PsychologyMental Model by Joshua Kennon

Mental Model: The Thief Among Us


One of the things that has perplexed me for a long time is Charlie Munger’s insistence that a significant minority of humanity is wired in such a way that they will steal if given the opportunity, regardless of whether or not they need the resources they are taking from another person.  Whether this is an adaptive evolutionary trait (which would make sense) or a byproduct of other mental models, he asserted that this known fact makes it important for the people designing society’s systems to build in significant checkpoints and safeguards to prevent immoral behavior by people who cannot, for lack of a better term, help themselves.  I finally called this mental model in my own notes, “The Thief Among Us”, because it helped me remember it.

The Millionaire Dentist Who Stole a Navy Veteran’s Debit Card to Buy Pizzas

The power of the mental model was driven home in a major way when I began reading a story from earlier this year.

[mainbodyad]A 14-year Navy veteran living paycheck-to-paycheck and going to school full-time went to the store to buy supplies for his 9-year-old son’s birthday party.  He dropped his debit card in the parking lot.  After returning home and realizing the card was gone, he immediately called the debit card company and informed them.  Within eight minutes, the bank realized someone had swiped the plastic at a pizzeria and called police.  The police offers arrived as the thief was purchasing two large pizzas with extra olives.

The police asked the man if he was having money troubles before arresting him.  He laughed.  The thief was a successful dentist, had $250 in cash in his pocket, an estimated net worth of $3 million to $4 million, and was in town to see his son play for Yale’s baseball team.

While dealing with the credit card company, the Navy veteran missed his son’s birthday party.

The Thief Is Never Who You Think

Retail stores have learned a lot of important lessons about this mental model.  The most likely thief at a store like Target, for example, is a middle aged, respectable looking white woman with two or three children.  Likewise, as ABC news reported about the findings of a recent study, those who are environmentally conscious are more likely to steal:

Pop quiz: You need $20 for lunch and can only ask one person for a loan.

Do you ask a) the eco-conscious vegetarian who only buys green cleaning products, or b) the Hummer-driving meathead who says Al Gore is overrated.

If you choose person A – assuming she cares as much for fellow human beings as she does for the planet – you could end up hungry.

Green consumers are more likely to steal, lie and hoard their money compared with those who are exposed to environmentally friendly products but don’t buy them, according a new study by University of Toronto researchers to be published in the journal Psychological Science.

Another study showed that in the general population, there are certain personality types prone to shoplifting with anti-social, aggressive men being the most common.  Often, the theft has nothing to do with money at all.

The Importance of Internal Audit

My senior year of college, when I had the honor and privilege of interning for one of the biggest insurance companies on the East Coast, I asked the CEO what he thought the single, most important thing I should learn from my experience should be.  He responded, “Internal Audit”, then went on to explain that internal audit was the most important function of a company like a property and casualty insurance group.

Thief Among Us Mental Model

A significant portion of the population is wired to steal regardless of whether they need to for survival. This is why it is vital for those designing systems to create enterprises that can catch this type of behavior and withstand a good deal of ‘sin and folly’ to paraphrase Charlie Munger. Image © Thinkstock

That answer surprised me.  He had learned something that my relative youth and inexperience had not yet taught me: You have to create systems that encourage and demand honesty.  Otherwise, you can go broke.  That means you violate your duty to policyholders, owners (shareholders in the case of stock companies or policyholders in the case of mutual companies), and society.

This was hard for me to understand.  It took me some time because I grew up in a family where there was essentially only one rule: You didn’t lie.  We might get in trouble for something, but the only time we’d be in hell-hath-no-fury territory was when we lied about our actions.  This was so ingrained that years after graduating from college, I came across some books that I had borrowed from a professor and forgot to return in the bustle of two internships, graduation, a book deal, and starting my first business.  I tried to return them to him, only to find out he is now off the grid living in Thailand.  A few times a year, I try to figure out how to track him down and get the materials back in his hands because I had promised to do so.

The takeaway lesson is that, when building your business, internal audit procedures are vital.  You need systems that can protect your stakeholders.  People will try to steal from you.  Vendors will try to rip you off.  It is your moral duty to attempt to stop this “sin and folly” to borrow another Munger phrase.  It’s a lesson that it took me too long to learn because my own internal value system made it hard for me to accept despite the contrary evidence that the behavior was part of mankind’s makeup.  Save yourself the time and come to peace with it.  A significant percentage of people will steal given the opportunity to do so, whether or not they need to steal, whether or not there is a reason for them to steal, or even if there are personal risks to them stealing.  Your job is to make sure they are caught and the system can endure a lot of abuse.


  • Tricia Drake

    I have read before that eco-conscious people are more likely to lie, cheat and steel.  It was as if a person had a limited capacity to be good, similar to a dieter’s limited amount of willpower.  I often think about it when I am shopping at whole foods.  

  • I know this article is over a year old, but I just have to comment this thought.

    I don’t think some people are hardwired towards theft. Rather, I think they get a psychological thrill from stealing something, especially if they get away with it. This is similar to the thrill some people get from gambling, and uses the same neural reward system to addict them.

    Kleptomania could be considered an addiction, and many psychologists do think it is, although many do not. Perhaps there should an AA type of program for these people?

    Regardless, your point about internal audits is a good one.

  • Connelly Barnes

    So true!

    I have had this happen so often when I deal with people providing goods or services. It’s not enough for some to have an honest deal and fulfill it carefully. They want to send double equipment and double bill, such as my Internet provider, or tow my car due to their error, such as my parking people, and be reluctant to reimburse the cost of towing.

    This is one reason I love DIY, e.g. DIY investment, tax returns, car repairs, etc. The reliability of people claiming to provide a service is typically around 80% or so, because they don’t double check and do a good job. Even when I am not an expert in the given area if it is a straightforward enough task I can often have 100% reliability just by being careful.

    One could argue that some of these DIY activities are not economic, and that is probably true, but in many cases having higher reliability is worth it, plus there’s the enjoyment of learning something new!

  • JB

    Joshua, were you ever able to return the books to your old professor?

  • Marc

    I’m aware this is a fairly old article, but I feel compelled to add a comment. I live in South Africa, where we are currently embroiled in a scandal that is just, on the face of it, insane. Our president, one Jacob Zuma, has been accused of being in cahoots with the Gupta family. Together, they’ve engineered state capture and theft of public funds that quite frankly beggar belief. Billions of Rands, by the sounds of it. Thanks to the selfish actions of quite literally two families, the country is facing a budget shortfall of 50 billion Rand, with an economy that is stagnating despite the world economy, especially emerging markets, growing like blazes. The corruption that can be directly attributed to our President is just…staggering. A country on the verge of imploding, because, as the article said, he quite literally cannot say no to an opportunity to get more for himself. Does he need to? No. Do the Guptas? No, they’re billionaires already. But it’s not enough, and it’ll never be enough.

    As the article stated, the main reason for all this is the system. Our constitution puts far too much power in the hands of the executive, and in particular the president. That’s less of a problem when you a saintly individual like Nelson Mandela, but when you have an absolutely immoral (I want to use the term amoral, as it really does seem like morality doesn’t even apply) character like Zuma, then the potential for abuse is overwhelming. The president has created an environment where anyone that might be able to put a stop to his exccesses owe them their very position. He can hire and fire at will. He puts his cronies and other beholden individuals into positions of power, and they get away with whatever they want, so long as they serve his and his master’s needs.

    In short – yes, have safeguards built into any system, because humans are flawed, and some far more so than others.