Bob Diamond, chief executive of Barclays, has resigned because of Libor rate-fixing among his traders in 2005–9. He once defined the ‘culture’ of a successful bank as ‘how people behave when you think no one is watching’. Plato knew all about that, as the story of Gyges’ ring in his dialogue Republic (c. 370 bc) explains.
Glaucon, challenging Socrates to demonstrate that behaving morally is intrinsically good (whatever the consequences), tells how a Lydian shepherd Gyges found a ring which rendered him invisible when he turned it to one position on his finger, and visible again when he turned it back. As a result, he seduced the king’s wife, with her help killed the king and took the throne. Glaucon continues: would not anyone, however committed to morality, act in this way? He would steal whatever he wanted from the marketplace, sleep with anyone he wanted to, kill or free from prison whomever he chose, and generally act like a god. Anyone in this position would be thought mad not to take advantage.
So, says Glaucon, who is happier: the moral man who is badly off in every way, except in being moral, or the immoral man, who is well off in every way, except for being immoral? Obviously the latter. Now, the immoral man knows that it is in the interests of society as whole that people are moral and not immoral. That being the case, he will ensure that he appears moral: for ‘appearance trumps reality’, and ‘it is the acme of immorality to give an impression of morality while actually being immoral’. The immoral man can then use his moral reputation to exploit everything for his own and his friends’ advantage and success. All this ‘explains why gods and men provide a better life for the immoral than the moral person’. Much more of this sort follows, and the rest of the Republic is taken up with Socrates’ answer.
Glaucon’s analysis fits the Libor lot perfectly. The remedy, chant commentators, is to regulate more and change the ‘culture’. Better, surely, to hire honest