A few years ago I brought my children in to participate in a univerisity study on why children lie. Well, my eldest daughter who was 10 or so at the time, was to complete a questionaire with the most bizarre questions that had no correct answer whilst having the answers sitting right beside her. My daughter, although she was afraid of failing, never did look at the answers. At one point she got so frustrated that she started crying. Although the study bordered on child abuse, at least I know now that my daughter is honest.
My youngest daughter, who was 4 at the time, had a different experiment, and that was to not go look under a blanket that obviously had a dancing Elmo doll underneath. When she was left alone to play, she played for a minute, then kept looking over to the blanket with the Elmo underneath. Yes, she eventually went over to look under the blanket and discovered the Elmo. However, when asked later if she did, in fact, look under the blanket, my daughter admitted with a shy but sweet smile that she did. But I think it was because she was smart enough to realise that nothing bad would happen to her if she did admit to it. Therefore, this may be the key. If someone knows that they will be punished excessively, they may lie. If they know they won't be punished or know that life is fair and they can ACCEPT that they will probably get their just desserts when they are found out, then they will tell the truth....in the end. That's why you can't deal with a liar, because nothing is real, or at least their world is totally different than your world. Therefore, if you are counting on them, not much of anything will get done, because they'll be too busy trying to cover up their lies than actually doing any work.
I think much self study and perhaps therapy is the only way for a person who lies to turn their life around. As we've found from the above mentioned study, lies, or at least the tolerance of lies, are taught by the family of the children. The normal functioning of a family is paramount to how honest a child will turn out to be. This includes the parent's ability to accept responsibility, to teach the consequences of actions, and to discipline gently but reasonably.
You may say that calling someone a 'liar' is a bit harsh, but I believe that even if I lie, I become a 'liar' at that point. For how long I'm a liar is a different question. You become truthful if you tell the truth. So therefore, I suppose the best way to reverse becoming a liar is to own up to your lie. Not just to look good to others but to really be honest with yourself and the world, or the reality so to speak, that you live in.
In the end, it's all about confidence in oneself and confidence in the world. However, if the world is one of violence in Nazi occupied Europe, then your world is not real anymore and to lie to save a neighbour is totally justified. But existentially, saving a neighbour from certain death is based on the ultimate truth, isn't it?
E