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 rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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