S+B: What’s the stewardship view of profit, then?
Yankelovich: It goes back to an older American tradition of enlightened self-interest. You can do well by doing good. I admit I used to be very suspicious of enlightened self-interest, but I have a nostalgic yearning for it now. In 1999, I conducted a 50th-anniversary survey of the Harvard Business School class of 1949. They were mostly in their 70s then. When they articulated the guiding principles they followed in making decisions, they said things like: “Work hard,” “live by the rules,” “distinguish right from wrong,” and “practice self-discipline and self-sacrifice.” Self-respect is more important than winning. And being a leader means putting others’ needs ahead of your own. That’s enlightened self-interest.
S+B: You’re 80 now, so you would have been in that class yourself, wouldn’t you?
Yankelovich: I was at Harvard at the time, but in the Graduate School of Arts and Sciences, not the business school.
Those attitudes were replaced in the 1960s and 1970s by unenlightened self-interest: Win at any cost. Strip away regulations and constraints. Anything that isn’t illegal is OK. Conflict of interest isn’t a real issue, except for a few straitlaced dummies. Everybody bends the rules, and you have to do so to survive. Someone caught in an ethically questionable situation might say, “Well, I didn’t do anything wrong. I didn’t break the law.” For someone from my generation, ethics doesn’t have anything to do with breaking the law. Essentially, there was a dumbing-down of morality that came in with the baby boomers in the 1960s.
S+B: But some writers — like William Strauss and Neil Howe, the authors of Generations [William Morrow, 1991] — argued that the baby boomers were the most moralistic of all. They saw their parents as morally obtuse, preaching sacrifice while actually being greedy.
Yankelovich: At the heart of the cultural revolution of the 1960s was the thought: “We’re not dominated anymore by a psychology of scarcity. We can afford more attention to our own aspirations and self-fulfillment.” Sacrifice for others, which they saw as often hypocritical, was only praiseworthy if it was necessary. That theme spread in the 1970s with remarkable speed. It was a widespread transformation of values, and it led to many positive results: a less intolerant, more pluralistic, less one-size-fits-all society.
But there were also negative results. The preoccupation with self led many people from repudiating unnecessary sacrifice to discarding the ethic of sacrifice altogether. The emphasis on relative values, as opposed to absolute values, left people somewhat bereft of common agreement about right and wrong. The current explosion of religious belief represents a search for something absolute to believe in. But in the larger culture, particularly the business culture, there is no overarching sense of shared morality.
This cultural trend then converged with the policy trend that we’ve already mentioned: the perversion of shareholder value into the primacy of short-term earnings. And there was a third trend: deregulation. Deregulation had its main effects on the gatekeepers: law firms and accounting firms. They learned quickly that the firms that got hired most were those which showed clients how to skirt the edge of the law. A report by the American Academy of Arts & Sciences concluded that there wouldn’t have been a fraction of the recent scandals were it not for the collusion of the gatekeepers. [See Jay Lorsch, Leslie Berlowitz, and Andy Zelleke, Restoring Trust in American Business (MIT Press, 2005).]
The three trends of moral relativism, short-term shareholder value, and deregulation combined to put, for example, a huge amount of temptation in the path of banks, mutual funds, and Wall Street.