Integrity and Agreement: Economics When Principles Also Matter

Chapter 5. Lying, Contracts, and Political Behavior

Chapter 5 Lying, Contracts, and Political Behavior The previous three chapters provided the theoretical foundations for integrity . This chapter begins the discussion of how integrity, particularly commitment -integrity, works in different contexts. It deals with legal contracts, which turn out to be fairly straightforward, and then moves to a more nuanced area, the political agreement. Throughout my analysis of these types of agreements and those that follow I will continually focus on the roles of coherence , a normative condition of integrity, and mutual deceit, a moral loophole of lying, to generate novel implications. Though alluded to brie›y, mutual deceit has not yet been discussed in any detail, so the chapter starts by considering lying, the issue underlying the minimalist moral principle, and mutual deceit. Don Quixote the politician keeps every promise he makes and upholds every contract he signs, even if it kills him. Volpone breaks political and contractual promises any time it suits him. Martha vows not to lie and even possesses the strength of will necessary to hold to that principle. Does that mean she could never break a contractual or political promise to remain a person of integrity? 5.1. Lying and Mutual Deceit An untold number of philosophers throughout the ages have concerned themselves with the issue of “truth,” yet the issue of lying has apparently garnered far less attention. Sissela Bok’s work stands out as the contemporary classic on the issue and provides the basis for most of this section.1 Bok de‹nes a lie as “an intentionally deceptive message in the form of a 74 1. Bok 1978. statement.”2 Both the intent to deceive and the communication of the deception must exist. Intent is particularly crucial because it means that the liar knows she is trying to alter or bias the options of the person being lied to. As a result, lying yields three kinds of effects. First and foremost it harms those being lied to. Lying is like violence in that it can coerce individuals to act against their will. Second, it breaks down societal trust. To the extent that individuals cannot determine the veracity of claims made by those with whom they interact, fewer potentially bene‹cial interactions will occur. It is a bit of a paradox that market economies thrive on trust because it reduces the contracting and enforcement costs of interactions, but also that individuals confront the incentive to free ride on that trust because doing so could lead to material gains. If you entrust me with an asset without incurring legal protections , we may both gain by that reduced cost of our interaction, but I may also be tempted to violate your trust and skip town if it was my best economic alternative .3 Moreover, the more it is perceived that those in the media, politics, and other major institutions lie, the less citizens will trust those institutions, and the less civic engagement results. A bandwagon of dishonesty could result , exhibiting a cascading effect similar to those that drive fads, sudden revolutions , and the spread of corruption.4 Finally, while a liar usually lies in order to gain power or some other bene‹t, personal costs also exist. Not only does a liar risk losing personal credibility with others, but also a current lie may launch one down the slippery slope of making it easier to lie again. That’s signi‹cant because lying generally diminishes one’s own character.With a few possible exceptions to be discussed, a person who intends to harm or coerce others indulges traits that literally no moral, religious, or humanistic tradition endorses. To consider the justi‹cations for lying, we need to investigate two conditions : intent and alternatives. Lying with the intent to bene‹t oneself at the expense of harm or coercion to another brings about universal condemnation. In other cases, the issue of intent has proven to be more contentious. Kant maintained that it is an absolute moral duty to not lie, no matter any goodness of intent. Based upon the three versions of the categorical imperative , we can deduce that a lie (1) is not a personal maxim that could be willed into a universal law, (2) would violate the dignity of the person lied to, Lying, Contracts, and Political Behavior • 75 2. Bok 1978, 15. 3. The usual retort is that reputations or some other kind of sunk cost could prevent that act from being my best alternative. For the context of assuring product quality...