We can’t figure it out: every few months there are a bunch of articles about corporate/financial psychopaths. It’s not like it’s a big shock or some kind of secret. Maybe it’s spurred by some academic paper.
Again, our point: D&O insurers, get on this, and figure out if having a psychopath CEO or key employee is a quantifiable risk or not. We also think this is a material disclosure and would like to see it in SEC docs or other placement docs. Isn’t the Board of Directors with their fiduciary duty to shareholders (not to mention employees) responsible for making sure the key employees are able to do the job? So why not brain scans in the board room? The data is there and we’re sure you could get expert witnesses to opine that you can tell who is a psychopath.
Here’s some of the press recently:
The Financial Psychopath Next Door, CFA Magazine (paywall)
Psychos on Wall Street 3/2/201 Wall Street Journal video, article (we note the distinction between “psychos” and “psychopaths” but who are we to quibble if WSJ wants to cover this)
“One out of every ten wall street employees is a psychopath, says researchers” By our calculations, this is one of 2: 4 of 100 are psychopaths in general population, and given that the diagnosis is skewed heavily male, we’re going to guess that its 4 of every 50. Given that there is a self-selecting population, we’re going to make up the statistic that it is 1 of every 2.
TechCrunch Founder Calls Arianna Huffington a ‘Touchy Psychopath’ Sore loser? Sexist? Accurate?
And, via JESSE’S CAFÉ AMÉRICAIN (here), we found this full length documentary:
Having worked in the finance industry, I don’t think it is anywhere near 1:2. They are risk takers. They actually take more risks than psychopaths: http://www.huffingtonpost.com/2011/09/26/stockbroker-psychopath_n_981950.html
The competitiveness explains a lot of the lack of empathy. Basically, these guys are in a zero sum game, every day.
That said, having worked with a bunch, they feel shame. They aren’t sociopaths. E.g. Leeson likely felt shameful and disgraced when found out. I know guys that came up short and felt bad about it.
I actually think a bunch of them are narcissists of the NPD sort. They imagine the world revolves around them. They are unaware of what’s going on in their own heads. They are driven by the need to amass status symbols (including hot women), flaunt their things, cover up their weaknesses, etc.
Hi SD.
Avoiding unclarity: by psychopath (or sociopath, which we use interchangeably) we mean people who lack the ability to have compassion. They understand that other people have feelings (they have “theory of mind”) but don’t care about what those feelings are.
We’re totally guessing about the 50% — this is because organizations self-select for those who are competitive within the organization.
We understand the gambling casino and internal pressure to win to advance. Shame or no, we’ve never seen a trader actually care about grandma when they’re gambling with grandma’s pension.
“Sociopath, psychopath” — OK. I can see why you’d lump them together. Being low-empathy and having been a finance professional, I probably see some variation in the shades of black that seem unimportant to you.
In my experience, the psych traits vary fom job to job.
E.g. traders are risk takers. Brokers (sales) are without conscience. Investment bankers are master manipulators and intelligent.
I’d worry most about the investment bankers. They are terribly competent.
In my own experience, the finance types are typically narcissists. Narcissists are notably unaware of themselves. E.g. here’s Madoff, who knows he’s got a problem (he’s terrible to some people, but not all people). If he were to read Stout’s “Sociopath Next Door”, he wouldn’t recognize himself. If he were instead to read Maccoby’s “Productive Narcissist” he might recognize himself: http://nymag.com/news/features/berniemadoff-2011-3/
Here’s something you might enjoy: http://gawker.com/5866258/the-outrageous-break+up-quiz-and-other-grim-tales-of-dating-finance-pros
You can read about women encountering the low-empathy finance types. I suspect some of them are more aspie (low affective empathy) than anything. That’s why they can’t connect with the girls.
There was a mistake in that last comment. I should have written:
“You can read about women encountering the low-empathy finance types. I suspect some of them are more aspie (low cognitive empathy) than anything. That’s why they can’t connect with the girls.”
Look at the psychos in media: Rush, almost all at Fox News, and all at News Corp, and if that is not enough, look at all the republicans trying to probe women before they can have abortion and other such lunacy, and finally, we only need to just look at the presidential candidates in the primaries and you are searching for psychos in wall street?
SD
Shades of black, good analogy.
We think it may be semantics.
We just haven’t seen professional consensus on the definitions, so we’re not going to waste time on splitting hairs, not that there aren’t varying shades of black, that’s all. We just use the shorthand “psychopath” or “sociopath” interchangeably, mostly so search engines pick it up, because people search for both. Our own non-professional definition is “lacking the organic biology to have a moral center” at varying degrees. This can be physiological, anatomical, genetic, etc., we’re agnostic as to modality. There can be varying shades of black on that. So “narcissists” are at one end, sort of a charcoal-gray black; and psychopaths who aren’t particularly interested in drawing attention to themselves are perhaps flat black. (Just an analogy). As we understand it, high functioning autistic spectrum (caveat, caveat, we’re no expert) does have the biology experience some compassion, but rather trouble picking up on the inputs (social signals). So we don’t really lump this into the psychopath-sociopath realm as a definitional matter.
(Sorry to those who feel they’re being labeled; and we’re waiting for the professionals to get their act together to get us the right words to use for all of this. We view this as a brain health/disease continuum but the DSM-crowd seems stuck on subjective definitions rather than objective quantitative measurements. Another post another time).
Ancient1 – research as to the difference in red state brains versus blue state brains is bubbling up to the surface. Our view (developing): those to the low empathy end of the empathy-systematizing spectrum (to pick a relevant model) tend toward the conservative. People are looking at genes, physiology and the rest of it. We think that fear-mongering works best on those who are easily riled up (to state the obvious).
P. K. Hatemi et al., A genome-wide analysis of liberal and conservative political attitudes. Journal of Politics 73, 271 (2011).
Another study shows that political views relate to how jumpy you are — the more easily threatened (physiologically) the more conservative.
People who are easily disgusted are reportedly more conservative.
Disgust Sensitivity and the Neurophysiology of Left-Right Political Orientations