Why Bernie Madoff Didn’t Lurk in Dark Alleys

We all know that one of the Ten Commandments is “Don’t steal.” But it’s also hard for us to imagine Bernie Madoff or Jeffrey Skilling in a hooded sweatshirt in a darkened alley mugging a little old lady. And yet clearly, Madoff and Skilling violated that two-word, easy-to-understand commandment. So we have to ask: how in the world were they able to justify it?

A large part of that justification is because different forms of stealing have different “feels” to them. Physically taking money from another person feels more violent, more immediate, and less justifiable of an action. “Cooking the books,” however, can easily feel explainable by the perpetrator. It’s pretty easy to follow the commandment “Don’t steal” if it simply means, “Don’t go around robbing people in the middle of the night.” But Skilling and Madoff did steal – and stole significantly more money than all the armed robbers in America combined.

In fact, when people don’t deal in cash directly, they actually are able to rationalize their actions, and thus end up stealing significantly more money from people.

Cash Keeps Us (More) Honest

Behavioral economist Dan Ariely ran a fascinating study in the MIT dorm rooms to examine what might allow people to steal without feeling all that guilty about it. At first, he put six Coke cans in a communal refrigerator. Within three days, all six cans were gone. No doubt, people thought, “No one will notice, and hey – free Coke!”

He then put six one-dollar bills on a plate in the refrigerator. They were left totally untouched.

Why? As Ariely explains:

When we look at the world around us, much of the dishonesty we see involves cheating that is one step removed from cash. Companies cheat with their accounting practices; executives cheat by using backdated stock options; lobbyists cheat by underwriting parties for politicians; drug companies cheat by sending doctors and their wives off on posh vacations. To be sure, these people don’t cheat with cold, hard cash (except occasionally). And that’s my point: cheating is a lot easier when it’s a step removed from money. (Ariely, Predictably Irrational, 218-219)

There seems to be a psychological block that prevents most of us from simply forcibly taking cash from people, but allows us to rationalize small falsifications that ultimately end up being the same thing as stealing. And that is why, in fact, the Torah has more to say about honesty in business beyond just, “Don’t steal.” In Leviticus, the Torah even regulates what might happen one step away from money that might lead people to cheat.

Honest Weights and Measures

Leviticus 19 contains some of the most important and most famous laws in the Torah. The Ten Commandments appear here, as do the verses, “You shall not stand by idly while your neighbor bleeds” and “You shall love your neighbor as yourself.” The whole chapter is known as the “holiness code,” implying that beyond just being ethical, treating people fairly is truly a sacred obligation that God demands of us.

The very last laws in chapter 19 say, “You shall not falsify measures of length, weight or capacity. You shall have an honest balance, honest weights, an honest ephah (a unit of dry measure) and an honest hin (a unit of liquid measure)…” (Leviticus 19:35-36)

Why did this law have to be written in the first place? The simple answer is: you don’t forbid something from happening unless it has already been occurring. So clearly, there were people who would falsify their weights and measures. Cheating and stealing are nothing new in today’s society!

And that’s what makes this commandment so important and valuable. If the Torah had simply said, “Don’t steal,” our natural ability to rationalize would have given people the opportunity to say, “Well, if I weigh down my grain a little bit, no one will really notice. And after all, everyone else is doing it, so it’s not really stealing.” Instead, the Torah teaches us, “Don’t cheat even – perhaps especially – when you’re one step removed from money.” It’s a lot easier to steal when you’re one step removed – and that’s why that commandment is needed.

The First Thing We Will Be Asked When We Die

The Rabbis even elevated honesty in business to become one of the highest values we need to live up to. In fact, in the Rabbinic mind, the first thing God will ask us when we die is not, “Did you believe in Me?” or “Did you pray?” No – according to the Talmud (Shabbat 31a), the first question we will be asked when we die is, “Were you honest in your business dealings?”

We sometimes say that we know we are acting honestly if we can look at ourselves in the mirror in the morning. But perhaps that is not enough of a judge. After all, our ability to rationalize could make it very easy for us to say, “Well, it’s just a small thing I’m taking.” Moment by moment, we can easily find ways to steal that feel OK and won’t cause us to lose sleep.

So to truly bring ourselves up to our highest standards, the question should not be, “How do we feel about ourselves right now?” It should really be, “How do we want to feel about ourselves at the end of our lives?”

Only by having our day-to-day actions live up to the values we espouse can we truly be proud of the actions we take.

Posted on April 19, 2012

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