The honor system is the best system

Or how we should learn to stop worrying about new forms of cheating and love the status quo

December 12, 2022
Jonathan Libov

New technology often stirs fears of cheating or stealing. Some examples:

Now consider this image:

Ski rack

These are skis put aside by skiers on a mountain while they're drinking hot chocolate in the chalet. Anyone, including that guy sitting in the Adirondack chair looking at his phone, could steal any of these skis. He could put a dozen pairs in his car and sell them in his car, or he could take just one and never have to rent again. But he doesn’t, because people generally don’t cheat.

Life presents us with opportunities to cheat all the time:

  • Bittorrent is still alive and well
  • You could just walk out of a restaurant or a taxi without tipping. Remember, Uber ratings happen before the tip is revealed.
  • You can steal someone else’s joke or media on social media and present it as your own
  • You can lie to would-be investors about the performance of your business

Alex Danco on the curious infrequency of scams in Silicon Valley (namely, founders absconding with a few million dollars that they immediately, and legally, convert into a bonus):

I’ve long believed that the real mystery of Silicon Valley isn’t the outsider question, “How is Silicon Valley so wild and crazy”, but actually the insider question: “How is Silicon Valley so stable?” It’s built on speculative finance, it’s full of experiments whose outcome you can’t know for years, and it has to move fast enough and fluidly enough that (at early stage anyway) it effectively works on the honour system despite the FOMO environment. It’s so interesting how, in this environment, there aren’t any scams like this...I’ve long believed that the real mystery of Silicon Valley isn’t the outsider question, “How is Silicon Valley so wild and crazy”, but actually the insider question: “How is Silicon Valley so stable?”

Why is it that people don't cheat more often when it seems like they'd have something to gain and almost nothing to lose?

Why don’t people cheat more often?

Sure, there are people out there who, when faced with these opportunities to cheat, take the immoral path. Why don’t people cheat? Three reasons:

Fear of getting caught. This is why we have a justice system, and to be clear I’m not suggesting that if convenience stores or car dealerships switched to a “pay what you want” model that people would generally pay fair value. But from Bittorrenting to tipping or stealing social media there’s almost no method to even mete out punishment, and people still generally do the right thing. (Yes of course every Instagram meme account is just re-posting others' memes but I think everyone, blockchain-provenance maximalists aside, would agree we have a pretty well functioning meme economy).

Self-esteem. I’d venture to guess that 90% of people believe they’re in the top 10% of moral behavior, and that’s an important belief to maintain in order to get out of bed every morning. By contrast, the reason people believe that sociopaths like SBF, Elizabeth Holmes and Bernie Madoff will eventually get caught—that is, we all know they won't cheat enough just to get ahead and stop—is that tolerance for lying is a fatal flaw; a person with that kind of sociopathy has as much chance at survival as an organism with no fear of or ability to experience pain. It’s also worth noting that people’s overestimation of their own rectitude explains why they overestimate other people's proclivity to cheat; surely the 90% of people who are less moral, everyone thinks, must be jumping at the chance to cheat. But of course only 10% of those people are actually in the top 10%.

People are convenience seekers more than they are capital-seekers. We all know how the Napster/Bittorrent story ends: Spotify and Netflix etc. have such good user experiences that they’re worth the $12/month. It’s for similar reasons that people don’t just steal other people’s skis; ski rentals are convenient enough to be worth the price. It’s not so much an economic calculation as a Larry-David-esque eh when comparing the convenient paid option with the free immoral option. Heck even the ski dude on the Adirondack chair fiddling with his phone is evidence of this; fiddling with your phone is more convenient than stealing a bunch of skis.

Anxiety about cheating generally reveals anxiety about systems that are already flawed

As Byrne Hobart puts it in Deepfakes Paranoia Considered Pointless, the anxiety about deepfakes is similar to the anxiety we once had about Napster: it’s generally an expression of a system whose distribution monopoly is eroding.

Music once had an atom-based distribution monopoly on the production of records and CD’s the same way the media once had a distribution monopoly on plopping newspapers on people’s driveways. The erosion of those monopolies naturally causes finger-pointing at bad things that will happen in this new world: artists not getting paid because of torrents and people with no editorial standards influencing the conversation. Sure we experienced some pain and attrition with Napster just as we’re experiencing some pain now with the unbundling of media organizations, but then again if you’re a media organization today you might look at how all the music groups survived just fine. If Soundcloud was born out of a new bottom-up promise in music, and Substack is to media and Soundcloud is to music, that’s a pretty tolerable outcome.

The same is true in education, where there are newfound concerns with cheating via GPT. But in reality cheating isn’t really much of a problem:

Cheating isn’t a problem in school because deep down, even the less motivated kids acknowledge that there’s some merit in school, and cheating your way through K-12 and college would render all those years a waste of time and opportunity. Also, cheating feels bad.

It’s also true that Education has some monopoly on education, but we can deal with that. Some new technologies have become inconveniently convenient to the status quo, but not only is human behavior pretty Lindy, people are generally more upright than we give them credit for.