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The IMF, psychopaths, and the Greek fascists October 10, 2012

Posted by larry in economics, Psychology.
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James Kwak in his blog has mentioned a recent paper dealing with inequities in the distribution of wealth and the consequent instabilities that can be caused by this. It is “Instability and Concentration in the Distribution of Wealth” by Fernholz and Fernholz — http://www.ricardofernholz.com/Redistribution.pdf.

I think this model has something to recommend it. It shows, as Kwak himself says, that wealth accumulation has very little to do with skill and more to do with luck. But more importantly, it shows I think that unless a society actively prevents this sort of accumulation, it will inevitably occur if society is arranged in the way this model assumes. I think it is clear from considerations such as this, among other things, that certain societies have not just facilitated this accumulation process but have encouraged it and indeed enhanced it. While this is an obvious triviality empirically, it is nice to see a model supporting it however obliquely. Since I am uncertain whether our politicians know what they are actually doing, I can’t say whether they have arranged this deliberately. They bullshit so much that it is impossible to tell.
      I would like to comment on something Bill Mitchell said about IMF staff. While I agree with him in respect to the staff of the organization in general, indeed for most organizations, I think it is necessary to distinguish between the top staff and those lower down. Some psychological research tends to show that an unfortunately large proportion of CEOs are sociopathic. As I define this, distinctly from Robert Hare, this means that such people will act psychopathically in certain social roles or in certain situations. This is distinct from what could be called a true psychopath who acts psychopathically in all situations and in every social role. Most sociopaths are what is known as ordered psychopaths. Physical violence is not what they do; they engage in what could be reasonably described as emotional violence, which of course can destroy people’s lives. Bullying does not quite cover the phenomenon.
      More than one bank CEO was certainly psychopathic at work. How they acted outside the work environment I don’t know, therefore can’t say whether they are true psychopaths. And it really doesn’t matter for our analytic purposes. Sociopathic individuals are just as destructive as true psychopaths, in those situations where they act out their psychopathologies. Working with some of them was apparently a nightmare. For one, morning meetings were known as ‘morning beatings’ (mentioned on Newsnight). Perhaps people like this should be locked up but the law doesn’t quite know what to do with people who inflict only emotional trauma that is unaccompanied by physical violence. The onus is on the person being treated badly to deal with it either by leaving the situation (in most cases like this, the job) or engage in some other action, such as lodge a complaint, which usually is counterproductive — the sociopath is not dislodged and the complainer may be fired or demoted.
      What is extraordinary is how so many people are unwilling to accept that someone they know, who is known to act badly, unless they act as badly as some have bee known to, is sociopathic or psychopathic. All kinds of excuses are employed in order to excuse the sociopath’s behavior. Even by people who have nothing to lose. Hare believes that most corporations, and this must now include I think other institutions, like universities, have become increasingly psychopath friendly. So, instead of being sidelined or fired, they are promoted. Bureaucracies don’t seem to be able to distinguish between charismatic leadership attributes and psychopathic charm — successful sociopaths, indeed some violent psychopaths, are often quite charming. And unless you know them well or investigate them closely, it is difficult to tell the difference unless you are deliberately looking for them.
      Another thought, this time about the fascists in Greece. It seems to me that they are acting as an elementary welfare organization, handing out food and the like. The US Democratic party, during the thirties, forties, and part of the fifties, did the same. If as a young man, say, you went down to Democratic party headquarters and said you needed a job, they would check out to see whether your family was democratic and assess your affiliation. If all went well, they would find you a job. They expected loyalty in return, in particular, you voting democratic in the next and subsequent elections. As the fifties wore on, this function disappeared. Mostly for two reasons. The democrats were co opted into the neoliberal mindset and the welfare state worked well and was seen to be working well, though the state’s activity in this regard was not seen in this light.
       Implementing an elementary welfare operation is a brilliant tactic on the part of the Greek fascists. It is only working at all because the welfare operations of the Greek state have become virtually impossible to implement due to the austerity imposed by the Troika. Since I think it can be fairly assumed that the Troika do not wish to bring about the resurgence of fascism, and since it is unlikely that they are all idiots, the program they are implementing is probably a mixture of snobbery, bad ideas, and incompetence.
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