OVER THE LAST TWO YEARS, nearly every institution of American life has taken on the unmistakable stench of moral rot.
Tax evasion siphons 10,000 times more money out of the U.S. economy every year than bank robberies. SOURCE: FBI; IRS.
And this clubbiness has human costs. Tax evasion, to pick just one crime concentrated among the wealthy, already siphons up to 10,000 times more money out of the U.S. economy every year than bank robberies. In 2017, researchers estimated that fraud by America’s largest corporations cost Americans up to $360 billion annually between 1996 and 2004.
Tech took a personal hit thanks to Warren Buffet’s partner Charlie Munger and his views on EBITDA, which stands for earnings before interest, taxes, depreciation and amortization. Tech companies love to talk about their “adjusted EBITDA,” because it makes them look profitable — even a financial loser like Uber.
“I don’t like when investment bankers talk about EBITDA, which I call bulls— earnings,” Munger said at a recent company shareholders meeting. “Think of the basic intellectual dishonesty that comes when you start talking about adjusted EBITDA. You’re almost announcing you’re a flake.”
Silicon Valley has often held itself up as a highly evolved ecosystem that defies the usual capital-labor dichotomy — a place where investors, founders, executives and workers are all far too dependent on one another to make anything so crass as class warfare. The recent developments at Google have thrown that egalitarian story into doubt, showing that even in the most rarefied corners of Silicon Valley, the bosses are willing to close ranks and shut down debate when the stakes are high enough. (…) Workers weren’t just organizing to save the world from Google. They were also organizing to save themselves from Google, where those who didn’t fit the mold of the straight, white, male techie felt they could be too easily marginalized or dismissed.
The rot isn’t just trickling down, it’s a raging torrent. Student cheating is at an all time high across grades and globally is a billion dollar market.
Philemon is part of the global industry of contract cheating in which students around the world use websites to commission their homework assignments. (…) Lancaster began studying contract cheating more than a decade ago when he noticed one of his own students posting assignments online. “I found one of my students who was putting up my assignment up for tender on an internet site. So, people were bidding different amounts of money to complete that computer programming assignment.”
Let’s hope the handbasket we’re careening down in is well made, so we can survive our trip to Hell and come out the other side in one piece.
“Working at Google or Facebook seemed like the coolest thing ever my freshman year, because you’d get paid a ton of money but it was socially responsible,” said Chand Rajendra-Nicolucci, 21, a senior at the University of Michigan. “It was like a utopian workplace.”
Now, he said, “there’s more hesitation about the moral qualities of these jobs. It’s like how people look at Wall Street.”
“It felt like in my freshman year Google, Palantir and Facebook were these shiny places everyone wanted to be. It was like, ‘Wow, you work at Facebook. You must be really smart,’” said Ms. Dogru, 23. “Now if a classmate tells me they’re joining Palantir or Facebook, there’s an awkward gap where they feel like they have to justify themselves.”
Audrey Steinkamp, a 19-year-old sophomore at Yale, which sends about 10 percent of each graduating class into tech, said that taking a job in Silicon Valley is seen as “selling out,” no different from the economics majors going into consulting who are “lovingly and not-so-lovingly called ‘snakes.’”
“The work you do at a place like Facebook could be harmful at a much larger scale than an investment bank,” Ms. Dogru said. “It’s in the pockets of millions of people, and it’s a source of news for millions of people. It’s working at a scary scale.”
Oops, seems that the moral considerations of where to work are of much more importance for both college and grad students.
Agriculture is supposed to be a market “ripe for disruption,” including tractors that do everything except scratch your back.
Instead they are searching out tractors made in the 1970s and 80s that are more profitable to use.
Tractors manufactured in the late 1970s and 1980s are some of the hottest items in farm auctions across the Midwest these days — and it’s not because they’re antiques.
Cost-conscious farmers are looking for bargains, and tractors from that era are well-built and totally functional, and aren’t as complicated or expensive to repair as more recent models that run on sophisticated software.
And it’s the “sophisticated software” they don’t want.
But tractors from the 1970s and 1980s aren’t so dramatically different from tractors produced in the 2000s, other than the irksome software, and at a time when farmers are struggling financially, older tractors can make a lot of business sense.
Both are good news.
Constricting the worker pipeline at one end and a user rebellion at the other are two of the few things that can act as Daniel to tech’s Goliath.
From religious leaders to politicians; corporate titans to everyday folks; glitterati to moguls; intelligentsia to idiots; there seems to be no action that elicits societal condemnation, let alone punishment, for anyone except getting caught.
That’s right, getting caught.
If a societal no-no, first vehemently deny it and/or claim you didn’t realize anybody actually minded. If that doesn’t work, apologize profusely using language that changes the focus from what you did and who you hurt to you, i.e., how sad you are for them and how your big sister broke your GI Joe when you were a kid, so it’s not really your fault.
Another approach is to buy their silence, but if that doesn’t work, you can claim that the devil led you astray, you were weak, but you’ve preyed a lot, God forgave you and so should those you mislead/hurt.
Enterprise and Internet companies emote about how important user privacy is and how hard they try to protect it every time they’re hacked or their hands are caught in the cookie jar.
Worse, repercussions of serious criminal actions, especially murder, are relativity easy to avoid as long as you’re white and well-healed — or in law enforcement.
It used to be that people talked of someone having a “strong moral compass.” I suppose many still do, but that’s not worth much when “true north” is portable, shifting with the trends on social media and shoved around by rigid ideologies.
Ironic, isn’t it. Right on top of yesterday’s post about ethics, comes this.
Most people even slightly in touch with the tech scene have heard about the Apple engineer who was fired for allowing his daughter to show off features of the new iPhone X in a YouTube video.
The engineer who was fired, Peterson’s father Ken Bauer, is seen in the video using Apple Pay on the iPhone X. He hands the phone to his daughter, and she walks through various features.
The daughter posted a follow-up video saying,
“Apple let him go. At the end of the day, when you work for Apple, it doesn’t matter how good of a person you are. If you break a rule, they just have no tolerance.”
How ‘bout that.
Dad knew he shouldn’t do it, but did it anyway.
Daughter takes no responsibility and says Apple is the bad guy.
What is wrong with this scenario?
Companies don’t make rules for the fun of it.
Rules are there to ensure certain actions are or are not taken.
Rules are not there to break.
Most companies (all?) would consider giving public exposure to a yet-to-be released product a firing offense.
Hopefully Bauer learned his lesson and won’t do the same thing at his next company; however, his actions will give pause and make many hiring managers skittish.
Cynic that I am, I wonder what, if anything, his daughter will learn from this experience. She doesn’t look all that young, so you have to wonder what her actions will be when she starts working.
It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.
Golden Oldies are a collection of what I consider some of the best posts during that time.
This post was written in 2009, but could just as well have been written yesterday based on currents events. There’s no question that whether it’s in business, politics, religion, or our personal relationships people in the US and the rest of the world are suffering from a major shortage of ethics.
However, what’s missing and what’s needed to correct the problems depends on your point of view. (And perhaps the image should be updated to read ’22nd Century’.)
Last Friday I wrote that ‘right’ and wrong’ were moving targets.
With the large number of companies that have been destroyed or severely damaged by behavior ranging from stupid through unethical to downright illegal there is a call for more ethics to be taught at ever level.
Everywhere you turn you hear people saying that we need more ethics, but ‘ethics’ have never been clear cut.
Actually, I think they’ve always been situational, fluid and simultaneously contradictory. Look at the definitions from dictionary.com
(used with a singular or plural verb) a system of moral principles: the ethics of a culture.
the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.: medical ethics; Christian ethics.
moral principles, as of an individual: His ethics forbade betrayal of a confidence.
(usually used with a singular verb ) that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.
All of the descriptions use words with no absolute concrete meaning; sticking to my usual example, murder has always been considered wrong, but the definition of murder, even today, keeps changing and often isn’t agreed upon even within the same society, e.g., the pro-choice/anti-abortion war.
Now look at the first four definitions for moral, the usual synonym,
of, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes.
expressing or conveying truths or counsel as to right conduct, as a speaker or a literary work; moralizing: a moral novel.
founded on the fundamental principles of right conduct rather than on legalities, enactment, or custom: moral obligations.
capable of conforming to the rules of right conduct: a moral being.
Same thing, there are no absolute terms with which to define it.
Perhaps, then, ethics should be defined by current law, but that certainly hasn’t worked. It’s far too easy to adhere to the letter of the law and totally ignore the spirit of it. That keeps you out of jail, but certainly doesn’t make you ethical.
As a friend said the other day, “An ethical man knows it’s wrong to cheat on his wife; a moral man doesn’t cheat.”
Further, there can be conflicts between personal ethics and law, where adhering to one violates the other. Should law prevail or personal ethics? Whichever you choose, it’s because you agree on a subjective level.
People say that those decisions should be made for “the greater good.” Again, by whose definitions? I’m sure that Hitler believed his actions in “purifying the races” were for the greater good—as he saw it—however I, and a large number of other people, don’t agree.
But even though this example seems so black and white, you’ll find people who still agree with Hitler’s reasoning and work to carry it forward.
It’s amazing to me, but looking back over more than a Feb decade of writing I find posts that still impress, with information that is as useful now as when it was written.
Golden Oldies are a collection of what I consider some of the best posts during that time.
When I wrote this post in 2009 one of the things I wondered was this. If 95% of students felt it was OK to cheat (not a new attitude) to get what they wanted in school would they see cheating and other similar actions/attitudes as acceptable in the grownup world of work?
While eight years isn’t all that long, we’re already seeing the answer and it’s not pretty. As usual, Silicon Valley is leading the way and, sadly, it will probably get a lot worse before it gets any better
According to Donald McCabe, a professor of management and global business at Rutgers University, “95 percent of high school students say they’ve cheated during the course of their education, ranging from letting somebody copy their homework to test-cheating. There’s a fair amount of cheating going on, and students aren’t all that concerned about it.”
“The professor has been surveying cheating practices among college kids for 18 years and high school students for six years. He says he’s surveyed 24,000 high school students in 70,000 high schools, grades 9 to 12. His findings? Sixty-four percent of students report one or more instances of serious testing-cheating, which include copying from someone else, helping someone else cheat on a test, or using crib notes or cheat notes.
In 2002 17-year-old Alice Newhall was quoted in a CNN article on cheating, “What’s important is getting ahead. The better grades you have, the better school you get into, the better you’re going to do in life. And if you learn to cut corners to do that, you’re going to be saving yourself time and energy. In the real world, that’s what’s going to be going on. The better you do, that’s what shows. It’s not how moral you were in getting there.“”
Colleges are no different, with MBA students leading the pack. “56 percent of MBA students admitted to cheating… In 1997, McCabe did a survey in which 84 percent of undergraduate business students admitted cheating versus 72 percent of engineering students and 66 percent of all students. In a 1964 survey by Columbia University, 66 percent of business students surveyed at 99 campuses said they cheated at least once.”
MBAs lead another pack; see if these names sound familiar: Jeff Skilling (MBA, Harvard). Joe Nacchio, (MBA, NYU), Richard Fuld, (MBA, Stern), John Thain, (MBA, Harvard), the list goes on and on.
Do you see a pattern here?
It’s OK to cheat in high school to get good grades to gain entrance to a good college;
it’s OK to cheat in college to gain entrance to a top grad school; and
it’s OK to cheat in grad school to insure access to a good job, especially on Wall Street; so
it must be OK once you’re working to cheat to improve your company’s bottom line.
Cheating is good business in its own right directly or in the sub-strata of plagiarism.
Google offers 1,620,000 results for “how to cheat in school,” 605,000 for “how to cheat on a test” and another 562,000 for “how to cheat on tests,” not to mention the more than 3,000 “how to cheat” videos on YouTube.
Meanwhile, on the plagiarism front, “school papers” returns a whopping 22,600,000 results.
Take a good look at the numbers and you’ll see that religion, spirituality and cheating seem to happily co-exist.
“The University of California at Los Angeles’s Higher Education Research Institute reported that 80 percent of students show high degrees of religious commitment and spirituality. The new data comes from a survey conducted this past year involving 112,232 first year students attending 236 various colleges and universities.”
All the ethics courses, integrity lectures and moral preaching that go on aren’t likely to change decades of successful cheating—mainly because it works getting people where they want to go.
Cheating isn’t new, but the casual acceptance of it as a viable life strategy has radically changed.
I often claim the label of Luddite and am know to my friends as a digital dinosaur (I spent the weekend upgrading from Office 2003 to 2007).
I’m not a lover of the Internet of Things, because I believe anything/everything can be hacked. (If you have evidence to the contrary, please share).
To me, the idea of hackable self-driving cars is a nightmare and drones make me cringe.
Obviously, I’m not the only one who feels this way.
It seems my revulsion is shared by my distant cousins.
However, if I react the same way I would probably be sued and possibly jailed.
The problem, of course, is that technology is light years ahead of society, not only on a moral/ethical level, but on a consideration of consequences — of which there seems to be none.
A Friday series exploring Startups and the people who make them go. Read allIf the Shoe Fits posts here
Nir Eyal is a guy who has been there and done that when it comes to entrepreneurial efforts.
What caught my eye first were his thoughts on manipulation (similar to my own), but what really grabbed me was his view on its morality, especially the morality of creating addictive products.
Eyal provides a “Manipulation Matrix” that requires you to respond to just two questions.
“Will I use the product myself?” and second, “Will the product help users materially improve their lives?”
Whether you’ve started a company, work for a startup or are thinking about doing either, answer the questions, find yourself on the Matrix and then read Eyal’s descriptions of each one.
And if you run or work for an already going concern or even a large corporation the questions are still worth answering.
It’s always useful to know if your work and moral code match.
If not, you may want to change one of them.
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Surprisingly, in spite of scandals and lawsuits people still seem to have trouble understanding that they are different—not joined at the hip.
I could write a lot on this subject to go along with all the articles and advice already out there, but I’m a believer that stories, especially true stories, carry more power.
Such is the story of MetLife that, along with Prudential and John Hancock, will pay out more than a billion dollars for their completely legal but totally dishonorable actions.
The difference between an annuity and life insurance is that the former is paid to a live beneficiary, while the latter is paid to the dead beneficiary’s heirs.
A live beneficiary makes a fuss if the check doesn’t arrive on time.
Heirs only make a fuss if they know abut the insurance policy.
MetLife and the others were very careful to check to see if annuity beneficiaries were among the living, since they could stop paying if they weren’t.
But they saw no reason to cross reference deaths with their life insurance holders, because then they would have to pay.
An absolutely legal decision—but…
“There is simply no reason why insurance companies shouldn’t be scrubbing their policy lists,” looking for matches with the Social Security Administration’s master death index. (…)They stressed that insurers had generally checked the Social Security death index regularly to see whether other customers, who bought annuities, had died. In that case, the insurers stopped sending payments.
Stories are powerful teaching mechanisms.
The difference between legal and honorable should be crystal clear.
[Oops! My apologies. this weekend was the first warm days where I live and I spent them in my garden:) (What a mess!) In so doing, I lost track and didn’t write Sunday’s Quotable Quotes and although I had this post ready I forgot to schedule it for this morning. –Miki]
It’s the traditional compact in corporate America: what C.E.O.’s do on their own time is their business, as long as they are not breaking any laws. And it’s a compact that is rapidly going by the wayside, as boards concerned with the corporate reputation are increasingly making clear.
However, it does make one wonder when actions that have almost always resulted in termination at lower levels make headlines when they happen in the executive suite.
With few exceptions, most companies have rules against managers dating subordinates; affairs between peers are considered dicey and intra-office adultery is a definite no-no.
When companies are demanding entre to the personal/private areas of candidates’ social media prior to hiring why is it so surprising that corporate boards are focusing on personal/private executive behavior?
In a world where street reps are forever and the bedrock of good corporate culture is trust and authenticity there is no room for do-as-I-say-not-as-I-do executives.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Whether you’ve started a company, work for a startup or are thinking about doing either, answer the questions, find yourself on the Matrix and then read Eyal’s descriptions of each one.
Such is the story of 
