Class & corporate crime

Andy Coulson and Rebekah Brooks are two of the very few senior media figures not to have been to either private school or Oxbridge. Is this a coincidence?
Maybe not. Here’s a theory. To rise to a top job without the benefit of a private or Oxbridge education requires a disproportionate amount of ambition and competitiveness. And this is likely to dispose one to at least tolerate sharp practice; even if Coulson and Brooks didn‘t know of their journalists‘ sharp practice, their competitive personalities are likely to have promoted a cut-throat culture which encouraged such behaviour. As Adam Smith said:

The candidates for fortune too frequently abandon the paths of virtue; for unhappily, the road which leads to the one, and that which leads to the other, lie sometimes in very opposite directions. But the ambitious man flatters himself that, in the splendid situation to which he advances, he will have so many means of commanding the respect and admiration of mankind, and will be enabled to act with such superior propriety and grace, that the lustre of his future conduct will entirely cover, or efface, the foulness of the steps by which he arrived at that elevation.

Of course, Coulson and Brooks are only two data points. But there are several other examples of how people from “outside” backgrounds have been guilty of misdeeds in highish corporate positions:
- of the Guinness four, three were from working class or northern backgrounds who left school at 16, and the other was an immigrant.
- Asil Nadir and Robert Maxwell, two of the biggest corporate fraudsters, were both immigrants.
- Peter Clowes of Barlow Clowes notoriety was from a working class family in Moss Side.
- Nick Leeson went to state school and not university.
- Malcolm Calvert, one of the few people to have been convicted for insider dealing in recent years,  “was far from a typical recruit” at Cazenove.
Of course, these don’t represent a statistically significant sample, and nor could they given that it’s rare for people from poor backgrounds to get very rich, and rare for corporate fraud to be prosecuted successfully. Nor is it the case that public schools and Oxbridge don’t produce criminals - though these tend to pursue crime as a substitute for conventional careers rather than as a complement.
All I’m suggesting is that there might be a correlation between corporate crime and social background. But (even) if I’m right about the fact, might I be wrong about the mechanism? Could it be instead that the propensity towards misconduct is equally spread across the classes, but it just happens to be that successful people from outsider backgrounds are more likely to come under close scrutiny and so be caught out?

Comments

[Hanna]

I find this line of logic very worrying. How do you account for the majority of politicians, bankers etc who went to private schools / oxbridge and indulge in corporate crime? I think it is more a case of who gets away with it.

[john b]

Hanna: there's a difference between immoral and illegal. While you might reasonably think that the actions of many politicians and bankers during the 2000s *should* be illegal, they mostly aren't as the law currently stands.

[F8vnz]

Oxbridge graduates may just be better at getting away with it.

[Curt Doolittle]

There is very clear data that most people who rise from the middle class to become deca-millionaires do so becyase they work hard and are ehtical and therefore can attract the cooperation of people who have money.

There is very clear data that journalism is not an ethical occupation because it consists of sharing information that people do not want shared, but that others want to know. Therefore journalism is a habitual moral dilemma, which desensitizes journalists to immoral actions.

I suspect that is behavior is a complex version of the Principle Agent problem. Without reinstating liability under libel, slander, and privacy laws, we will not fix this problem.

[Edward Spalton]

This whole mania about Public School privilege was well on its way to being sorted out. Back in the Fifties I remember very peppery Public School headmasters on Panorama who were being given a grilling because so many state school pupils were getting to Oxbridge.

Then Labour decided to destroy the grammar schools.
I went to school in Leicestershire which was the first county to go comprehensive. When it was announced, the Labour leader of the local Urban District Council really gave the game away. I remember it clearly because it was so blatant.
"Good, working class lads go to grammar school, get good jobs and vote Tory. We're going to put a stop to that".

Whilst the teachers at our grammar school never gave away their own political opinions, I am now reasonably sure that many of them were the sort of people who voted Labour in 1945 because they saw Labour as the party of increased opportunity and fairness. They were outraged beyond measure!

And, as a nasty twist in the tale, Margaret Thatcher was the Education Secretary who closed down most grammar schools when in office and then whinged about Labour taking away the ladder of opportunity later.

[Paolo]

Well, I am Italian, being a civil servant for three years among other things and have been working alongside many Oxbridge alumni, I mean many. I have always been clear that I wanted to abide to a thougher standard of transparency and work ethics (if required), being blunt at times, at the risk of failing to be as "in tune" with the mainstream opinion as one would have to be to succeed carrier-wise.

You might be right Chris but I put to you that there might well be a similar pattern at work at the other end of the scale.....if we really have to generalise.

[ortega]

John Carlin points out, in an article I have only found in what I supose is the spanish translation, that there is a dividing line in the british newspapers, wich is at the root of the present case: the chequebook journalism, paid information. This is the usual practice not only of the NotW, but of all the tabloids: Mirror, Express, Daily Mail and The Sun. 'Serious' newspapers, The Guardian, The Independent, The Times, Telegraph or Financial Times do not have that kind of work. Their writers are more prepared and better educated. Of course, they sell a lot less.
Maybe the class distintion, the hunger for some kind of news, is also al the readers end?

Just in case,

http://www.elpais.com/articulo/opinion/Fresas/nata/elpepiopi/20110709elpepiopi_12/Tes

[Bruce]

"To rise to a top job without the benefit of a private or Oxbridge education requires a disproportionate amount of ambition and competitiveness."

And probably overconfidence in their abilities and judgement once they reach that top job because to get there they will have had to have a track record of rarely failing - of having taken risks and got away with it.

[Dave]

I agree with Hannah above. You are generalising too much here. It's sad to see your narrow minded way of thinking.

Wasn't Jeff Skilling (of Enron fame) a Harvard MBA and worked at McKinsey?

Didn't Michael Milken (the great inventor of junk bonds) attend Wharton business school?

Frank Quattrone (great tech iBanker for Morgan Stanley, DB and CSFB) went to Sanford and Wharton

Apart from a great education all these "successful people" have one thing in common they were convicted of wrongdoing and served time.

These are just a few. The hedgefund world is full of amazing educated people who have or are currently committing corporate crimes like insider dealing (I am not talking about anything immoral. I mean they are participating in ILLEGAL acts).

It depends on the person not just the education or background.

[Aslangeo]

All the examples given by Dave above are American, they have a quiet different culture to us Britons.

The class divide mentioned by the original poster is a peculiar UK issue, where some people from working class backgrounds have "chips on their shoulders", having risen against the odds and may be tempted to behave in a poor manner. These people are also more likely to get caught and are more likely to be punished more severely if caught due to resentments within the establishment.

[AMcguinn]

So, the only mechanism to get people into powerful positions who do not have a strong tendency to unscrupulousness is inherited privilege.

Sounds right to me.