Cheater, Cheater

Jackson Lears

American CEOs make 265 times the amount of money an average worker is paid. (Getty)

Cheating is as American as cherry pie. In the country that created the confidence man as a cultural hero and celebrated the slogan Winning is the only thing” as moral wisdom, fair play is a problematic ideal. David Callahan knows this, but he also knows that cheating has been most widespread when markets have been least regulated. In a spirited revival of the classic muckraking form, he shows that the last quarter-century has been a golden age of cheating. Callahan is onto something.

As economic inequalities have deepened during the last several decades, the renewed worship of money has bred temptation at all levels. Executives at Enron, Worldcom and other corporations, intoxicated by the heady atmosphere of deregulation, defraud shareholders of billions and get away with little or no punishment. The little guy naturally says: If the big shots get away with it, why not me? So he cheats on his taxes, steals from his company and downloads music without paying for it.

These may be trivial matters, but Callahan believes they are symptomatic of a deeper disease in the body politic. The infection takes hold as early as high school or college (cheating is rampant on campus), feeding (and feeding on) the conviction that success in life requires cutting moral corners, that success is ultimately defined in monetary terms. Consequently, our public life is pervaded by corruption and hypocrisy.

Callahan is a good enough sociologist to know that this charge requires specific grounding: If one defines cheating as breaking the rules to get ahead (as he does), then it matters who is making the rules as well as who is breaking them. Deregulation has made many unethical practices technically legal, such as those that pervade the credit card industry: deceptive advertising, usurious rates, hidden fees, excessive penalties. Free-market fundamentalism conceals a multitude of sins.

Callahan also is a good enough historian to understand how we got to this perilous state. The flaunting of ill-gotten gains during the first Gilded Age provoked the broad moral concern of turn-of-the-century progressive reformers. They laid the foundations for the American version of the welfare state, which came into being during the New Deal and framed public discourse throughout the post-World War II decades. Corporations had struck an implicit social compact with labor unions, trading job security for acceptance of work rules, and loyalty to their employees and their community in exchange for a steady supply of skilled workers.

By the 80s that compact was broken, and the only constituencies recognized by corporate executives were their shareholders and themselves. The unleashing of turbo-capitalism under Ronald Reagan brought with it a privatization of public morality. Government became less concerned with curtailing corporate malfeasance than with policing personal behavior. For the new breed of moral reformer, marijuana was more alarming than toxic waste. 

This new Gilded Age has revived the mood of the old, at least among top-echelon businessmen. Consider the story of Neurontin, a drug developed to combat epilepsy and approved by the Food and Drug Administration for that use only. But the Parke-Davis Company promoted the drug for off-label uses, by bribing doctors with paid consultant’s meetings” at posh resorts. The tone of the campaign was set by John Ford, senior marketing director of Parke-Davis, who made it clear in an internal company directive that he wanted to persuade doctors to prescribe Neurontin for just about anything. Neurontin for pain, Neurontin for everything,” Ford wrote. I don’t want to hear any of that safety crap, either.” By safety crap,’” Callahan observes, Ford meant the legitimate concerns doctors might have about using Neurontin for purposes that had not been vetted by clinical trials.”

Besides cultivating indifference to the public good, the reengineered” corporations of the new Gilded Age have intensified individualism in their own organizations. Jeffrey Skilling of Enron adopted the policy of rank and yank,” which meant firing the 15 percent of employees who scored at the bottom on periodic evaluations. Such policies encouraged cronyism backbiting and a Social Darwinist mentality.

The drive to maximize the bottom line has reshaped law and accounting. Major law firms demand 2,200 to 2,400 billable hours from young associates who can at best produce only 1,700 to 1,800: The temptation to pad statements is overwhelming. And in big accounting firms, it is an open question how best to survive — how far to bend each rule, how aggressive to be on behalf of clients. The pressure to please them, and to boost revenues, is intense. Regulatory ineptitude does not help: the failure to separate the accountants’ auditing and consulting functions, for example.

But the most destructive force, in Callahan’s account, is not any specific policy, but the winner-take all” ethos that sanctifies success at any moral price. The result is a distortion of professional standards in sports, education and journalism, as well as business. Marion Jones and Barry Bonds load up on steroids so they can set world records; Jayson Blair and Stephen Glass invent stories out of whole cloth so they can become top investigative journalists; students at exclusive Horace Mann School cheat on exams so they can get into the Ivy League university of their choice. No wonder ordinary Joes think they have a right to any largesse they can claim, fairly or unfairly.

In the decline and fall of the Internal Revenue Service (IRS), they can watch the winner-take-all ethos collaborating with deregulation. The IRS now has insufficient funds to prosecute or even investigate the high-income filer (who can afford to fight back), so the target of choice becomes the low-income filer (who can’t). What situation could be better calculated to encourage trickle-down corruption?

In this society, only a putz plays by the rules. Callahan’s political solutions are more persuasive than his cultural ones. He wants to implement a Keynesian program of public investments to ensure secure jobs and decent wages and to embark on a good old-fashioned war on corruption” led by a thousand Eliot Spitzers. The problem is not that human beings have not become any more greedy,” he quotes Alan Greenspan, but that the avenues to express greed have grown so enormously.” To close them we need a major new investment in combating white-collar crime in the healthcare and pharmaceutical industries, as well as on Wall Street.

This powerful argument descends to the realm of pious hope when Callahan turns to cultural reforms: We need, he says, more livable communities, more restrained consumption and a genuine revolution in business ethics. Who could argue with these goals? But who knows how to bring them about?

A hundred years ago, the progressive reformer could draw on a coherent worldview shaped by Social Gospel Protestantism. For better and worse, our culture lacks that coherence today. But if we ever do try to overcome our divisions and regenerate our public life, we will find few more thoughtful guides than David Callahan.

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Jackson Lears is editor of Raritan and author, most recently, of Something for Nothing: Luck in America.
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