the member of our in-group happens to be an authority figure—a parent, boss, teacher, or someone else we respect—chances are even higher that we’ll be dragged along.
In with the In-Crowd
It’s one thing to get riled up about a bunch of college students cheating their university out of a few dollars (although even this cheating accumulates quickly); it’s quite another when cheating is institutionalized on a larger scale. When a few insiders deviate from the norm, they infect those around them, who in turn infect those around them, and so on—which is what I suspect occurred at Enron in 2001, on Wall Street leading up to 2008, and in many other cases.
One can easily imagine the following scenario: A well-known banker named Bob at Giantbank engages in shady dealings—overpricing some financial products, delaying reporting losses until the next year, and so on—and in the process he makes boatloads of money. Other bankers at Giantbank hear about what Bob is up to. They go out to lunch and, over their martinis and steaks, discuss what Bob is doing. In the next booth, some folks from Hugebank overhear them. Word gets around.
In a relatively short time, it is clear to many other bankers that Bob isn’t the only person to fudge some numbers. Moreover, they consider him as part of their in-group. To them, fudging the numbers now becomes accepted behavior, at least within the realm of “staying competitive” and “maximizing shareholder value.”*
Similarly, consider this scenario: one bank uses its government bailout money to pay out dividends to its shareholders (or maybe the bank just keeps the cash instead of lending it). Soon, the CEOs of other banks start viewing this as appropriate behavior. It is an easy process, a slippery slope. And it’s the kind of thing that happens all around us every day.
BANKING, OF COURSE, is not the only place this unfortunate kind of escalation takes place. You can find it anywhere, including governing bodies such as the U.S. Congress. One example of deteriorating social norms in the U.S. legislative halls involves political action committees (PACs). About thirty years ago, these groups were established as a way for members of Congress to raise money for their party and fellow lawmakers to use during difficult election battles. The money comes primarily from lobbyists, corporations, and special-interest groups, and the amounts they give are not restricted to the same degree as contributions to individual candidates. Aside from being taxed and having to be reported to the FEC, few restrictions are placed on the use of PAC money.
As you might imagine, members of Congress have gotten into the habit of using their PAC funds for a gamut of non-election-related activities—from babysitting bills to bar tabs, Colorado ski trips, and so on. What’s more, less than half of the millions of dollars raised by PACs has gone to politicians actually running in elections; the rest is commonly put toward different perks: fund-raising, overhead, staff, and other expenses. As Steve Henn of the NPR show
To deal with the misuse of PAC money, the very first law that Congress passed after the 2006 congressional election was intended to limit the discretionary spending of Congress members, forcing them to publicly disclose how they spent their PAC money. However, and somewhat predictably from our perspective, the legislation seemed to have no effect. Just a few weeks after passing the law, the congressmen were behaving as irresponsibly as they had before; some spent the PAC money going to strip clubs, blowing thousands of dollars on parties, and generally conducting themselves without a semblance of accountability.
How can this be? Very simple. Over time, as congressmen have witnessed fellow politicians using PAC funds in dubious ways, their collective social norm has taken a turn for the worse. Little by little, it’s been established that PACs can be used for all kinds of personal and “professional” activities—and now the misuse of PAC funds is as common as suits and ties in the nation’s capital. As Pete Sessions (a Republican congressman from Texas) responded when he was questioned about dropping several grand at the Forty Deuce in Las Vegas, “It’s hard for me to know what is normal or regular anymore.”2
