Sex wars and the city

Martha Gill's Irrational Animals column.

There's a persistent opinion knocking around that blames the financial crisis on one small molecule: testosterone. It is testosterone, apparently, that makes traders go feral as stocks rise, taking bigger and bigger risks until Lehman Brothers happens, or someone falls out of a window.

Women, then, goes the argument, are safer traders -so let's fill trading floors with the ladies. Naturally cautious, milder creatures, they make better investors. If women ruled the world, continues the logic, getting jovial now, lighting its pipe - there would be no stock-market crashes, and probably no, like, wars, either.

The argument is, on the face of it, pro-women. After all, it's saying women are good at something; they're good at not being overconfident. But is it feminist? Not really. Broad behavioural generalisations based in biology rarely do women much good. Along with "risk aversion" goes "less competitive" and "less confident". Banking may need these traits but they aren't attractive to employers, and it's damaging to saddle an entire gender with them.

So the argument isn't particularly feminist. But perhaps more interestingly, neuroscientists are starting to find that it isn't particularly true, either. It seems risky decision-making has more to do with confidence than gender. Being a woman, evidence suggests, only affects trading behaviour
as far as it's used to deplete your confidence. If you're told your gender doesn't like risk, it's surprisingly hard to go away and bet a million on the stock exchange with the right sort of swagger.

A recent study at Stanford University took 53 men and women - some bankers, some undergraduates - and gave them 14 risky choices. In each choice, a participant could either make a punt for a high sum, with a greater risk of failing, or go for a low-risk, low-pay option. The more frequently someone chose the safe option, the more risk-averse they were judged to be.

When the experimenters brought up gender stereotypes before the trial, women became overwhelmingly more cautious, whereas men took more risks. When such stereotypes were not used, men and women performed almost equally.

For the men, just knowing that women were negatively stereotyped made them confident enough to take riskier gambits. Expose a woman to typecasting and you knock her self-belief enough to produce the opposite effect.

Swat team

How can women avoid the problem? It's quite hard. The experimenters think even the process of shrugging off stereotyping - just thinking, "Nonsense, you total knob" - robs you of just enough energy to affect your decisions. They call it "ego depletion". Swat away a couple of negative comments and your next decision is more likely to be a safe one.

The study is provocative, not least because it invites extrapolation. After all, it's a bit of a coincidence that qualities "natural" to women - trying to please people, avoiding conflict, being self-deprecating - would be equally "natural" to any dominated and therefore less confident group.

I'm tempted to make the link.

Women: not as safe as all that, Getty images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

This article first appeared in the 02 April 2012 issue of the New Statesman, France is my enemy

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.