THE FAILURE INTERVIEW
DAVID CALLAHAN, AUTHOR OF "THE CHEATING CULTURE"
by Jason Zasky

In the new Hollywood movie The Perfect Score, six high schoolers concoct a plan to steal the answers to the S.A.T. (Scholastic Aptitude Test), each student under the impression that the only way to avoid being unfairly judged is to cheat the powers-that-be. Although the plot is fiction, the film illustrates an increasingly common sentiment—that it's okay to cheat if you perceive that the system is stacked against you. Beset by cynicism and intense pressure to keep up with one's peers, seemingly moral individuals are resorting to cheating at school and work in hopes of leveling the playing field.

In his recent book "The Cheating Culture: Why More Americans Are Doing Wrong To Get Ahead" (Harcourt), author David Callahan examines economic and cultural changes that have prompted the rise in cheating over the past two decades. Relying on qualitative evidence more than hard-to-find quantitative data, Callahan—co-founder and Director of Research at the New York-based public policy center Demos—explores not only "how" and "why" more people are cheating for private gain, but postulates what can be done to reverse the trend. While the book's predominant message is troubling the outlook isn't necessarily bleak. As Callahan notes in the preface, "Much cheating, as we'll see, can be traced to conditions that we have the power to change…."

What was your motivation for writing a book about cheating?
This is something that I've been thinking about for a long time. I had long been interested in values and had noted that for the last two decades the values debate in this country has been very narrowly framed by conservative moralists. Then a couple of years ago I was writing a book on the Harvard Business School class of 1949—this group of guys who grew up in the Depression and fought in World War II and went to Harvard on the GI Bill. Many of them went on to lead the big companies of the post-war era. I was talking to them around the time those Enron and WorldCom scandals were erupting, and these guys were really appalled. They were saying that this kind of thing would have never happened in an earlier era because corporate leaders had different values. There was less greed; there was less cutthroat competition. It got me thinking broadly about whether American values had really changed that much.

Around the same time, I started noticing that business wasn't the only sector experiencing scandal. The Stephen Ambrose flap was occurring with this historian caught in a big plagiarism case, there was that flap about the Princeton admissions office breaking into the Yale admissions office's computer system, and I noticed a spate of articles about tax evasion. There was cheating all over the place. So I set out to write a book that explored the question: Is there really more cheating, and if so, why?

Can you define "cheating" as you see it?
I look specifically at people who see themselves as honest citizens—and most of their life would confirm that self-identity—but are cutting corners and breaking rules to get ahead professionally or financially. I'm not concerned with criminals and I'm not interested in adultery. I also don't look at corruption in politics and cheating in that sphere, because I feel like that's been so exhaustively covered.

So a key distinction here, just to put a finer point on it: In the area of insurance fraud you have people who are staging accidents in order to make money, and then you have people who get into an accident and inflate their claim with the insurance company. That's the difference. It's hard versus soft fraud.

Do you think there is more cheating taking place nowadays? Or does the media simply highlight it more than in the past?
Well, I place this in a historical context and see this as a cyclical phenomenon in American history. There's always been cheating in America. But we go through these periods where the country becomes more focused on getting ahead financially, more enraptured by greed and money, and sometimes our culture gives people a sense of greater license to do whatever it takes to achieve wealth. I think the '80s and '90s have been such a period, I think the '20s was such a period, and the robber baron era was similar. So I do think that in the grand historical scheme we're in one of those periods.

"We live now in a winner-take-all economy. That creates incentives for people to do whatever it takes to become a winner."

In terms of the specific types of cheating there is evidence of increased cheating in a few key areas. Tax evasion is certainly up now compared to 15 or 20 years ago. The IRS has tracked tax evasion with this formula known as the tax gap and has charted a large increase in tax evasion over the past decade. There is a lot of good evidence about increased cheating among high school and college students which has been collected through large surveys. For example, in 1992, 61 percent of high school students acknowledged that they had cheated within the past year, whereas in 2002 that number was up to 74 percent. Also, there is some good data about increased workplace theft in certain areas. In the late 1990s compared to the early '90s more employees did such things as abusing their expense accounts and corporate credit cards. Then in sports there's a pretty wide consensus that the steroid problem in baseball is much worse today than it was a decade ago. All players and observers of the game agree on that. Of course, in the area of business there's no question that the late '90s saw a level of dishonesty and a pervasiveness of dishonesty around earnings reports that was unprecedented. In other areas it's harder to nail down what's been going on. I believe that structural conditions in the area of law and medicine have led more professionals in those fields to break the rules of their profession. But there's less good data there so it's more of an inference.

Is the cheating we're seeing nowadays economically driven or is it a societal issue?
I think the economic changes have made cheating more rational in two main ways. One is that the carrots have gotten a lot bigger—the rewards for people who get to the top of their profession are much greater today than they were in the past. If you are a star slugger you can be paid 15 or 18 million dollars [a year], compared to maybe five million dollars a decade ago. A slugger can make more money in a year than Mickey Mantle made in a lifetime. I think that's a pretty good incentive to juice up on steroids, which are very unsafe and unattractive drugs. You have to have a damn good reason to want to take them. The possibility of paychecks that size is a pretty good reason.

Similarly, the carrots in the world of business have gotten a lot bigger. The CEO's of the late 1990s who were getting so much of their compensation in the form of stock, had the potential—if they kept their stock high, through, say, fraudulent earnings reports—to make so much more money than CEO's of any other era. So somebody like Gary Winnick [company chairman] of Global Crossing could make $750 million in just a few years. You see these bigger carrots in one profession after another. You see them in law, you see them in journalism, you see them in medicine. We live now in a winner-take-all economy. That creates incentives for people to do whatever it takes to become a winner.

Meanwhile, the sticks are hitting a lot harder. There's more insecurity around work and personal finances today than there was a few decades ago. There's a lot of evidence that middle class and even upper middle class households are feeling very pinched financially with the run-up of housing prices in particular, but also by health care and child care costs. There's a lot of people who did everything right but are still feeling like they're getting crunched. If you look into the rise of economic inequality over the past quarter-century and the new bottom line orthodoxy's which have come into business, that helps explain how we got to the point where the carrots are so much bigger and the sticks hit so much harder.

I also look at the role of sleeping watchdogs. In the area of governance we've seen key regulatory agencies that are supposed to be enforcing the rules not really having the capacity to keep up. For example, during the 1990s the number of companies filing earnings reports—public companies filing documents with the Securities and Exchange Commission (SEC), which polices Wall Street—increased by 40 percent. But the SEC's enforcement capacity remained flat during that same period. Same thing with taxes. Tax returns increased both in their quantity and their complexity in the '90s but IRS capacity remained pretty much flat during that same period.

So sleeping watchdogs, bigger carrots, sticks hitting harder, and finally I look at the changed values in our society. The individualism that came out of the '60s got hooked up with the materialism of the '80s. The "me" generation met "greed is good" and it created a real focus on money and self along with the notion that competitive cutthroat behavior was just fine.

Are all the different economic classes cheating equally, so to speak?
That's a hard question to answer. There's a lot of evidence that there's cheating across all the different classes. The winning class has been cheating because they feel they can get away with it, which has been largely a rational view. Whereas the professional class has been cheating because they will do anything to get into the winning class. Meanwhile, a lot of middle class Americans are cheating around their taxes, stealing from the workplace, and cheating around auto insurance and insurance claims. Cable television theft is a big problem, [as is] electronic piracy. I think that ordinary people are often cheating because they are pretty cynical. They think the system is stacked against them and want to get back at the system.

Is cheating now so commonplace that people aren't even conscious they are doing it anymore?
That's a phenomenon that I explore in my book. When there's the perception that everybody does it then people start to feel that it's okay for them to do it. You see this play out in different ways. Students will talk about how they feel that other students are cheating and if they don't they are placing themselves at a disadvantage in terms of competing for college admissions or class rankings. Also, a lot of people feel that tax evasion is so prevalent that if they are not evading their taxes then they are being a chump because everyone else is gaming the system. It's a big problem.

"The 'me' generation met 'greed is good' and it created a real focus on money and self along with the notion that competitive cutthroat behavior was just fine."

One of the most interesting points you make in the book is how every past rebellion against laissez-faire excesses came on the heels of a Republican presidency. Is the current administration's behavior just mirroring what we're seeing in American culture?
In fairness, both parties have been implicated in the corporate takeover of our politics over the past two decades. The Democrats have taken a lot of special interest money as well as the Republicans. I think though that the Bush administration doesn't seem to be guided by any other set of values besides playing to their base of wealthy Americans. Whereas Ronald Reagan really seemed like a deeply committed man, Bush has struck me as a captive to the wealthy interests of this country. Which makes him seem similar to Coolidge or Hoover. I think the nakedness of that—that kind of clear alliance between the Bush administration and corporate and wealthy interests—has the potential to really provoke a response, the kind that we didn't see during the Reagan years.

Do you believe that President Bush's growing credibility gap and the public's increasing frustration with the Bush administration is a signal that a backlash is imminent?
In 2000, Al Gore ran on a populist platform—he was for the people and Bush was for the powerful—and it turned out he was right. Bush got into office and proceeded to do favors for the top five percent of Americans. It looks like whoever is the nominee in 2004 is also going to run on that same populist kind of platform. All the Democratic nominees have been talking about the notion that the Bush administration is a captive of private interests. So this election has the potential to be framed around some populist themes. It's not clear that the public is ready to fully embrace a kind of populist backlash to private power in this country. It's not clear that this election will be that moment. But it at least has the potential.

On a related note, how does a decline in trust play into cheating?
A society with less trust—and trust has gone down significantly in the United States over the past 40 years—is a society where strangers are less likely to feel that they can put their fate in other people's hands, and more likely to feel that others will rip them off or take advantage of them. If you feel that way then you really start to look out for yourself and "Do unto others before they do unto you" becomes the golden rule in that environment. So trust is a really important part of this equation. I think there's good reason to believe that the economic inequality that has grown up in the past 30 years has undermined trust by creating new divisions between the classes—people feeling like they really don't have much in common with each other.

What can be done to change this culture?
I think we need tougher rules and better values. On the one hand we really need to crack down, particularly on the cheaters at the top. The wealthy Americans who have felt that they are above the law in this country need to be taught that that is not the case—that nobody is above the law in a democracy. That can make a huge difference because many Americans look up to the wealthy and powerful as role models. The wealthy and powerful—whether it's CEOs or celebrities—have so much visibility and cultural influence today that changing their behavior could have an impact and make people less cynical.

On the other hand I think better values are really important. This is a lot harder to bring about. There is a lot of interesting work being done to promote ethics in corporations. There's also great work being done on character education for young people to teach kids how to think through ethical dilemmas and to create environments of academic integrity at universities and in high schools. But in the end, better values also boil down to pulling America away from the intense materialism of recent years—the focus on money and celebrity. I'm not sure how to do that. It's hard to do that through public policy. I think what we need is a kind of cultural backlash. In the '60s there was a backlash [against] the conformity and consumerism of the '50s. I think what we need is a backlash to the hyper-materialism and self-centeredness of the '80s and '90s.

Did writing a book about cheating change your opinion about the subject? Or did it confirm whatever preconceived notions you had going in?
I didn't really go in knowing that much about the topic. I had my hunches. It underscored to me the complexity of this—the complexity of human psychology around these issues. The thought processes that people go through in dealing with ethical dilemmas are very complicated and also very hard to discern, especially when cheating is normalized. People often don't give a lot of thought to what they're doing so you don't find elaborate rationales for what people are doing when they cut corners. So the subconscious nature of this and the way that it has infiltrated our culture is one of the things that struck me.

Is "The Cheating Culture" a hopeful book? Or is it ominous?
I think it's hopeful because it places all this in a historical context and says that this stuff tends to come and go. We go through these phases of greed and excess and individualism and cutthroat behavior run amuck. But then we have backlashes to those periods of excess. The record of history lends grounds for optimism.

RECOMMENDED LINKS
http://www.cheatingculture.com