Wednesday, February 29, 2012

Say it Ain't So Horation Alger

A recent study from a Berkeley professor found that the rich tended to act more unethically than those with moderate or low earnings: Slate. Who would have guessed it? Of course, some are already calling the study an exercise in "class warfare," but I think it is important research. The author argues it could be the result of less reliance on social ties than middle class and the poor, thus creating a more individualistic mentality. Interestingly, researchers found that even those that win the lottery exhibited increased unethical behavior, including keeping incorrect change and even taking money from children. Really it is just more empirical support for the argument that the wealthy in America have low ethical standards for their behavior and think of themselves first. This is obviously not universally true -- take Bill Gates, George Soros and George Clooney as three examples -- but it does beg the question of what society will look like if we keep increasing the power they have in the economic and political realms. 

A good film that explores these ethical lapses is Margin Call (2011), which I recently saw. It dramatizes the days leading up to the 2007 mortgage crisis and the firms that offloaded their holdings right before the derivatives dropped precipitously in value. The film follows a night when the firm recognizes that it could be destroyed if it kept the mortgage derivatives on the books and thus decides to sell them to customers without informing them of the risk (and reality that they will soon lose their value). Some characters suffer through an ethical quandary, but all accede to the wishes of the CEO and the needs of the few (themselves and their firm) over the many. Wall Street has obviously never been a bastion for ethical behavior, but it is clear that Reaganomics and the liberalization and deregulation of markets has led to an almost sociopathic climate within firms, where greed reigns over even a hint of humanity and decisions are made that destroy lives across the globes every day. Overall, the film based loosely on real events and this latest study provide further argument for the claim that government and regulation are the only things that stand in the way of a return to a social darwinist world ruled by the few for their benefit alone. They may both be examples of class warfare, but it appears we need a fair helping of it at present.

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