The Economics and Politics of the Psychopath

The Gulags, the Chinese and Nazis Labor camps, were not the work of capitalists, but of capitalism’s enemies

BY JR NYQUIST

In November 2010 The Economist published a piece on psychopathy. The article suggested, however indirectly, that if psychopaths are packed into prisons they might also be packed into corporate boardrooms. It is, after all, the stupid psychopaths who get arrested. Perhaps the smart ones – being far more dangerous – go up the corporate ladder. According to The Economist, “The combination of a propensity for impulsive risk-taking with a lack of guilt and shame (the two main characteristics of psychopathy) may lead, according to circumstances, to a criminal career or a business one.”

In a short paper by Clive R. Boddy, titled The Implications of Corporate Psychopaths for Business and Society, the Corporate Psychopath is defined as “those people working in corporations who are self-serving, opportunistic, ego-centric, ruthless and shameless but who can be charming, manipulative and ambitious.” Boddy claims that psychopaths “may theoretically be present in organizations at senior managerial levels in much larger numbers than their approximately 1% incidence in the general population would suggest….”

Boddy’s paper claims that “Corporate Psychopaths are drawn to corporations as sources of power, prestige and money.” However, these folks are a “threat to business performance and longevity because they put their own interests before those of the firm.” In other words, psychopaths seek out situations where their tyrannical behavior and exploitive abilities will be condoned or even admired without actually caring if the business they manage ultimately succeeds. 

In a book titled Working With Monsters, Australian academic psychologist John Clarke shows how destructive psychopaths can be in the workplace. They present themselves as charming and efficient while, in reality, they are irresponsible and self-serving. Always in search of victims to enslave, the psychopath prefers to destroy rather than to build and should never be given authority over others. Yet, more often than we would like to admit, such people acquire positions of power for inflicting their petty tyranny on others. As Boddy wrote in his paper, “coming across [psychopaths] in organizations could present an employee with situations of harassment and humiliation.”

In an age of colossal financial loss – of Ponzi schemes at the corporate and federal level – there must be, somewhere in upper management, more than a few psychopaths. The damage done by such people may be incalculable. Think of the Savings and Loan crisis of the late 1980s and early 90s. Out of 3,234 savings and loan associations, 747 failed at an estimated total cost of $370 billion. Ruthless individuals, with no sense of responsibility, are highly dangerous when given management positions in sensitive organizations such as banks, investment firms, or government. In this respect, the news may be worse than we want to hear. Organizational psychologist Paul Babiak, author of Snakes in Suits, claims that psychopaths tend to rise quickly in business on account of their charm and readiness to manipulate others. While perfectly normal in outward appearance, the psychopath may appear to be an ideal leader. But in reality he victimizes everyone who relies on him.

According to Boddy, Corporate Psychopaths may appear to be “almost perfectly rational beings, with the important caveat that in making rational decisions they will put their own interests before those of the corporation they work for.” He then cited Hansen & Wernerfelt’s 1989 paper, Determinants of Firm Performance: The Relative Importance of Economic and Organizational Factors in support of the statement that “the critical issue in firm success is the building of an effective human organization and the presence of Corporate Psychopaths would directly affect such organizational development because they tend to be disruptive to those around them, especially to junior colleagues.” 

In original usage, a psychopath was merely someone with a sick mind. The term might be applied to all psychologically disordered or disturbed individuals. More recently the term has acquired a more precise meaning, and is defined by the Diagnostic and Statistical Manual of Mental Disorders (DSM) as someone with anti-social personality disorder (ASPD). Robert Hare’s Psychopathy Checklist, Revised (PCL-R) is a commonly used psycho-diagnostic tool for assessing psychopathy today. A Canadian researcher into criminal psychology, Hare offered the following checklist of traits: (1) Interpersonal/Affective, (a) glibness/superficial charm, (b) grandiose sense of self-worth, (c) pathological lying, (d) cunning/manipulative, (e) lack of remorse or guilt, (f) shallow affect, (g) callousness, lack of empathy, (h) failure to accept responsibility for his or her own actions; (2) Lifestyle/Antisocial, (a) need for stimulation/proneness to boredom, (b) parasitic lifestyle, (c) lack of realistic long-term goals, (d) impulsiveness, (e) irresponsibility, (f) juvenile delinquency, (g) early behavior problems, (h) revocation of conditional release, and (i) criminal versatility.

In the October 26 edition of the Chronicle Review, Kevin Dutton asked Robert Hare if modern society was “becoming more psychopathic?” Hare replied in the affirmative, citing “stuff going on nowadays that we wouldn’t have seen 20, even 10 years ago.” To clinch his point Hare referred to the “recent hike in female criminality” and what was happening on Wall Street. As Dutton succinctly put it, “the new millennium has seemingly ushered in a wave of corporate criminality like no other. Investment scams, conflicts of interest, lapses of judgment, and those evergreen entrepreneurial party tricks of good old fraud and embezzlement….”

But the Corporate Psychopath may not be the greatest danger of our time. Arguably the most dangerous psychopaths stand outside business, determined to destroy capitalism from positions in government and the media. In her speech titled America’s Persecuted Minority: Big Business, Ayn Rand warned that negative talk about businessmen must be regarded with suspicion in the present age. “Every movement that seeks to enslave a country,” said Rand, “every dictatorship or potential dictatorship, needs some minority group as a scapegoat which it can blame for the nation’s troubles and use as a justification of its demands for dictatorial power. In Soviet Russia, the scapegoat was the bourgeoisie; in Nazi Germany, it was the Jewish people; in America, it is the businessman.”

While there is real merit in worrying about Corporate Psychopaths, there is much more merit in worrying about political psychopathy. For what is our modern politician but a charming manipulator with a calculating mind? What else can be made of the lack of accountability we find in politicians today, or the glib way in which they deflect questions and criticism? And what holds out the promise of power more than politics? If a psychopath seeks power in business, he may yet be stopped by that accounting which all private businesses must make. If he enters politics, he need only repeat the big lie while turning his charisma toward the media.

Yes, indeed, Political Psychopaths have produced more victims than Corporate Psychopaths; and while we may read of corporate greed or embezzlement in the news, we may rest assured that the Soviet Gulag, the Chinese Labor camps, and crimes of the Nazis were not the work of capitalists, but the work of capitalism’s enemies.