The Upper Classes are More Dishonest—Official!

A series of studies conducted by psychologists at the University of California, Berkeley and the University of Toronto in Canada and reported by the NSF reveal something the well off may not want to hear. Those who are relatively high in social class are more likely to engage in unethical behavior. Lead researcher Paul Piff of UC Berkeley said:

Our studies suggest that more positive attitudes toward greed and the pursuit of self-interest among upper class individuals, in part, drive their tendencies toward increased unethical behavior.

Relative to the lower class, the upper class are more likely to break the law while driving, more likely to exhibit unethical decision-making tendencies, more likely to take valued goods from others, more likely to lie in a negotiation, more likely to cheat to increase their chances of winning a prize and more likely to endorse unethical behavior at work.

Piff explained:

The relative privilege and security enjoyed by upper class individuals give rise to independence from others and a prioritization of the self and one’s own welfare over the welfare of others—what we call greed. This is likely to cause someone to be more inclined to break the rules in his or her favor, or to perceive themselves as, in a sense, being “above the law”.

They therefore become more likely to committing unethical behavior.

Procedures

Piff and colleagues conducted seven survey, experimental and naturalistic studies to determine which social class is more likely to behave in unethical ways—to engage in behaviors that have important consequences for society such as cheating, deception or breaking the law.

In two naturalistic field studies that examined unethical behavior on the road, researchers were surprised by the differences between upper and lower class people, finding upper class drivers were significantly more likely to pursue their own self-interests and break the law while driving than were lower-class drivers. In these studies, the researchers defined social class by an observable cultural symbol of social class—namely, their car. Drivers of higher-end automobiles were four times more likely to cut off other vehicles before waiting their turn at a busy, four way intersection with stop signs on all sides. In addition, they found upper class drivers were significantly more likely to drive through a crosswalk without yielding to a waiting pedestrian.

In another laboratory study, the upper classes were more likely to cheat to improve their chances of winning a cash prize. Piff and colleagues first measured social class using the MacArthur scale of subjective socioeconomic status, where participants rank themselves on a 10-rung ladder relative to others in society in terms of their wealth, education and the prestige of their jobs. Participants then played a “game of chance” in which a computer presented them “randomly” with one side of a six-sided die on five separate rolls. Participants were told higher rolls would increase their chances of winning a cash prize, and were asked to report their total score at the end of the game. In fact, die rolls were predetermined to sum up to 12. The extent to which participants reported a total exceeding 12 was a direct measure of their cheating. The researchers concluded greed was a “robust determinant of unethical behavior”.

Plato and Aristotle deemed greed to be at the root of personal immorality, arguing that greed drives desires for material gain at the expense of ethical standards.

Due to their more favorable beliefs about greed, upper class people are more willing to deceive and cheat others for personal gain.

Study 4 sought to provide experimental evidence that the experience of higher social class has a causal effect on unethical decision-making and behavior. It was the only study in which researchers manipulated participants into temporarily feeling either higher or lower in social class rank to test whether these feelings actually caused people to behave more or less unethically.

At the end of the study, the experimenter presented participants with a jar of individually wrapped candies, ostensibly for children in a nearby laboratory, but informed them that they could take some if they wanted. This task served as a measure of unethical behavior because taking candy would reduce the amount that would otherwise be given to children. People in this study, who were made to feel higher in social class rank, took approximately two times as much candy from children than did people who were made to feel lower in social class rank. Piff concluded:

Across all seven studies, the general pattern we find is that as a person’s social class increases, his or her tendency to behave unethically also increases.

The Banker by C-J Moncur

The Banker

Hello, my name is Montague William 3rd
And what I will tell you may well sound absurd
But the less who believe it the better for me
For you see I'm in Banking and big industry

For many a year we have controlled your lives
While you all just struggle and suffer in strife
We created the things that you don't really need
Your sports cars and Fashions and Plasma TV's

I remember it clearly how all this begun
Family secrets from Father to Son
Inherited knowledge that gives me the edge
While you peasants, people lie sleeping at night in your beds

We control the money that controls your lives
Whilst you worship false idols and wouldn't think twice
Of selling your souls for a place in the sun
These things that won't matter when your time is done

But as long as they're there to control the masses
I just sit back and consider my assets
Safe in the knowledge that I have it all
While you common people are losing your jobs

You see I just hold you in utter contempt
But the smile on my face well it makes me exempt
For I have the weapon of global TV
Which gives us connection and invites empathy

You would really believe that we look out for you
While we Bankers and Brokers are only a few
But if you saw that then you'd take back the power
Hence daily terrors to make you all cower

The Panics the crashes the wars and the illness
That keep you from finding your Spiritual Wholeness
We rig the game and we buy out both sides
To keep you enslaved in your pitiful lives

So go out and work as your body clock fades
And when it's all over a few years from the grave
You'll look back on all this and just then you'll see
That your life was nothing, a mere fantasy

There are very few things that we don't now control
To have Lawyers and Police Force was always a goal
Doing our bidding as you march on the street
But they never realise they're only just sheep

For real power resides in the hands of a few
You voted for parties what more could you do
But what you don't know is they're one and the same
Old Gordon has passed good old David the reigns

And you'll follow the leader who was put there by you
But your blood it runs red while our blood runs blue
But you simply don't see its all part of the game
Another distraction like money and fame

Get ready for wars in the name of the free
Vaccinations for illness that will never be
The assault on your children's impressionable minds
And a micro chipped world, you'll put up no fight

Information suppression will keep you in toe
Depopulation of peasants was always our goal
But eugenics was not what we hoped it would be
Oh yes it was us that funded Nazis!

But as long as we own all the media too
What's really happening does not concern you
So just go on watching your plasma TV
And the world will be run by the ones you can't see

Written By Craig-James Moncur
16/10/2009

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LA Dodgers a Microcosm of American Society

The LA Dodgers are bankrupt. They do not have the cash to pay their employees’ wages. We are talking about a community here. The Dodgers are a baseball team much loved by its many patrons, as sports teams usually are, whether big or small. And the Dodgers are bankrupt despite recent success—they made the play offs as recently as 2008 and 2009. Why then has this catastrophe engulfed the team? Andrew Gumbel of the UK Observer has explained it.

The fact is that the owner of the team has sucked them dry for his own aggrandisement. It should be a lesson for Americans, especially those who persistently defend the mega rich, people whom they do not know and never will, and people who are richer than they can ever imagine—America’s plutocrats, the corrupt and greedy rich.

Frank McCourt, not the deceased Irish novelist but a car lot magnate, bought the team and bled it dry to support a life of luxury for himself and his family. McCourt bought the Dodgers from News Corp, who had used it to build up a regional sports network. To do it, McCourt borrowed $150m from Bank of America, $75m from Major League Baseball and $196m from Fox, so he had not spent a penny of his own money.

McCourt then sliced off what was most profitable, the stadium car park and the ticket office as his own operations, which charged the Dodgers rent, and, in turn, giving McCourt security to borrow more dollars. He paid himself $5m a year, his wife, Jamie, $2m pa as chief executive, and their two children $600,000 each—one was a student at Stanford University and Goldman Sachs employed the other. McCourt also enjoyed a private jet and four luxurious houses in Hollywood and Malibu. In typical robbing financier style, the money and debt were spread among, and constantly moved between McCourt’s shell companies and subsidiaries to hide what was going on.

And what was going on was that the assets of the team were being stripped and moved into the personal accounts of a single family and a few hangers on.

Yes, it ought to be a lesson for the average American, whether poor and unemployed or middle class and imagining that they are well off. You just do not have a clue, especially you Tea Partiers taken in by rich men’s stunts to keep you on side. The invisible über rich of the USA are taking you all for the same sort of ride as McCourt took the community that supported the LA Dodgers. They are robbing you silly, and too many of you are defending them!

You cheer because they are sending your boys to distant lands to get maimed and killed, and they make money out of armaments and the vast support industry of the military-industrial complex that supports it. Often you don’t even get a badly paid job out of it. They manufacture more and more abroad in low cost countries. You lose your jobs, or the threat is used to keep wages down or to get concessions from the city and the state treasury, and all of it goes into pockets just as McCourt’s did. You don’t know what is going on because they are like McCourt experts in hiding it, and have a gigantic publicity service called the media to feed you anything to keep you confused and divided.

Get real! You Yankees are like the Dodgers fans—being conned!

How Incentives Destroy Co-operation and Will Destroy Society

Human societies depend upon each of us helping our neighbors, and not exploiting them, and about 80 percent of us are willing to participate fairly in joint projects of mutual benefit. The other 20 percent are skivers, people who will try to get the benefits with as little effort as they can get away with. The skiving free loaders are not popular with the others who pull their weight, and usually sanctions or punishments are applied to those who try to exploit other people’s mutual effort for their own gain. It is called norm enforcement, the norm being that everyone should pull their weight, and those who do not are deviants from the norm.

Data like these are not difficult to get by testing in controlled situations. If my neighbor and I could each build a house on our acre plot in six months, but by co-operating we could do a better job making use of our complementary skills and finish the two houses in eight months, then we have a clear benefit from co-operating. If the houses still took six months each and were no better, we might as well build our own, and we only have ourselves to blame for anything that goes wrong. The act of co-operating must itself have a benefit or there is no point in it. So setting up a test in which people can share a sum of money they have been given with other participants to get a benefit from the pooled resource mimics my neighbor and I helping each other build a house, as long as it is likely that by sharing we can all be better off.

In such tests, Professor Stephan Meier, Assistant Professor in Management at Columbia Business School, and co-worker, Andreas Fuster, PhD candidate, Harvard University Department of Economics, discovered that when people were given private incentives, norm enforcement became less effective. The incentives seemed to take the edge off the hard feeling towards the skivers.

1. Participants were asked to contribute to a common pool of cash to be divided equally among them all at the end of each of six rounds, whether or not all participants contributed. No kind of norm enforcement was used. People gave only small amounts to begin with, and gave less in each round.
   
2. By adding an incentive to contribute (a lottery ticket), with no opportunity to enforce norms, people contributed more gladly, including free riders.
   
3. Norm enforcement was introduced to the first test, in the shape of a fine on free riders at the end of each round. Those who were fined, most of them, increased their contributions in subsequent rounds.
   
4. Adding the lottery ticket incentive made contributors scale back their punishment of free riders by almost half, and free riders were less likely to make larger contributions in subsequent rounds whether or not they were punished. The result tended towards the previous test without incentives.
   

Fuster says:

Individual incentives can really change the structure of how we deal with one another, what the norms are, and how we enforce norms. If social forces in an organization are important, managers need to be attuned to norm enforcement and peer effects. They should understand that adding monetary incentives can dramatically change this dynamic and lead to a net negative effect.

The point is that the lottery ticket became the aim of participating, there being nothing to be gained by sharing through the common pool. Free riding therefore became irrelevant. Everyone would give just enough to get a lottery ticket, whether a free rider or not.

On the face of it the experiments are flawed. There is no co-operative gain to be made by contributing to the common fund. The pool needs to be enhanced in some way to make it more like human co-operation. Even so, it is easy to see that a separate incentive can draw attention from the whole point of a co-operative venture—the advantages of co-operating—by distracting attention from the primary objective.

It is the reason, for example, why sports can be so easily disrupted by gambling. Whatever is to be gained from illegal betting can make sportsmen actually want to sabotage the supposedly co-operative team objective, and lose for their personal gain.

The same is true of senior managers and board members who begin to give themselves bonuses from the company’s earnings. The drive to maximize bonuses distract from the corporate aims, and when shareholders will not sack managers and board members who are lining their own pockets at the expense of the shareholder, then the managers can run amuck.

That is what happened in our banks. Barclays’ shares for example sank by a half over several years when top managers in most banks lifted their own compensation, including bonuses, by obscene amounts, and shareholders let them get away with it. Needless to say, the holders of large blocks of shares, able to sway any shareholders’ meeting, are often themselves large banks and city institutions, so effectively they are in a scam to rob the ordinary small shareholder and the customers.

Politicians are the same. Their objective is supposed to be to represent the interests of the people who vote for them, but they are all too easily distracted by the wads of maney waved at them from corporate bosses. Tony Blair is getting his compensastion now for his sacrifice of pretending to be a Labour Party Prime Minister, when he was a Republican Quisling. The incentives of the rich soon make most career politics forget what they are there for.

Our societies used to take an extremely dim view of bribery, but no longer. Bribes are today incentives, and the law enforcers themselves are too ready to accept them. A cabal of superrich people have corrupted the western world beyond redemption. Western society is decadent and immoral. Democracy is superficial. We are run by this megarich class, which controls every party with its incentives, incentives to do as they want, and not what is good for society.

The often despised Arabs are showing more courage and awareness now than the once militant workers of the UK and France. Workers in the US have always been too easily fooled by their betters. Even after thirty years of declining real wages, longer hours and poorer conditions for those in work, and a labor pool of twenty or thirty million unemployed or part time workers, while the top thousand or so people have trebled their wealth, the average American is still beguiled by the moribund American dream, Republican crooks and pastors, and their own inability to comprehend what is going on. They are the ones without the incentives, but rather are offered carrots.

Carrots might be incentives for donkeys, but Americans ought to be more sophisticated than those famously uncomplaining beasts of burden. Its time they started to do what the Arabs have already begun. Get out in mass on to the streets, trash a few corporate HQs and banks, and threaten revolution. Social instability is one thing the rich do not like, and can do little about, except getting national guards to shoot citizens.

Then everyone will realize that the state is not theirs, and democracy is an illusion.

Cash Bailouts Are Frittered as Added Executive Compensation

A business study of corporate bailouts has found that debt relief is more successful than cash injections. It revealed that, in the year after a cash bailout, executives paid themselves and some employees higher compensation!

Executives of firms that receive cash almost immediately give their employees and themselves raises.

Professor Kenneth Kim

The study of the performance of 104 corporate bailouts in 21 countries between 1987 and 2005, was carried out by Kenneth Kim, associate professor, and Zhan Jiang, assistant professor, at the University at Buffalo School of Management, and Hao Zhang, assistant professor, at the Rochester Institute of Technology.

They found also that bailed out firms could recover to a point where their performance was as good as before, depending upon several factors. Recovery was best for firms that had had a sudden decline for reasons outside management control, or because they had problems servicing their debt. Firms that had declined more gradually with no significant external factors, or were unprofitable, were genuinely sick, and could not recover as well despite the bailout, though many did survive. Kim noted:

The former were profitable, they just needed a hand. So, it makes more sense to rescue firms that have been otherwise strong than to keep afloat “prolonged decliner” firms that have been weak or inefficient for some time.

Firms recovered least from governmental bailouts, because governments:

1. don't monitor firms after the bailout as closely as large shareholders and banks
2. may bail out a firm to keep people employed or to keep the economy going, regardless of the firm's performance
3. are more inclined to bail out firms with government connections.

Cooperation and Monitoring to Deter and Punish Free Loading Works Best

The default assumption of evolution is that each individual animal follows only its own interests, and so cooperation in more than small groups is impossible because free riders take advantage of the others to enjoy the benefits without contributing anything, or as much, to the joint venture. Yet, human beings do cooperate, and field studies show that many communities are able to manage their commons—woodland, pasture, fishing. They manage to do it by combining a degree of cooperation with monitoring free riders to deter them.

Researchers, Professor Michael Kosfeld, Devesh Rustagi and Professor Stefanie Engel, studied a forest commons management program of pastoralists in Ethiopia. They recorded the degree of conditional cooperation in a group—the proportion of members willing to cooperate provided that others cooperate too. They found that groups differ widely in their share of conditional cooperators, from 0 percent to 88 percent. When conditional cooperators were a small proportion, not surprisingly, many were free riders. Presumably, this amounted practically to free exploitation of the resources.

Statistical analysis showed that the groups with more conditional cooperators were more successful in managing their forests, as measured by the number of immature trees there were per hectare. Looking into this further, the researchers investigated what the groups actually did to guard against free riding. They measured the time spent in monitoring the forest.

Groups with more conditional cooperators not only cooperated more but also monitored more by patrolling the forest to detect and deter free riders. With 60 percent conditional cooperators, a group spent on average 14 hours more per month monitoring than a group without any conditional cooperators. It shows that conditional cooperators spend time not just helping each other but also trying to stop free riders. Professor Kosfeld said:

Our findings fill a long standing gap between field and laboratory studies on human cooperation.

A positive correlation between conditional cooperation and costly monitoring sheds light on the evolution of human cooperation. The theory of gene culture evolution predicts greater cooperation in groups which enforce cooperation by deterring or punishing free riders. Rustagi explained:

The results yield important policy implications for the governance of human collective action. Because humans differ in their motivation to cooperate, an effective solution to commons problems should not be based on incentives for purely self regarding individuals alone but needs to explicitly take into account the complex interplay of heterogeneous motivations and behavioral norms to cooperate voluntarily.

This circumlocution must mean that free riders ought to be deterred from having the benefits of the cooperation of others or somehow punished for it. What can that mean in our modern societies, however? Are the so called benefit scroungers to have their benefits withheld, as the UK Con-Dem government are threatening, so that they have to starve, beg or turn to thieving to live? Or do the cooperators accept that people who are willing or are only able to live at a sustenance level nevertheless have the right to life without being starved to death. Earlier human societies always let the poor, aged, and disabled use common heath land, and a commandment in the Jewish scriptures (the Old Testament of the Christians) was to leave a portion of a field to be picked by the poor. No decent society has ever let people starve in the midst of surplus.

Does it mean then that the very rich, who pay others to do their work and are able to do so by taking much more than their fair share of society’s output, should be punished for being greedy and selfish while others have to work for their share? These wealthy people surely are the latter day free riders of our society. Mostly, they have done nothing themselves to advance society. They are where they are because some relative, a father, grandfather or perhaps uncle, who did something useful and successful, have left them with money and possessions that they have never earned themselves, but yet that they insist is rightfully their own, or nowadays by voting themselves huge compensation packages and bonuses. They are the free riders of today, and they are the ones who should be rightfully punished by society.

By far the easiest way to punish them, and to allow the ones in society who do the work to benefit, is to tax the rich at a suitably punitive level, and to distribute the money in social wages, that is to say, better social services like health and education, services that everyone in a decent society should expect to get free when they need it. Everyone will be freely educated when they are young, will be freely treated when they are ill or injured, and will be freely cared for as old people.

That is a society in which cooperation works, in which the real scroungers, the free loading rich are benignly punished by removing some of their unearned wealth and giving it to the poor who at present cannot afford many of the basic things in life. It has the benefit for the wealthy too, the people who still own the factories and banks, of letting people consume, for it is out of consumption that the free riders take their surpluses. A proper civil society is called civilization, and harks back to the sort of societies we used to have albeit on a smaller scale. It is human and humane. Let’s do it.