Gender and casino capitalism

I hate to get into reductionist pop psychology but it is very evident that the vast heaving masses of traders one sees in all the photos of trading exchanges, and the leading lights of economic (mis-)governance in the west overwhelmingly come from one race and one gender.
What is it about so many (white) guys and their addiction to risky behavior that encourages them to shrug aside regulation of their betting games (that is, our financial markets) whenever they can?*
It is interesting, therefore, to read this story about Brooksley Born, a now-retired woman in her late 60s, who as head of the US’s Commodities Futures Trading Commission (CFTC) back in 1998 sought to regulate private derivatives contracts, warning that left unregulated they could “pose grave dangers to our economy.”
Well, she lost that round to Alan Greenspan and Robert Rubin, who argued that the CFTC didn’t have jurisdiction and refused to let the institutions they headed (the Fed and the Treasury Department) do anything to help with the task.
The Bloomberg piece linked to above notes that Born had been one of the first women admitted to Stanford Law School back in the 1960s. The article’s two (male) writers also say:

    While described as smart, charming and analytical by friends and colleagues, Born was seen by some as stubborn and lacking political savvy.

Hey, why didn’t these anonymous sources just seek to additionally demean her by describing her as “shrill” or “witch-like” while they were about it?
More recently, of course, the white guys who are sitting atop of all these roiling and deeply toxic markets have come to the conclusion that, gee, yes certainly the derivatives markets need to be regulated if capitalism is to be saved…
And that includes Greenspan , who now acknowledges he was “partially” wrong to oppose such regulation back in the 1990s.
The authors include this quote from Joseph Dial, who served as a CFTC commissioner from 1991 to 1997:

    “Brooksley was a voice crying in the wilderness…There’s no question in my mind, the current financial debacle had its genesis some 10 years ago.”

Of the US’s top economic regulators/officials right now, FDIC head Sheila Baer is the only female. And of the 17 members of Obama’s Transition Economic Advisory Board, only four are female.
… On a related note, Willem Buiter wrote this interesting analysis of the members of Obama’s TEAB. His conclusions?

    * They’re old!
    * Too few serious economists!
    * Far too many lawyers!
    * They are protectionist!
    * They are the unalluring faces of past failures!

I think all these are valid criticisms, except for the one about protectionism. The comments Buiter makes under the last of those rubrics are particularly to-the-point. I tend to agree with his judgment that Paul Volcker may the best of this admittedly lack-luster bunch.
But I wish he had also noted the gender and ethnic/racial imbalances on the board.
And besides, one of those on the board is Larry Summers… who has still not performed anything like an adequate mea culpa for the demeaning comments he made about women’s intellectual capacities back when he was at Harvard.
Fwiw, my bottom line on the issue is that females have just the same amount of intellectual potential as males, but that women tend to have different life experiences and social environments which encourage many or most of us to look at issues in social life in ways different from (and in general, more holistic than) the often rigidly linear thinking style used by most men.
An understanding of human psychology is, of course, central to any understanding of economics, and especially the psychology of markets. If economic actors really were all rationally optimizing, strictly self-serving versions of “homo economicus”, as traditional western economists considered them to be, they would still be capable also of looking beyond their immediate, narrow self-interest and take into consideration the health of “the market”, or “the economy” in general.
Instead of which, far too many of the “pioneers” and other players within the largely unregulated casino capitalism that has arisen in the past 15 years have been looking only at their own position relative to that of claimed peers or competitors… “If Trader X down the hall just bought his third Lamborghini, why, I have to get one too”… And what they haven’t taken into account are the interests of society as a whole, or low-income or other non-“trader” people within it, or the health of the supporting economy as a whole. Most women, I would say, would think more holistically about these matters and these social responsibilities; and be far more wary about engaging in very risky trading behavior.
(I’m just reading Kindleberger and Aliber’s classic book “Manias, Panics, and Crashes.” It has some great material about the dysfunctionality of the psychology of many participants in the financial markets.)
* One final note here. Of course J.M. Keynes, J.K. Galbraith and many other humanistic and “holistic” analysts of economics were also white men. But it is the heaving masses of participants in commodities and derivatives markets I’m criticizing here, along with the older white guys who run the firms they work for, and the people–overwhelmingly white and male– who run the relevant government departments, congressional committees, etc that in the 1990s were, in effect, “bought off” not to regulate, or to actively deregulate, those markets.

5 thoughts on “Gender and casino capitalism

  1. Don Bacons

    In economic affairs as in foreign affairs America has a drug problem, an overdose of a dangerous drug, testosterone, which has resulted in over-abundant adventurism and a failure to ask for directions. Where is the new Lysistrada?

  2. bevin

    And then there was Margaret Thatcher whose government was such an inspiration to (neo) liberals everywhere.

  3. vadim

    It’s funny, just as you think Obama’ advisors might be “too old” or “too white” to do their jobs, a lot of people probably think Obama is “too black.” I doubt that demeaning racist and sexist caricatures is a more “holistic” way of discussing politics.
    FWIW the CFTC has also been run recently by Wendy Gramm, who is neither male nor white.

  4. vadim

    Come to think of it Enron was filled with female higher ups, including Wendy Gramm. Louise Kitchen and Lynda Clemmons I think each were featured on the cover of Forbes (clemmons riding her motorcycle.)
    if anything women are better represented in fields like trading than in other spheres of banking, chiefly because the work can be performed from home and the hours allow for things like maternity leave.
    As far as “white guys” sitting on top of the markets, I suppose Helena that Asian, Middle Eastern and African men and women have no hand in the workings of financial markets, oil especially? Here for your reference is a picture of Edmund Daukoru, OPEC’s former president:
    http://nigeriaworld.com/images/news/big/niger-delta/former-opec-president-edmund-daukoru.jpg
    To be sure, the pit trading grunts featured on CNBC are all heavyset white guys from staten island, but exchange floor types are at the bottom not the top of the food chain. More and more they’re being replaced by computers – at NYMEX eg the futures pits are almost deserted.

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