Honesty: The Best Policy?

Jill Rutter opened the event pointing out its relevance to IfG’s work behavioural economics. Evan Davis then led the discussion with Dan Ariely, Duke University Professor of Psychology and founder of the MIT’s Centre for Advanced Hindsight. Ariely has written several books, including his most recent work ‘The Honest Truth About Dishonesty’.

Ariely’s main points were:

• We rationalise ourselves to act dishonestly according to our sense of what acceptable behaviour is, rather than what is legal or not. This sense of acceptable behaviour is determined by social structures. (2m51s-6m03s)
• People can have moral codes which they apply to some aspects of their life (e.g. cheating in a relationship) and not others (e.g. cheating in business). (6m17s-12m50s)
• What people think is moral ‘in the moment’ determines whether they behave honestly or not. When carrying out government policy, this is what needs to be borne in mind. (13m00s-18m05s)
• There is a dilemma in acknowledging that people have a capacity to be dishonest without encouraging dishonest behaviour and a deterioration of the ‘moral compass’. (18m55s-27m10)
• When people are given the opportunity to be dishonest they will gradually alter their behaviour to become increasingly dishonest. Then, at a certain point, people no longer exhibit gradual increases in their dishonesty, they are just dishonest most of the time. (28m18-31m05s)
• Standard theories of criminal justice deal with the aftermath of crime by imposing punishments, but most people do not conduct a cost-benefit analysis on whether to conduct a crime based on those punishments. Policy should therefore place an emphasis on preventing criminal activity (e.g. education). (31m06s-36m13s)
• In the financial services sector bankers are faced with enormous conflicts of interests, in which their huge financial incentives are extremely difficult to ignore. ‘Sunshine policies’ cannot deal with these issues – the conflicts of interest themselves need to be overcome. (36m14s-41m31s)
• Nudge policies can have enormous impacts, but they are not the right approach for the financial industry, as conflicts of interest require more than a ‘nudge’ to be overcome. (41m32s-46m58s)
• Questions focused on the implications of group thinking on group dishonesty, the morality of multinational companies’ tax dealings, the difference between ordinary individuals and criminals, and how Ariely’s findings about dishonesty can be used to redesign our environment. (46m59s-1h16m29s)