Cohan on psychopaths and the financial crisis

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William Cohan, author of “Money and Power: How Goldman Sachs Came to Rule the World”, talks about an article in a recent Journal of Business Ethics that blames the financial crisis on corporate psychopaths at the helm of financial institutions.

Source: Bloomberg, January 4, 2012.

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1 comment to Cohan on psychopaths and the financial crisis

  • SDS

    Psychopaths are not the same as sociopaths. Psychopaths probably can’t form enough bonds that would be necessary to climb the ladder. Sociopaths, however, could. They could form and maintain a “network” to enable them to climb to the top.

    Correlation also does not equal causation.

    By the way, everyone thinks this is something “new under the sun”. What about the Robber Barons of the late 1800’s and on? Rockefeller was ruthless in creating Standard Oil. We all know about Senator Clark viz. the recent passing of his daughter. What about the miserable conditions Swift meat packing employees toiled under? Those are but a tiny fraction of people who would fit the definition of sociopathic behaviors. What they lacked in exotic securities and split-second trade executions they more than made up for in other ways with monopolistic practices, crony politicians in their pockets, etc.

    In my opinion, the author of that original paper is merely trying to demonize all successful traders, probably to release himself and others, including most European nanny-state governments, from bad financial decisions they have made over the years. If he can do that, it gives everyone a target to shoot at, lay the blame on, etc. It’s sort of like the Salem Witch Hunts – if your cow dies, blame it on your next door neighbor who owns a pet cat, and therefore must be consorting with the devil. Did a few jealous/ruthless neighbors in Salem poison their neighbor’s cattle? I’ll bet they did. But we also know that ignorance and poor animal husbandry was the cause of most livestock deaths, not the neighbor and her familiar consorting with the devil.

    But it’s easier to dream up some silly cause to demonize a relatively small group of people, most of which are innocent, based on a tiny subset that might happen to have the issues discussed above. Scapegoating and demonization are alive and well in the 21st. century. I guess some things never do change.

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