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Ethics and Morality
Morality, Power and the Banks
Power fosters moral exceptionalism - a lesson about banking?
Posted July 4, 2012
On the 27 September 2002, in a small German town near Frankfurt, 11-year-old Jakob von Metzler, son of the head of a wealthy banking dynasty, climbed down from the school bus and made his way home. That night, his anguished family received a ransom demand, which they paid, but Jakob was not released. Four days later, a 27- year-old law student called Magnus Gäfgen was arrested and confessed to the kidnapping, but even after several hours of questioning, refused to disclose where Jakob was being held.
The deputy police chief of Frankfurt, Wolfgang Daschner, fearing that the boy might die a slow death in a forgotten shed, ordered his subordinates to get Jakob’s location from Gäfgen by threatening him that a specialist interrogator was being helicoptered in from Frankfurt to inflict pain on him of the sort he had never experienced before. It took only a few minutes for Gäfgen to direct them to a lake near Frankfurt, where they found Jakob, wrapped in plastic and already dead.
A debate blew up in Germany about the morality of threatening torture, even in such an urgent case. The two contrasting perspectives were of a rule-based approach – it is in principle wrong to threaten or use torture – versus an outcome-based approach – in this case it is not wrong to do this because it had the chance of saving Jakob’s life.
This true story was one of a number that Jorris Lammers of Tilburg University and colleagues used to probe the effects of power on people’s moral thinking. They asked volunteers to make judgements about the correct decision to take in a number of moral dilemmas. In another example, the girlfriend of a boy who has just been diagnosed with terminal cancer overhears the doctor’s diagnosis before the boy does. She begs the doctor not to tell her boyfriend until after they return from a long-planned and very special trip to Africa, which he had always dreamt about visiting. Given that he had only 6 months to live, why not let him enjoy this particular journey unburdened by the knowledge of his fate. The doctor’s ethical rules mean that he should tell the boy, but an outcome-based decision – in other words the end justifying the means – would mean he should not tell.
Lammers found that power – whether unconsciously primed in the mind or actually given over other people in an experimental situation – made volunteers much more likely to advocate rule-based decisions, and less likely to advocate outcome-based decisions: minds primed with power were more likely to say that threatening Magnus Gäfgen was wrong and that the doctor should tell the boy about his terminal diagnosis. Minds primed with powerlessness were much more likely to say that threatening torture was justified and that the doctor should let the boyfriend go on holiday without knowing his diagnosis.
Power, then, makes people more moral, or at the very least rule-following – or does it?
Here is another moral scenario which Lammers presented to his volunteers:
“Suppose someone is looking for a new apartment after his landlord has terminated the tenancy. However, the only affordable option is public housing, for which there is a three year waiting list. There is however a trick that allows him to bypass the waiting list and immediately obtain a house.”
Was using this trick acceptable? – Rate this between 1 (definitely not) and 9 (definitely yes).
What happened? In Lammers’ volunteers, exactly the same as before – those randomly assigned to a power frame of mind were much more likely to rate it less acceptable than those with minds unprimed by power. But then came the twist. Lammers gave this story to only half the volunteers. The other half read this one:
“Suppose you are looking for a new apartment after your landlord has terminated the tenancy. However, the only affordable option is public housing, for which there is a three-year waiting list. There is however a trick that allows you to bypass the waiting list and immediately obtain a house.”
The first was one written in the third person about someone else, while the second was written about you. As soon as the moral judgment became about the readers the effects of power on their minds reversed. Power now made people less likely to choose the rule-based judgment, and more likely to choose the ends-justifies-means, outcome-based judgment.
The Governor of the Bank of England, Sir Mervyn King, last week accused the banks of having a culture of ‘excessive compensation’, ‘shoddy treatment of customers’, ‘mis-selling’ and ‘the deceitful manipulation of a key interest rate.’ Both the chairman and the CEO – American Bob Diamond - of Barclays eventually resigned, but at least four other UK banks are involved in some or all of these practices.
What is it about banking that fostered such behaviour? Banking does not attract bad people, we can presume, so how do we explain the recklessness, greed and immoral behaviour which has been exposed since the catastrophic crash of 2008? The enormous financial incentives to behave in this way are no doubt a big factor – obscene bonuses for profits, no matter how obtained, must share some of the blame. But this is unlikely to be the only answer.
Another factor may be the effects of the power that bankers hold. Largely unaccountable except to occasional shareholders meetings and often quiescent boards, some senior bankers exercise a control over resources and events in the world that greatly exceed that of the elected governments of most small to medium size nations.
While politician’s power is constrained and curbed by the constant monitoring of a free press, electoral sentiment and an independent judiciary scrutinizing for constitutional infringements, senior bankers hold enormous power relatively unconstrained by any limiting mechanisms – so long as they keep generating profits.
This week’s LIBOR scandal, where Barclays, among other banks, has admitted to manipulating the interbank lending rate, thus affecting the movement of trillions of dollars across the world, and the profits obtainable by bets made on these movements, shows that scandalous behaviour may potentially yield bigger profits and hence be rewarded rather than constrained.
Power has strong neurological effects on the brain and one of them, as Lammers and his colleagues have shown, is to change moral thinking. Power fosters moral exceptionalism, where rules are applied strenuously to other people including the bank customers, but the bankers themselves feel themselves excepted from equivalent rules governing their conduct. So the scandalous behaviour of banks may stem from a moral lassitude which is caused by the excessive power they hold. How to curb this power in the complex global financial systems a problem governments will have to try to solve.
New York Times April 10, 2003; DW World – Deutsche Welle 3.10.2002
Lammers, Joris et al (2009) Journal of Personality and Social Psychology, 97, 279-289
