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In October of 2010, a van driver near Coimbatore, a city in Southern India, picked up a young girl walking to school. He offered to drop her off at school, but instead, kidnapped her and took her to a remote destination. Later, when asked why he did what he did, the man would say that he wanted money to buy clothes for Diwali, a popular festival in India. Everyone—that is, everyone who can afford it—wears new clothes during Diwali and this man didn’t want to be left out. As it turned out, the man’s plan went awry. The girl’s parents could not provide the ransom that the man was demanding, and he ended up killing the girl in a fit of rage.

In this true story, it is easy—and indeed justifiable—to chastise and punish the man for taking an innocent girl’s life. However, the story has another side to it, a side that most people tend to miss or ignore. That side of the story is equally important, especially if we want to understand the reasons why people behave unethically.

Understanding why people engage in unethical behaviors has always been of interest to humans, which is why the fight between “good” and “evil” is a central theme in many books and movies. In recent years, however, ethics has also become an important topic. Shocked by the extent to which corporations and leaders have engaged in unethical behaviors, virtually every top business school offers a course on “Ethics” or “Corporate Social Responsibility.” The hope is that exposure to these courses will make students—our future business leaders—think twice before engaging in unethical behaviors.

But how does one teach people ethics?

One approach is to expose them to the prevalence and negative consequences of unethical behaviors. For example, showing students the story of Enron, or telling them about the policies and people that led to the 2008 financial crisis can jolt the students into realizing both the prevalence of unethical behaviors and the negative consequences they generate. This can, in turn, alert the students into being “on guard” against committing unethical acts themselves.

There are, however, two problems with this approach. The first problem is that students are likely to forget the lessons they learned in these classes once they graduate. Just as our New Year resolutions fall by the wayside within weeks of making them, people’s resolve to guard against unethical behaviors will likely wane once other priorities—meeting targets, family obligations, etc.—take over.

Further, exposure to stories of unethical behaviors is more likely to result in pointing fingers at others, rather than in reflecting on one’s own fallibility. Thus, people walk away from watching The Smartest Guys in the Room (a movie about Enron) or Inside Job (a movie about the 2008 financial meltdown) feeling outraged at our current crop of leaders; rarely do these movies help people recognize that, had they been in these leaders shoes (from childhood), they may themselves have acted in exactly the same ways.

Dan Ariely's findings show that all of us, if given a chance, would cheat a little

Dan Ariely, author of the excellent new book, The Honest Truth about Dishonesty documents impressive evidence to show that, contrary to what most people believe, the world is not made up of a few really bad apples. Rather, he shows that the world is made up of a LOT of—and yes, that includes you and me—slightly bad apples. Dan’s conclusion, that all of us cheat a little, is based on the following theory: people are tempted by the economic incentives to cheat, but they also want to hold on to the self-image as honest, upright people. So, what do they do? They strike a compromise. They cheat, but only to the extent that their self-image is not jeopardized. Thus, for example, people given an opportunity to surreptitiously look up the answers to a test do so for a few (but not all) questions. Such cheating allows them to fare better in the test while also maintaining the self-image as an honest person. Similarly, when filling out a travel reimbursement form, people pad up the expenses for only some (and not all) of their taxi rides and dinners.

Now, you may think that these small transgressions are harmless because they won’t add up to much, but that’s not true. As Dan points out, our “small transgressions” add up to a whopping $6 billion per year in the US alone. More importantly, by engaging in them, we do our bit to promote a culture of leniency toward unethicality, and this culture emboldens those with stronger proclivities to engage in more extreme unethical behaviors. Thus, by cheating a little, we are, in our own small way, paving the way for the Jeff Skillings and Bernie Madoffs of the world to cheat a lot.

Dan’s findings suggest that the first approach—of exposing people to the prevalence and negative consequences of unethical behaviors—won’t help much because people do not even realize that they are themselves to blame to at least a small extent.

So, Dan suggests the following alternative approach. He suggests putting systems and processes in place to remind people of important moral principles (e.g., the Ten Commandments) or “honor codes” just before they undertake consequential acts—such as filling out the tax return or taking an exam. Dan and his co-authors find that these types of interventions can significantly reduce unethical behaviors. For example, students from MIT who read and signed “MITs honor code” before taking a test did not cheat on the test. In contrast, those who did not sign this code cheated. (This finding is particularly interesting because MIT does not have an honor code!)

Dan’s approach would complement the first approach and together, help curb unethical behaviors to a significant extent.

But, for several reasons, they may not be enough by themselves. First, it’s not clear if exposure to the moral codes or principles will continue to be effective in the long run. Recalling the Ten Commandments may significantly lower cheating the first time around, but not the tenth time. Second, as Dan himself discovered, it is not easy to get top leaders to put in place process and systems that curb people’s tendency to cheat. The IRS, for example, wasn’t willing to make people sign the tax form before they filled it out. (Currently, people sign the form after they fill it out, by which time it is too late.)

Finally, and this is really the most important reason why neither of the two approaches discussed thus far is sufficient, some of the most heinous crimes that we commit at the collective level—as a nation or a species—result from individually ethical behaviors. Consider, for example, global warming, which is a significant—if not the most significant—man-made problem that we currently face. Global warming is due to the collective impact of individually ethical behaviors. No one person’s carbon footprint is large enough to make a difference, but together, our footprints can, and likely have, resulted in a devastating effect for future generations. Consider similar other problems, from the decimation of wild animals and fish to the rising income gap between the rich and poor. In all of these cases, our individual behaviors are not unethical, but collectively they generate unethical ones. (See The Story of Stuff for more examples.)

This is why we need a third approach to curb unethical—especially collectively unethical, but individually ethical—behaviors. This approach involves changing the “Rules of Living.”

"The One with the Most Toys Wins"

One of the most prominent rules by which we currently live is this: “The one with the most toys wins.” I will call this the “toys” rule. According to this rule, the more powerful, rich, famous, respected, and beautiful you are, the more you have succeeded in the life. Implicitly, this rule suggests that, to be happy, you need to extrinsic rewards—money, power, fame and beauty—and that you can’t really be happy unless you have them.

An alternative rule by which we could live, although few of us have tried, is the following: “The one who enjoys life the most, wins.”I will call this the “enjoyment” rule. According to this rule, the more fun you have had in life, and the more enjoyable and happy it has been, the more you have succeeded.

The difference between these two rules may seem subtle—especially if you believe that the only way to have fun is to be rich, powerful, and famous—but consider the following example as an illustration of the difference between them.

Imagine that your son has just come back from camp, and he tells you that he played soccer. What would you ask your son about the game? Would you be more inclined to ask him, “How many goals did you score, son?” or would you ask, instead, “How much did you enjoy the game, son?”

If you asked him the first question, you would be emphasizing “toys” rule, nudging him toward the path that eventually leads him to tether his self-image and happiness to how rich, famous, and powerful he is. If you asked him the second question instead, you would be emphasizing the “enjoyment” rule, setting him on the path to follow his passion and intrinsic interests.

My thesis is that the world would be a more ethical place if people lived life by the “enjoyment” rather than the “toys” rule. This is because, in contrast to extrinsic rewards—money, fame, power, etc.—enjoyment is not a scarce resource. When you go to a concert, your enjoyment is not diminished when you see others--or the band--enjoying themselves; indeed, if anything, your enjoyment is augmented by the others’ enjoyment. In contrast, when you discover that your colleague gets a higher pay, or that he has been promoted over you, your happiness is diminished.

Thus, when you and I—and everyone else around us—is chasing money, fame, and power, and all of us are going at it at full throttle, there’s no way of avoiding stepping on other people’s toes—our win has to come at someone else’s loss. As a result, living by the “toys” rule encourages us to behave unethically. If, on the other hand, we pursue enjoyment instead, we won’t have to step on others toes as much. Thus, we would be less likely to behave unethically.

Now, you may wonder what would happen to a society in which everyone followed intrinsic interests and no one was interested in chasing money, power, or fame. You may instinctively believe that such a society would become unproductive and decadent. After all, isn’t innovation driven by the pursuit of money, power, and fame?

Not necessarily. Even within capitalistic societies, innovations are driven mainly by people who follow their passion, rather than by those who chase extrinsic rewards. As I articulated in another article, a society in which people follow their intrinsic interests may produce fewer widgets per year, but the widgets will be more meaningful, and the production of these widgets will happen in a more sustainable manner.

This is all well and good, you may say, but how do we get to change the rules of living? How can we expect billions of people, all of whom have subscribed to the “toys” rule, to suddenly adopt an entirely new rule?

I agree that it would be virtually impossible to change everyone. But what is eminently possible is to take personal responsibility to change yourself—to “be the change you want to see” (a quote by Gandhi). This is the first step toward helping create an environment in which people live by the “enjoyment” rule. Without taking this step, you will only run into obstacles and frustrations if you seek to change others.

But why should you take personal responsibility to change yourself when others are not willing to?

There are two main reasons. First, contrary to what you may believe at first blush—that you would be sacrificing your own welfare by adopting the “enjoyment” rule when others are living by the “toys” rule—you will discover that pursuing your inherent interests actually makes your life more fulfilling and meaningful. Several findings show that pursuing inherent interests and finding meaning in what you do is a critical determinant of life-satisfaction. As somewhat of an aside, it turns out that, even from the perspective of being rich, powerful and famous, you would be better off following your intrinsic interests, rather than chasing extrinsic rewards (see the following TED talk). Consider any rich, powerful, or famous person and you will likely discover that they spent a considerable amount of time in their early years pursuing intrinsic interests.

Second, when you take personal responsibility for being the change you want to see, you will discover an important truth: that there’s a very good reason why others don’t want to change—change is extremely hard! You will discover how difficult it is to resist the allure of money, fame and power, and the numerous subconscious ways in which you continue to behave in accordance with the “toys” rule despite the outward conviction that these things don’t matter to you. And in making these discoveries, you will realize that the most effective way to change others is not through anger, frustration, or coercion, but through understanding, love and compassion.

And when you look at the world through this lens of love and compassion, you will recognize the myriad ways by which the “toys” rule pressurizes people to engage in unethical behaviors. You will realize, for example, that the van driver in the opening example is as deserving of our sympathy and commiseration as he is deserving of punishment.

Interested in these topics? Go here for my new (and free!) online course on happiness

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