Dialogue: People won't behave.....

"The fact is, people just suck", says G. "They won't talk to each other, they won't co-operate or behave well. You're saying that the key problem isn't so much the economy as getting people to behave better. But is that ever going to happen? Isn't that way too big a problem for us ever to solve?" G is fed up after a long day at the office trying to get people to behave well and not piroutte like prima donnas.

Sure, it's a major problem, I say. But that's why we've evolved institutions to help people behave better and have checks and balances when they don't. Take the police, for example. There wasn't really a police force until about two hundred years ago. If you wanted justice if someone hit you, you probably had to go round up some cousins and some pitchforks before you could have anything done about it. That kind of institutional innovation can help.

And at least if we recognize that's the problem, that's a step forward, I say.

I've been thinking about what G said. We've evolved a public morality which has lots of quite thin and abstract universal rules - pay your taxes (to some extent), be tolerant, be polite to customers - but hardly any emphasis on how people behave in most situations. People cheat on their spouses, act like assholes to their employees, drive sharp bargains against the less well-informed, or become obsessive or self-absorbed. And society has remarkably little to say about that.

The older idea of being a "gentleman", for example, seems laughably obsolete. But that should tell us something. There was at least a moral code of behavior attached to that idea, even if it was often observed in the breach.

It wasn't just being polite at the dinner table, either. Some historians of the City of London, like Cain & Hopkins in British Imperialism: 1688-2000 (2nd Edition), describe its development in terms of 'gentlemanly capitalism." It was almost a cliche that deals could be done on "my word is my bond' and a handshake. JP Morgan said that what mattered more than anything else in striking a deal for him was character.

Of course, that was much easier in a small and rather exclusionary world which shared background and neighborhoods and clubs, and in which reputation and ostracism counted for something.

On the downside, it was stuffy. On the upside, it didn't need as much litigation and strict-rulemaking.

Such reliance on social control can go badly wrong sometimes. The British used to celebrate their permissive, "principles-based" accounting and regulatory system, which let the City of London become flexible and innovative, as against the "rules-based" American approach, where armies of lawyers pored over detailed SEC and CFTC and OCC regulations and rules mattered very much.

The British approach did not distinguish itself in the crisis. Apparently gentlemen were no longer behaving like gentlemen.

The question might be why. More generally, how do you ever get people to work constructively together?

That's one of the deeper questions of leadership and management, of course, and the difference between success and failure or most organizations . Some of it has to do with the dynamics of groups. Small groups can come to know and trust each other - a platoon that has gone though a battle and relied on each other, for example. Aganst that, sometimes small groups can also turn into their own claustrophobic war zone).

Other factors matter. Over time, strong cultures can support innovation and development and revenues. Leaders often ask people to look for a higher purpose or cause, such as the nation or the common good or the pride of the team, or beating the company down the street.

Often religions provide a moral code, or a particular social class will evolve some form of ethical constraints.

But none of this applies in our abstract secularized universalized rules-based morality for society as a whole, though. What higher purpose? What close team? What sense of common pride? What sense of virtue? We stress impersonal rules.

We have a strange reverse ethics, in a way. There is surprisingly little social sanction for mistreating your spouse or kids - cheating on your wife or abandoning your kids in a divorce. For the closest relationships in our lives, that is remarkable. But there is very strident social demands for abstract qualities like "tolerance" or "nondiscrimination."

Why is racism seen as much more of a serious personal fault than adultery? Of course neither is an acceptable thing, but why do we obsess about the first and almost ignore the second?

The concrete has come to be valued vastly less than abstract, passive coexistence, and gender or racial or other kinds of sensitivity. But one can be an asshole in practice and be admired. (see Jobs, Steve).

People aren't going to behave when society puts so little emphasis on treating others well in concrete situations. If predators and assholes can get away with it, they will. That's one answer to G's frustration. Our social rules have little to say about it.