Psychology in the city

Growing pains.

In these times of global financial crisis and banking scandals, some understanding and solutions may come from the science previously frowned upon: psychology.

Since 2008 the financial world and banks in particular have been in crisis. The reaction in the public has been fierce, angry and accusing. Bankers are now shamelessly being called all sorts of names, even in the quality press. The man in the street feels dissociated with people in banking as they perceive them. That uncomfortable feeling of dissociation is a normal coping strategy where understanding fails. “These people aren’t like us,” most seem to feel. A lot of people are now looking at psychology to help them understand.

The question of what was going on and what the people in banking are like is a very valid one, but one that will take a long time to answer. The answer will evolve with time and perspective. Right now, arrows are pointing at a few individuals: the big bosses with big bonuses. They came under scrutiny in the first round of this on-going crisis and it seems that many didn’t understand the prevailing mood building up against them. That led to speculations of many of them being psychopaths. There is in fact quite a bit of scientific research to support that thesis. Several scientists have found similarities in personality traits between psychopaths in hospitals and prisons and top executives. Some personality disorders were found to be even more common in managers than in criminally or psychiatrically monitored psychopaths: histrionic PD (using superficial charm, being insincere, egocentric and manipulative), narcissism and compulsive PD (being perfectionist, rigid, stubborn and dictatorial). That makes nice headlines and always draws in lots of comments, but it is worth looking into it deeper. The scientist Hare has developed a questionnaire for measuring psypathology and found 1 per cent of the average population to show psychopathic tendencies. In executives it was 4 per cent. He presumes it might be a lot more in the financial world, but he has no data to back that up. He made a guess of 10 per cent.

It makes you wonder if only 4 to 10 per cent of a population can make such a difference. They can, with a majority of people being of a more neurotic disposition and therefore enjoying being shown the way. We have few leaders; but leaders have many followers. It is just how it is; it has always worked like that. Outspoken leaders, decision makers, trendsetters, psychopaths: they show a doubting crowd how things should be done and they have an impact. In a corporate world they set the tone for culture and competition. If 20 colleagues fight for one promotion, and one of the colleagues gets the knifes out, the others are likely to follow. However, having worked as a coach and employee wellbeing professional for nearly two decades it is my observation that such corporate culture is still strongly dictated from above. The knife-fighters make promotions more easily; the corporate arena has been moulded around ruthless fighting. The competition between companies was and is a hard-fought and ruthless one; that favours ruthless personalities inside the company.

Top-bankers have been called all possible insults, but we do need to take a step back. This hard-paced competitive world of banking did manage to get the absolute most out of people. With their locomotive pulling power they did manage to keep economies thriving. Progress and developments have been made in the financial world. Moreover, it is not unusual to find surprising and frightening character traits in groups of perfectly integrated and non-criminal people. Typically surgeons and butchers could find in their jobs outlets for a deeper rooted aggression. Extreme personality traits can therefore be applied perfectly functional and acceptable. In psychology we call it sublimation. No one less than Friedrich Nietzsche came up with the term first; Freud and Jung developed the concept further.

Our financial world is certainly driven by success. It feels however like things have gone too far and that shouldn’t surprise. Success breeds the desire for more success. Neuroscience teaches us how success heightens the release of testosterone in brain, which in turn hightens the release of dopamine. Dopamine triggers the reward centre in the brain. No wonder they now call it casino banking: people on a winning streak in the casino turn into strange creatures as well, just like some of your relatives do when playing certain board games. In the past I have raised the argument for having both a reward and punishment system for our top executives. One does not work without the other, major psychologists like Pavlov and Skinner teach us. It seems there are too many rewards for the top guys, and not enough punishments foreseen in their contracts. A reward-only system will breed greed, and I believe that is exactly what people perceive in bankers right now.

In the very competitive lower echelons of financial institutions and certainly on the trading floor, employees are approved of on the basis of how much money they bring in rather than how they behave. Such lack of control invites border-crossing behaviours. People are a lot more likely to do the wrong thing or eat the sugary bun when they think or know nobody is watching. And when they are ordered to hurt others, many are likely to obey that order, we know from the very famous Milgram experiments. We now know that orders were giving by executives operating in a psychopath-dominated environment. The ones that got hurt, I guess, are the customers and even whole national economies. I feel absence of supervision works a silent approval of behaviours that are potentially damaging to others.

Companies are money-making machines; talent is their fuel. They have learned over the years to use the ultimate strategies to get the talent in and to get most out of talents. Up until recently they gambled massively on satisfaction. It was a game of seduction, lust and gratification. The carrot on the stick was the Ferrari-and-champagne-lifestyle, the ultimate almost mystical goal the boardroom. Since the crisis, I see in more and more companies how that strategy has made way for one of fear. Many people have been sacked and anyone can be the next one at any time. As such, our companies play on what Freud found to be the two main drives of humans: libido and fear of death, Eros and Thanatos. Cunningly they play on insecurities and family-relationships as they lure highly talented people at the end of university time and offering them a chance to show mum and dad they can stand on their own two feet. Parents are constantly worried about how their kids will survive after they are gone; they are seeking proof that their kids will be all right. Our big financial centres offer that. That the reality for these young people often turns out quite differently is a message that can difficulty be disclosed to anyone, let alone the home-front.

No crisis is endless, and we will get out of this complicated cluster of crises too. And as with every crisis, we will come out damaged but stronger, better, smarter and more mature. We will not have a revolution; I don’t feel we are ready for that nor need that. Revolutions are too often sign of immaturity. Through all the criticism the British and global financial world have been bestowed upon The City in the past few weeks, it is all too easy to lose track of the fact that the financial heart of London has been a trendsetter in corporate culture for decades. Through the avalanche of criticism, that is made to sound like a bad thing. It isn’t. Through the competition driven evolutions of the past decades, also technical ones, we have developed a banking sector that has been propelled forward in complexity but also ability. Our financial sector and corporate world are now advanced and outstanding; it will take us some time to learn to manage and control it efficiently. The desire to just get rid of the existing system is a kneejerk reaction, a flight reaction. We are going to make do with the one economic system we’ve got and the millions of bright, talented and righteous people working in it. We will have to learn and live with it, even though right now many of us have lost sight of how excellent it all is. It is through the basic psychological drives upon which our economy has played so cunningly that a more mature personality develops. It is probably that more mature personality our corporate world is searching for now.

Our professional sectors will come out changed; I feel it will all be less extreme, a bit more boring. There will be more morals and less champagne, more mainstream and less party. The economy is a long winding road. Going too fast, we seem to have run off the road –again. On a very bendy road, even with a Ferrari, it is better to slow down and stay in the middle of the road as much as you can. It takes you to through the curves and to your destination much faster and much safer.  As with all evolving sectors in our day and age, the economy will find inspiration for growth in non-economic fields like philosophy, psychology, mathematics, physics, biology, electronics provided they accept those sciences for what they are. As a psychologist, I feel the corporate world has not always wanted to understand and correctly implemented my beloved science. They seem sometimes to have opportunistically tamed psychology and created a processed version, foregoing many potential benefits of such rich and innovative science. Incorporating insights from non-economic fields in an open and accepting way will reconnect the financial and hard corporate world with a wider socio-economic and global reality, sense of which appeared to have been lost.

The fact that the pimple burst so publicly in London could prove to be the best news for London in the end. It may not look good right now, but London will hopefully see itself forced to become the most ethical and trustworthy financial centre in the world. The others will be lagging behind. If London gets this exercise right, it will remain the most important financial centre in the world for decades to come. But the exercise might hurt a lot: growing pains.

City workers in london. Photograph: Getty Images.

Peter Sioen is a career & management coach and psychologist working for Mvantage Ltd in London; and international TV, radio & news media commentator with a self-coaching book in preparation. Blogging on http://petersioen.tumblr.com/

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The biggest divide in politics is not left against right, but liberals against authoritarians

My week, including a Lib Dem membership rise, The Avalanches, and why I'm putting pressure on Theresa May over child refugees.

It is a boost for us that Nick Clegg has agreed to return to the front line and be our Brexit spokesperson. I hadn’t even had a chance at our meeting to make him the offer when he said: “Before we start, I’ve been thinking about this and want to take on the fight over Europe.”

With Labour apparently willing to give the Tories a free pass to take us out of Europe, the Liberal Democrats are the only UK-wide party that will go into the next election campaigning to maintain our membership of the EU. The stage is remarkably clear for us to remind Theresa May precisely what she would be risking if we abandon free trade, free movement, environmental protection, workers’ rights and cross-border security co-operation. More than a month on from the referendum, all we have heard from the Tories is that “Brexit means Brexit” – but they have given us no clue that they understand what that means.

 

Premature obituaries

Not long ago, the received wisdom was that all political parties were dying – but lately the supposed corpses have twitched into life. True, many who have joined Labour’s ranks are so hard left that they don’t see winning elections as a primary (or even a desirable) purpose of a party, and opening up Labour to those with a very different agenda could ultimately destroy it.

Our experience has been happier: 20,000 people joined the Liberal Democrat fightback in the wake of the 2015 general election result, and 17,000 more have joined since the referendum. We now have more members than at any time this century.

 

Breaking up is hard to do

Journalists have been asking repeatedly if I want to see the break-up of the Labour Party, with moderates defecting to the Liberal Democrats. I have been clear that I am not a home-wrecker and it is for Labour to determine its own future, just as I focus on advancing the Liberal Democrat cause. Yet I have also been clear that I am happy for my party to be a home for liberals of whatever hue. I enjoyed campaigning in the referendum with a variety of progressive figures, just as moderates from different parties shared platforms in 1975. It struck me that far more unites us than divides us.

That said, not all “moderate” Labour figures could be described as “liberal”, as John Reid demonstrated as Labour home secretary. The modern political divide is less left v right than authoritarian v liberal. Both left and right are looking increasingly authoritarian and outright nasty, with fewer voices prepared to stand up for liberal values.

 

What I did on my holidays

Time off has been virtually non-existent, but I am reading A Wilderness of Mirrors by Mark Meynell (about loss of trust in politics, the media and just about everything). I’m also obsessively listening to Wildflower by the Avalanches, their second album, 16 years after their first. It’s outstanding – almost 60 minutes of intelligently crafted dialogue, samples and epic production.

During the political maelstrom, I have been thinking back to the idyllic few days I spent over half-term on the Scottish island of Colonsay: swimming in the sea with the kids (very cold but strangely exhilarating ­after a decent jog), running and walking. An added bonus is that Colonsay is the smallest island in the world to have its own brewery. I can now heartily recommend it.

 

Preparing for the next fight

The odds are weirdly long on an early general election, but I refuse to be complacent – and not merely because the bookies were so wrong about Brexit. If we have learned one truth about Theresa May as Prime Minister so far, it is that she is utterly ruthless. After her savage cabinet sackings, this is, in effect, a new government. She has refused to go to the country, even though she lectured Gordon Brown on the need to gain the endorsement of the electorate when he replaced Tony Blair. Perhaps she doesn’t care much about legitimacy, but she cares about power.

You can be sure that she will be keeping half an eye on Labour’s leadership election. With Jeremy Corbyn potentially reconfirmed as leader in September against the wishes of three-quarters of his MPs, Mrs May might conclude that she will never have a better chance to increase her narrow majority. Throw in the possibility that the economy worsens next year as Brexit starts to bite, and I rule nothing out.

So, we are already selecting candidates. It is vital that they dig in early. As we are the only party prepared to make the positive case for Europe, such an election would present us with an amazing opportunity.

 

Sitting Priti

David Cameron pledged to take an unspecified number of unaccompanied children from camps across the Continent. I am putting pressure on Theresa May to turn that vague commitment into a proper plan. Having visited such camps, I have been fighting for Britain to give sanctuary to a minimum of 3,000 unaccompanied children, who are currently open to the worst kinds of exploitation. We have heard nothing but silence from the government, with underfunded councils reporting that they are not receiving the help they need from Whitehall.

Meanwhile, it remains government policy to send refugees to Turkey – whose increasingly authoritarian government has just suspended human rights protection.

As if all of this were not grim enough, we have a new Secretary of State for International Development, Priti Patel, who has said that she thinks aid should be used largely to promote trade. As someone who wants our country to be respected around the world, I find this plain embarrassing. Actually, it’s worse. It’s shaming. As with Europe, so with the world: the ­Conservative government is hauling up the drawbridge just when we need more than ever to engage with people beyond our shores.

Tim Farron is the leader of the Liberal Democrats. To join the party, visit: libdems.org.uk/join

Tim Farron is leader of the Liberal Democrats.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue