GUEST: David Callahan
I’m Richard Heffner, your host on The Open Mind. And the idea I would like to pursue here today derives from a compelling new Harcourt book titled “The Cheating Culture: Why Americans Are Doing Wrong to Get Ahead.”
Its author, my guest, is David Callahan, a Princeton University Ph.D. in Politics and the Co-founder of Demos, a new public policy think-tank based in New York.
Now, I must say that what I find particularly intriguing about Dr. Callahan’s chronicle of cheating and dishonesty in contemporary America in our sports, in our business affairs, in our professions, politics and personal lives is his insightful and rather unique emphasis on the resurgence, a newly powerful role in our thinking, over at least the past generation, or so, of 19th century Social Darwinism.
This means, of course, an individualistic, marketplace based dog-eat-dog, sink or swim, survival of the fittest, I’m alright, Jack, and the devil take the hindmost emphasis on free enterprise, social and economic thinking that is very little concerned with anything other than Number One.
Indeed, Dr. Callahan leaves very little to the imagination in the connection he draws between this newly dominant laissez-faire ideology and our cheating culture. And I would ask him today to elaborate upon his insistence that American’s never sympathetic to life’s losers, seemed to grow even more callous towards the weak during the 1980s and 90s. We also turned more worshipful of the strong, mainly the rich and famous. “Why are those attitudes relevant to cheating?” asked my guest. “Because it is a small step from believing that big-shots intrinsically deserve their power to indulging the abuse of that power.” Is that the basis for your thinking about we American cheaters?
CALLAHAN: That’s pretty much it. You know cheating is not a new phenomenon in the United States. We’ve always had cheating. This has … always been kind of a cutthroat culture and there’s always been a kind of rough and tumble aspect to American life. But I argue that in the eighties and nineties it became even more rough and tumble; nastier, more cutthroat. Kind of like the twenties, kind of like the Robber Baron era of a hundred years ago.
You know Ronald Reagan came into office in 1981 and he said in his Inaugural Address that, you know, government was not the solution, government was the problem. And for the past two decades we’ve had this relentless attack on government and the message that, you know, nobody should be there to catch you if you fall.
And I think when we have that kind of message coming from our leaders and infusing our culture, people, you know, they’ll do whatever it takes.
HEFFNER: Yeah, but wait a minute. One, on the one hand, nobody should be there to catch you when you fall. Isn’t that a stretch to nobody should be to make sure you don’t knock the other fellow over.
CALLAHAN: Well, I mean, this is the thing. We’ve had … government watch dogs that are supposed to be the referees of fair economic competition … the IRS, the SEC, which polices Wall Street. These agencies have been starved of resources over the past two decades. The people at the top, the rich, the powerful, the CEOs … my argument is that these people have been cheating because they think they can get away with it. And it is … it’s been largely a rational view that there’s just nobody whose out there who’s going to be able to go up against their top notch legal talent.
HEFFNER: A rational view.
CALLAHAN: It’s a rational view. I think so. That, you know, money buys you legal defense in this country. You got a lot of money, you can get great lawyers, you can tie those government prosecutors up in knots; you can come in to the courtroom and keep these people busy for four months like we’ve seen in the Tyco trial with Dennis Koslowski. That trial’s been going on for four months. Show any one, any jury 10,000 documents over a four month period, they’re not going to know what to believe by the time they get into a jury room. It’s very hard to prosecute these white collar cases.
So the people at the top they can get away with cheating and believe that. Ordinary people see this, they feel the system is stacked against them; they feel the rules aren’t fair. And so they think, “Well, why should I play by the rules?”
HEFFNER: Well, there seems to be, as I read through your book, a kind of harshness in your concern about the absence of punishment.
HEFFNER: And this is obviously what you’re talking about. But you start off listing the absence of punishments in terms of a lot of kids …
HEFFNER: …a lot of school children. Now, you say these are the school children who are the children of very wealthy people …
HEFFNER: … and that’s why they get away without any punishment at all. But this is, obviously a major concern of yours.
CALLAHAN: Well …
HEFFNER: … the no punishment society …
CALLAHAN: Well …
HEFFNER: … if you’re from underneath.
CALLAHAN: Well, some people aren’t punished in this society. You know we have more people in prison than ever. Two million people in prison. We have a lot of people serving these long mandatory minimum sentences for non-violent drug offenses. And yet, you know, when it comes to more privileged people, we have a completely different view of punishment.
The draconian “get-tough” attitude of the last two decades is only applied to part of the population. So I go through in my book all the ways in which, in which we’ve indulged cheaters. You look at the professional class, doctors, lawyers, stockbrokers. You know, the associations that are supposed to be policing those professions have been falling asleep on the job.
The state bar associations that are supposed to get rid of crooked lawyers, you know if they’re caught over billing clients or doing other kinds of wrong things. Those associations have been extremely weak in the eighties and nineties. The state medical societies that are supposed to police doctors … they’re not doing their job.
HEFFNER: You say “falling asleep” on their jobs. Is that what you mean? Or are they doing what they were intended to do; are they doing what voluntarism is supposed to do?
CALLAHAN: Well, there’s lots of different stories here. State bar associations, what has happened there is that they’ve been sort of co-opted by their members. And instead of looking out for the public and protecting clients interests and, and you know, the consumer interests, they’ve been often looking out for lawyers in their state. And they’ve also been starved of resources that, you know, these state bar associations just aren’t being able to, to deploy the resources to do the job. So you have these crooked lawyers who, who, you know, they get caught over billing and nothing happens to them. And the public can’t even find out which lawyers are dishonest out there because these records are kept from the public. Same with doctors.
HEFFNER: Well, Dr. Callahan. Let me ask you this question and it puzzles me … do you think you could have written this book fifty years ago, or a counterpart to it. Now I didn’t say twenty years ago …
HEFFNER: …but fifty years ago.
CALLAHAN: I feel like I could have written this book eighty years ago, in the 1920s, when we had land frauds in Florida and all sorts of shenanigans on Wall Street. The twenties was very much an era like the eighties and nineties, the Jazz Age when you had, you know, lots of speakeasies and the sort of whole culture of cheating back then.
I don’t feel like I could have written this book in the thirties or forties or the fifties. You know, the mid-decade … the decades of the mid-century were very serious and sober time. And one of the significant things that characterized the middle part of the twentieth century was that there wasn’t a lot of economic inequality. That in the eighties and nineties, the “haves” have been pulling away from the rest of our society, we’ve had these huge income gaps and the rich have been kind of living their own, in their own separate moral reality. You didn’t’ have those kinds of income gaps back in the fifties and sixties.
HEFFNER: But if you are talking about, and you do, and you write beautifully about Social Darwinism and it’s such a pleasure for me because since the late Richard Hofstadter…
HEFFNER: … I haven’t seen very many social observers, historians even writing about Social Darwinism, what, what it really means. But if what you say now is true, aren’t’ you talking about the nature of the American nation? You’ve taken a period, the thirties, the forties, the fifties … basically you could say the thirties and the forties …
HEFFNER: … when we were faced with Depression and then a war …
HEFFNER: … you’re talking about a few decades out of many now …
HEFFNER: …so aren’t you, when you talk about the cheating nation, talking about most of our history.
CALLAHAN: Well, these currents run very deep in the American psyche, you know. This is a nation shaped by the frontier; a nation that, you know, wiped out the Native Americans, a nation that had slavery. This has been a very tough nation, rough and tumble nation. But we, we have this split personality. There’s the tough American, which believes that everybody should be on their own and pull themselves up by their bootstraps and has no sympathy for life-losers.
But then there’s the fair American who has this kind of compassion, communitarian streak. And throughout American history you can see this kind of fluctuation back and forth. The tough American sometimes is dominant, as it has been for the past 25 years. And then, and then the fair American sort of re-emerges in, in our society as it did in the sixties and as you saw in the thirties and also after the backlash against the Gilded Age, the fair American and all the reforms of the Progressive Era.
HEFFNER: Do we need then crisis and turmoil to bring out of us the better angels?
CALLAHAN: Well, ahmm, that’s an interesting question because, you know, a hundred years ago when we came out of the Gilded Age into this new era of progressive reform, there wasn’t any sort of single crisis that precipitated that. There was just a sense that capital had overreached, that the Robber Barons had gone too far; that our democracy was being subverted. That the, that the American way … you know fairness, equality of opportunity, that these ideals were being extinguished by the titans of industry.
And the question that, that I pose in my final chapter, is “When is the backlash going to come against the era of extreme capitalism that we’ve been living in over the past two decades?” Will it come … is it already beginning with all of these white collar trials and, and the outrage about the corporate scandals, or is it some place off in the next decade or two?
HEFFNER: What’s your answer?
CALLAHAN: Well, I think that this Presidential election will be very important. If, if President Bush, who is more friendly to business interests in this country than probably any President since Coolidge, if he loses and if there’s a kind of populous moment in that election, then I think that we could see a, a shift, a break, a turnaround, that begins to lead to a new era of reform. And a kind of reigning in of the, of the power of private interests over our political process.
HEFFNER: And your bet?
CALLAHAN: My bet is that it could still be a little further off than that. I think that the corporate scandals have generated a lot of outrage, but it hasn’t been so visceral and it seems to have faded. You know the Martha Stewart trial has been getting a lot of attention, but the Tyco trial just kind of began to sink under the headlines and nobody paid much attention. And, well, people don’t really seem to remember Enron much. But, there’s a lot of grass roots activity out there and I think that it could all begin to, really, the cake could rise.
HEFFNER: I’ve wondered whether that grass roots activity cannot and has not been in the past co-opted by the use of words and phrases that are designed to capture what you’re looking for …
HEFFNER: … for instance, compassionate conservatism. Well if you …
HEFFNER: … use those words and you call Bills before the Congress, Bills to preserve the environment when really they’re designed for the opposite …
HEFFNER: … words can do us in.
CALLAHAN: Well, there’s been a lot of doublespeak from the highest positions of power in this country. One of the things I, I think can turn the nation around is if, if Democrats and the moderate reformers really begin to talk more about values. You know values … the whole concept of values has been, has been really owned by the Right over the past 25 years.
Conservatives have talked relentlessly about values. Teen pregnancy, abortion, sexuality, divorce, drugs, crime, you name it. But you haven’t heard much about values from Democrats. And to the degree that Democrats have talked much about values, it’s generally been on the, the Right’s terrain and trying to prove that they care as much about family values as Republicans do.
But I think that there’s an opportunity to talk about what is a real moral downside of, of the market. You know the market is great. The free market is the, is the golden goose in America
HEFFNER: Do you feel compelled to say that?
CALLAHAN: No. No. I think that the free market creates tremendous prosperity. It just needs to be balanced, it needs to have a counterweight. And also the market has an inherent moral downside. You know the, the very values that propel forward market prosperity … competition, for example, some individual striving … those values also have a downside if they’re taken too far. Too much competition becomes cutthroat, too much individualism becomes self-absorption.
HEFFNER: Well then you don’t really mean the free market and its wonders. You mean the not-so-free …
CALLAHAN: Well, I …
HEFFNER: … not-too-free …
CALLAHAN: Right. I, I mean a mixed economy.
HEFFNER: How did we get away from the notion of a mixed economy?
CALLAHAN: Well, you know in the …
HEFFNER: We got it … but the words don’t go with it.
CALLAHAN: Well, we’ve been losing it. In the 1970s there began a relentless assault on the, the mixed economy that the United States had through the mid-century and it was an assault that argued that too much government dragged down efficiency and that there weren’t enough incentives and that there was too much red tape. This was a period of globalization, recession. So we had all these values come in in the 1970s; a lot of corporations became much more focused on the bottom line and equity norms went out the window within corporations.
You know in 1965 the average CEO was paid 40 times the average worker. Now it’s more like 300 times. And, so there’s been a cultural shift within business, even as there’s also been a public policy shift in this relentless attack on government and, and a move towards the freest possible market.
HEFFNER: Well now, you’ve written a book, you’ve studied and written a book about CEOs whose origin was, what, thirty years ago? Forty years ago?
CALLAHAN: Well my last book was on the Harvard Business School class of 1949. And this is a group of guys who, they were all men who went to Harvard Business School at that time, who were raised in the Depression, who fought in World War II, who came out, were lucky to have this opportunity, went on in business, many of them became CEOs in some of the biggest companies of their time, like Johnson & Johnson and Xerox. And yet they really had very different attitudes from, from today’s CEOs. They felt that it was wrong for CEOs to, to be, you know, making so much more money than the average worker and they felt that CEOs shouldn’t treat themselves as these imperial leaders. And it was a very different attitude that existed in business thirty or forty years ago.
HEFFNER: Because of the crisis …
CALLAHAN: And that’s gone.
HEFFNER: … they had lived through.
CALLAHAN: Because …
HEFFNER: War. Depression.
CALLAHAN: Well, it was, it was the whole attitude in the United States. You know that the identical houses in Levittown were sort of a symbol of a post-War era where, where, you know, people really did aspire to this kind of classless society. And, you know, there were major problems in that period, with, with the lack of Civil Rights and the persistence of Jim Crow and all that. But it was a, it was a very different era of more social solidarity, greater trust among Americans. You know during the post-War boom, everybody got, got their incomes increased together, you know. The top 20% gained, but so did the middle and so did the people at the bottom. And in the last 25 years, it’s the top 20%, almost exclusively that’s made most of the economic gains, while the middle class has been kind of treading water and, and surprise, surprise … trust is down, social solidarity is down, it’s an atmosphere conducive to cheating.
HEFFNER: Well, I was just going to say, that is the basis for your analysis of cheating.
HEFFNER: The social trust, the barriers are down …
HEFFNER: … so why not cheat.
HEFFNER: Because in truth, look back 200 years ago, the cheating aspect of American life I don’t think was really quite that prominent.
HEFFNER: And maybe we couldn’t have seen it even if we were able to be …
HEFFNER: … brought back there. But now your catalogue of cheating makes ones hair …
HEFFNER: … stand on end.
CALLAHAN: Right. Well, there is a whole lot of it. You know I talk about how students in both high school and college are cheating more. How there’s greater tax evasion these days. How steroids has taken over professional baseball now. Lawyers over billing. Doctors taking dirty money from pharmaceutical companies; it’s a pretty long litany in there and it covers pretty much all, all sorts of Americans.
HEFFNER: Again, I come back to the question. The cure? Where do we find it, doctor?
CALLAHAN: [Laughter] Well, let me talk a little bit more about what’s driving us. I talk … I look at four explanations of increased cheating. One is economic pressure on individuals, that the bottom line mentality has swept into lots of sectors that were, were previously insulated from market pressures. You know every body is being chased by bean-counters and kind of looking over their back and making sure they’re meeting their quota. Look at a profession like law, or medicine, both of those have become, just in the past twenty years, much more focused on profits and … so you have these young lawyers who are trying to, you know, bill enough hours to ensure they get a bonus and have some shot at, at making partner. Whereas those pressures were barely around thirty years ago.
Another major factor driving this cheating is the huge rewards of people at the top. That the winners in this society get paid so much more than ever before. Look at something like baseball. You know, the, the sluggers today make $15, even $20 million dollars a year; whereas the top paid sluggers ten years ago, you know, maybe made $5 million dollar a year. And that is a pretty big incentive to juice up on steroids to build the muscles to hit more, hit more balls over the fence.
And then, the third reason is lack of government regulation and watchdogs, which we talked about. And then there’s the changing values of the eighties and nineties. So, it’s this … you know, these set of complex forces that are working together to create more cheating.
HEFFNER: The trouble is that when one is finished with this litany, you do feel like giving up.
CALLAHAN: Well, except if you remember American history, we always go through these periods, there’s always a backlash; there’s was a backlash after the Robber Baron year. There was a backlash after the Go-Go 1920s and there’s always periods of reform in this country, following periods of excess and the overreach of, of markets. And so …
HEFFNER: And that’s what you see it as, just a period of excess.
CALLAHAN: A period of excess, which reflects deep strains in the American psyche, but strains that “come and go” in their intensity. In my, in my chapter about solutions and what we can do, I, I kind of … I talk about the macro things that we can try to do. And then I, I kind of go down to the level of the individual. And at the macro level I talk about the need for a new social contract.
You know, people need to want to follow the rules at some level because you can never enforce compliance by everybody. And in order for people to want to follow the rules, they have to feel that there’s a social contract that’s working. That, that … if they play by the rules, they’ll get ahead. If they break the rules, they’ll all be treated equally before the law; that everybody gets a say in how the rules are made and that there’s some broader sense that we’re all in it together, and live in the same moral community.
That’s not the society we live in right now. There are a lot of people who are playing by the rules who aren’t getting ahead. And aren’t even being able to make ends meet. And there’s a lot of people who are breaking the rules and who are getting to the top.
And so we have this kind of broken social contract, this dysfunctional society in many ways. And unless we deal with those, those macro problems, I don’t think we’re going to get very far in, in dealing with cheating in the professions or among ordinary people or in corporations.
HEFFNER: Voluntarism. You seem to have some, if not affection for, some belief in the power of voluntarism. How could you in a society like our own?
CALLAHAN: Well, America has more voluntarism than any other advanced industrialized democracy.
HEFFNER: And America has more cheating.
CALLAHAN: We have, we have a very powerful civil society in this country and people historically have been very engaged in that civil society whether its, you know, through organized religion or whether it’s through community groups. A lot of that, despite the much discussed decline of civic life … a lot of that has been re-inventing itself. I mean just through the, the Internet in recent years we seen that. Meetup.com and Friendster.com and all of the thirst for connection that, that you see manifested through the Internet these days.
And so I think that there are other values that have been very powerful in this society. And the question is how do you teach those values to young people? You know I think a big problem here is that young people starting from a, a very early age, they look out and they, they see this rough and tumble economy where it’s harder to get good jobs and harder to keep them. They’re afraid that if they don’t get into a name brand school, their life is going to be over. There’s not a lot of other things out there to really care about or champion besides money and status. We don’t have a lot of great heroes these days.
Politics has been a very, kind of negative and cynical place in the eyes of many young people. And, and as long as there’s that kind of vacuum, people are going … young people are going to just think that there’s … it’s okay to cheat, you know, and that they don’t need to have strong, strong ethics, because that’s just the jungle that they’re living in.
HEFFNER: Because they’ve been taught. Haven’t they been taught because that has what’s worked to their success. It’s not the kids who are pushing to get into the schools, it’s the parents who are pushing the kids …
HEFFNER: … who then push themselves.
CALLAHAN: Well the parents and the kids both feel this anxiety. You know reading about and researching, talking to kids in some of the best schools in this country, high schools, you know these kids really understand what they’re up against in terms of this economy. And they understand that the people who are really the stars do very well, and the people who, who fall behind face all sorts of new risks and uncertainties. The parents feel that and fuel that anxiety, but the kids are in, in on it too.
HEFFNER: What a pity. Maybe an antidote in part is to get some of them to read “The Cheating Culture”. Dr. Callahan thanks so much for joining me today on The Open Mind.
CALLAHAN: Great to be here.
HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time, and if you would like a transcript of today’s program, please send $4.00 in check or money order to The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150.
Meanwhile, as an old friend used to say, “Good night and good luck.”
N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.