Australian prime minister John Howard made trust the cornerstone of his campaign in Australia's recent election. It seemed an odd opening gambit when he was in the middle of battling allegations that he had misled voters in the lead-up to the previous election.

Tarring your political opponent as a liar is reliable, if unimaginative, ploy for winning an election -- even though it can easily backfire if the rumours turn out to be false.

But despite the feverish tone of propaganda churned out by the political parties about the mendacity of their opponents, the real crisis of honesty in society is not in legislatures, but in homes and offices across the country.

At least, this is the message of a new book by the co-founder of the American thinktank Demos, The Cheating Culture: Why More Americans Are Doing Wrong To Get Ahead (Harcourt, ISBN: 0151010188). Daniel Callahan is a card-carrying liberal who argues that his fellow citizens have lost their moral compass and need to return to the solid middle-class value which characterised the way businesses were run in the Fifties.

While other American liberals have been thumping the table about foreign policy, interest rates, health and social security, Callahan raised his hand in a recent newspaper column to complain about "the mounting ethics problems in American society".

"The recent corporate scandals are only occasionally mentioned on the campaign trail," writes Callahan. "Nor has there been much talk of rampant academic dishonesty among high school and college students, which has soared in recent years; or the major steroid scandal that has lately been engulfing the sports world; or tax evasion, which has more than doubled in the past decade; or the deplorable state of ethics in many professions, including medicine, law, and journalism." (1)

The Cheating Culture is a somewhat depressing catalogue of unethical behaviour throughout professional life. Callahan admits that he can't prove that more people are cheating now than in the past, but like many others he senses that it has permeated the fabric of American life.

"Cheating is everywhere," he writes. "Again and again, Americans who wouldn't so much as shoplift a pack of chewing gum are committing felonies at tax time, betraying the trust of their patients, misleading investors, ripping off their insurance company, or lying to their clients."

It may be hard for British and Australians to appreciate how odd complaints about moral decay and praise of Fifties business leaders sound in the mouth of an American liberal.

The "culture wars" between US liberals and conservative are fought with a World War I savagery. Endlessly across political no man's land the shells whistle madly through the air and thump into the muddy trenches scattering mud and debris across the landscape. There's no civility or dialogue between tattered flags emblazoned with the words "liberal" or "conservative". It's a fight to the death between free market conservatism and interventionist liberalism.

Which is why Callahan's focus on individual moral responsibility is so interesting and refreshing. It opens at least the possibility of a conversation between "conservatives" who focus on issues like traditional crime, drugs, premarital sex, stem cell research and divorce and "liberals" who thunder about greed, white-collar crime, materialism, and inequality. After all, both adultery and theft are condemned in the Ten Commandments. Surely, if conservatives showed a bit more concern about obscene rip-offs by white-collar shysters and if liberals did the same about teenage pregnancies, they might find a link.

Not that Callahan is running up a white flag. Rather than blaming the radical individualism of the 60s (which conservatives target), he points the finger at the "greed is good" generation which sprang up in the 80s under Ronald Reagan.

The underlying problem, he believes, is that free-market system rewards predatory greed more than hard work and virtue.

"The past two decades have seen rising greed, harsher competition and growing materialism - and a concomitant decline in the emphasis on community, service and social responsibility. In a dog-eat-dog America that worships winners and is tougher on economic losers, it is no surprise that so many people will cut corners to get ahead. Lax government regulation also makes it easier to cheat," he claims.

Devotees of an unfettered market blame the down side of free enterprise on a dominant culture which doesn't esteem virtues like solidarity and honesty. In the words of William McGurn, the chief economics writer for the Wall Street Journal, "law works best when it ratifies some social consensus. It works least well when it tries to impose such a consensus." (2)

But Callahan insists that this isn't enough. More vigorous regulation is needed to repair the moral fabric. In the first place, the silvertails have to be deterred from cheating. They have to realise that they do not live in a different moral universe and are governed by the same laws as everyone else.

And government also needs to ensure that the "winning class" is honest for another reason -- to avoid what he calls "trickle-down corruption".

"What happens when you're an ordinary middle-class person struggling to make ends meet even as you face relentless pressures to emulate the good life you see every day on TV and in magazines? What happens when you think the system is stacked against people like you and you stop believing that the rules are fair? You just might make up your own moral code.

"Maybe you'll cheat more often on your taxes, anxious to get a leg up financially and also sure that the tax codes wrongly favour the rich. Maybe you'll misuse your expense account at work to afford a few little luxuries that are out of reach on your salary-and you'll justify this on the grounds that the people running your company are taking home huge pay cheques while you're making chump change."

Unless people believe that you can win when you play by the rules, there's little hope of creating a society which is not imbued with the cheating culture.

What's missing in Callahan's analysis is an appreciation of the underlying reasons why people yield to temptation and bad example or why they ought to be virtuous even if they won't get caught. His book could do with a bit more ethics and a bit less sociology. But he still deserves to be commended for putting personal morality on the national agenda.

As he wrote recently, "Big rewards await the candidate who takes up the issue of ethics and fuses traditional conservative concerns about personal responsibility with longstanding liberal complaints about the overreach of market forces in US society." (1)

(1) David Callahan, "Candidates Talk a Lot About Values, Not Enough About Ethics". Tallahassee Democrat, 19 August 2004.

(2) Rebecca M. Blank and William McGurn, "Is The Market Moral?: A Dialogue on Religion, Economics, and Justice", Pew Forum Dialogues on Religion & Public Life, 2004.

Michael Cook is editor of Mercator