Creating a Marketplace for Honesty

Dan Ariely, The Honest Truth About Dishonesty: How We Lie to Everyone—Especially Ourselves

If we’re honest with ourselves, we know we’re not honest with ourselves, at least not always. Post-Enlightenment rationalism has a myth of humans as instruments of reason, and sees unreason as a failure of human nature. But behavioral economist Dan Ariely, who has studied the limits of human rationality for years, turns his attention to what those limits say about humans’ ability to deceive. And his results are fascinating.

Classical economics contends that most people weigh the rewards of breaking the rules against the risk of getting caught. Ariely demonstrates how that vision, called the Simple Model of Rational Crime (SMORC), withers under scrutiny. Even as a thought experiment, it doesn’t make sense, or nobody would carry their laptops and iPods in public. But Ariely isn’t content with thought experiments, when he could apply very real science.

Behavioral economics apparently combines the most ambitious aspects of developmental psychology with business administration. As such, Ariely buttresses his assertions with bold new research. He demonstrates, through clinically controlled experiments, the manners in which honesty waxes and wanes. And he shows the manner in which diligent leaders can encourage greater honesty without resorting to irrational moralism.

Start with two seemingly contradictory facts. First, if we remove consequences, nearly everyone cheats at least a little bit. Second, almost nobody cheats as much as they could. Even if we kick the doors wide open and send all the guards home, few people would plunder the treasury. We can perform bizarre mental gymnastics to rationalize away small transgressions, but people will do what it takes to think of themselves as essentially good.

Unfortunately, we often cannot see the subtle ways in which daily life undermines our honesty. We miss the conflicts of interest that plague virtually all of us—if I can recommend two choices of action for you, and one will make me a profit, what will stop me from putting your needs ahead of mine? And, strangely enough, common human altruism can justify dishonesty. If I can tell a lie that earns you a reward, my likelihood of dishonesty increases.

But it’s not enough that dishonesty just happens; it also spreads virally. When we see people who essentially resemble us get away with dishonesty, we are more likely to cheat ourselves. Anyone who remembers the business ethics failures of 2002 and 2008 recognizes this. The reassuring corollary of this, however, proves that, if we see others resist dishonesty, our likelihood of virtuous behavior increases. We seek role models, even as adults.

Importantly, the most common suggestions for suppressing dishonesty don’t work. While Ariely proves that supervision discourages cheating, regulation only works if regulators remain omnipresent yet emotionally distant, which is unfeasible. And harsh punishments only work if people perform cost-benefit analysis before cheating, which Ariely shows we do not. Thus both the traditional liberal and conservative solutions prove founded on empty air.

Ariely’s most notable solution to dishonesty is also his simplest: remind people that they have a moral code. If people signed contracts, tax returns, and other documents at the top rather than the bottom, people would fudge less. If we ask people to contemplate their ethical foundations, they act appropriately. Even self-avowed atheists cheat less after swearing on a Bible. These elegant solutions arise not from external scolding, but innate declarations of character.

Rituals of purification also seem to make a difference. Research subjects cheated less right after Catholic confession, the rites of Ramadan and Yom Kippur, and other sacred “reset buttons.” Of course, today’s plural society could not compel us to participate in religious rites; but Ariely speculates on the possibility of creating secular equivalents. Considering how many of us have something to confess, I heartily endorse this plan.

I wish Ariely addressed how much our flexible honesty is innate, and how much is learned. In a late chapter, he describes performing his honesty experiments in multiple nations, finding that people demonstrate similar levels of honesty across borders. But since all societies rely on standards of trust, a dishonest society seems very unlikely. Perhaps Ariely could only test inherent honesty using children raised by wolves or something.

Ariely demonstrates that, if we clear away the ideological rubbish, the systems currently in place to encourage honesty have not worked. If we claim to be rational people, we will stop clinging to our Enlightenment myths, and recognize the deeper truth: humans are complex and inconsistent, and deserve the respect that comes with addressing our issues with nuance. We can become honest. Here’s hoping.