George Monbiot: The 1% are the very best destroyers of wealth the world has ever seen

[marmar]

The 1% are the very best destroyers of wealth the world has ever seen
Our common treasury in the last 30 years has been captured by industrial psychopaths. That's why we're nearly bankrupt

George Monbiot
guardian.co.uk, Monday 7 November 2011


If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren't responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.

The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. "The results resembled what you would expect from a dice-rolling contest, not a game of skill." Those who received the biggest bonuses had simply got lucky.

Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. "The illusion of skill … is deeply ingrained in their culture."

So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgment, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying? .............(more)

The complete piece is at: http://www.guardian.co.uk/commentisfree/2011/nov/07/one-per-cent-wealth-destroyers

[PoliticAverse]

1. Recommended reading: Fooled by Randomness...

http://www.amazon.com/Fooled-Randomness-Hidden-Chance-Markets/dp/1587990717

[RKP5637]

2. Well observed!!! "The psychopathic traits on which the bosses scored so highly,

Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.

In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that

if you have psychopathic tendencies and are born to a poor family, you're likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you're likely to go to business school."

[FiveGoodMen]

3. "captured by industrial psychopaths"

Just fucking exactly!

[yurbud]

4. ''industrial'' is giving them too much credit. I have some respect for people who...

build a business from the ground up or can keep a business a going concern without resorting to MBA tricks like layoffs and shell corporations to cook the books.

The problem is purely with the financial sector's ''money for nothing'' ethic, and it trickling down into actual businesses in the ways mentioned above.

If we are not going to close Guantanamo Bay, our government should at least do us the favor of scheduling a very long retreat for Wall Street execs there.

[fasttense]

5. American society rewards luck not skill.

50 years ago being a psychopath would not have helped much in getting ahead in business. But today the lucky psychopath can control our government. Just look at the Koch brothers.

[Prometheus Bound]

6. Daniel Kahneman's Guardian article is here. Fakery exposed.

These are some of the very highest paid members of society we're talking about here. There is clear evidence that they make their bonuses on sheer luck. There is zero correlation with skill. They could do as well rolling the dice.

Daniel Kahneman: How cognitive illusions blind us to reason

Mutual funds are run by highly experienced and hardworking professionals who buy and sell stocks to achieve the best possible results for their clients. Nevertheless, the evidence from more than 50 years of research is conclusive: for a large majority of fund managers, the selection of stocks is more like rolling dice than like playing poker. Typically at least two out of every three mutual funds underperform the overall market in any given year.

More important, the year-to-year correlation between the outcomes of mutual funds is very small, barely higher than zero. The successful funds in any given year are mostly lucky; they have a good roll of the dice. There is general agreement among researchers that nearly all stock pickers, whether they know it or not – and few of them do – are playing a game of chance.
http://www.guardian.co.uk/science/2011/oct/30/daniel-kahneman-cognitive-illusion-extract

[blkmusclmachine]

7. .

:kick: