A new study commissioned by Ernst & Young has startling results that are cause for real concern in the business world. In a survey of 1,758 corporate professionals from across the world, 15 percent of respondents thought an economic downturn was enough justification for using immoral and misleading business practices, a rise from 9 percent in 2010.
More appalling are the responses from the 400 CFOs included in the study: 47 percent found it was warranted to lie and bribe if it helped their company survive a downturn.
One suspects that if anything such statistics understate the true problem. If I were planning to lie, cheat and steal to build my corporate empire, I doubt that I’d start out by confiding those plans to some random pollster from Ernst & Young. Somehow one thinks that people who have no problem with lying and stealing are OK with lying about their plans to steal.
That the survey is global offers Americans a small degree of comfort; certain corporate cultures abroad are known for their tolerance of shady behavior, and we can hope that the figures for American business are a little better. But that is no cause to be smug. A pervasive culture of dishonesty in business is more than a nuisance; it is a threat. There are always a few bad apples out there, but if we reach a tipping point where enterprise is habitually and routinely dishonest, the world will grow nasty and poor with surprising speed.
A pervasive culture of dishonesty forces everyone to deal defensively and to think only of the very short term. Systemic dishonest exacts huge costs; it also leads to a commercial environment where avaricious lawyers and ham-handed regulators have the upper hand.
It is for these reasons that Via Meadia favors harsh treatment for prominent businesspeople convicted of dishonorable, illegal and dishonest behavior in the administration of their business concerns. Their crimes do not just hurt the individuals of the companies they defraud. They damage society as a whole by setting a bad example and by communicating a signal that these practices are widespread.
To pay their true debt to society, their punishments must set an example as well. We favor long prison terms and savage confiscatory fines that make crystal clear to everyone in the business world that crime does not pay. (The laws defining this behavior need to be carefully drafted; sloppy and loose laws that give prosecutors too much discretion can be as damaging as crime itself.) Shame, the loss of status and security for themselves and for family members reduced to penury by confiscations, restitution and fines: prominent businesspeople who betray the public must pay a price so shockingly high that others will be deterred — and the public’s belief in the law will be renewed. If pro-business, pro-market politicians don’t introduce some reasonable and well crafted laws along these lines, we must expect that anti-market activists will exploit the opportunity and ultimately pass laws that are so broad and so sketchy that prosecutors will have the whip hand over every business in America.
This isn’t just about economics. A free society must be a virtuous society or it will fail. Without strong personal ethics (which usually, though not invariably, are cultivated from a faith in God) free markets crumble and free societies do not stay free. Any decline in the ethical standards of our political, business and cultural elites is a clear and present danger to the freedoms we cherish, and society must have the capacity to defend itself against these powerful and destructive enemies within.
One way to combat such a business culture and re-inject strong personal ethics into our business lives is through education. Ambitious men and women need more than just one semester of Business Ethics—learning ethics and attaining a moral compass comes from constant learning and a reconnection with religion and morality throughout one’s upbringing. Helping your child cheat on the SAT to increase their chances of admission to a prestigious college, for example, is the kind of behavior that, if widely tolerated and allowed to spread, will slowly poison our common life.
American schools and colleges, especially those who teach the most talented and the best connected, need to reconnect with their religious and ethical roots. Almost every school in America held its students and faculty to higher personal standards fifty years ago than it does now; one result is the pervasive erosion of business ethics among the top banks and institutions at the commanding heights of our society.
We need teachers, headmasters, principals and college presidents and deans who are ready to stand up for (and be held accountable by) serious moral standards beyond the tepid green PC pablum that substitutes for serious ethical and religious discourse in many contemporary educational institutions.
Tolerance of unethical personal and business behavior among the rich and the powerful needs to be recognized for what it is: a deadly threat to all we hold most dear.