What is fair? If you value equality, recent reports about Wall Street pay are surely irksome. If you value efficiency, you may see the continuation of outsized bonuses as a necessary, even desirable, instrument to reward the most talented individuals — the most efficient producers — among us.
Different people value different things. According to the World Values Survey, Americans are less than half as likely as Finns to support income redistribution if it comes at the expense of incentives for individual effort.
Where does the Finnish mania for equality come from? And why the American obsession with efficiency? Presumably, our parents and teachers have a lot to do with it. Kids in Finland are taught from a different lesson plan, so to speak.
But is there any hope of changing the views of fully formed adults (many of whom have already performed in leadership roles) as they sit through classes in, say, business or law school, learning about (in some cases) the world according to Milton Friedman or Ayn Rand? Exposed to these compelling intellectual frameworks, which emphasize market efficiency and model human behavior as driven primarily by rational self-interest, do students become more “American” than “Finnish”?
Learning is, in some sense, indoctrination, and it is not easy to measure its effect. Students don't randomly decide to study economics, for example, rather than French literature. Perhaps the econ majors were efficiency fanatics to begin with.
Or perhaps their teachers exercise more influence than we give them credit for. At Yale Law School, all students are required to take courses in contracts and in torts, and they're randomly assigned to an instructor for each class. Some of these teachers have PhDs in economics, some in philosophy and others in humanities. Some have no strong disciplinary allegiances at all. Professors are encouraged to design their courses as they see fit. Instructors from economics may emphasize the role of contracts in making possible the efficiency gains of the marketplace, while philosophers may emphasize equal outcomes for contracting parties. So economists teach about efficiency and philosophers teach about equality.
To figure out whether this affected their young charges, we put 70 Yale Law students in a computer lab and had them play a game that would reveal to us their views on fairness. (The study, which was coauthored with Shachar Kariv of the University of California, Berkeley, and Daniel Markovits of Yale, can be found here.)
The students made 50 decisions about giving. In some cases students started with $10, and for each dollar they gave up, their (anonymous) partner in the game would get, say, $5. In this case, giving was “cheap.” In others, giving was expensive (each dollar given up yielded only 20 cents for the partner).
Someone who gives a lot when it's cheap and keeps most of the pie for himself when giving is expensive focuses on efficiency: he's making sure the maximum amount is paid out to him and his partner combined. Someone who keeps 80 percent of the pie when it would be cheap to give is more focused on equality. Someone who always keeps everything, regardless of the price of giving, is just plain selfish, the very embodiment of the rational, self-interested Homo economicus.
It turns out that exposure to economics makes a big difference in how students split the pie, in terms of both efficiency and outright selfishness. Students assigned to classes taught by economists were more likely to give a lot when it was cheap to do so. But they were also much more likely to take the whole pie for themselves.
These findings hint at the influence that powerful ideas may have in shaping how we see the world, even late in life. It's also a sobering message for teachers such as myself. The students in my classroom will venture forth into the world of business and management, carrying with them some of the viewpoints and attitudes that I choose to emphasize in my lectures.
Unfortunately, ethics isn’t a matter of black-and-white or good-and-bad. Yet we can still aspire to teach students different ways of thinking about the world that will allow them to make honest decisions in a world that is many shades of gray. Students learn much more than the facts; what we choose to communicate to them is a responsibility not to be taken lightly.
Ray Fisman is the Lambert Family Professor of Social Enterprise in the Finance and Economics Division, a Bernstein faculty leader at the Sanford C. Bernstein & Co. Center for Leadership and Ethics and director of the Social Enterprise Program at Columbia Business School.
An earlier version of this piece appeared on Forbes.com.
Raymond Fisman was a Columbia Business School faculty member from 1999 to 2015.