Psychopaths On Wall Street

When the New Yorker published John Seabrook's Suffering Souls in its November 10, 2008 issue, I read the article with great interest. You will recall that Lehman had gone bankrupt in September and the financial meltdown was in full swing. Seabrook's article was about psychopathology, which seemed especially pertinent to what was happening to the economy. For as long as I can remember I had thought that some large percentage of those working in finance and politics were "crazy" and irredeemable. There haven't been any good reasons for me to change my views since 2008, nor do I anticipate there will be. What is psychopathy?

At thirty-eight, [Dr. Kent] Kiehl is one of the world’s leading younger investigators in psychopathy, the condition of moral emptiness that affects between fifteen to twenty-five per cent of the North American prison population, and is believed by some psychologists to exist in one per cent of the general adult male population. (Female psychopaths are thought to be much rarer.)

Psychopaths don’t exhibit the manias, hysterias, and neuroses that are present in other types of mental illness. Their main defect, what psychologists call “severe emotional detachment”—a total lack of empathy and remorse—is concealed, and harder to describe than the symptoms of schizophrenia or bipolar disorder. This absence of easily readable signs has led to debate among mental-health practitioners about what qualifies as psychopathy and how to diagnose it. Psychopathy isn’t identified as a disorder in the Diagnostic and Statistical Manual of Mental Disorders, the American Psychiatric Association’s canon; instead, a more general term, “antisocial personality disorder,” known as A.P.D., covers the condition.

If you understand these terms—emotional detachment, moral emptiness, lack of empathy and remorse—you should have no trouble understanding the link between Wall Street (or K-Street or Congress) and psychopathology. In short, if you stand in their way or you can be of use to them, these financial movers & shakers are going to fuck you over, and they simply don't care about doing it. There's no remorse.

Put this way, this complex psychological phenomenon becomes pretty easy understand. Everybody knows such people exist out there in the world. It's very likely that some of you know some of these people personally.

Seabrook's article goes on to explain how psychopathology is diagnosed. Unfortunately, no effective treatment exists, nor will it. It's as though there is crucial part of the psyche—the superego in Freud's terms, a conscience—which is simply absent in these people, and nothing can restore what wasn't there to begin with. It has always been this way.

Evidence that Wall Street is rife with psychopaths recently appeared in the March/April issue of the CFA Magazine in an article entitled The Financial Psychopath Next Door. I can't access the article itself, but Business Insider cited this "fascinating" statistic from the study.

A shocking statistic jumped out at us.  From the article:

Studies conducted by Canadian forensic psychologist Robert Hare indicate that about 1 percent of the general population can be categorized as psychopathic, but the prevalence rate in the financial services industry is 10 percent. And Christopher Bayer believes, based on his experience, that the rate is higher.

Bayer is a well-known psychologist who provides therapy to Wall Street traders...

A little more color on these particular types of psychopaths:

These "financial psychopaths" generally lack empathy and interest in what other people feel or think.

At the same time, they display an abundance of charm, charisma, intelligence, credentials, an unparalleled capacity for lying, fabrication, and manipulation, and a drive for thrill seeking.

A financial psychopath can present as a perfect well-rounded job candidate, CEO, manager, co-worker, and team member because their destructive characteristics are practically invisible. They flourish in fast-paced industries and are experts in taking advantage of company systems and processes as well as exploiting communication weaknesses and promoting interpersonal conflicts.

Unfortunately writes the author, the best candidates for many Wall Street jobs exhibit the traits of a financial psychopath.

It goes without saying that job candidates in finance (and real candidates in politics) do not undergo a battery of psychological tests designed to weed out psychopaths (or those with other personality disorders) before they get a chance to do some real damage. That is to say that humans generally are totally unaware that so many of their high-profile leaders (in finance, politics, and so on) are as crazy as the day is long.

One problem is that these lunatics "present well" as they're fond of saying in the psych business—they have an abundance of charm, charisma, intelligence, and credentials. Unfortunately, these superficial "positive" personality traits cover up an unparalleled capacity for lying, fabrication, and manipulation, and a drive for thrill seeking.

None of this is going to change anytime soon. It's a Big Problem, but psychopathology among the elites has been part & parcel of the Human Condition for thousands of years. Such people are drawn to wealth & power like moths to a flame. Back to Seabrook—

Psychopaths are as old as Cain, and they are believed to exist in all cultures, although they are more prevalent in individualistic societies in the West. The Yupik Eskimos use the term kunlangeta to describe a man who repeatedly lies, cheats, steals, and takes sexual advantage of women, according to a 1976 study by Jane M. Murphy, an anthropologist then at Harvard University. She asked an Eskimo what the group would typically do with a kunlangeta, and he replied, “Somebody would have pushed him off the ice when nobody else was looking."

... In the late nineteen-thirties, an American psychiatrist named Hervey Cleckley began collecting data on a certain kind of patient he encountered in the course of his work in a psychiatric hospital in Augusta, Georgia. These people were from varied social and family backgrounds. Some were poor, but others were sons of Augusta’s most prosperous and respected families. Cleckley set about sharpening the vague construct of constitutional psychopathic inferiority, and distinguishing it from other forms of mental illness. He eventually isolated sixteen traits exhibited by patients he called “primary” psychopaths; these included being charming and intelligent, unreliable, dishonest, irresponsible, self-centered, emotionally shallow, and lacking in empathy and insight.

“Beauty and ugliness, except in a very superficial sense, goodness, evil, love, horror, and humor have no actual meaning, no power to move him,” Cleckley wrote of the psychopath in his 1941 book, The Mask of Sanity, which became the foundation of the modern science. The psychopath talks “entertainingly,” Cleckley explained, and is “brilliant and charming,” but nonetheless “carries disaster lightly in each hand.” Cleckley emphasized his subjects’ deceptive, predatory nature, writing that the psychopath is capable of “concealing behind a perfect mimicry of normal emotion, fine intelligence, and social responsibility a grossly disabled and irresponsible personality.” This mimicry allows psychopaths to function, and even thrive, in normal society. Indeed, as Cleckley also argued, the individualistic, winner-take-all aspect of American culture nurtures psychopathy.

The psychiatric profession wanted little to do with psychopathy, for several reasons. For one thing, it was thought to be incurable...

Cleckley’s book fell out of favor, and Cleckley described himself late in life as “a voice crying in the wilderness.” When he died, in 1984, he was remembered mostly for his popular study of multiple-personality disorder, written with Corbett Thigpen, “The Three Faces of Eve.”

Hervey Cleckley's fate—out of favor, a lone voice crying in the wilderness—points to Humanity's Fate. A goodly proportion of those in our ruling elites are not psychologically fit enough to serve hamburgers at McDonald's. As the Eskimos recommend above, we should have pushed them off the ice a long time ago.

Unfortunately, that's not the way things work.

Bonus Video — "I Am Fishead" Are Corporate Leaders Egotistical Psychopaths? (from Psychopathic Economics)

 

Comments

[Wanooski]

But Dave, Psychopathy greatly increases income potential, you must just hate "successful" people. ;)

[Honesty]

"It's very likely that some of you know some of these people personally."

I hate to say this but my older brother is a corporate lawyer at Weil, Gotshal & Manges. He's perfectly normal when we speak basketball, tennis, music or books we enjoy, but on political or economic issues he's ruthless, shockingly so I might add. Although, I can't say that he's like that all the time, it's like there is a on and off switch, certain topics trigger psychopathic behavior (God, I can't believe I'm using these terms to describe my brother).

[John D]

What's the old saying,,, "you don't have to be crazy to work here, but it helps!"

[Bill Hicks]

"It's very likely that some of you know some of these people personally."

If I had to estimate the number of such people out there based upon professional colleagues I known throughout the years, I'd say it's a bit higher than 1% (and I don't work in the financial service sector). Perhaps double or maybe even triple that number.

The last one I had to work with exhibited all of the classic traits, and he and I became enemies because I learned to see through him. What astonished me was his ability to stay friends with others even after he had stabbed them in the back. Goes to show just how many people are taken in by superficial charm, even after the psychopath has proven that he'll screw them over when given the chance.

[eugene]

The diagnosis of antisocial personality has been around for a long time and is well known in the mental health community. They comprise about 3% of males and 1% of females in the general population. There are varying degrees of pathology within the diagnosis. In the more severe levels, they are dangerous. In a capitalistic society, the characteristics are rewarded well. Nothing matters except their own desires, goals, etc. They could care less about you as an individual except, of course, what use you are to them. And yes, all of us know someone that would qualify for the diagnosis. The behavioral pattern tends to moderate as they age. We all loved them dearly when the economy was booming. We only complain when the boom ended. In a very real sense, antisocial behavior is a characteristic of empires such as America. Empires take what they want with little, or no regard, for those taken from. We really don't care about the disadvantaged and consider them a "drag" on society. Their lot in life is, relatively, meaningless to us.

Actually, there are ten types of personality disorder with varying implications for Wall Street types.

[Total Recall]

Psychopathy = General Agricultural Civilization Adaptation Syndrome; i.e., GACAS, prounouced "jackass."

[Diogenes]

“The world is a dangerous place to live; not because of the people who are evil, but because of the people who don’t do anything about it.”~Albert Einstein

That quote heads Davos Sherman's "The Final Tipping Point" post from his Psychopathic Economics 101 blog.

He follows with a reference to Pareto, then continues at length in his distinct style to provide information with an attitude. About half way down, he has embedded a video titled "'I Am Fishead' are corporate leaders egotistical psychopaths?". I highly recommend his post, his blog (started last December), and especially the video which is outstanding:

http://www.psychopathiceconomics.com/DavosEconomicForum/2012/02/12/the-final-tipping-point/

http://www.psychopathiceconomics.com/DavosEconomicForum/

http://www.youtube.com/watch?v=6MWpxH-RlFQ

"A fish stinks from the head."

I am reminded of M Scott Peck's "People of the Lie" (1983) which sparked my interest in this topic so long ago.

Many thanks, Dave, for another fine post.

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