The Occupy Wall Street movement has focused our attention on brokers’ excessive salaries and bonuses. But an article in CFA Magazine suggests that there is a darker side to Wall Street. Sherree DeCovny writes that one out of every ten Wall Street employees is clinically psychopathic. They are also more willing to take dangerous risks in part because they don’t have great empathy for others and therefore don’t worry as much about possible negative consequences. She suggests that the gambling itself with the chemical rush of serotonin and endorphins matters more to these traders than the possibility of portfolio gains.
“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” writes DeCovny. Yet she stresses that for someone with a “latent compulsive gambling problem” a job trading stocks can trigger pathological responses that result in escalating lies and even embezzlement and fraud. In fact she says a person with this problem would often feel gratified by an enormous loss which goes a long way to explaining the criminal actions of recent rogue traders.
In “Greg Smith’s Resignation: Are Wall Street Traders Psychopathic?” Maia Szalavitz explores additional research that suggests that powerful people at the top tend to behave less ethically than others. Researchers found for example that people driving fancy cars — a measure of high economic status — were most likely to cut off other drivers and to fail to stop for pedestrians at crosswalks. Yet the same research revealed that unethical behavior wasn’t linked directly to a person’s wealth but to how much they believed that greed was acceptable. In fact additional research offered by Szalavitz illustrated that simply being in the physical presence of visible wealth reduces a person’s willingness to share.
So as we seek meaningful financial reform maybe it’s time to redecorate those fancy Wall Street lobbies and corner offices which likely serve as a breeding ground for selfish greedy behavior.