Trust is in the Air

EconTalk Extra
by Amy Willis
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Joel Peterson on Leadership, B... Peter Boettke on Public Admini...

airline.jpg How can a good manager learn to trust his subordinates? What about his kids? In this week's episode, EconTalk host Russ Roberts sat down with Joel Peterson, who teaches at the Stanford Graduate School of Business and serves as the Chairman of the Board of JetBlue Airways. The two discuss Peterson's "strange career" as well as his new book, The 10 Laws of Trust.

Let's hear what you took away from this week's episode... As always, we love to hear from you!

1. As a traveler, what would you consider to be the most significant innovation in the airline industry? How about as an investor in an airline? To what extent are these two answers the same for you, and why?

2. Roberts identifies two types of betrayal one could experience in the business world. Have you ever been betrayed in one of these ways? What's the best response to business betrayal? How might one use an experience of betrayal to build what Peterson calls "smart trust?"

3. Both Roberts and Peterson suggest finding a coach or mentor. What does Peterson mean when he says, "But, you can't ask somebody to be your mentor. The mentor marketplace does not work that way." Who has been your greatest mentor, and why? How did you find him or her?

4. Can ethics be taught??? Why or why not?

5. To what extent has American business and personal culture changed over the last few decades? How closely would you align yourself with Roberts and Peterson, and why?

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COMMENTS (2 to date)
SaveyourSelf writes:

4. Can ethics be taught??? Why or why not?

It depends on what you mean by ‘ethics’. In the article linked to the word ‘ethics’, ethics is defined as studies of values and virtues. In light of that definition, the initial question translates as ‘Can the study of values and virtues be taught?’ Or, if distilled down further, ‘Can you teach someone to study?’ and ‘Can you teach someone about values and virtues?”

Yes, using timely and consistently rewards and punishments you probably can teach someone to study and yes, you can teach someone about values and virtues. So I think it is reasonable to conclude that teaching people to study values and virtues is possible.

A more interesting question comes when the author of the linked article—Stephen Hicks—defines values and virtues. A value, he states, is a good to be achieved or a standard of right to be followed, whereas a virtue is a character trait that enables one to achieve the good or act rightly. There are two concepts in each one of those definitions separated by an ‘or’ to suggest they are equivalent and substitutable, except they are not.

A ’good to be achieved’ is an observable, measurable outcome, whereas a ‘standard of right’ is a behavior deemed in advance to be optimal with specifying why or how. The first concerns an outcome and the other a behavior. They are not even remotely similar.

There is a phenomenon in scientific study—I think it’s called substitution bias—where people confuse that which we measure for that which we care about. For example, we care about not dying. But we live a long time, so measuring dying is often expensive, difficult, and time consuming. So there were some large cross sectional studies like the Framingham Heart Study that demonstrated Elevated cholesterol increased risk of heart attack. So we thought that lowering cholesterol would decrease heart attacks and, furthermore, extend lifespan. Enter Zetia, a medication that does a great job of lowering LDL cholesterol without many side effects. Which is great, except it also does not decrease the risk of death or heart attack or stroke. So what’s the point in taking it? There isn’t one. Because nobody cares about their cholesterol. They care about not dying. Same thing in the other direction. Higher HDL was associated with fewer heart attacks. Except medications that increase HDL--like Niacin--do not appear to extend life or reduce heart attacks.

In short, the goal we care about and the tool we use to try and achieve it are not substitutes. To treat them as substitutes is dangerous. Sometimes it is necessary, but it is never optimal. The same applies to ethics. Outcomes matter. Behaviors only matter in so far as they are actually related to outcomes. To describe behaviors as outcomes in and of themselves stinks of substitution bias. Knowing this, ethics becomes a whole lot simpler.

In the long run, survival is the master value. All other values and all virtues draw their meaning from their relationship to the master value. In the short run, the picture is far more complicated, but in the long run it’s that simple.

Edward Derian writes:

Ethics can and must be taught. It must be taught by the church. " reason and experience both forbid us to expect that national morality can prevail in exclusion of religious principle." Washington's farewell address.

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