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Higher social class predicts increased unethical behavior (PNAS)

Seven studies using experimental and naturalistic methods reveal that upper-class individuals behave more unethically than lower-class individuals. In studies 1 and 2, upper-class individuals were more likely to break the law while driving, relative to lower-class individuals. In follow-up laboratory studies, upper-class individuals were more likely to exhibit unethical decision-making tendencies (study 3), take valued goods from others (study 4), lie in a negotiation (study 5), cheat to increase their chances of winning a prize (study 6), and endorse unethical behavior at work (study 7) than were lower-class individuals. Mediator and moderator data demonstrated that upper-class individuals’ unethical tendencies are accounted for, in part, by their more favorable attitudes toward greed.

Adapting to a Highly Automated World

This is a very good paper that asks hard questions about what may happen in the near future as we get better and better at saving more and more labor. Its quite old but its very well done so it ages quite well, as a longtime amateur futurist I think more honest than many newer explorations of the same issues.

LOOTING:The Economic Underworld of Bankruptcy for Profit.

NBER Working Paper No. R1869 During the 1980s, a number of unusual financial crises occurred. In Chile, for example, the financial sector collapsed, leaving the government with responsibility for extensive foreign debts. In the United States, large numbers of government-insured savings and loans became insolvent - and the government picked up the tab. In Dallas, Texas, real estate prices and construction continued to boom even after vacancies had skyrocketed, and the suffered a dramatic collapse. Also in the United States, the junk bond market, which fueled the takeover wave, had a similar boom and bust. In this paper, we use simple theory and direct evidence to highlight a common thread that runs through these four episodes. The theory suggests that this common thread may be relevant to other cases in which countries took on excessive foreign debt, governments had to bail out insolvent financial institutions, real estate prices increased dramatically and then fell, or new financial markets experienced a boom and bust. We describe the evidence, however, only for the cases of financial crisis in Chile, the thrift crisis in the United States, Dallas real estate and thrifts, and junk bonds. Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.

State Capture

The classical definition of state capture refers to the way formal procedures (such as laws and social norms) and government bureaucracy are manipulated by private individuals and firms so as to influence state policies and laws in their favour. State capture seeks to influence the formation of laws to protect and promote influential private interests. In this way it differs from most other forms of corruption which instead seek selective enforcement of already existing laws.[3] State capture may not be illegal, depending on determination by the captured state itself,[4] and might be attempted through private lobbying and influence. The influence may be through a range of state institutions, including the legislature, executive, ministries and the judiciary, or through a corrupt electoral process. It is similar to regulatory capture but differs in the scale and variety of influenced areas and, unlike regulatory capture, the private influence is never overt. The private influences cannot be discovered by lawful processes, since the legislative process, judiciary, electoral process, and/or executive powers have been subverted.

The politics of the private finance initiative and the new NHS

"This is the last of four articles on Britain's public-private partnership in health care We began this series by arguing that the private finance initiative, far from being a new source of funding for NHS infrastructure, is a financing mechanism that greatly increases the cost to the taxpayer of NHS capital development. The second paper showed that the justification for the higher costs of the private finance initiative—the transfer of risk to the private sector—was not borne out by the evidence. The third paper showed the impact of these higher costs at local level on the revenue budgets of NHS trusts and health authorities, is to distort planning decisions and to reduce planned staffing and service levels."