Dishonesty is good for business, but bad for humanity
Lying is a path to success (and extinction)
The accounting firm Ernst & Young was hit with an unprecedented $100 million fine on June 28, 2022 after evidence surfaced that hundreds of their employees had been cheating on the ethics section of the Certified Public Accountant test for over a decade. Despite prominent warnings on the open-book, at-home exam cautioning people not to cheat, employees shared answers and exploited a flaw in the software that allowed them to pass after answering just a single question correctly.
“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” lamented Gurbir Grewal, the director of the Securities and Exchange Commission’s Enforcement Division.
Ernst & Young was fined by the SEC not just because they failed to take sufficient action after learning that their CPAs had cheated. What irked the SEC is that while under investigation, Ernst & Young officially denied that they that had a cheating problem until shown internal reports proving that they had known about the cheating for years. In other words, Ernst & Young lied about the fact that their employees were liars.
This level of dishonesty seems to have shocked both Grewal and the public who were captivated by headlines highlighting the irony of cheating on an ethics exam. But it comes as no shock to students of psychology or biology. That’s because lying is woven into the fabric of society (including the business world) just as it’s woven into the neurons that generate the human—and animal—mind. Dishonesty flourishes and often leads to success in both accounting and nature alike.
The roots of human lying and deception are found throughout the animal kingdom, where you can trace its origins as a successful behavioral strategy for humans and other animals. From the moment animals evolved the ability to communicate with each other hundreds of millions of years ago, the concept of false information emerged.
Consider the ease with which animals can lie with something as simple as the color patterns on their skin. If you live in the southern part of the United States, chances are that you’ve bumped across images highlighting the difference between the deadly coral snake and the harmless milk snake. Both have bands of black, yellow, and red, but in a different order. At first glance, it’s difficult to notice the difference between the two, which is exactly what the milk snake is banking on. By mimicking the coloring of a venomous coral snake, the venom-less milk snake can deter predators without having to waste energy on costly venom production. The milk snake is generating false information about the danger it poses—a lie it wears proudly on its skin.
There are, however, far more sophisticated forms of lying in the animal kingdom. Lying that looks as if the animal is intending to fool someone in a human-like way. The cuttlefish—an adorable squid-like animal with tentacles for a face (a bit like Davey Jones from Pirates of The Caribbean)—is able to change the color patterns on its body in order to communicate. The larger males typically monopolize the females when it comes to mating. If a smaller male wants to mate with a female, he will engage in a kind of lying called tactical deception. The small male will sandwich himself between the female and a larger male, displaying the “come mate with me” pattern to the female on one side of his body, and the “I am a female” pattern on the other side. From the big male’s perspective, it looks as if there are two females socializing. The deceitful smaller male can then continue to woo the female and, if he’s lucky, mate with her without the bigger male realizing that he was duped.
Human lying, however, is truly next level when compared to even the most deceitful cuttlefish. Humans have two things that animals do not possess to the same extent that make lying possible: language and theory of mind. Language allows us to share the thoughts in our heads with others, which allows us to lie not just about which partner we’d like to have sex with, but literally any subject we can think of. We can lie about where we were last night. Or what our favorite flavor of ice cream is. And, of course, we can lie to the SEC about ethics violations.
Theory of mind is a skill that allows humans to understand that other people have thoughts, beliefs, and ideas of their own. And with that understanding comes the capacity to manipulate those thoughts, beliefs, and ideas. It’s a skill that most animals struggle with. An NFT broker for example, might understand that her client believes that NFTs are a risky investment. Thanks to theory of mind, a crafty broker can manipulate the client’s beliefs in order to make a sale by assuring them that a Bored Ape NFT is a solid, risk-free investment. It’s a subtle game of salesmanship and truth-manipulation to get someone to do what you want. A useful skill in both love and business.
Some researchers believe that language and theory of mind evolved for the purpose of helping humans lie to each other. Whether or not this is true, there is no denying that deception is a fundamental part of everyday human behavior. Humans tell, on average, 1 to 2 lies a day. And some humans (1 in 10 of us) are pathological liars, telling dozens of lies a day. Ironically, despite the ease with which humans lie, we are rather terrible at spotting lies being told to us. Research suggests that humans are hardwired to believe that most of the communication we receive from other humans is accurate. We default to credulity. This sets up a scenario where humans appear to both be wired for producing and believing lies in equal measure.
This scenario is something the business world has been aware of long before psychologists arrived to confirm that which we all already know. The ability to manipulate others—by offering false information—is not just an effective way to make a sale for some unscrupulous retailers, but a proven method for climbing the corporate ladder. People recognize and appreciate this kind of political savvy in others, even if we understand that it involves dishonesty. In a study from 2018 of toxic people in the workplace, 110 employees at major corporations were tested on their levels of honesty. Those employees who were found to be the least honest (i.e., the biggest liars) were also rated by their coworkers and their bosses as the most competent, savvy, and politically skilled and thus were the most likely to be promoted. The study found that dishonest employees “as opposed to honest-humble, employees are more likely to view themselves as politically skilled, and when equally perceived as politically skilled by their supervisors, they receive higher ratings on task performance and team facilitation.”
The ability to lie—and lie well—is a proven path to success, which is perhaps why Ernst & Young were not too keen to punish their cheating employees. Why punish the people who are likely to be your best performers?
The danger with being a savvy, good liar is that when you shift from lying to an individual—like a client or your spouse—to lying to the public at large via the media, the negative repercussions become dire. The bestselling author and man responsible for the modern resurgence of stoicism Ryan Holiday chronicled his former career as a media strategist in his 2012 book Trust Me, I'm Lying. In it, he detailed his efforts to generate sales and publicity for various clients by planting false news stories online. Holiday writes: “In an age of images and entertainment, in an age of instant emotional gratification, we neither seek nor want honesty or reality. Reality is complicated. Reality is boring.”
Because humans default to believing what we hear, the internet is the perfect place for media savvy folks to change the public’s understand of the nature of reality. This is why the internet is rife with manipulation by content creators looking for clicks and sales. But it’s also a breeding ground for sinister political forces. It is this cynical manipulation of political beliefs and ideologies where the human capacity for deceit ticks over from a handy way to generate income to the thing that might doom our species to extinction.
Consider two examples of bold-faced lies that could lead to the end of humanity in the coming century. First, the war in Ukraine. Both sides accuse the other of creating and believing lies about what’s happening in Ukraine. The Russians appear to believe that Nazis run the Ukrainian government, and use this as a justification for war. Ukraine denies this, and instead accuses Russia of acting like Nazis in attempting to overthrow an innocent, sovereign democracy. Clearly one side is acting on and/or spreading false information. Very likely, neither side is dealing with 100% accurate information given the extent of media and news manipulation at this moment in history.
But there is no denying that Russia told a brash and easily falsifiable lie that kicked off the current conflict. In early 2022, as hundreds of thousands of Russian troops amassed on the Ukrainian border, the Russians swore that Russia had no plans to invade Ukraine. Oleg Stepanov, Russian Ambassador to Canada, told The Star on January 28th that “[Russia] will not invade Ukraine. We are not going to ... try to disrupt that territorial integrity of Ukraine. We recognize Ukraine as a sovereign state.”
This was a boldface lie. And it helped Russia reach its intended goal. Russia repeatedly denied invasion plans, slowing the West’s response to the inevitable invasion. The result is a war in Europe that could spill over into neighboring NATO counties and increase the risk of nuclear holocaust. Lying is at the heart of one of the most pressing existential crises our species has faced.
And then there’s the climate emergency and the lies that brought it into existence. The science is quite clear that the Earth is warming, that burning fossil fuels is the cause, and that if we don’t stop, most of human civilization will be destroyed by the end of the century. It’s right there in black and white in the UN’s Intergovernmental Panel on Climate Change report from April 4, 2022. And yet, 1 in 4 Americans are unsure if climate change is real, with many of those who acknowledge that it’s happening still adamant that fossil fuels are not to blame. There are many social, political, and psychological reasons for this level of denial, but some of the blame surely rests on the shoulders of the lies told by the fossil fuel industry itself. The oil and gas industry—as well as the US Congress—had received scientific reports as early as 1968 suggesting that burning fossil fuels could lead to global warming. But from that time until the present day, factions of the industry have been actively denying that reality. Senior Director, Federal Relations at Exxon Mobil Corporation Keith McCoy was caught on tape in July of 2021 admitting that his company had been lying to the media about the dangers of burning fossil fuels for decades: “Did we fight aggressively against some of the science? Yes. Did we join some of these shadow groups to work against some of the early efforts? Yes, that’s true. But there’s nothing illegal about that. You know, we were looking out for our investments, we were looking out for our shareholders.”
Like Russia, McCoy was involved in a bold-faced lie intended to manipulate large numbers of people in order to advance a goal. In this case, a business goal. In Russia’s case, a military goal. In both cases, the obviousness and audaciousness of the lie was no impediment to its success. Because humans, as we now know, both default to believing the things we hear and respect those who lie to us. And, as Holiday noted, we sometimes prefer to reject reality if it’s too boring (or inconvenient).
Accepting the reality of lying for our species is the key to understanding our behavior. Lying is part of the fabric of our societies. We cannot extricate it from our lives. But we should not celebrate it. As the political divide in the United States continues to widen over “different perspectives” on reality, including the nature of climate change but also the “stolen election” madness that is currently sweeping the nation, our species’ relationship to lies and truth should be the focus of our concern. A tolerance for savvy liars in both business and politics is precisely the problem we need to address. How do we rein it in knowing that it’s such an integral part of human psychology? I do not know. But if we cannot find a balance soon, we could lie our way into self-extinction.
An excellent treatise on the prevalence of lying, and its origins. The desire of people to believe in lies because it serves them, or they think it will, has its origins in the first history of man.
If you’ll forgive a Biblical reference, Eve chose to believe the lie that if she ate of the fruit (we don’t really know if it was an apple - another lie), she would be like God, knowing good and bad.
Wow. Equality with God; not a bad gig, she must have thought. And no doubt she perpetuated or embellished the lie when she spoke to Adam. And so paradise was lost.
Satan, masquerading as a snake or serpent, was also self-serving. He himself lusted after God’s power to have sovereignty over humans.
And so, as you so eloquently describe, man has selfishly used deception to function to his own advantage. But all is not lost. It is possible to operate with integrity. And while we may valiantly attempt to do so, we have to be as cognizant as your article points out of our own and others’ propensity for deception.
Thank you, Justin. I really enjoyed your insights.
I just finished reading your new book. It completely knocked my socks off. I hope it is a major publishing success.