The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead

Copyright © 2004 by David Callahan

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The Library of Congress has cataloged the print edition as follows:

Callahan, David, 1965–

The cheating culture: why more Americans are doing wrong to get ahead / David Callahan.—1st ed.

p. cm.

Includes bibliographical references and index.

ISBN 0-15-101018-8

1. Business ethics. 2. Professional ethics. 3. Social ethics. 4. United States—Moral conditions. I. Title.

HF5387.C334 2004

174—dc22 2003015529

eISBN 978-0-15-603557-6

v2.0317

Preface

My friend Peter went through a shoplifting phase a few years back. His thefts reflected his tastes—$40 bottles of Bordeaux, for example—and though Peter showed no signs of kleptomania, his friends agreed that he must have mental problems. Why else would a normal adult be shoplifting?

Last April, my friend Max filed taxes in Connecticut, where he used to live, even though he now resides in New York City. Dodging the city’s killer taxes saved him about $3,000. Did anyone think Max was disturbed? Hardly. His friends thought he was smart to keep his legal address in Connecticut.

Petty shoplifting is a misdemeanor. Tax evasion is a felony that can yield prison time. If anyone has a screw loose, it’s really Max, not Peter. Right? Well, yes and no. And this funny dichotomy says a lot about morality in America these days, as I’ve learned while writing this book.

In the fall of 2001, when Enron collapsed into a heap of debts and lawsuits, I was working on a history of the Harvard Business School class of 1949. Most of its members are now in their late seventies, and many ran big companies in their day. When I asked them about the corporate scandals, they’d shake their heads in disgust—disgust at the bloated pay packages, the gilded perks, and most of all at the pervasive lying by CEOs. It’s about values, the ’49ers said, in trying to explain what went wrong in the executive suites of Enron, Tyco, and so many other companies. Today’s business values normalize felonious behavior; yesterday’s values were less tolerant of such behavior. To the ’49ers, the corporate scandals were almost that simple.

This was not reassuring to hear. It meant that, sure, we could pass stiffer laws and get new watchdogs. We could toss CEOs in prison and throw away the key. But such a crackdown would only get America so far as long as business leaders were greedy, self-centered, and materialistic.

As I mulled over these questions of values, I began noticing other stories in the news about cheating. The historian Stephen Ambrose was enmeshed in a plagiarism scandal; Princeton’s admissions office was in trouble for breaking into Yale’s computer; Alabama’s football team was put on probation for recruitment violations; the IRS reported that tax evasion was up sharply. There was even a story about cheating on the hallowed American ground of state fairs, as contestants misrepresented the real weight of livestock to win cash prizes. I wondered, what’s going on here? Why so much cheating? Is there more cheating now than in the past, as it seems? And is it all connected?

To answer these questions, I set out to explore what changes in American life might be leading us to cheat more. I cast a wide net in my research, looking at different professions, our government and legal system, the economy and culture, and people’s values. I’ve drawn on government reports and statistics, studies by social scientists, public opinion polls, histories of different professions, and a mountain of journalistic investigations of scandals and cheating incidents. My research assistants and I also conducted over eighty interviews with people involved in the cheating culture in one way or another: parents, students, teachers, coaches, athletes, experts in business ethics, stock analysts, lawyers, accountants, doctors, and law enforcement officials. These interviews were immensely helpful, especially those where cheaters talked openly about their motives. For obvious reasons, many of the people interviewed did not want their names used.

This is a dark book in some ways. An increase in cheating reflects deep anxiety and insecurity in America nowadays, desperation even, as well as arrogance among the rich and cynicism among ordinary people. Many of the stories that follow are very troubling; some are tragic. And yet there is real hope here, too. Much cheating, as we’ll see, can be traced to conditions that we have the power to change—from how much security our economy affords people, to how well government polices business, to the ethical climate in our schools. We can make different choices in the years ahead, and I suggest a number of such choices in my concluding chapter.

I owe a large debt of gratitude to those who helped make this book possible. In the back of the book, I’ve listed all the people who shared their expertise and experiences. Here, I’d like to thank those who worked closest with me in developing the book: Andrea Schulz, my editor at Harcourt, who brought extraordinary talent to the task of improving successive drafts of the manuscript; Andrew Stuart, my literary agent; LeeAnna Keith and Carolyn Rendell, my research assistants; and my colleagues at Demos, especially Miles Rapoport, who has been unfailingly supportive of this project. Also, a special thanks to Wendy Paris for her encouragement and thoughtful comments on the manuscript—and for her patience and love.

David Callahan

New York

July 2003

CHAPTER ONE

Everybody Does It

I played a lot of Monopoly growing up. Like most players of the game, I loved drawing a yellow Community Chest card and discovering a bank error in my favor—Collect $200! It never occurred to me not to take the cash. After all, banks have plenty of money and if one makes an error in your favor, why argue?

I haven’t played Monopoly in twenty years, but I’d still take the $200 today. And what if a real bank made an error in my favor? That would be a tougher dilemma.

Such things do happen.

Just to the east of where the Twin Towers once stood is a twenty-six-story office building that houses the Municipal Credit Union of New York City. The credit union has 300,000 members—federal, state, and city government employees—and over $1 billion in assets. Although a number of buildings near Ground Zero sustained serious damage when the towers came down, the MCU’s glass-and-steel building on Cortlandt Street survived unscathed. However, the credit union did suffer a major computer failure that severed its link to the New York Cash Exchange (NYCE), the largest network of automatic teller machines in the Northeast.

The network managers at NYCE quickly detected the severed link. The problem meant that while credit union members could withdraw money at cash machines, NYCE couldn’t immediately track these transactions or prevent members from overdrawing their accounts. NYCE leaders managed to get through to the credit union staff, even though the organization was in chaos. They posed the following choice: With just a few strokes on a computer keyboard, NYCE could cut off all cash withdrawals until the severed link was restored—which could take several weeks—or NYCE could let the cash keep flowing and sort out the withdrawal records later. Theoretically, anyone with a credit union ATM card could take out as much money as they wanted. The credit union would have to assume that risk. What did it want to do?

The Municipal Credit Union of New York is one of the oldest credit unions in America, founded more than eight decades ago. It is guided by an ethos of self-help and pooled aspirations. Many of its members are firemen and policemen and, in the wake of the attacks, it was widely assumed that some of these people had perished just across the street from the MCU’s office. There was no way the credit union would prevent its members and their families from accessing their money at a time of crisis. Thomas Siciliano, the general counsel of the credit union, said later: We felt it would have hurt them badly and added to the chaos of the city. The MCU trusted them to use their ATM cards responsibly.

Credit union members realized early on that their ATM use wasn’t monitored and that there was no limit to how much cash they could take out. As word spread, withdrawals skyrocketed. As many as 4,000 members overdrew their accounts, some by as much as $10,000. One member used his card more than 150 times between late September and mid-October.

In November, the computer link with NYCE was finally restored. As the credit union got back to normal, it pieced together the full record of cash withdrawals after September 11. Those who had overdrawn their accounts had left a substantial electronic trail, and the MCU set about tracking them down. Siciliano led this work. He initially suspected that most of the members’ overdrawing had occurred by accident, or maybe was prompted by emergency needs. The MCU assumed the best of its members, even those with average bank balances of less than $100 who had withdrawn thousands of dollars in just a few weeks. We try to understand people, Siciliano says. We’re not just about the bottom line.

The MCU sent letters to those with overdrawn accounts listing the money that was missing and asking for repayment. While some money was repaid, many letters got no response. More letters were sent—notarized letters with threats. After months of appeals, $15 million was still missing. At that point, the MCU called in the authorities. A criminal investigation, led by Manhattan District Attorney Robert Morgenthau and the New York City Police Department, extended into the following summer. It resulted in scores of arrests.

A FEW BLOCKS AWAY from the credit union’s offices, another investigation was reaching its climax in the spring of 2002, this one at Merrill Lynch’s newly repaired global headquarters on Vesey Street. After September 11, Merrill Lynch had scattered 9,000 employees around back-office facilities in New Jersey and midtown. Months passed before it was able to move back downtown. When Merrill did return, morale at the company was low. Huge layoffs had depleted its ranks and profits were down in the new bear market. Worse, Merrill found itself cornered in a criminal probe led by New York State Attorney General Eliot Spitzer.

Before his assault on Wall Street made him famous, Spitzer was an obscure state official. Those who did know him were reminded of a character straight out of early-twentieth-century America. Wealthy by birth, with a father who bankrolled his political career, Spitzer is a muckraking crusader for the public interest.

Merrill Lynch had come to Spitzer’s attention in a circuitous fashion. In early 2001, a Queens pediatrician named Debases Kanjilal hired a lawyer to pursue a civil suit against Merrill. Kanjilal was among the legions of investors who got burned when the NASDAQ cratered in 2000. Specifically, he had lost $500,000 on a single Internet stock, InfoSpace. Kanjilal’s instinct had been to sell InfoSpace when it was trading at $60 a share. But his broker at Merrill Lynch had urged him to hold on to the stock, advice that reflected Merrill’s public research reports that recommended InfoSpace as a buy stock. Standing behind those research reports, and affirming their recommendations in his TV appearances, was Merrill’s star analyst and Internet stock guru, Henry Blodget.

It is hard today to appreciate the influence once wielded by Blodget. Just over thirty years old in 2000, Blodget was a Yale grad who had never aspired to stardom on Wall Street. He had tried instead to make it as a writer, and when that didn’t work out, his father rescued him from unemployment by helping him land a position at Prudential Securities. Blodget’s career was unremarkable until he shot to fame in 1998 with his prediction that Amazon’s stock would reach the unthinkable price of $400 a share. When the stock did, in fact, hit that level a month later, Blodget was hailed as an oracle. Shortly thereafter he moved to Merrill Lynch with a $3 million contract. There, he reigned as the single most visible adviser to investors hoping to score big in the Internet gold rush. Blond and affable, with telegenic good looks, Blodget was everywhere with his stock predictions as well as broader prognostications about the new economy.

What Blodget didn’t mention to CNBC junkies or Merrill Lynch’s own clients was that his role at Merrill went far beyond analyzing stocks. Like other star analysts of the time, he also became deeply involved in Merrill’s investment banking business, helping to bring Internet companies—and fat underwriting fees—to Merrill. One of the companies Merrill’s investment banking division represented was Go2Net, a company that InfoSpace was in the process of purchasing in 2000. Merrill had a financial interest in InfoSpace’s stock price staying high so that the deal would go through.

Debases Kanjilal held on to his InfoSpace stock even as it declined steadily. Finally he sold at $11 a share and took a staggering loss. At the time Kanjilal sold, Merrill and Blodget were continuing to recommend InfoSpace to investors. Kanjilal’s losses were part of an estimated $4 trillion that investors lost when NASDAQ crashed. Big-name analysts hyped many sinking tech stocks with the same enthusiasm they’d shown in pumping them up. For example, as of May 2001, Morgan Stanley’s top Internet analyst, Mary Meeker, was still bestowing her once-coveted outperform rating on Priceline, then down from $162 to $4, and on Yahoo!, down from $237 to $19.50.

Kanjilal’s lawsuit against Merrill Lynch attracted the attention of Eliot Spitzer’s office not long after it was filed. Initiating a criminal investigation, Spitzer uncovered a shocking pattern of public deceit and conflict of interest at Merrill Lynch. He found e-mails by Henry Blodget privately ridiculing the same stocks that he and Merrill were publicly pushing. A piece of junk, Blodget had called InfoSpace, even as he recommended it. He privately called other stocks a pos, or piece of shit. Spitzer also found a memo in which Blodget detailed the compensation he deserved for bringing in investment banking business—a memo that flatly contradicted Merrill’s claims that analysts were not rewarded for playing such a role. As a result of the investigation, Spitzer charged that Merrill Lynch’s supposedly independent and objective investment advice was tainted and biased by the desire to aid Merrill Lynch’s investment banking business. In Spitzer’s view, the behavior by Merrill and Blodget constituted securities fraud, a serious felony.¹

Spitzer’s evidence against Merrill Lynch resulted in the company agreeing to pay a $100 million settlement. This case turned out to be just the first step in a larger investigation of other top Wall Street firms that had engaged in a range of abuses by insiders, which culminated in a historic $1.4 billion settlement in 2003.

And what happened to Blodget? Not much. Saying he wanted a lifestyle change, Blodget had accepted a November 2001 buyout offer from Merrill worth an estimated $5 million. He spent his days working on a book for Random House and meeting regularly with lawyers. In 2003, Blodget settled with Spitzer’s office, agreeing to pay a $4 million penalty—yet admitting no wrongdoing. The settlement was easy enough to afford. Blodget had pulled in nearly $20 million during his brief star turn at Merrill.

HENRY BLODGET and the ATM looters have nothing in common and much in common. Blodget was among the ranks of the big winners in the new economy—the very top earners who saw unprecedented income gains during the boom of the 1990s. His education and background had helped him to secure his place in the Winning Class: successful parents, private schools, Yale University, connections on Wall Street.

The ATM looters, by contrast, were among the far larger ranks of Americans who had either stayed put economically or realized only modest gains during the boom years. They occupied the lower rungs of what Robert Reich has called the Anxious Class, and the 1990s were not easy for them. Although median wages for workers near the bottom crept up in the latter part of the decade, these gains did not make up for wage losses since the late 1970s and, in any case, were wiped out by large increases in the cost of living across the New York area. Records from the DA’s office indicated that most of the ATM looters lived paycheck to paycheck with little money in the bank for emergencies. Some had average balances below $100 for months on end.

Economically and culturally, Henry Blodget and the ATM looters might as well have lived on separate planets. What they have in common is that both did wrong—yet both squarely identified themselves as upstanding citizens. Many members of the Municipal Credit Union work for the very authorities that enforce law and order in New York City. They would never have contemplated robbing a bank. But, hey, if a cash machine starts spitting out free money, what are you going to do? Meanwhile, Blodget did not begin his career on Wall Street imagining that one day he’d end up in the crosshairs of the state attorney general, and in many ways Blodget was simply the fall guy at Merrill Lynch. A close reading of the e-mails uncovered by Spitzer shows that Blodget often caved to company pressures to hype stocks and was uncomfortable with his role. At Merrill, like many other financial services companies, the investment bankers were notorious for leaning heavily on the analysts to say the right things about the stocks of important clients.

Blodget made millions playing by the rules of a deeply corrupt game. Plenty of other analysts did the same thing and many thought nothing of it. The system was sordid, says one analyst who worked at Prudential during this period. But because everyone knew it was sordid, it no longer seemed sordid anymore. As the analysts saw it, the big institutional investors on Wall Street were not naïve, and they weren’t stupid enough to believe even half of what research analysts tied to investment banks said about the companies their banks represented. Everyone knew how the game was played, says the former Prudential analyst. Analysts hyped stocks because they had to, and serious investors simply ignored them.

The problem was that a star analyst like Blodget wasn’t talking to insiders; he was on television, speaking to the public, and his recommendations were also heeded by Merrill Lynch brokers nationwide as they counseled clients on where to invest. We are losing people money and I don’t like it, one of Blodget’s colleagues complained to him in an e-mail. John and Mary Smith are losing their retirement.²

Blodget made an attractive poster boy for Wall Street corruption, just as he had been the perfect pitchman for the high-tech bull market. Yet ultimately there was nothing uniquely immoral about Henry Blodget. He found himself in a cheating culture and he went along.

IT’S EASY TO BASH Blodget for getting rich in a corrupt system or the ATM looters for ripping off their own credit union. But these days many of us aren’t behaving much better. In one area of American life after another—sports, business, law, education, science, medicine—more people seem to be cutting corners. Consider the following:

A psychiatrist in Westchester County, Dr. Dana Luck, suddenly finds herself busy evaluating local teenagers for signs of even the slightest learning disability. She knows what is causing the spike in her business: a College Board ruling that students with disabilities who receive extra time on the SATs will no longer be identified to admissions officers as disabled. The wealthy parents coming to Dr. Luck want only one thing: an official diagnosis of disability that will allow their kids more time on the SATs. Dr. Luck finds nothing wrong with most of her young patients. But parents who keep diagnosis shopping can find a more compliant disability expert and, for the right price, get what they want. Meanwhile many poorer kids with learning disabilities go without the diagnoses they deserve because they can’t afford the cost. Although it is well known that academic cheating by students has reached an all-time high, it’s also true that parents and tutors and other adults are increasingly helping students do whatever it takes to get an edge in their high-stakes education careers. Money lubricates much of this corner cutting.

A researcher at Harvard Medical School, David Franklin, takes a job as a medical liaison for a large pharmaceutical company. His job is to reach out to doctors and explain to them the many reasons why they should prescribe the company’s new drug, Neurontin. Federal law says that drugmakers can only promote a drug for FDA-approved purposes. But Franklin is pressured by his superiors to promote Neurontin for a wide range of off-label uses, many of which are wholly untested and possibly dangerous for patients. He lies to doctors nearly every day, telling them anything that will get them excited about Neurontin. According to court records, his company also offers doctors large cash payments to push Neurontin’s off-label uses to other doctors and to sign journal articles they didn’t write touting the virtues of the drug, which haven’t been verified by clinical trials. Do the doctors object? Hardly. Thousands of doctors pocket kickbacks to become Neurontin pushers. The Neurontin scandal is only one of many prescription drug scandals that have recently rocked the medical world.

A reporter is writing an article on Ronald Zarrella, the CEO of Bausch & Lomb. Checking Zarrella’s background, the reporter discovers that NYU’s School of Business Administration has no record of the M.B.A. that Zarrella says he earned there. Confronted with this information, Zarrella confirms that, in fact, he did not get an M.B.A. from NYU as he had long contended. This revelation is just the latest in a spate of résumé-faking cases, including ones involving high-profile people like George O’Leary, the former Notre Dame football coach; Kenneth Lonchar, the former chief financial officer of Veritas software; and Sandra Baldwin, the former president of the U.S. Olympic Committee. Executive recruitment and employment agencies say the problem of misrepresentation by job seekers at every level has soared over the past decade and that up to half of résumés include lies.

I’m out with a group of friends at dinner. The check comes to $141 and we split it evenly. Then one of my friends, a freelance writer, reaches for the receipt. Anyone mind if I keep the receipt? She’s not asking whether there are any ethical objections to her writing off our expenditures for her taxes; she’s wondering whether anyone else had hoped to do the same thing. Nobody objects on the latter grounds, and certainly not on the former. I’m not surprised. The IRS reports that tax evasion has gotten worse in recent years, costing the U.S. Treasury a minimum of $250 billion a year, and maybe twice that. Wealthy Americans are the biggest offenders, but sophisticated tax evasion is becoming a more populist activity. For example, as many as two million Americans now have illegal offshore bank accounts that they use to evade taxes, a problem that increased dramatically in the 1990s. Good weather, it turns out, is only part of the Caribbean’s appeal.

A leading high school basketball player named LeBron James, the next Michael Jordan some say, shows up one day at his school in Akron driving a new $50,000 Hummer H2 sports utility vehicle crammed with three TVs. The Ohio High School Athletic Association immediately launches an investigation, suspecting that the Hummer is a gift from a sports agent or university recruiter. James denies everything. My mom gave it to me, he says. Few believe that James’s middle-class mother can afford a top-of-the-line Hummer, but no one can prove a violation of state rules. It’s a typical episode in the money-saturated world of collegiate and professional sports, where recruiting violations, drug use, and other kinds of cheating—like Sammy Sosa’s corked bat—are pervasive.

A new technology is developed that allows ordinary Americans to engage in the large-scale theft of copyrighted materials. Use of the technology spreads rapidly, especially on college campuses, and results in hundreds of millions of dollars in lost sales revenue by companies and individual artists. This epidemic of stealing via Napster and other music file-sharing programs is accompanied by almost zero ethical second-guessing by users. The music industry, after all, is reviled for its greed and commercialism. Music piracy is nothing compared to the widespread theft of cable and satellite services. Americans are now stealing nearly $6 billion a year worth of paid television. Hooking up the neighbors so they can watch the Sopranos, too—sans a tribute to HBO—is considered the community-minded thing to do. Americans may be bowling alone, as Robert Putnam says, but increasingly we are stealing together.

A former New York Times reporter decides to write a book about his stint at the newspaper. He’s a young man who only spent a few years at the Times and he didn’t win any Pulitzer Prizes. Still, the book proposal generates buzz and results in a mid-six-figure advance. The reporter, who previously could barely afford to pay his rent, is slated to become quite wealthy before the age of thirty. All in all, not a bad payoff for Jayson Blair, who fabricated quotes and other information in numerous stories. Blair’s financial rewards easily outdo those of Stephen Glass, the disgraced New Republic writer who won a large advance from Simon and Schuster to write a novel about his dishonest career and was invited on 60 Minutes to promote it. We’re all used to the idea of tax evasion or cheating on Wall Street. But cheating by writers? Yes, indeed. An unprecedented number of cases of plagiarism and fraud have rocked the worlds of book publishing and journalism in recent years, including those involving historians Stephen Ambrose, Michael Bellesiles, and Doris Kearns Goodwin, and journalists Patricia Smith, Mike Barnicle, Michael Finkel, and others.

A management consultant is out golfing with two CEOs who are negotiating a deal worth millions. He is shocked when the CEOs decide to bet an aspect of the deal worth $150,000 on the outcome of the golf game (company money, mind you). He is even more shocked when he sees one of the CEOs kick his opponent’s ball into the woods to help him gain a winning advantage. In fact, none of this should come as a surprise. A 2002 survey of high-ranking corporate executives revealed that 82 percent admitted to cheating on the golf course. Why? Because playing golf is now a big part of networking and doing business in corporate America, and it doesn’t look good to be a terrible player.

These stories are not isolated instances. They are part of a pattern of widespread cheating throughout U.S. society. By its nature cheating is intended to go undetected, and trends in unethical behavior are hard to document. Still, available evidence strongly suggests that Americans are not only cheating more in many areas but are also feeling less guilty about it. When everybody does it, or imagines that everybody does it, a cheating culture has emerged.

Yet why all the cheating, and why now?

One might think that there’d be no shortage of possible explanations floating around for this crisis. America has been a nation of moralizers since the days of Benjamin Franklin, who advised in his 13 Virtues to Imitate Jesus and Socrates—a pretty high bar. But rarely has that cultural leaning been more pronounced than in recent decades. We have been living in the age of the Moral Majority and the Christian Coalition, the age of family values and zero tolerance. Religious figures and intellectuals and newspaper columnists have talked endlessly in recent years about moral issues large and small: teen pregnancy, school uniforms, violent video games, graffiti, pedophilia, welfare dependency, crime, drug use, and so forth. God, who previously didn’t play much of a role in American politics, has come to be as omnipresent in election campaigns as corporate donors seeking favors.

Yet America’s watchdogs of virtue have been largely silent about the new epidemic of cheating. To be sure, rampant cheating by students has begun to receive attention in the past several years. And the recent corporate scandals induced a media feeding frenzy. There have also been big stories about cheating by athletes, or tax evasion, or plagiarism by journalists. Still, there’s been very little effort to connect all these dots and see them for what they represent: a profound moral crisis that reflects deep economic and social problems in American society.

Concerns about cheating do not jibe easily with the way that Americans have talked about values and personal responsibility since the early 1980s. That conversation has been orchestrated by conservatives and the religious right, while liberals—often uncomfortable talking about values—have largely kept their mouths shut. America’s moral ills were defined in the ’80s and ’90s in terms that reflected traditional conservative worries, with a focus on things like crime, drugs, premarital sex, and divorce. Other concerns—little problems like greed, envy, materialism, and inequality—have been excluded from the values debate.

But lately conservatives haven’t had much to complain about. Many aspects of Americans’ personal behavior have changed in recent years. Crime is down. Teenage pregnancy is down. Drunk driving is down. Abortion is down. The use of tobacco and illicit drugs is down. Opinion surveys suggest that Americans are growing more concerned about personal responsibility, as conservatives have narrowly defined that term.

Nevertheless, cheating is up. Cheating is everywhere. By cheating I mean breaking the rules to get ahead academically, professionally, or financially. Some of this cheating involves violating the law; some does not. Either way, most of it is by people who, on the whole, view themselves as upstanding members of society. Again and again, Americans who wouldn’t so much as shoplift a pack of chewing gum are committing felonies at tax time, betraying the trust of their patients, misleading investors, ripping off their insurance company, or lying to their clients.

Something strange is going on here. Americans seem to be using two moral compasses. One directs our behavior when it comes to things like sex, family, drugs, and traditional forms of crime. A second provides us ethical guidance in the realm of career, money, and success.

The obvious question is: Where did we pick up that second compass?

HISTORY OFFERS SOME initial clues to this puzzle. Cheating is not a new problem in the United States or anywhere else. It has existed in nearly every human society.

In Ancient Greece, the Olympic games were rife with cheating. Athletes lied about their amateur status, competitions were rigged, judges were bribed. Those caught were forced to pay fines to a special fund used to erect statues of Zeus. Greece ended up with a lot of statues of Zeus. In ancient China, there was frequent cheating to get admission to the civil service. Test takers sewed pockets into their garments for smuggling crib notes and resorted to other creative deceptions. The persistence of cheating on civil service tests was especially impressive given the penalty imposed on those caught: death.

The United States, for all of its moral preoccupations, distinguished itself early on as a natural home to the cheating impulse. Suspicion of authority was part of the fabric and fable of American life from the Republic’s earliest days. A search for personal liberty is what brought many to the New World after all, and frontier culture and Jeffersonian suspicions of centralized power nurtured this mind-set. Later, America embraced the rawest form of industrial capitalism in the world. Amid rough-and-tumble business competition and lax regulation, a certain level of lawlessness became part of economic life. An anything goes mentality thrived in a country where everyone supposedly had a shot at success—and where judgments of personal worth centered heavily on net worth. As the great sociologist Robert Merton once said, putting his finger on an ugly paradox: A cardinal American virtue, ‘ambition,’ promotes a cardinal American vice, ‘deviant behavior.’³

During the Gilded Age in the late 1800s, America’s new industrialists waged vicious battles as they built, and fought over, the engines of economic growth: railroads, steel mills, oil refineries, coal mines, and banks. These titans of industry cheated each other, they cheated and destroyed their smaller competitors, and they cheated consumers. The tycoon Cornelius Vanderbilt summed up the ethos of the day in a warning delivered to a business adversary who had swindled him: "You have undertaken to cheat me. I will not sue you, for law takes too long. I will