The Sociopathy or Sociology of Traders?

On the sociopathic side, we have this:

And I mean the Santelli rant, which I do not want to embed from YouTube because the comments there are just vile. But do listen to the crowd of traders that surround him, note when they cheer and when they boo.

And then, there were the Enron traders that "managed" the California energy crisis:

Enron – The Smartest Guys in the Room, both the book and the film are worth everybody’s time.

This leads me to a post by Denis Colombi (yet, again) on the sociology of trader compensation prompted by the French government’s intention to cap said compensation. Let’s follow Colombi’s analysis:

The Trader as Myth

In the current context, the question of traders’ compensation (translation: the humongous bonuses) have made headlines and attracted political attention. By and large, and following Bourdieu, Colombi argues that compensation reflects not just their position within economic structures of remuneration but also within symbolic structures reflecting relationships of legitimacy as part of their power position in the field of economic relations. The myth (as in foundational culturally-accepted story) of the traders serve to provide legitimacy to their compensation, that is, to make acceptable for a variety of actors, especially political actors. In the current context, one could argue that traders are facing a crisis of legitimacy: their compensation is now viewed with some skepticism even though the structure of the field itself might remain unaffected.

So, what is the myth or social representation of the trader? Christian Bale in American Psycho? The trader has become a shortcut for any kind of "Wall Street" worker, a player in the world of wealth and finance (Colombi also mention the crush of my youth, Largo Winch although the feminist in me might probably cringe at some of the stuff). The trader has also become personified in the media through the highly-publicized cases of Nick Leeson and Jérôme Kerviel, embodying the typification (in Schütz‘s sense) of the trader. The persuasive strength of the representation is based on the idea of extreme power that can impress as much as terrify because competence at playing high-stakes financial games is borderline sociopathic. The Golden Boy can easily be turned into the psycho-killer but both representations involve some super-human powers in terms of capacity to influence and manipulate social reality on a global scale… which is why the two traders mentioned above contribute to the persuasiveness of the myth of the super-powerful being who can single-handedly destroy giant transnational financial institutions as much and generate enormous wealth for them.

Traders have power of life and death (in terms of employment and livelihood) over the masses below them on the social ladder. In that context, indifference to human life is a job qualification. The price to pay for enormous competence only accessible to a few. After all who can understand global financial mechanisms (not even the players themselves apparently)… Didn’t Thomas Friedman tell us years ago that no one was in charge of globalization? Traders are the only ones who have access to the esoteric knowledge that allows them to navigate the global financial system and manipulate it. At least that’s the representation.

When it comes to compensation, their stratospheric levels are based on two elements of the myth, according to Colombi:

  1. The trader has an important job involving high risks not just for him (he’s a man, of course… capitalism ain’t for girls or the faint of heart) but for society as a whole, as exposed by the financial crises experienced by the global system in the past 20 years.

  2. The trader needs these super-human qualities to exercise such a dangerous function. In order to properly "work" the system, he needs certainly some diplomas and degrees (as classical or traditional legitimation) but also to be exempt from some of society’s moral restraints(I might add) along with charisma and exceptional personality.

All this is part of the justification discourse on high compensation.

In times of economic crisis, these elements can turn against the traders or their employers (the Enron tapes were damning for the entire company). In good times, the traders are treated like the high priests of global finance, endowed with special knowledge, incomprehensible for us mere mortals. But this means that when things go South, the entire class suffers from contestation of their power and a loss of legitimacy. After all, society lets them roam free based on the idea that they will police themselves (like that ever worked) and besides, one for the source of legitimacy of the traders is the principle of rational efficiency: the good ones make money, the bad ones don’t and the system sorts them out without any need for outside interference.

When things become critical (as "in crisis"), all trading activity becomes "speculation" as the questionable activity of gambling for gambling’s sake without any social utility. In this sense, speculation becomes the archetype of the disembedded economic activity but with devastatingly real consequences that the traders never considers or suffers. All of a sudden, societies discover in their midst social actors with no sense of citizenship and civility.

Trading Power (pun intended)

For Colombi, as much as the crisis might cause a loss of legitimacy of the traders, as class, it does not undermine the relationships of economic power that underpins their existence as class, again. For instance, high compensations are presented as a means to motivate them to work harder and more effectively (Thanks, VeganProf for finally explaining the difference between effectively and efficiently to me!) in the interest of their employers and not just themselves. However, the bonuses that have been so discussed and questioned (by Presidents Sarkozy and Obama, for instance) are not distributed on a class basis but on an individual basis. If bonuses are incentives, as the common discourse goes, rather than rewards, they cannot be attributed individually.

Citing Olivier Godechot‘s work, Colombi proposes an alternative: rather than rewards or incentives, bonuses are part of hold-ups (ransom?). When an individual loses or leaves a job, s/he takes with her/him a body of knowledge, competencies, information and relationships which will allow them to demand greater compensation from her/his next employer who will want to acquire such knowledge, competencies, information and relationships, all social and cultural capital that can be translated into economic capital. And these social relationships are essential. Far from being a purely rational world dominated by abstract laws, the market is actually highly personalized (hence the importance and utility of economic sociology). The possession of a network of relationships is therefore a major source of power especially when the individual trader is the only link between two other nodes in the network.

However, social capital takes time to build along with a network. This means, according to Colombi, that the banks, as employers, invest in a trader for the months that it will take for him to build social capital in a profitable fashion. The problem is that social capital is highly transferable once someone has it. The return on investment might go to another employer. As much as social capital is collectively produced (it takes more than one individual to create it), it is individually enjoyed and will derive high financial compensation for whoever possesses it.

And indeed, when talks of capping or even eliminating bonuses started in the United States, for companies that took bailout money, the pushback from the financial world was immediately that the oh-so competent traders were all going to leave and go work in other countries, for competitor companies. For Godechot, this potential blackmail ("give me my bonus or I’ll leave and you’ll be hurt") is the equivalent of the armed robber holding a gun to the cashier’s head. Is it only hold-up or truly hostage-taking?

The Globalization of Beheadings

Stirling Newberry connects the dots (he’s not just a brilliant economist, you see):

Here are my two cents: There are different types of violence in society:

(1) Interpersonal violence (getting mugged on the streets),

(2) structural violence (when social conditions such as poverty, lack of safety or security, hunger, etc. are experienced as violence with the same consequences as interpersonal violence), and

(3) symbolic violence (the cultural and social, and yet unrecognized as such, modes of social domination, such as distinction practices in culture and schools, but also in gender relations)

There different types can overlap, of course, and there seems to be a positive correlation between the level of structural and symbolic violence in a society and its level of interpersonal violence. That partly explains why Scandinavian societies have lower levels of all three types compared to the United States, which has more of all three overall.

Back the beheadings: these are forms of interpersonal violence, to be sure. But beheading is not just any form of killing. It is dehumanizing and demeans the individual, both forms of symbolic violence. The Mexican and Saudi societies are both interpersonally and structurally violent, for different reasons and the Saudi society is based on persistent masculine domination where every aspect of culture is "coded" in such terms (ergo, symbolic violence). The Mexican society is enormously structurally violent, as we can see in the case of Ciudad Juarez, which leads to much interpersonal violence as well as organized violence by criminal networks.

As the global economy continues to go down the tubes, and religious fundamentalists of all tripes try to gain or maintain the upper hand and criminal organizations step in to fill the economic gaps, this might translate into a surplus of violence on the part of both groups as it is their main mode of asserting dominance.

Witch Hunts (Literally)

After the killings of Albinos is Tanzania for traditional "medicinal" purposes, now we get real witch hunting in Papua-New Guinea:

The good thing about these Amnesty International press releases is that we hear about stories like these that would go completely unreported otherwise.

The frustrating thing about these press releases is that there isn’t much in terms of social background and context to explain the resurgence of these kinds of killings. I know AI focuses on the human rights violations and works to obtain justice for the victims, but from a sociological point of view, it does not help understand why this is happening there and now.

Colonial Dumping

Nice New International Division of Labor we got here: we produce garbage and we send it to poor countries… Larry Summers would be so proud. Maybe Jeffrey Sachs can also make the argument that stripping toxic waste is the best job these people can hope to have, so, it’s all good.

Why The Lack of Coverage of THAT OTHER Mom?

The one that got beheaded by her husband? And why the scare quotes?

Will we see death threats directed at the murderous husband and his attorney(s)? Calls to have his children taken away? Nasty calls for his sterilization? Any discussion of patriarchy and misogyny (just like there are discussions of the evils of single motherhood)? Any dehumanizing nickname… "Chop-off Dad"??

“It’s the working class folks who end up paying the most for the crimes of elite”

So says another great post by Todd Krohn on the stratified nature of the economic crisis, bailout and stimulus:

Just go read the whole thing.

Economic Depression and Fascism

Serenis Cornelius, over at the great blog Comprendre L’Actualité Economique (in French), has an interesting post on the connections between economic depression and fascism. I’ll summarize the main elements of the post

This is, of course, related to the historical connections made between the Great Depression of the 1920s and 30s and the rise of fascism, Nazism and Franquism. It is conceded that the rise of totalitarianism is partly related to the financial collapse of Western economies then.

Are we in a similar situation today? Impossible to tell, of course. What we can do though, is notice a few signs that point in a certain direction. First, as SC notes, one can note the strong and deep social inequalities in Western societies, along with rising unemployment along with discrete social elements which, if connected, could lead to the rise of totalitarian forms. What are these social elements? These are elements that make a society fascist-ready. Five characteristics are relevant here:

  1. A triple rejection within the population of Parliament, the Market and Education. There is contempt for elected representatives (all lazy, self-serving and corrupt!). There is also the rejection of the Market as the law of the jungle, and yet manipulated by the elites for their own profits at the expenses of the rest of the population. Finally, the Education system sees its legitimacy contested in that it does not seem to provide for equality of opportunities but rather allows the elites to maintain their power.

  2. A rejection by the population but also of the media and the political class of any form of intellectualism, of all that is not pragmatic or has no immediate practical application. Basically, it is the rejection of the application of Reason because intellectuals are useless that can lead to the idea that intellectuals, writers, and professors are parasites with no useful skills. This is something that can be found on the right, obviously, but also on the left as well. This was illustrated recently by the different US political talk shows where Nobel Prize winner Paul Krugman had to “debate” ignorami media figureheads as if they were on an equal footing or where arguments such as “if economists knew what they were talking about, they would be rich” are considered as if they were something other than bar conversation. (See this post by Digby for an illustration of this trend)

  3. The success of conspiracy theories among the population, the media and the political class. One could make the case that this is the general MO of the religious right to whip their flock into a frenzy. But conspiracy theories are also used to attribute political and social phenomena such as unemployment, inequalities and poverty to the deliberate actions of certain groups who profit from such phenomena. Pseudo-intellectuals (famous A-list bloggers can be in that category) also populate this niche but are careful to demarcate themselves from the rational intellectuals who are object of contempt. It is in this context that scapegoats (internal and external) are found and labeled based on their nationality (illegal immigrants), race (brown people… Hispanics, Latinos, Arabs, etc.), social class (depending on the political spectrum: bankers on the left, stupid black people who borrowed too much money because the evil government forced the banks to loan to them on the right), sexual orientation (Gays!!), etc.

  4. The rise of heightened propaganda and other forms of non-rational discourse such as the appeal to emotions, guts, sensitivity to appeal to the citizen or the potential voter. The point is no longer to convince but to seduce, to move and to generate mystical feelings that will be exponentially experienced in big crowd meetings and rallies.

  5. The Nation becomes the only relevant (imaginary) community incarnated through politics, economics (Buy American!), in arts and sports.

SC thinks these elements are present in France. I think they are present in the United States as well and many of these are present in the Obama movement. The question for the social scientist is to determine whether these elements were always there to start with and if they are really amplified by economic conditions. After all, the American evangelical religious right has been around for a while and the movement itself has long historical roots that always reflected fascist tendencies.

As SC puts it, these five characteristics should be considered “ingredients” and they have to be mixed in a particular fashion, under particular circumstances to produce totalitarian forms. An additional ingredient is necessary for a society to become fascism-ready: the nation’s savior, the charismatic leader. the one who will be able to crystalize on his own person all the expectations of a traumatized population thrown into precarity, the one who will turn hatred and resentment into pride and, yes, hope.

And let me add my own editorial note: if anyone did not notice these traits in the Obama candidacy and movement was not paying attention. It was scary then, it is still scary now and these kinds of flame wars may seem trivial but they do reflect this (Corrente is holding firm on rational discourse and is then being attacked from all sides with insults and investives from the so-called Progressive blogosphere, pro- and anti-Obama alike).

Why We Need Deviants – Octomom Edition

I have posted about before about the now-famous "Octomom " (which sounds a lot like the title for one of those cheesy Scifi Channel Saturday night movies, if you ask me) and how the scrutinizing of her pregnancy was part of a more general aspect of patriarchy (for a slightly different view, see Jay Livinston’s comment in the same post). A similar point was also made more recently by Katha Pollitt:

Since then, there have been further development and analysis on this story that generated some interesting commentaries. First, the main aspect that had attracted my attention was how quickly the story had morphed, in the media, from the "miracle births" to "the return of the welfare queen" (and I can’t even imagine what the level of venom would be if the mother was African-American). That bile has spilled over into society in the form of death threats:

Now, there is no denying that there is always a deranged fringe in the American society that is prompt to threaten death at the first sign of what they perceive to be a threat to civilization. This usually comes from the far-right, religious fundamentalist crowd.

But there us no doubt that the hostility that has emerged against the "Octomom" (quite a dehumanizing nickname) is in itself an interesting phenomenon for the sociologist in that it brings to light some underlying aspect of our culture and social norms when it comes to motherhood. So, what norms did the Octomom break? After all, we do not impose limits on how many children people have. But we do have a culturally constructed image of "what motherhood is" against which we evaluate real life mothers and pass judgment.

Indeed, the Welfare Queen was the successfully propagated stereotype of the promiscuous black woman who keeps popping kids and collecting welfare and driving Cadillac with all the money the state coughs up for hers and her kids upkeep. Never mind that the stereotype never matched the reality of welfare recipients (stereotypes hardly ever match reality).

In our collective imagery, "ideal" motherhood is white, heterosexual, and married and has the children in sequence (again, see that "other" oh-so white, straight AND thoroughly patriarchal family with 18 kids who gets a TV show instead of the venom directed at the Octomom) or the kid glove treatment for the FLDS even though there is no doubt that abuse takes place within that community.

According to sociologist Sally Radkoff, the anger dorected at the Octomom follows from her breaching specific norms:

Radkoff also emphasizes the social class dimension to childbearing: you can have as many children as you want… as long as you’re wealthy and it’s not going to cost society a dime.

There is one additional dimension to the outrage directed at this woman and especially the fact that she has not been embraced by the religious right and the anti-choice movement. For many in that crowd, despite idealized and heavily religious imageries of children as gifts from God and motherhood as the natural state of women, they tend to see pregnancies as slut-punishment. Birth control and abortion should not be legal because then, women would have sex autonomously without having to fear the potential punishment in the form of being stuck with a kid for the next 20 years or so.

Well, that does not work here. Suleman has had her children without sexual intercourse. So, technically, she does not fit the definition of promiscuous. But she’s not married either and she claims her autonomy to have as many children as she wants… hence the most successful (that is, the one that sticks) is that of "who’s gonna pay for your brood?".

Bottom line: this is one big reminder to all women who rank low on the social ladder: you’re only allowed children if you can afford them and only one at a time, with a husband… oh, you’d better be white too.

The big outrage is a great example of the Durkheimian functions of deviance. This woman violated our standards of ideal motherhood. There is a price to pay for that. When it comes to women’s bodies, society, in the form of various social groups and collectivities has a right to inspect, scrutinize, and judge… And to impose sanctions that can take a variety of forms (such as nasty comments on blog posts or death threats) but all involve some degree of reassertion of social control over the offending woman’s body ("Spay her!") and social stigma.


You don’t read that every day:

So, what exactly will GSK do?

I wonder how long GSK’s shareholders are going to keep him as CEO?

More seriously, this is not the first time a pharmaceutical company does something like this. If I remember correctly, Merck donated the anti-Guinea worm medication for free some years back.

Second, how much will this undermine generic medications companies? Will it drive their prices down or hurt them significantly?

Third, maybe this guy is just one of these social entrepreneurs that Muhammad Yunus has been calling for to develop his model of social capitalism.

Honor Killings as Caste-Based Phenomena

I have blogged quite a bit about honor killings in the past, but mostly, I have pointed out the gender aspect of it as part of maintaining a patriarchal structure. In the case below, there is an additional aspect to honor killings:

In this story, the killings are used as a means of enforcing caste-based boundaries and as social sanctions, inflicted by the dominant group, against those who dare to trespass from below on the social ladder. In this case, the gender dimension is eclipsed by the social necessity to retaliate against, and sanction, the entire group rather than just the individuals directly involved.

In previous stories, the girl is usually the one who’s murdered by a male relative. Here, it is the family of the boy who is killed for caste boundaries crossing. Mass violence is then exercised as a planned form of social control. The deviant behavior that is sanctioned is that of the boy’s family. In this sense, the sanctioning of deviance serves the social purpose of reminding everyone in the community that caste boundaries are not to be crossed.

It is still a case of patriarchal system if by that we use the meaning of patriarchy as outlined by Goran Therborn, as NOT male power but as the rule of the father. This case also underlines the persistence of of the idea of individual relationships as collective and community matters where privacy has no meaning. IT is a Western idea to treat such relationships as private and dyad-based… except when it comes to commercializing and commodifying them… then it’s a social matter as well.

In this sense, community-based life also constitutes a transparent / surveillance society without the high-tech gizmos, but through the reliance of traditional networks of information circulation and where interactions are strictly monitored for their conformity to the norms, especially caste-based norms that underpin the social structure.