Honest workers or thieves? A bagel-seller: Mr. Paul Feldman who trusted customers to pay made surprising discoveries about dishonesty.
He’s a former defense analyst who decided to go into the bagel business. He got the idea after years of providing his co-workers with bagels - see he would go off in the morning, bring bagels and cream cheese into the office and then leave a cash basket for people to pay him back voluntarily. In 1984, his research institute fell under new management and Paul decided to leave. He then started a new business delivering bagels to offices and instituting the same honor system - this was a great business plan and he was delivering 8,400 bagels a week to 140 different offices. Being an economist and all he kept detailed statistics regarding payment rates and how those differed amongst different types of companies.
Despite all the attention paid to rogue companies such as Enron, academics know very little about the practicalities of white-collar crime. There are no good data. A key fact of white-collar crime is that we hear about only the very slim fraction of people who are caught cheating. Most embezzlers lead quiet and theoretically happy lives; employees who steal company property are rarely detected.
What did Feldman discover? That larger companies have lower payment rates than smaller companies, and that executives steal more than lower level employees. He also discovered that payment rates go down around holiday seasons and go up when the weather is nice. He also noted an increase in payment rates after 9/11.
Feldman has also reached his own conclusions about honesty, based more on his experience than the data. He believes morale is a big factor — that an office is more honest when employees like their boss and their work. He also believes that employees further up the corporate ladder cheat more than those below. He got this idea after delivering for years to one company spread out over three floors — an executive floor on top and two lower floors with sales, service, and administrative employees. (Feldman wondered if perhaps the executives cheated out of an overdeveloped sense of entitlement. What he didn’t consider is that perhaps cheating was how they came to be executives.)
One of the argument for the above phenomenon is that morality represents the way we would like the world to work while economics represents how it actually does work. If that’s true, then the story of Feldman’s bagel business lies at the very intersection of morality and economics. Yes, a lot of people steal from him, but the vast majority (in average around 87% of the people who took the bagel but paid for it), even though no one is watching them, do not.
This was presented in the Sunday Times and is an excerpt from Freaknomics, a book written by economist Steven D. Levitt and journalist Stephen J. Dubner.
I like your conclusion that maybe (I'd say, very probable)people in the senior positions get to that through cheating. This is their habit, or character. You told me this when you drove me home. Now I read it again. It was still very valid. Florence.
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