I have always understood the interplay between Government and business is where the real dramas of political/economic philosophies develop and are enacted. I must admit that the real shock came for me when I realised that far from living in a Lockean vision of truth, freedom, peace etc, that our systems owe themselves more to the rather appalling ideas of Thomas Hobbes. Lock inspired an egalitarian balanced society, Hobbes advocated a return to an unending feudal society.
That is what we have now, albeit updated. A resurgent feudal society.
Consider the feudal model, we all remember the 5 different layers, a king at the peak, his barons underneath, the minor nobility next, the knights next and everyone else at the bottom. Aside of the pyramid, the priesthood, the Church, who were given privileges in return for their confirmation of divine support for the king. The modern model is almost exactly the same, repeated, overlaid, and not as clear across society, but it is there none-the-less.
Instead of one king, we have many, called major shareholders. Instead of barons, we have CEOs, instead of minor nobility we have upper management, instead of knights we have minor shareholders and at the bottom we have workers. Aside, we have two elements, that support the major shareholders, government, which provides protection with a legislative framework and the media, which delivers the messages of the major shareholders. (Both those organizations are feudal in their structure as well, just as the Church is still.)
But why? Why is there a renewal of emphasis on a previously discarded social system? I offer three main reasons, economic, political and psychological.
The first two are obvious, but the third, well.. not so clear, but very real.
The feudal system offers the most clear hierarchical structure for any organization. Each layer of management has reciprocal rights and responsibilities. These are clear and obvious, and dealt with under a variety of labels in any book analysing business. Politically, the same thing exists. One President, Prime Minister, lots of Members of Parliament, Duma, Congress, with Senators, Lords, or whatever other label applies, a Public Service of some type, then the enforcement arms, military and police, then the general public. Again, each layer has a set of reciprocal rights and responsibilities, and these are frequently jealously guarded or can be made very flexible depending on the prevailing attitudes.
Inherent in these structures is the very simple message “Obey – or else!” How long will your career last if you do not obey? How many promotions will you gain if you argue a lot? How long will you avoid a speeding ticket if you never drive under the speed limit? How long will your hobby of serial killing last if you keep at it? Non-compliance incurs the wrath of the powers that be, so we are socialized to comply. But what of those people who do not comply?
This is where my third reason, (above) psychological, comes in.
The non-compliers fall into three main categories, and each category is sub-divided into smaller groupings. The first, and most obvious group, are the criminals. Most crimes are a matter of geography and social circumstance, e.g. “The Daily Planet”, in Melbourne, is a publicly listed brothel on the Australian Stock Exchange. If I was to invest in it, I may be prosecuted for profiteering from immoral earnings in my home city of Adelaide. Publicly smoking a joint in Amsterdam is very different than publicly smoking it in New York. The list goes on and on. Other crimes are commonly held to be damaging to society so are pretty general, but the penalties vary greatly from location to location. No matter what the penalty though, the crimes are still committed – (usually for the same reasons, but that is for another time). Prison for non-compliance, when caught, and frequently a shortened life expectancy, (violence or other lifestyle issues threaten early mortality).
The second group of non-compliers are the conscientious objectors. Some reject society altogether, and run away to isolate themselves in a wilderness. Some are fringe dwellers, usually homeless, can be lost in alcohol or drugs, they are frequently persecuted minorities, often itinerants. These groups often operate in a twilight between petty criminal and semi-legitimate employment, cash in hand work mainly. Rarely participating in the mainstream benefits of social membership, like health care and so on, the conscientious objectors have hard lives, and non-compliance frequently results in a shortened life expectancy.
It is the last group that is the most interesting of the lot – and the most dangerous. These people comply with social rules, they can even prosper, sometimes extravagantly, but they are not part of society, they do not believe in it, they do not support it, it is there for their convenience and gratification. They have no conscience, they are completely selfish, they are the narcissists and the psychopaths amongst us.
I mentioned serial killing above for a reason. There are, in reality, few serial killers. There have always been people who’s moral compass rarely points north. In history, I suspect many such people have been able to climb to the peaks of their societies by murder, legitimizing it by their success, the gaining of a throne. Rome, Japan, China, England all had such rulers. Today, they cannot mount a throne, so they are limited to being highly publicised serial killers, about whom movies are often made. Even fictional psychopaths, e.g. Hannibal Lecter, have found their way into our collective consciousness. But I want to dismiss these as irrelevant to the definition of a psychopath I am applying here. The modern psychopath is more likely to be a business leader, a CEO or even a Major Shareholder.
Violent psychopaths are far fewer than the media would have us believe. Not all psychopaths are violent. According to Martha Stout, (The Psychopath Next Door) the percentage of psychopaths amongst us could be as high as 1 in 25, or 4%. Robert Hare uses an even tighter definition of psychopathy and still realises a figure of 1%. These do not sound like much, but in a population of the US, 314 million, that means between 3.14 and 12.56 million psychopaths are alive and not so well in the US. In Australia this translates out at between 220-880- ,000 people. Terrified yet? Don’t be, you probably work with one or more and you don’t even realise it. Likely, they don’t even realise it. There are so many of them amongst us, it is inevitable some will rise to become CEOs and Major Shareholders. And it is at that point that they are most dangerous.
Serial killers wreck families, but psychopathic CEOs, bankers, Major Shareholders, Presidents, professors of economics, and other respected members of society, can combine to wreck economies, entire nations, all without conscience. Who is the more dangerous?
Some psychiatrists and neuroscientists, like James Fallon, have a barrage of tests and scans that can indicate degrees of psychopathy, and my money would be on more than half our business and political leaders being psychopaths. I would include people who’s names are mentioned in the press every day, and the quiet, very, very powerful families of whom mere mortals have never heard of. (Interestingly enough, Fallon accidentally found out that he himself is one such and his book, The Psychopath Inside, makes for an interesting read.)
What is it then that I mean when I use the term “psychopath”? Psychopath has become something of a generic term to mean someone without a conscience. That is, they can never feel guilt, or pity or love, or sorrow or grief. They do not know how. They do not understand these emotions. They cannot adequately assess risks, personal or professional. This, you might think would make them ideal for killers, or soldiers or criminals, but the reality is, while the criminal ranks have a disproportionate number of psychopaths, the majority of such people are not criminals. (A recent survey of imprisoned Italian Mafia revealed few psychopaths.)
Robert Hare maintains that he would have gained a better understanding of psychopathy if he had spent more time on Wall Street than in the prison service. It is there, on the stock markets and political capitals of the world where the real criminals have been gathering.
My evidence for this? In the 1960s, the Chicago School, under Milton Friedmann, began developing its theories of economic development. The conservative nature of Friedmann was going to act in a way that was contrary to Keynesian practices that had endured since 1945. Like anything new, it was going to reach a certain level of success. That success, in South America, attracted the attention of the Conservative Right and by 1980 was in full glare with the elections of Maggie Thatcher and Ronald Reagan. The core philosophy is “competition is good.” Ergo, a lot of competition is a lot more gooderer. This implies the brakes have to come off, right off. No regulation, no government interference in the market, let it run freely. (“Laissez faire” all over again with similarly disastrous results.)
This has a huge set of implications in a range of areas, but here I am only considering personnel. One of the changes encouraged was the reduction of middle management. Fewer jobs means higher competitive responses from applicants so the quality of applicants has to rise. Sounds good, but reality is that it hasn’t worked like that.
Many large organizations outsource their HR. This means that job applications are taken from anywhere and everywhere, insiders, outsiders, half a world away if the job is highly paid or profiled enough. Applicants provide resumés, personal statements, “vision statements” and the nett effect is that it is so much tripe.
Job applications no longer rely upon personal perceptions of middle managers. Considerations about how they view someone in their team, about how that person works, how they get along with other people, the personal qualities of candidates viewed over a long period of time no longer count.
The quality of spin applied to achieve a desired position has improved over time, to the point where even job titles are obscured to be more positive than they really are. For example, the tea lady is a supply manager, an assistant director is a very different role than an assistant to the director. Also, a CEO of a two person company that did nothing is not the same as a CEO of a national organization. What is worse, referees are quite frequently no longer reasonable, accurate or even honest in their references.
The risk of being sued for a poor reference has become such a danger that many referees are so circumspect in their language that potential employers cannot get the real information they require to assess an applicant. Even if a company is asked if they would employ the applicant again, if they were separated, they cannot answer properly. Many company’s now operate a “once only” policy, if you leave once, you cannot come back. The only time bad news is passed on is when a company declares an employee was terminated “for cause”, (usually implying theft) – but even that is not done often.
So, the triple-barrelled weapon aimed at the head of a company’s employment practices is primed and ready. The checks on a person’s qualifications do not always achieve the right measure of accuracy. The referees are not always helpful and the applications themselves are far better fictional writing than we would like to believe. Sometimes, the gun goes off. The successful applicant is often the most successful liar and the most successful liars are the ones without a moral compass.
In Australia we had the amazing spectacle of Craig Thompson, former union official, now former Member of the House of Representatives, stand up in Parliament and blatantly lie. His lies were so well told that most of us were sucked in, how could we not believe this person. He had answers for everything, his body language, his expressions, his logic was impeccable – but he lied, everything he said was a lie. Thompson was found guilty of a number of criminal offences in a court of law. Essentially Thompson attacked us on a level we just cannot defend against – this is what psychopaths and narcissists are good at.
The difference between a narcissist and a psychopath is simple, the psychopath has no conscience, the narcissist has half a conscience, that is, they can experience emotion when it applies directly to them, but they cannot relate that emotion to anyone else. Narcissists are only half-psychopathic, but only in the context of themselves. They will make the same decisions as a psychopath, as long as they clearly benefit from it – who cares if no-one else does?
When these people reach positions of power and influence, there are no clear rules, no risks that cannot be taken, no consideration of the impact of their behaviour on anyone else. This lies at the heart of the recent GFC. This is why Enron, Lehmann Bros., and so many others could do what they did, ethics and morals took a back seat to existentialist planning and risk taking.That is the hallmark of conscienceless thinking, psychopathy. The people making decisions were thought to be crazy, but after, not before. Everyone ignored the obvious lack of common sense – and that is the usual response to psychopathic behaviour.
The real problem is that many of the current leaders have been selected using the employment practices outlined above. How many of them are not what they say they are? How many are toxic?
In the end we are left with two real problems. First is how can we trust the people in charge of the economic apparatus not to gamble it away? Second, how can we stop them from doing the same things over and over again, until completely wrecking the West? I suggest we currently cannot and we are seeing the “Decline and Fall of the Western Empire”. Alternatively, list probity as a sign of mental illness, as one wag has put it.
Probity in behaviour is a desirable quality, but usually ignored. Who wants a CEO that will not do everything and anything to make profits? Shortly before his death, Sir Barton Pope, an icon of manufacturing in my home town, was asked what he thought was his greatest achievement. His response could have been any number of things, but his reply was simply, “Giving employment to three thousand people.” In the modern world, I suspect he would be considered an anachronism.
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