Volkswagen and the Future of Honesty

The market is giving its own answer to the question “Is honesty for suckers?” Its response is: “No, honesty is for those who want to maximize value over the long term.” Of course, some corporations will get away with cheating. But the risk is always there that they will be caught. And often – especially for corporations whose brands’ reputation is a major asset – the risk just isn’t worth taking.

Honesty maximizes value over the long term, even if by “value” we mean only the monetary return to shareholders. It is even more obviously true if value includes the sense of satisfaction that all those involved take from their work. Several studies have shown that members of the generation that has come of age in the new millennium are more interested in having an impact on the world than in earning money for its own sake. This is the generation that has spawned “effective altruism,” which encourages giving money away, as long as it is done efficiently.

→ Project Syndicate