One or two economists, like this year's Nobel Prize winner, Robert Shiller, try to explain aspects of behaviour in terms of "norms": rules-of-thumb that we adopt when taking economic decisions. Norms can sometimes imply a radical departure from the perfectly rational, utility maximising, homo economicus, assumed by traditional economics. Norms can emerge from many sources and can be inexplicable in terms of formal logic or even what is conventionally assumed to be right or wrong. They fit uneasily into orthodox mathematical models which is why most economists dismiss them.
The thinking behind norms will be familiar to psychologists. At one extreme, it is easy to show, using countless examples of actual behaviour - not just in the financial world - that we are capable of believing anything. Our capacity to rationalise any belief, no matter how odd, is infinite. Our beliefs, honestly held, but often demonstrably nuts, drive our decision making. We have a legal system that tries to head off the consequences of our weirdest beliefs but even then, many lawyers will testify that many law breakers didn’t think they were doing anything wrong. The law, if they were conscious of it, didn’t apply to the rule breaker. Few of us actually say “I know this is wrong but I am going to do it anyway”. We invent reasons and rationalise why our behaviour makes perfect sense. It is part of the human condition.
When, back in the day, countless thousands of Irish people opened illegal offshore bank accounts, many of them justified this action, believing that they already paid enough tax, the tax system was demonstrably unfair and that they were only doing what everybody else, who could, did.
I once asked a member of the (then) ruling South African Afrikaner class, “what were you thinking during the years of Apartheid?” He responded: “My teachers told me it was right, my prime minister told me it was right, my parents said the same as did my pastor”. My own response was the same as any non-Afrikaner would have given, “Were you not capable of thinking for yourself - others amongst you did reach different conclusions?” But my question was beside the point. His beliefs were his beliefs, they were almost universally shared by his peers, and it was easy to see where they came from.
Quite rightly, we can judge the actions of others to be wrong, to be crimes worthy of punishment. Where the behaviour in question is demonstrably not criminal, not illegal, but an offense against our ethical norms, we collapse into paroxysms of moral outrage - and leave it at that. Nothing much is achieved beside our fits of indignation. Sometimes we pass a law or change our institutions to try to make sure it never happens again. Our response is often entirely negative: stop doing it. We rarely ask the deeper question: how can we change, how can we adopt norms that not only stop this from happening but also adapt, in ways that change our beliefs and behaviour in a positive, pro-active way? Do we think any of the behavioural norms that led to the banking collapse have changed in any meaningful way?
I doubt that any charity official or a senior civil servant in receipt of excessive salaries or pensions ever thought they were doing anything wrong. We might demur, but our anger, if left at that, achieves little, changes nothing.
Psychologists tell us that one of the greatest lies that we tell ourselves is when we say we embrace change. Stephen Grosz, in his magnificent 'The Examined Life' reveals those of us who say, without irony, "I want to change, but not if it involves changing".
By all means rail against those who we believe have committed the sin of greed. But we also need to be practical: how do we construct an ethos of public service, of volunteerism perhaps, one that better accords with norms that we deem to be acceptable? Norms can be imposed from the top, but, like laws, if most individuals disagree with them they can be ineffective. In business and politics it is time to change one norm in particular. For far too long, the description “cute hoor” has been a sign of approval, not approbation. It’s time for change. Easy to say of course.
If we want some misbehaving charities in particular, and public service in general, to change, it has to come from the bottom up. More of us need to put our hands up and get stuck in. Of course, plenty of people do this. But it needs to become a norm , not an exception. For example, more people who have lots of relevant experience, and some available time, could volunteer - and be invited - to serve on boards and similar bodies. This may be unfair, but the process whereby people get selected to serve is utterly opaque to me. I am convinced that there are many qualified individuals who would work for little or no monetary reward.
As society ages, more and more fit, financially sound (in all senses of the term) people will meet this description: not rich enough to be philanthropists but able to give in other ways. Yes, some of this happens already, but I am sure it could become more widespread, more normal.
