Showing posts with label art. Show all posts
Showing posts with label art. Show all posts
Wednesday 29 November 2023
Friday 3 November 2023
Sunday 22 January 2023
Sunday 2 March 2014
In God we trust - all others bring data. The perils of data-driven cricket -
For all his triumphs as England coach, Andy Flower ultimately got the balance between trusting people and numbers wrong
Tim Wigmore in Cricinfo
March 2, 2014
Was Andy Flower ultimately empowered by data or inhibited by it? © PA Photos
Cricket is an art, not a science. It's a fact that needs restating after the disintegration of Andy Flower's reign as England coach. Slavery to data had gone too far. The triumphs of the more jocund Darren Lehmann, Flower's coaching antithesis, are a salutary reminder of the importance of fun and flair in a successful cricket team. And it's not only cricket that could learn from the tale.
Big data - the vogue term used to describe the manifold growth and availability of data, both structured and not - is an inescapable reality of the 21st century. There are 1200 exabytes of data stored in the world; translated, that means that, if it were all placed on CD-ROMs and stacked up, it would stretch to the moon in five separate piles, according to Kenneth Cukier and Viktor Mayer-Schonberger's book Big Data. Day-to-day life can often feel like a battle to stay afloat against the relentless tide of data. One hundred and sixty billion instant messages were sent in Britain in 2013. Over 500 million tweets are sent worldwide every day.
Kevin Pietersen was the subject of a good number of those after his sacking as an England cricketer. Amid the cacophony of opinions, one voice we could have done without was David Cameron's; the prime minister gave a radio interview saying that there was a "powerful argument" for keeping the "remarkable" Pietersen in the team.
Cameron had once recognised the dangers of descending into a roving reporter, promising, "We are not going to sit in an office with the 24-hour news blaring out, shouting at the headlines." Downing Street's impulse to comment on the Pietersen affair is a manifestation of information overload at its worst: with so much space to fill, politicians feel compelled to fill it. The result is that they have less time to do their day jobs.
| Flower's reign, for the most part, showed the virtues of using data smartly. But data is emphatically not a substitute for intuition and flair - either in the office or on the cricket field | |||
Datafication often brings ugly and perverse consequences. The easiest way to reduce poverty is to give people just enough money to inch them ahead of an arbitrarily defined definition of poverty, rather than tackle the deep-rooted and more complex causes. Schools are routinely decried for a narrow-minded approach to education - "teaching to the test" - but this is the inevitable result of the obsession with standarised tests. California has pioneered performance-related pay for teachers, but a huge rise in teacher-enabled cheating has been one unforeseen result.
No industry has been permeated by datafication quite like the financial sector. The complex - oh, so complex - algorithms that underpinned the financial system had a simple rationale. In place of impulsive human beings, decision-making would be transferred to formulas that dealt only in cold logic, ensuring an end to financial catastrophes. We know what happened next. Yet the crash has changed less than is commonly supposed: around seven billion shares change hands every day on US equity markets - and five billion are traded by algorithms.
The Ashes tour felt like English cricket's crash. The numbers said that it couldn't possibly happen; those who spotted the warning signs were belittled as naysayers letting emotions cloud their judgement. The Ashes series was caricatured as the triumph of the old school - Lehmann's penchant for discussing the day's play over a beer - over Flower's pseudo-scientific approach. While clearly a simplification - Lehmann is no philistine when it comes to data - the accusation contains a grain of truth.
Flower's attraction to big data originated from reading Moneyball, the book that examined how the scientific methods of Oakland Athletics manager Billy Beane helped the baseball team punch above its financial limitations. But it is too readily forgotten that the Oakland Athletics ran out of steam in knockout games. "My shit doesn't work in the playoffs," Beane exclaimed. "My job is to get us to the playoffs. What happens after that is luck." Not even Beane found an empirical way of measuring flair, spontaneity and big-game aptitude.
After the debris of England's tour Down Under, The Sun published its list of the 61 "guilty men" - including 29 non-players - involved in England's Ashes tour. It was hard not to ask what on earth the backroom staff was doing. And, more pertinently, if England's total touring party had numbered only 51 or 41, could England really have performed any worse? The proliferation of specialist coaches and analysts seemed antithetical to the self-expression of players on the pitch.
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Similar questions are being asked in different fields. The average businessman now sends 108 emails a day. But, as inboxes get bigger, so opportunity for creativity decreases. This reality is slowly being recognised: a multi-million dollar industry has grown around filtering emails to liberate businessmen from the grind. The world is running into the limits of Silicon Valley's favoured mantra "In God we trust - all others bring data."
No one would advocate pretending that big data doesn't exist. Datafication is happening at a staggering rate - the amount of digital data doubles every three years. Flower's reign, for the most part, showed the virtues of using it smartly. But data is emphatically not a substitute for intuition and flair - either in the office or on the cricket field.
By the last embers of Flower's rule, England seemed not empowered by data but inhibited by it, as instinct, spontaneity and joy seeped from their cricket. Accusations of England lacking flair on the field had a point - witness Alastair Cook's insistence on having a cover sweeper regardless of the match situation. Going back to 2011, consider England's approach to tying down Sachin Tendulkar in the home series against India: they relied on drawing Tendulkar outside his off stump in the early part of his innings rather than let him get his runs on the on side, the result of a computer simulator plan, created by their team analyst Nathan "Numbers" Leamon.
The selection of three beanpole quick bowlers to tour Australia was rooted in data showing that such bowlers were most likely to thrive in Australia. The ECB looked at the characteristics of the best quick bowlers - delayed delivery, braced front leg and so on, and then tried to coach those virtues into their own players, seemingly not realising it was too late; you can't change those things once bowlers are more than about 15. But it did not matter how many boxes Steven Finn, Boyd Rankin and Chris Tremlett ticked in theory when they were utterly bereft of fitness and form in practice. It was proof of the pitfalls of excess devotion to data and reliance on bogus statistics. "Garbage in, garbage out," as some who work with data are prone to saying.
Data is a complement to intuition and judgement, not a replacement for them. As Cukier and Mayer-Schonberger argue in their study, big data "exacerbates a very old problem: relying on the numbers when they are far more fallible than we think".
Criticisms of Flower's reliance on data always lingered under the surface, as when South Africa expressed bafflement when Graham Onions was dropped for Ryan Sidebottom in 2010, a data-driven decision largely made before the tour even began. For all his triumphs as England coach, Flower ultimately got the balance between trusting people and numbers wrong. He was in good company. In the brave new world, those who thrive will not be those who use data most - but those who use it most smartly.
Friday 11 October 2013
Art galleries should be apothecaries for our deeper selves
Museums of art should recognise the therapeutic potential of their collections and display them accordingly. Step through the lobby into the gallery of love
Jan Steen's Woman at her Toilet might help you make a long-term relationship more exciting.
What would you do to help someone who felt deeply anxious about the future? Or who was dragged down by a sense of sadness and loneliness? How could you make a long-term relationship more exciting or alleviate your impression of being a loser?
My answer in all of these cases is to recommend that you look closely and repeatedly at certain works of art. To be more specific, I'd advise taking in Sugimoto's North Atlantic Ocean for the first problem, Richard Serra's Fernanda Pessoa for the second, Jan Steen's Woman at her Toilet for the third and a 15th-century statue of the Buddhist saintly figure, Guanyin, for the fourth.
The idea that one might use art for a purpose, for "instrumental" reasons, tends to set off alarm bells. Art is not an instrument, comes the almost automatic reply. It shouldn't be thought of as some kind of tool. It's not a pill. It shouldn't be asked to perform some specific function, especially something as egocentric as to cheer you up or to make you a more empathetic person. Art galleries aren't chemists.
I couldn't disagree more. If culture is to matter to us deeply, then it has to engage with our emotions and bring something to what one might call our souls. Art galleries should be apothecaries for our deeper selves.
Religions have always been clear on to this psycho-therapeutic score. For hundreds of years in the west, Christian art had a very clear function: it was meant to direct us towards the good and wean us off vice. A lot of Buddhist sculpture had an equally clear mission: to encourage us to achieve an inner calm by contemplating the serene expression on the Buddha's face, especially his smile. We should take some inspiration from these examples and demand more from the art of our times.
There is nothing wrong with thinking of artworks as tools and asking them to do things for us. They can help our psyches in a variety of ways: rebalance our moods, lend us hope, usher in calm, stretch our sympathies, reignite our senses and reawaken appreciation. But in order to do these things, they need to be better signposted as having the power to do so. Modern galleries should recognise the therapeutic potential of their collections and honour it in the way they display them. At present, art museums are typically set out under headings such as The Nineteenth Century or The Northern Italian School, which reflect the academic traditions in which their curators have been educated. But this may not do very much for us in our deep selves. A more fertile indexing system would group together artworks from across genres and eras according to our inner needs.
In my ideal museum, you would enter into the lobby and find a map showing galleries devoted to a range of topics with which we often need help: work, love, family, mortality, community, status, anxiety. In the gallery of love, for example, you might be shown Pisano's Daphnis and Chloe, a deeply evocative reminder of the sense of gratitude and wonder with which most of us start relationships, but all too soon abandon (art is a superlative memory-bank for precious emotions that otherwise disappear). The gallery might then move us on to a Richard Long sculpture, where highly irregular and jagged stones were brought into harmony within a perfect circle, a metaphor for the way our own differences would ideally be accommodated in relationships.
Through such themed galleries, art would start to serve psychology in the same way it has served theology for centuries. A walk through a museum of art would amount to a structured encounter with a few of the emotions which are easiest for us to forget but life-enhancing to remember. Arranged in this way, museums of art would then be able to claim that they really had fulfilled that excellent but as yet elusive ambition of becoming substitutes for our cathedrals and churches in a rapidly secularising society.
Tuesday 28 May 2013
Can Agatha Christie be political?
Hercule Poirot may not be a highbrow hero, but he still has plenty to teach us about life. Portuguese author José Rodrigues dos Santos on why all literature packs a political punch
Thou shalt not kill … David Suchet as the eponymous detective in Agatha Christie's Poirot. Photograph: ITV/Rex Features
Agatha Christie's The Murder of Roger Ackroyd is considered by many to be the finest crime mystery ever written. It tells the story of how Hercule Poirot investigates a killing, and stuns us when he identifies the culprit. Arthur C Clarke's Rendezvous With Rama is the most awarded science-fiction novel ever, and tells the story of an unidentified spaceship that crosses the solar system and leaves behind more questions than answers. José Saramago's Blindness is frequently pointed out as one of the best 20th-century novels in world literature, and it tells the story of a sudden epidemic of blindness in Lisbon.
Apart from the obvious quality of these books – a quality that arises either from their storyline or their written style – what do they have in common? Well, they are not political. Even Saramago, who has never hidden the fact that he was a communist, and an active one at that, never actually wrote an obvious political novel.
What, then, is a political novel? Politics is not necessarily something that involves political parties, as we might immediately assume, but rather an activity related to the management of societies. Decisions and actions that affect us all are politics, but also ideas and concepts. Actually, it's the latter that provide the blueprint for the former.
We can find many quality novels that do have a clear political message. Gustave Flaubert's Madame Bovary questions the social anathema of 19th-century female adultery; George Orwell's 1984 or Animal Farm are powerful critical metaphors for communist totalitarian dictatorships; Eça de Queirós' O Crime do Padre Amaro brings us a strong critique of the Catholic Church's hypocrisy towards priests' celibacy; and John Steinbeck's The Grapes of Wrath shows us the misery spread by unregulated capitalism in the wake of the Great Depression.
Should we say that O Crime do Padre Amaro is a superior novel compared with Blindness because it has a political message? Can we honestly claim that Animal Farm is more literary than The Book of Illusions just because Orwell's novel conveys a political meaning and Paul Auster's novel doesn't? Incidentally, is Dan Brown's The Da Vinci Code a political book? How can we say it isn't if it deals in a critical way with deep political issues such as who Jesus Christ really was, how his legend was shaped for political purposes, the role of women in the religious system of power and what the Opus Dei really is?
These are not easy questions, but they do point in different directions and help us clarify things a bit. A novel can be literary without an obvious political message. And the fact that the novel has a political message is not tantamount to a quality novel.
By the way, who decides what a literary novel is? Is The Da Vinci Code literary? Who can say it isn't? Me? My friends? The newspapers? A committee for good literary taste? Who belongs to such a committee? How was he or she elected? Does each one of us have to obey and accept the critical judgment of such a committee? How many times have committees of the day misjudged a work of art? Nobody cared about Fernando Pessoa's poetry when he was alive, and today he is considered the pinnacle of contemporary Portuguese poetry. Dashiell Hammett was thought of in his day as a second-rate popular author, but today his The Maltese Falcon is cherished as a classic. In his prime, Pinheiro Chagas was praised as an immortal author, but today nobody has even heard of him. If we probe deeper into what is and what is not literature, we find many questions and no solid answers.
So, we get back to the starting point. Should literature be political? Well, some might say this is like asking if art should be beautiful? Yes, by all means, art should be beautiful! Can't we, then, create ugly art? No, we can't! If it's ugly, it's not art, it's a failed attempt at it.
This is an interesting point because, faced with the idea that art has to be beautiful, French artist Marcel Duchamp presented in a 1917 New York art exhibition his latest artistic work, which he called La Fontaine, or The Fountain. It was actually a porcelain urinal made in an industrial factory. La fontaine created an uproar because it introduced the world to a new concept: art that is disgusting. It is ugly, and yet it is art.
Duchamp made a powerful point. He told us that an artwork is what the artist decides. So, what is a literary work? Well, it's what the author decides. Me, you, my friends, the newspapers, the committee for good literary taste may or may not like it; that's not relevant, because art can be ugly and yet be art. A literary work can be political or not political, and yet be a literary work.
Should literature be political? Hell, who cares? It is political if the author thus decides, and it isn't if the author so wishes it. The literary quality of a book is not linked to its political message, in the same way that the artistic quality of a sculpture is not linked to its beauty. They are different issues.
What is, then, a political novel? Can Christie's The Murder of Roger Ackroyd – a simple, albeit interesting, crime investigation – somehow be a political novel? The book does present us with a political message, though probably not even its author is aware of it. And that message is simple: thou shalt not kill. How more political can a message get? Thou shalt not kill is a political order given by the highest ruler of them all, God Almighty Himself. It is a sheer political message, created for social management.
French sociologist Louis Althusser once wrote that when a woman visits a shoe shop and buys high-heel shoes, she is making a clear ideological statement. By wearing high-heel shoes, she is expressing her idea of what society is and what her role in society should be, and what can be more political than that?
So, the question is not indeed if literature should be political. The real question is: could it be otherwise?
Wednesday 24 October 2012
Is sport an art?
In the early 1990s, there was a famous Reebok t-shirt with the simple slogan: "Sport is an art." Nice idea, but is it true? Can sport - which, by definition, is practical (score runs, take wickets) and competitive (beat the other guy) - belong to the same sphere as painting, literature and music?
The debate is not helped by the fact that sport and the arts are usually portrayed as antagonistic opposites - athletes v aesthetes, hearties v arties, jocks v thespians. From school to adult life, it is often (wrongly) assumed that there is little overlap between artistic creators and sporting competitors. (Writers, in fact, are often just as fiercely competitive as sportsmen.)
And yet no one (well, almost no one) disputes that sport can be beautiful. Last month, I tried to describe the aesthetic pleasure of watching David Gower bat - or just seeing him stand languidly and unhurriedly at the crease. When we watch Sachin Tendulkar turn his wrists at the very last moment, flicking the blade of the bat towards the on side just as the ball arrives under his eyes, we have experienced something beautiful: not just poise and grace but also concision and completeness. Nothing can be added or taken away from that Tendulkar flick that would not diminish the shot. Within its own terms, it cannot be improved upon.
A couple of years ago I watched Arsenal play Barcelona. The game finished a draw, but it was the spectacle rather than the result that left the deepest impression on me. Judged in terms of pure beauty - the physical grace of the players, the inventiveness of their movement - the match was surely the equal of any artistic or cultural event taking place in London that evening. Only someone with his eyes closed could pretend that the match had been defined completely in terms of goals scored and points bagged.
Occasionally I still hear arts-lovers complain that all sport is dull or anti-aesthetic. They are watching the wrong stuff. Anyone who loves ballet must surely recognise Roger Federer as one of their own. Again, elegance is matched by economy: the Federer effect is created not only by what he does but by what he avoids doing. There are no false brush strokes, no unnecessary chords, no superfluous sentences. There is no straining for effect, nothing is artificially tacked on.
There is another parallel between sport and the arts. In each sphere, the greats often have golden, productive spells late in their careers - periods when the insecurities have faded, when the urgent confusions that follow from deep ambition have receded. In his essay "Late Style", the academic Edward Said described how "age confers a spirit of reconciliation and serenity on late works". Yes, the artist may have been at the peak of his powers in his middle or "High" phase. But there is something even more moving about the final creative outpouring. (If you take only one thing from this article, listen, as I am doing now, to Richard Strauss'Four Last Songs - true Late Style.)
Said was writing about the arts, but the same principle applies to sport. The discerning fan will know the feeling of having watched a great player near the end of his career play sport on a higher level - without the fear and frantic-ness of his younger, restless days. We saw Late Federer in the Wimbledon final this summer, conjuring victory despite being outplayed for most of the first two sets. Late Zidane, too, seemed to grasp the whole football pitch before he made even the simplest pass. There was greatness in the small things - especially the small things.
But being beautiful does not make something an art. Many things are beautiful that cannot be classified as art. In The Principles of Art, the English philosopher RG Collingwood (no relation) set out to define the difference between an art and a craft. A skilled worker in a furniture workshop might be highly skilled - and might derive deep satisfaction from his work - but he is not an artist. He is a craftsman. A carpenter assembles bits of wood according to a plan for a table and, usually, the more exact the plan the better the table.
In contrast, art (according to Collingwood) demands a separation of means and ends. There must be an act of alchemy, the emergence of a creative vision. A poet "converts emotions into poems". Unlike the assembly of a table, the final poem is more than - and different from - the sum of its parts.
| A great sportsmen, very occasionally, does something that transcends the activity of scoring a goal or making a shot. He taps into a deep instinct that he cannot quite understand | |||
Where does this leave sport? I would say sport usually has more in common with craft than art. The batsman practising in the nets over many years is honing his craft. He is searching for a technique that is reliable, consistent, resilient and robust. And if one bit breaks or becomes damaged, he hopes the rest of his game will function adequately while he makes running repairs. The job of a good craftsman is to create a finished article that can be repaired without the whole thing always needing a structural refit.
But sport is not limited to being a craft. A great sportsmen, very occasionally, does something that transcends the activity of scoring a goal or making a shot. He taps into a deep instinct that he cannot quite understand, let alone articulate. But I suspect this artistic strand can only be achieved by accident. If I was a coach, I would be worried if my star batsman said, "Today I am going to bat beautifully." Far better that he tried to bat as simply and naturally as possible - and the beauty happened along the way, as a happy but unintentional by-product.
Sport, I think, can momentarily touch the arts. But it cannot permanently belong as one.
But sports certainly fulfil some artistic roles. In the classical world, the arts had a defined religious purpose. For the Greeks, watching a play was a communal act of piety, a form of shared worship. Modern sport achieves something similar. What do we feel when we walk among the masses to a vast sports stadium? We are part of the crowd, we share a purpose and sense of hope with the thousands around us - we belong to a broader congregation. That religious language follows naturally. The art critic Robert Hughes famously wrote that train stations were the cathedrals of the industrial age. To update Hughes: sports stadiums are the cathedrals of the post-industrial age.
Above all, sport provides us with timeless stories. It reveals, in dramatic ways, essential elements of the human condition. A few years ago, speaking at a BBC debate called "Sport v the Arts", the classical scholar Edith Hall made this startling claim: "Sport has only two narratives - either you win or you lose - how boring!"
The truth could not be more different. A moment's reflection reveals that within the overarching narrative of victory or defeat (there are also draws and ties, Edith), there are countless twists and subplots - often far more interesting and affecting than the headline-grabbing result. Sometimes you have to look more carefully to see the real story.
Sport can be experienced at many different levels. Just like the arts.
Monday 22 October 2012
VIEW GALLERYWednesday 9 May 2012
Sunday 19 June 2011
Testosterone and high finance do not mix: so bring on the women
Gender inequality has been an issue in the City for years, but now the new science of 'neuroeconomics' is proving the point beyond doubt: hormonally-driven young men should not be left alone in charge of our finances…
Tim Adams
Tim Adams
The Observer, Sunday 19 June 2011
Brokers Continue To Trade During Financial Turmoil
Panic hits the trading floor in October 2008. Photograph: Peter Macdiarmid/Getty Images
For the past few weeks I've had two books by my bed, both of which offer a first draft of what history may well judge the most significant event of our times: the 2008 financial crash. Read together, they are about as close as we might come to a closing chapter of The Rise and Fall of the American Empire. As literature, one of them – the final report of the Financial Crisis Inquiry Commission of the US Treasury – doesn't always make for easy reading: there are far too many nameless villains for a start. And, quite pointedly, there is not a heroine in sight. Reading the report I became preoccupied by, among other things – the fairy steps from millions to billions to trillions, say – the overwhelming maleness of the world described. The words "she", "woman" or "her" do not appear once in its 662 pages. It is a book, like most historical tragedies, written about the follies and hubris of men.
The other book, an entirely compulsive companion volume, is Michael Lewis's best-selling The Big Short, which Google Earths you into the crisis. Rather than looking at a global picture, it lets you into the bedrooms and boardrooms of the individual corporate men who catastrophically lost billions of dollars and, on the other side of those bets, the extraordinary ragtag of obsessive individuals who saw what was coming and made eye-watering fortunes. It gives the crash a human face, and once again that face is universally male.
The books are linked by more than subject matter, though. Lewis, a one-time bond trader himself – he left, 20-odd years ago, in incredulity and disgust to write his insider's account, Liar's Poker – gave evidence to the Crisis Inquiry Commission over the course of its 18-month sitting. In the end, however, he refused to sign off the report; and not only did he refuse to sign it, he also refused to put his name to the dissenters' addenda to the report, which three of the committee insisted upon. And not only that, he did not add his name to that of the single individual who insisted on a further addendum stating that he dissented from the dissenters' view. Lewis was not a fan of the report.
The reason for this was simple, he suggested. He felt that the committee, for all its considered judgment, had not understood, from the outset, a single, pivotal word. That word was "unprecedented". Though the inquiry had set out in the belief that the crash was an event different in kind to anything that had gone before, it nevertheless proceeded to judge it in the terms of previous crashes. What it failed to do, in Lewis's eyes, was this: it neglected to look for the things that might have changed in Wall Street or the City, the things that might have made individuals on the trading floors act in ways that were seen to be entirely, unprecedentedly, reckless. When he came to consider these things himself, Lewis felt that perhaps chief among the unprecedented novelties was this one: women.
"Of course," he observed, with tongue firmly in cheek, "the women who flooded into Wall Street firms before the crisis weren't typically permitted to take big financial risks. As a rule they remained in the background, as 'helpmates'. But their presence clearly distorted the judgment of male bond traders – though the mechanics of their influence remains unexplored by the commission. They may have compelled the male risk-takers to 'show off for the ladies', for instance, or perhaps they merely asked annoying questions and undermined the risk-takers' confidence. At any rate, one sure sign of the importance of women in the crisis is the market's subsequent response: to purge women from senior Wall Street roles…"
When I first read those remarks it was not clear how much in earnest Lewis had been when he made them. Subsequently, though, I heard him speak at the London School of Economics, and he took this idea in a slightly different direction. When asked what single thing he would do to reform the markets and prevent such a catastrophe happening again, he said: "I would take steps to have 50% of women in risk positions in banks." Pressed on this, he went on to suggest how science reveals that women in general make smarter decisions regarding investment than men, that when it comes to money, women in couples are demonstrably better at evaluating risk than their partners, and single women much better still.
Though those of us males who have an uncanny sense of money always slipping through our fingers might anecdotally believe this to be true, I was surprised to hear it stated as a fact. It seemed to beg a number of questions. First, if women really are better at making these judgments, why is it always men, still, without exception, who troop out before select committees to explain where it all went wrong, and how they weren't really to blame. And second, would it really be different if women were in charge?
You don't have to look too far into the science to realise that Lewis's claim, in broad terms, stands up. The first definitive study in this area appeared in 2001 in a celebrated paper that broke down the investment decisions made with a brokerage firm by 35,000 households in America. The study, called, inevitably, "Boys will be Boys" found that while men were confident in making multiple changes to investments, their annual returns were, on average, a full percentage point below those of women who invested the family finances, and nearly half as much again inferior to single women.
A more recent study of 2.7 million personal investors found that during the financial crisis of 2008 and 2009, men were much more likely than women to sell any shares they owned at stock market lows. Male investors, as a group, appeared to be overconfident, the author of this study suggested. "There's been a lot of academic research suggesting that men think they know what they're doing, even when they really don't know what they're doing." A fact that will come as a surprise to few of us. Men, it seemed, typically believed they could make sense of every piece of short-term financial news. Women, never embarrassed to ask directions, were on the whole far more likely to acknowledge when they didn't know something. As a consequence, women shifted their positions far less frequently, and made significantly more money as a result.
Naturally, if these findings were widely applicable, then it would be hard not to agree with Lewis's suggestion for reforming the sharpest end of capitalism. Rather than ring-fencing casino investment banks or demanding that high street banks hold vastly greater capital, as we heard at the Mansion House last week, wouldn't a safer model just be to hire more women?
To argue this case, you would probably need more than just behavioural evidence; you might need to understand some of the mechanisms which produced the trillion-dollar bad decision-making that led to what happened in 2008. In recent years, and particularly since the crash, a new science of such decision-making – neuroeconomics – has become fashionable in universities and beyond. It proposes the idea that you will create a better understanding of how people make economic choices if you bring to bear advances in neurobiology and brain chemistry and behavioural psychology alongside traditional economic maths models. Not surprisingly, neuroeconomics has plenty to say about the question of whether decision-making, in high-pressure situations, divides on gender lines.
The problem is that most of the scenarios used to investigate this divide are artificial. It is one thing attaching someone to an MRI scanner and telling him or her that a million pounds rests on their decision in a game; it is another when that person actually stands to lose a million pounds. Only one study, as far as I could discover, has had access to the brain chemistry, the neural biology, of young men actually working on trading floors. But the results it produced were nonetheless startling.
The study was led by a pair of Cambridge researchers. One, Joe Herbert, is a professor of endocrinology, and the other, John Coates, a research fellow in neuroscience and finance. Herbert, a specialist in the effect of hormones on depression, was fascinated to put some of his theories about the role of chemicals on decision making into practice. The curious thing about banks, he told me, "was that they know all about computers and systems and markets but they know next to nothing about the human machine sitting in the chair in front of screens making decisions. Nothing. We aimed to correct that just slightly."
It was Coates, though, who made the experiment possible. Having met Herbert at his lab in Cambridge, I met Coates in a pub in west London. He had a special advantage in gaining access to bond traders' brains, he explained: he used to possess one himself. Sharp-eyed and fit-looking, Coates retains the intensity of a man who used to run a trading desk on Wall Street during the dotcom bubble. He started off at Goldman Sachs and went on to Deutsche Bank. After some years trading, and making a lot of money out of a lot of money, he became increasingly fascinated by the way, during the dotcom years, the traders he worked alongside radically changed behaviour. They became, he says, "euphoric and delusional. They were taking far more risks, and were putting up trades with terrible risk-reward profiles". The dotcom was fun, in a way, he suggests; it was like the roaring 20s. "But I don't think anyone looks back on the housing bubble and laughs."
Coates was a relatively cautious trader himself, but there had been times when he too felt this surge, this euphoria: "When I had been making a lot of money myself, I felt unbelievably powerful," he recalls. "You carry yourself like a strutting rooster, and you can't help it. Michael Lewis talked about 'Big Swinging Dicks', Tom Wolfe talked about 'Masters of the Universe' – they were right. A trader on a winning streak acts exactly that way."
The second thing that Coates noticed was even more revelatory to him. "I noticed that women did not buy into the dotcom bubble at all," he says. "You couldn't find one who did, hardly. And that seemed like a pretty cool fact to me."
With this cool fact in mind, Coates began splitting his time between his trading desk and the Rockefeller University in Manhattan, which is perhaps the world's leading institute for the study of brain chemicals. There he started to become interested in steroids, and in particular something called "the winner effect". This occurs when two males enter a competition and their testosterone levels rise, increasing their muscle mass and the ability of the blood to carry oxygen. It also enhances their appetite for risk. Much of this testosterone stays in the system of the winner of a competition, while the loser's testosterone melts away fast; in evolutionary terms, the loser retires to the woods to lick his wounds. In the next round of competition, though, the winner already has high levels of testosterone, so he starts with an advantage, and this continues to reinforce itself.
"Steroids," Coates explains, "like most chemicals in your body, display what is called an inverted U-shaped response curve." That is to say, when you have low levels of them you lack vitality, and do very poorly at mental and physical tasks. But as the levels rise you get sharper and more focused until you reach an optimum. The key thing is this, however: "If you keep winning, your testosterone level goes past that peak and sliding down the other side. You start doing stupid things. When that happens to animals, they go out in the open too much. They pick too many fights. They neglect parenting duties. And they patrol areas that are too large." In short, they behave like traders on a roll; they get cocky.
Coates became convinced that this winner effect was what he observed in bullish trading markets, and what ended up dramatically distorting them. It also explained why women were mostly immune to the euphoria, because they had only 10% of the testosterone of men. What struck him most, though, was that, for all the literature about financial instability, economics, psychology, game theory, no one had ever clinically looked at a trader who was caught up in a bubble.
Coates wrote a research proposal. He came back to Cambridge where he had done his first degree, and because of his background eventually gained access, with Herbert, to a major City bond-dealing floor in London. They tested the traders for two hormones in particular, testosterone and cortisol (the anxiety induced, depressive "stress hormone"), and mapped their levels over a period of weeks against the success or failure of trades, individual profit and loss. Coates had imagined the experiment to be a preliminary study but the correlations he found – for evidence of irrationality produced by the winner effect and its converse – was "an absolute dream". They not only discovered that a trader's morning testosterone level could be used to predict his day's profitability. They also found that a trader's cortisol rose with both the variance of his trading results and the volatility of the market. The results pointed to a further possibility: as volatility increased, the hormones seemed to shift risk preferences and even affect a trader's ability to engage in rational choice.
Though the sample was limited, and suitable caution was needed in claiming too much, the correlations suggested that over a certain peak, testosterone impaired the risk assessment of traders. "And cortisol," he suggests, "was in some ways even more interesting than testosterone. We thought cortisol would rise when traders lost money," Coates says, making individuals more than usually cautious, "but actually it was going up incredibly when they were faced with just uncertainty. The stress hormones were switching over to emergency states all the time. There was an optimal level but these stress hormones can linger for months. Then you get all sorts of really pathological behaviours. If you are constantly prepared for high tension it affects your brain, and it causes you to recall stressful memories and become exaggeratedly risk-averse and kind of helpless."
Unfortunately this particular study ended in June 2007, before the full effect of the crisis, but its implications account, Coates believes, for some of what he subsequently heard from the trading floor. "If cortisol goes beyond a certain point, then it may become very difficult for traders to assess any risk at all. These guys are not built to handle adversity that well. There is an observable condition called 'learned helplessness', which if you are submitting to great stress over a long period of time makes you give up suddenly. Lab animals develop it: you open the cage and they won't escape. Traders have it too. They just slump in their chairs. In the crisis there were classic arbitrage opportunities as the markets were falling. Free money. But traders would sit there staring at the numbers and not touching it."
Since then, Coates has partly been working on the other strand of his original hypothesis, looking at the brain chemistry of women working in the markets. Because of the small sample sizes he has to work with – there were only three women out of 250 traders on the floor he first tested – the detail of that is far from complete, and he is properly reluctant to draw conclusions. What he will go so far as to say, though, is this. "Central bankers, often brilliant people, spend their life trying to stop a bubble or prevent a crash, and they are spectacularly unsuccessful at it. And I think it is because, at the centre of the market, you have these guys either ripped on testosterone or overwhelmed by cortisol so that they become completely price insensitive." Coates wrote a couple of articles after that research was published, suggesting that, if the winner effect was right, it was possible that bubbles were an entirely young male phenomenon. And if that were the case, then the best way of preventing boom and bust was to have more women and more older men – less in thrall to hormones – in the markets. "We know that opinion diversity is crucial to stable markets. What no one talks about is endocrine diversity, a diversity of hormones. The billion-dollar question is how to achieve it."
To most experienced, male, investment bankers, of course, this sounds like fighting talk. An old friend of mine, who traded his Cambridge English degree for an extremely lucrative life as a bond dealer, offered this, when I presented Coates's evidence to him. "It would be nice to think that having more female traders on the floor would make for less volatility," he said, "but that's wishful thinking. Financial markets are now global, so while we in the west might decide not to chase trends or react instinctively to breaking news because there are mature mothering types in boardrooms and sitting on risk committees, the rest of the world will, and our banks would lose out." And that's not all. "Many of the women I know who have managed money or have put capital at risk for banks have tended to be even more aggressive with risk than their male counterparts, as if perhaps to compensate for their supposed diffidence. Fighting their way through a male-dominated environment to a position in which they can invest/punt/ risk-manage, many women develop an ultra-masculine persona so as to be thought of as ballsy…"
Just a cursory glance through some of the recent spate of books and blogs written by young women who have worked in the City and lived to tell the tale would certainly seem to support this observation. Melanie Berliet, who worked as one of the only female traders in Wall Street, set the tone in her confessional blog: "If anything," she observed, "my token status gave me an extra thrill. I enjoyed being called a 'fucking dullard' or being instructed, patronisingly, to 'remove head from ass', because my reaction – to grin rather than cry – impressed the guys. I loved their attention and the daily opportunities to prove that I fitted in. What separated me from my colleagues was physical: my 5ft 9in, 120lb frame, my long, blondish hair – and my vagina. I had two options with my boss: trade sexual banter or resist. Typically, I chose the former. Like most traders, my base salary wasn't terribly high—$75,000 at the start of my third year. The bonus was all, and getting the right number rested on one thing, as I saw it: my willingness to promote my boss's fantasy of fucking me…"
John Coates doesn't believe the caricature, or at least he believes that in the upper reaches of banks, things have moved on. "A lot of my former colleagues are running divisions, or whole banks," he says. "I don't buy the sexist macho argument. The big investment banks desperately want women traders. But when they interview women who are qualified, the women don't want to do it…"
Neuroeconomics also starts to provide the answers to some of the reasons for that. Muriel Niederle is a professor at Stanford University, looking at gender differences in risk decisions. Over a period of years Niederle has developed clear evidence for the theory that though in non-competitive situations women demonstrate an advantage over men in making investment decisions, they either shy away completely from making those decisions in intensely competitive environments, or they respond less well than men to competition with very short-term high intensity and results-driven focus. This pattern is set, Niederle proves, from a very young age (and no doubt has a good deal to do with the differential presence of troublesome testosterone). Joe Herbert told me at his lab in Cambridge: "What is clear is that there are neurological differences between the sexes. Women, in very general terms, are less competitive, and less concerned with the status of being successful. If you want to make women more present, you have to remember two things: the world they are coming into is a man-made world. The financial world. So, either they become surrogate men… or you change the world."
Ah, changing the world. In the wake of 2008, there was a good deal of talk about that heady idea. Much of this talk concerned the creation of more gender balance in the city. The Economist coined the phrase "Womenomics" and argued that excluding nearly 50% of talent from crucial positions in business and finance was not only discriminatory but caused serious harm to stability and growth. Iceland's banks brought in women to clear up the mess that men had left. A good deal was made of the fact that the extraordinary success of microfinance in the developing world was because 97% of the loans were granted to women (men were – biologically? culturally? – not to be trusted). Science, neuroeconomics, was harnessed to develop some of those themes. And then, well, nothing. The commissions and the select committees decided that a return to something like the status quo, with all its implicit risks and inequalities, was the only option.
Womenomics still persists in a few places, however. The 30% Club was an initiative set up last November by executive women, and some senior men in FTSE 100 companies and accountancy and legal practices, to increase the number of women in decision-making and boardroom positions to that figure. It goes a little further than Lord Davies's recent report on the subject. But 30% is not an arbitrary number; it is thought – by neuroeconomists again, and through observation – to be the minimum proportion of women at the top of an organisation required to begin to change the culture; below that number, women tend to behave "like surrogate men"; above it, the subtle differences produced by gender might begin to influence the way decisions are made. In Britain there is still a good way to go: only 5.5% of executive directors in FTSE 100 companies are women (yet evidence shows that companies with women leaders have a 35% higher return on equity, and companies with more than three women on their corporate board have an 80% higher return on equity). On city trading floors, the percentage remains, for some of the reasons outlined above, at around 3% or 4%. Testosterone rules.
The country that has attempted most radically to change this balance is Norway, where a Conservative minister imposed a quota of 40% female directors in every boardroom. Most of the data suggests the initiative has been a great success, both culturally and commercially (though some, male, commentators argue that the turnaround is better explained by the spike in oil prices).
It would be hard to find many people in the city, even among women, who would favour quotas, though that argument can be made. John Coates, wearing his dealmaker's hat, suggests a practical solution. "The question is not whether men are risk takers and women are risk-averse. It is more what kind of risk do they want to take? My hunch is that women don't like high-frequency trading, so what you have to do is change the accounting period over which they are judged."
He then gives me a potted description of how things remain: "Say you have two traders. One trader makes $20m a year for five years, of which she might typically pocket a couple of million a year herself. At the end of five years she has made the bank the best part of $90m. Another trader makes $100m a year for four years. They don't want that guy to go off to a hedge fund so they let him take home $20m a year. But then in the fifth year – because of the winner effect – he loses $500m. That is essentially what happened in the financial crash. The bank has lost $100m and the trader has gained $80m. If you were judging these things over a five-year period, then you can see which person you would hire."
But, of course, that would require a very different idea of markets, and of money, to the one that is currently desperately being defended and remade. It would certainly require a greater degree of "endocrinal diversity". Still, the next time you hear someone suggest that things are getting back to "normal" in the city, and that we should at all costs start believing in exponential growth again, at least you can look him in the eye and state that you think his hormones might be playing up.
Neuroeconomics: Six things that the science of decision-making reveals
■ If groups of young men are shown pornographic pictures of women and then asked to choose between safe and risky investments, compared with men shown non-pornographic pictures they choose far riskier portfolios.
■ Our brains are designed to seek out novelty, but too much information can overwhelm them; we are generally better at assessing risk when listening to Bach than with the chatter of TV news.
■ Men's brains tend to shut down after they have proposed a deal, waiting for the response. Scans show that women brains continue to be active, analysing whether they have done the right thing.
■ Humans are the only animals that can delay gratification, a function of the prefrontal cortex. However, the prefrontal cortex only matures after the age of 30, and later in men than women. Before that, we are more likely to seek immediate gratification.
■ Our brains reward social interaction with the release of a chemical called oxytocin. It makes us feel good when we follow the herd. Stock market bubbles are one likely result of this.
■ Our brains are wired for human oxytocin-mediated empathy (or HOME). We are biologically stimulated to love (or hate) what is most familiar to us. We are built to form attachments, to value what we own more than what we do not own. This fact skews the rationality of all our investment decisions
Tim Adams
Tim Adams
The Observer, Sunday 19 June 2011
Brokers Continue To Trade During Financial Turmoil
Panic hits the trading floor in October 2008. Photograph: Peter Macdiarmid/Getty Images
For the past few weeks I've had two books by my bed, both of which offer a first draft of what history may well judge the most significant event of our times: the 2008 financial crash. Read together, they are about as close as we might come to a closing chapter of The Rise and Fall of the American Empire. As literature, one of them – the final report of the Financial Crisis Inquiry Commission of the US Treasury – doesn't always make for easy reading: there are far too many nameless villains for a start. And, quite pointedly, there is not a heroine in sight. Reading the report I became preoccupied by, among other things – the fairy steps from millions to billions to trillions, say – the overwhelming maleness of the world described. The words "she", "woman" or "her" do not appear once in its 662 pages. It is a book, like most historical tragedies, written about the follies and hubris of men.
The other book, an entirely compulsive companion volume, is Michael Lewis's best-selling The Big Short, which Google Earths you into the crisis. Rather than looking at a global picture, it lets you into the bedrooms and boardrooms of the individual corporate men who catastrophically lost billions of dollars and, on the other side of those bets, the extraordinary ragtag of obsessive individuals who saw what was coming and made eye-watering fortunes. It gives the crash a human face, and once again that face is universally male.
The books are linked by more than subject matter, though. Lewis, a one-time bond trader himself – he left, 20-odd years ago, in incredulity and disgust to write his insider's account, Liar's Poker – gave evidence to the Crisis Inquiry Commission over the course of its 18-month sitting. In the end, however, he refused to sign off the report; and not only did he refuse to sign it, he also refused to put his name to the dissenters' addenda to the report, which three of the committee insisted upon. And not only that, he did not add his name to that of the single individual who insisted on a further addendum stating that he dissented from the dissenters' view. Lewis was not a fan of the report.
The reason for this was simple, he suggested. He felt that the committee, for all its considered judgment, had not understood, from the outset, a single, pivotal word. That word was "unprecedented". Though the inquiry had set out in the belief that the crash was an event different in kind to anything that had gone before, it nevertheless proceeded to judge it in the terms of previous crashes. What it failed to do, in Lewis's eyes, was this: it neglected to look for the things that might have changed in Wall Street or the City, the things that might have made individuals on the trading floors act in ways that were seen to be entirely, unprecedentedly, reckless. When he came to consider these things himself, Lewis felt that perhaps chief among the unprecedented novelties was this one: women.
"Of course," he observed, with tongue firmly in cheek, "the women who flooded into Wall Street firms before the crisis weren't typically permitted to take big financial risks. As a rule they remained in the background, as 'helpmates'. But their presence clearly distorted the judgment of male bond traders – though the mechanics of their influence remains unexplored by the commission. They may have compelled the male risk-takers to 'show off for the ladies', for instance, or perhaps they merely asked annoying questions and undermined the risk-takers' confidence. At any rate, one sure sign of the importance of women in the crisis is the market's subsequent response: to purge women from senior Wall Street roles…"
When I first read those remarks it was not clear how much in earnest Lewis had been when he made them. Subsequently, though, I heard him speak at the London School of Economics, and he took this idea in a slightly different direction. When asked what single thing he would do to reform the markets and prevent such a catastrophe happening again, he said: "I would take steps to have 50% of women in risk positions in banks." Pressed on this, he went on to suggest how science reveals that women in general make smarter decisions regarding investment than men, that when it comes to money, women in couples are demonstrably better at evaluating risk than their partners, and single women much better still.
Though those of us males who have an uncanny sense of money always slipping through our fingers might anecdotally believe this to be true, I was surprised to hear it stated as a fact. It seemed to beg a number of questions. First, if women really are better at making these judgments, why is it always men, still, without exception, who troop out before select committees to explain where it all went wrong, and how they weren't really to blame. And second, would it really be different if women were in charge?
You don't have to look too far into the science to realise that Lewis's claim, in broad terms, stands up. The first definitive study in this area appeared in 2001 in a celebrated paper that broke down the investment decisions made with a brokerage firm by 35,000 households in America. The study, called, inevitably, "Boys will be Boys" found that while men were confident in making multiple changes to investments, their annual returns were, on average, a full percentage point below those of women who invested the family finances, and nearly half as much again inferior to single women.
A more recent study of 2.7 million personal investors found that during the financial crisis of 2008 and 2009, men were much more likely than women to sell any shares they owned at stock market lows. Male investors, as a group, appeared to be overconfident, the author of this study suggested. "There's been a lot of academic research suggesting that men think they know what they're doing, even when they really don't know what they're doing." A fact that will come as a surprise to few of us. Men, it seemed, typically believed they could make sense of every piece of short-term financial news. Women, never embarrassed to ask directions, were on the whole far more likely to acknowledge when they didn't know something. As a consequence, women shifted their positions far less frequently, and made significantly more money as a result.
Naturally, if these findings were widely applicable, then it would be hard not to agree with Lewis's suggestion for reforming the sharpest end of capitalism. Rather than ring-fencing casino investment banks or demanding that high street banks hold vastly greater capital, as we heard at the Mansion House last week, wouldn't a safer model just be to hire more women?
To argue this case, you would probably need more than just behavioural evidence; you might need to understand some of the mechanisms which produced the trillion-dollar bad decision-making that led to what happened in 2008. In recent years, and particularly since the crash, a new science of such decision-making – neuroeconomics – has become fashionable in universities and beyond. It proposes the idea that you will create a better understanding of how people make economic choices if you bring to bear advances in neurobiology and brain chemistry and behavioural psychology alongside traditional economic maths models. Not surprisingly, neuroeconomics has plenty to say about the question of whether decision-making, in high-pressure situations, divides on gender lines.
The problem is that most of the scenarios used to investigate this divide are artificial. It is one thing attaching someone to an MRI scanner and telling him or her that a million pounds rests on their decision in a game; it is another when that person actually stands to lose a million pounds. Only one study, as far as I could discover, has had access to the brain chemistry, the neural biology, of young men actually working on trading floors. But the results it produced were nonetheless startling.
The study was led by a pair of Cambridge researchers. One, Joe Herbert, is a professor of endocrinology, and the other, John Coates, a research fellow in neuroscience and finance. Herbert, a specialist in the effect of hormones on depression, was fascinated to put some of his theories about the role of chemicals on decision making into practice. The curious thing about banks, he told me, "was that they know all about computers and systems and markets but they know next to nothing about the human machine sitting in the chair in front of screens making decisions. Nothing. We aimed to correct that just slightly."
It was Coates, though, who made the experiment possible. Having met Herbert at his lab in Cambridge, I met Coates in a pub in west London. He had a special advantage in gaining access to bond traders' brains, he explained: he used to possess one himself. Sharp-eyed and fit-looking, Coates retains the intensity of a man who used to run a trading desk on Wall Street during the dotcom bubble. He started off at Goldman Sachs and went on to Deutsche Bank. After some years trading, and making a lot of money out of a lot of money, he became increasingly fascinated by the way, during the dotcom years, the traders he worked alongside radically changed behaviour. They became, he says, "euphoric and delusional. They were taking far more risks, and were putting up trades with terrible risk-reward profiles". The dotcom was fun, in a way, he suggests; it was like the roaring 20s. "But I don't think anyone looks back on the housing bubble and laughs."
Coates was a relatively cautious trader himself, but there had been times when he too felt this surge, this euphoria: "When I had been making a lot of money myself, I felt unbelievably powerful," he recalls. "You carry yourself like a strutting rooster, and you can't help it. Michael Lewis talked about 'Big Swinging Dicks', Tom Wolfe talked about 'Masters of the Universe' – they were right. A trader on a winning streak acts exactly that way."
The second thing that Coates noticed was even more revelatory to him. "I noticed that women did not buy into the dotcom bubble at all," he says. "You couldn't find one who did, hardly. And that seemed like a pretty cool fact to me."
With this cool fact in mind, Coates began splitting his time between his trading desk and the Rockefeller University in Manhattan, which is perhaps the world's leading institute for the study of brain chemicals. There he started to become interested in steroids, and in particular something called "the winner effect". This occurs when two males enter a competition and their testosterone levels rise, increasing their muscle mass and the ability of the blood to carry oxygen. It also enhances their appetite for risk. Much of this testosterone stays in the system of the winner of a competition, while the loser's testosterone melts away fast; in evolutionary terms, the loser retires to the woods to lick his wounds. In the next round of competition, though, the winner already has high levels of testosterone, so he starts with an advantage, and this continues to reinforce itself.
"Steroids," Coates explains, "like most chemicals in your body, display what is called an inverted U-shaped response curve." That is to say, when you have low levels of them you lack vitality, and do very poorly at mental and physical tasks. But as the levels rise you get sharper and more focused until you reach an optimum. The key thing is this, however: "If you keep winning, your testosterone level goes past that peak and sliding down the other side. You start doing stupid things. When that happens to animals, they go out in the open too much. They pick too many fights. They neglect parenting duties. And they patrol areas that are too large." In short, they behave like traders on a roll; they get cocky.
Coates became convinced that this winner effect was what he observed in bullish trading markets, and what ended up dramatically distorting them. It also explained why women were mostly immune to the euphoria, because they had only 10% of the testosterone of men. What struck him most, though, was that, for all the literature about financial instability, economics, psychology, game theory, no one had ever clinically looked at a trader who was caught up in a bubble.
Coates wrote a research proposal. He came back to Cambridge where he had done his first degree, and because of his background eventually gained access, with Herbert, to a major City bond-dealing floor in London. They tested the traders for two hormones in particular, testosterone and cortisol (the anxiety induced, depressive "stress hormone"), and mapped their levels over a period of weeks against the success or failure of trades, individual profit and loss. Coates had imagined the experiment to be a preliminary study but the correlations he found – for evidence of irrationality produced by the winner effect and its converse – was "an absolute dream". They not only discovered that a trader's morning testosterone level could be used to predict his day's profitability. They also found that a trader's cortisol rose with both the variance of his trading results and the volatility of the market. The results pointed to a further possibility: as volatility increased, the hormones seemed to shift risk preferences and even affect a trader's ability to engage in rational choice.
Though the sample was limited, and suitable caution was needed in claiming too much, the correlations suggested that over a certain peak, testosterone impaired the risk assessment of traders. "And cortisol," he suggests, "was in some ways even more interesting than testosterone. We thought cortisol would rise when traders lost money," Coates says, making individuals more than usually cautious, "but actually it was going up incredibly when they were faced with just uncertainty. The stress hormones were switching over to emergency states all the time. There was an optimal level but these stress hormones can linger for months. Then you get all sorts of really pathological behaviours. If you are constantly prepared for high tension it affects your brain, and it causes you to recall stressful memories and become exaggeratedly risk-averse and kind of helpless."
Unfortunately this particular study ended in June 2007, before the full effect of the crisis, but its implications account, Coates believes, for some of what he subsequently heard from the trading floor. "If cortisol goes beyond a certain point, then it may become very difficult for traders to assess any risk at all. These guys are not built to handle adversity that well. There is an observable condition called 'learned helplessness', which if you are submitting to great stress over a long period of time makes you give up suddenly. Lab animals develop it: you open the cage and they won't escape. Traders have it too. They just slump in their chairs. In the crisis there were classic arbitrage opportunities as the markets were falling. Free money. But traders would sit there staring at the numbers and not touching it."
Since then, Coates has partly been working on the other strand of his original hypothesis, looking at the brain chemistry of women working in the markets. Because of the small sample sizes he has to work with – there were only three women out of 250 traders on the floor he first tested – the detail of that is far from complete, and he is properly reluctant to draw conclusions. What he will go so far as to say, though, is this. "Central bankers, often brilliant people, spend their life trying to stop a bubble or prevent a crash, and they are spectacularly unsuccessful at it. And I think it is because, at the centre of the market, you have these guys either ripped on testosterone or overwhelmed by cortisol so that they become completely price insensitive." Coates wrote a couple of articles after that research was published, suggesting that, if the winner effect was right, it was possible that bubbles were an entirely young male phenomenon. And if that were the case, then the best way of preventing boom and bust was to have more women and more older men – less in thrall to hormones – in the markets. "We know that opinion diversity is crucial to stable markets. What no one talks about is endocrine diversity, a diversity of hormones. The billion-dollar question is how to achieve it."
To most experienced, male, investment bankers, of course, this sounds like fighting talk. An old friend of mine, who traded his Cambridge English degree for an extremely lucrative life as a bond dealer, offered this, when I presented Coates's evidence to him. "It would be nice to think that having more female traders on the floor would make for less volatility," he said, "but that's wishful thinking. Financial markets are now global, so while we in the west might decide not to chase trends or react instinctively to breaking news because there are mature mothering types in boardrooms and sitting on risk committees, the rest of the world will, and our banks would lose out." And that's not all. "Many of the women I know who have managed money or have put capital at risk for banks have tended to be even more aggressive with risk than their male counterparts, as if perhaps to compensate for their supposed diffidence. Fighting their way through a male-dominated environment to a position in which they can invest/punt/ risk-manage, many women develop an ultra-masculine persona so as to be thought of as ballsy…"
Just a cursory glance through some of the recent spate of books and blogs written by young women who have worked in the City and lived to tell the tale would certainly seem to support this observation. Melanie Berliet, who worked as one of the only female traders in Wall Street, set the tone in her confessional blog: "If anything," she observed, "my token status gave me an extra thrill. I enjoyed being called a 'fucking dullard' or being instructed, patronisingly, to 'remove head from ass', because my reaction – to grin rather than cry – impressed the guys. I loved their attention and the daily opportunities to prove that I fitted in. What separated me from my colleagues was physical: my 5ft 9in, 120lb frame, my long, blondish hair – and my vagina. I had two options with my boss: trade sexual banter or resist. Typically, I chose the former. Like most traders, my base salary wasn't terribly high—$75,000 at the start of my third year. The bonus was all, and getting the right number rested on one thing, as I saw it: my willingness to promote my boss's fantasy of fucking me…"
John Coates doesn't believe the caricature, or at least he believes that in the upper reaches of banks, things have moved on. "A lot of my former colleagues are running divisions, or whole banks," he says. "I don't buy the sexist macho argument. The big investment banks desperately want women traders. But when they interview women who are qualified, the women don't want to do it…"
Neuroeconomics also starts to provide the answers to some of the reasons for that. Muriel Niederle is a professor at Stanford University, looking at gender differences in risk decisions. Over a period of years Niederle has developed clear evidence for the theory that though in non-competitive situations women demonstrate an advantage over men in making investment decisions, they either shy away completely from making those decisions in intensely competitive environments, or they respond less well than men to competition with very short-term high intensity and results-driven focus. This pattern is set, Niederle proves, from a very young age (and no doubt has a good deal to do with the differential presence of troublesome testosterone). Joe Herbert told me at his lab in Cambridge: "What is clear is that there are neurological differences between the sexes. Women, in very general terms, are less competitive, and less concerned with the status of being successful. If you want to make women more present, you have to remember two things: the world they are coming into is a man-made world. The financial world. So, either they become surrogate men… or you change the world."
Ah, changing the world. In the wake of 2008, there was a good deal of talk about that heady idea. Much of this talk concerned the creation of more gender balance in the city. The Economist coined the phrase "Womenomics" and argued that excluding nearly 50% of talent from crucial positions in business and finance was not only discriminatory but caused serious harm to stability and growth. Iceland's banks brought in women to clear up the mess that men had left. A good deal was made of the fact that the extraordinary success of microfinance in the developing world was because 97% of the loans were granted to women (men were – biologically? culturally? – not to be trusted). Science, neuroeconomics, was harnessed to develop some of those themes. And then, well, nothing. The commissions and the select committees decided that a return to something like the status quo, with all its implicit risks and inequalities, was the only option.
Womenomics still persists in a few places, however. The 30% Club was an initiative set up last November by executive women, and some senior men in FTSE 100 companies and accountancy and legal practices, to increase the number of women in decision-making and boardroom positions to that figure. It goes a little further than Lord Davies's recent report on the subject. But 30% is not an arbitrary number; it is thought – by neuroeconomists again, and through observation – to be the minimum proportion of women at the top of an organisation required to begin to change the culture; below that number, women tend to behave "like surrogate men"; above it, the subtle differences produced by gender might begin to influence the way decisions are made. In Britain there is still a good way to go: only 5.5% of executive directors in FTSE 100 companies are women (yet evidence shows that companies with women leaders have a 35% higher return on equity, and companies with more than three women on their corporate board have an 80% higher return on equity). On city trading floors, the percentage remains, for some of the reasons outlined above, at around 3% or 4%. Testosterone rules.
The country that has attempted most radically to change this balance is Norway, where a Conservative minister imposed a quota of 40% female directors in every boardroom. Most of the data suggests the initiative has been a great success, both culturally and commercially (though some, male, commentators argue that the turnaround is better explained by the spike in oil prices).
It would be hard to find many people in the city, even among women, who would favour quotas, though that argument can be made. John Coates, wearing his dealmaker's hat, suggests a practical solution. "The question is not whether men are risk takers and women are risk-averse. It is more what kind of risk do they want to take? My hunch is that women don't like high-frequency trading, so what you have to do is change the accounting period over which they are judged."
He then gives me a potted description of how things remain: "Say you have two traders. One trader makes $20m a year for five years, of which she might typically pocket a couple of million a year herself. At the end of five years she has made the bank the best part of $90m. Another trader makes $100m a year for four years. They don't want that guy to go off to a hedge fund so they let him take home $20m a year. But then in the fifth year – because of the winner effect – he loses $500m. That is essentially what happened in the financial crash. The bank has lost $100m and the trader has gained $80m. If you were judging these things over a five-year period, then you can see which person you would hire."
But, of course, that would require a very different idea of markets, and of money, to the one that is currently desperately being defended and remade. It would certainly require a greater degree of "endocrinal diversity". Still, the next time you hear someone suggest that things are getting back to "normal" in the city, and that we should at all costs start believing in exponential growth again, at least you can look him in the eye and state that you think his hormones might be playing up.
Neuroeconomics: Six things that the science of decision-making reveals
■ If groups of young men are shown pornographic pictures of women and then asked to choose between safe and risky investments, compared with men shown non-pornographic pictures they choose far riskier portfolios.
■ Our brains are designed to seek out novelty, but too much information can overwhelm them; we are generally better at assessing risk when listening to Bach than with the chatter of TV news.
■ Men's brains tend to shut down after they have proposed a deal, waiting for the response. Scans show that women brains continue to be active, analysing whether they have done the right thing.
■ Humans are the only animals that can delay gratification, a function of the prefrontal cortex. However, the prefrontal cortex only matures after the age of 30, and later in men than women. Before that, we are more likely to seek immediate gratification.
■ Our brains reward social interaction with the release of a chemical called oxytocin. It makes us feel good when we follow the herd. Stock market bubbles are one likely result of this.
■ Our brains are wired for human oxytocin-mediated empathy (or HOME). We are biologically stimulated to love (or hate) what is most familiar to us. We are built to form attachments, to value what we own more than what we do not own. This fact skews the rationality of all our investment decisions
Friday 17 June 2011
What is talent in sport?
Is it just natural ability or the consistency that comes from perseverance?
Harsha Bhogle
June 17, 2011
My father believed - as was the norm with respectable middle-class families in the years gone by - it was important that his children were good at mathematics. If your child was good at mathematics, you had imparted the right education and fulfilled one of your primary duties as a parent.
He often quoted to us what his friend, a respected professor of the subject, used to say: "There should be no problem that you encounter in an examination for the first time." It meant you had to work so hard that you had, conceivably, attempted and vanquished every situation that could find its way into an exam paper. It begs the question: if you did achieve 150 out of 150 in an exam (which my wife very nearly did once, much to my awe), was it because you were extraordinarily intuitive or because you had worked harder than the others, so that you didn't "encounter any problem in an exam" for the first time?
In other words, is getting a "centum" (a peculiarly Tam Bram expression) a matter of genius or a matter of perseverance? It is an issue that many intelligent authors around the world have been debating for a while, and one that is at the heart of sport. Would anybody who solved a certain number of sums get full marks? Would two people, each of whom put in 10,000 hours (Malcolm Gladwell's threshold for achievement) produce identical results? Or are some people innately gifted, allowing them to cross that threshold sooner?
We pose that question a great deal in cricket when we argue about talent. Players who play certain shots - the perfectly balanced on-drive for example - are labelled "talented" and put into a separate category. They acquire a halo, and in a near-equal situation they tend to get picked first. "Talent" becomes this key they flash to gain entry. And yet it is worth asking what talent really is.
Is it the ability to play the on-drive or, more critically, the ability to play that on-drive consistently? It is a critical difference. Consistency brings in an element of perseverance that you do not normally bracket with talent.
Let me explain. I have often, while watching Rohit Sharma bat, said "wow" out loud. I probably said it because I saw him play a shot I did not expect him to. Or maybe it was a shot very few players were able to play. Just as often, I find myself going "ugh" with frustration at him. It is probably because, having had the opportunity to go "wow", I now expected him to play the same shot again. And so, without explicitly stating it, I am invoking the assumption of consistency to assess talent. The old professor of mathematics would have said, "Play the shot so often that it is no longer a new shot when you play it."
It is while I was debating this in my mind that I became aware of why Sachin Tendulkar paid such high compliments to Gary Kirsten for throwing him balls. Tendulkar wanted to perfect a shot and needed someone to throw him enough balls to attain that perfection, so that when he attempted it in a match he wasn't doing it for the first time. And in a recent conversation he said he was at his best when he was in the "subconscious", not distracted by the "conscious", and able to play by instinct - which he had perfected through practice.
Now we often call Tendulkar a genius, and yet, as we see, the talent that we believe comes dazzling through is, in essence, the product of many hours of perseverance. Is Tendulkar, then, the supreme example of my father's friend's theory of doing well at maths? And assuming for a moment that is true, shouldn't we be honouring perseverance because that is what it seems "talent" really is?
And so it follows that when we complain that all talented players don't get to where they should, we are in effect saying that they didn't practise hard enough to be consistent. Maybe it means we should all use the word "talent" more sparingly; not bestow it on a player until ability has been married to hard work long enough to achieve consistency.
This is also the starting premise of a new book I hope to continue reading - Bounce by the former table tennis champion Mathew Syed. I am delighted by its opening pages, one of which said "talent is overrated". It is something I have long believed.
Harsha Bhogle
June 17, 2011
My father believed - as was the norm with respectable middle-class families in the years gone by - it was important that his children were good at mathematics. If your child was good at mathematics, you had imparted the right education and fulfilled one of your primary duties as a parent.
He often quoted to us what his friend, a respected professor of the subject, used to say: "There should be no problem that you encounter in an examination for the first time." It meant you had to work so hard that you had, conceivably, attempted and vanquished every situation that could find its way into an exam paper. It begs the question: if you did achieve 150 out of 150 in an exam (which my wife very nearly did once, much to my awe), was it because you were extraordinarily intuitive or because you had worked harder than the others, so that you didn't "encounter any problem in an exam" for the first time?
In other words, is getting a "centum" (a peculiarly Tam Bram expression) a matter of genius or a matter of perseverance? It is an issue that many intelligent authors around the world have been debating for a while, and one that is at the heart of sport. Would anybody who solved a certain number of sums get full marks? Would two people, each of whom put in 10,000 hours (Malcolm Gladwell's threshold for achievement) produce identical results? Or are some people innately gifted, allowing them to cross that threshold sooner?
We pose that question a great deal in cricket when we argue about talent. Players who play certain shots - the perfectly balanced on-drive for example - are labelled "talented" and put into a separate category. They acquire a halo, and in a near-equal situation they tend to get picked first. "Talent" becomes this key they flash to gain entry. And yet it is worth asking what talent really is.
Is it the ability to play the on-drive or, more critically, the ability to play that on-drive consistently? It is a critical difference. Consistency brings in an element of perseverance that you do not normally bracket with talent.
Let me explain. I have often, while watching Rohit Sharma bat, said "wow" out loud. I probably said it because I saw him play a shot I did not expect him to. Or maybe it was a shot very few players were able to play. Just as often, I find myself going "ugh" with frustration at him. It is probably because, having had the opportunity to go "wow", I now expected him to play the same shot again. And so, without explicitly stating it, I am invoking the assumption of consistency to assess talent. The old professor of mathematics would have said, "Play the shot so often that it is no longer a new shot when you play it."
It is while I was debating this in my mind that I became aware of why Sachin Tendulkar paid such high compliments to Gary Kirsten for throwing him balls. Tendulkar wanted to perfect a shot and needed someone to throw him enough balls to attain that perfection, so that when he attempted it in a match he wasn't doing it for the first time. And in a recent conversation he said he was at his best when he was in the "subconscious", not distracted by the "conscious", and able to play by instinct - which he had perfected through practice.
Now we often call Tendulkar a genius, and yet, as we see, the talent that we believe comes dazzling through is, in essence, the product of many hours of perseverance. Is Tendulkar, then, the supreme example of my father's friend's theory of doing well at maths? And assuming for a moment that is true, shouldn't we be honouring perseverance because that is what it seems "talent" really is?
And so it follows that when we complain that all talented players don't get to where they should, we are in effect saying that they didn't practise hard enough to be consistent. Maybe it means we should all use the word "talent" more sparingly; not bestow it on a player until ability has been married to hard work long enough to achieve consistency.
This is also the starting premise of a new book I hope to continue reading - Bounce by the former table tennis champion Mathew Syed. I am delighted by its opening pages, one of which said "talent is overrated". It is something I have long believed.
Wednesday 15 June 2011
DRIFT - Spin Bowling
I receive a lot of e-mails asking about drift or curve.
For a right arm leg spin bowler the drift he/she is seeking is in toward a right hand batter which tends to square the batter up and then ideally the ball will spin away toward slip after landing.
Shane Warne created havoc with batsmen because of the drift and spin he achieved.
How does it happen?
Genuine drift, which should not be confused with the ball angling in to the batter by a slicing action at release, comes from several basic areas.
1) side on alignment toward the target area.
2) revolutions on the ball (mostly side spin)
3) strong shoulder rotation (180 degrees)
Breeze over the left shoulder can also encourage the ball to drift in toward the batter.
If, as a couple of boys have told me, the ball is "drifting" toward slip it is most likely the shoulders are rotating around the front leg creating an angle of release in that direction.
For a ball to genuinely drift toward slip the revolutions on the ball would normally be the opposite of the leg break eg; Googly or off spin.
The more over spin (top spin) on the ball at release the more the ball will "drop" on the batter and the less it is likely to curve inwards.
As a rule chest on spinners struggle for drift.
So, improve your alignment and impart lots of spin on the ball and await the outcome.
Tuesday 14 June 2011
Not Every Adulterer is a Villain
Terence Blacker: Not every adulterer is a villain
A Pinter-Bakewell affair would have not the slightest chance of remaining private
Tuesday, 14 June 2011
There are signs that, as in so many areas of modern life, standards of infidelity are in decline. An American congressman called Anthony Weiner has admitted having taken photographs of his crotch and sent them to a number of women he had never met. Here it has been reported that a famous footballer had an affair with his sister-in-law which had resulted in an abortion.
No wonder that audiences are flocking to the Comedy Theatre to see Betrayal, Harold Pinter's famous play from the golden age of adultery, the 1960s, based on his equally famous affair with Joan Bakewell. For the seven years during which they were seeing each other – in the biblical sense – both were glamorous public figures, yet they managed to keep their love out of the public gaze. When, eventually, some of their friends realised what was going on, they took a grown-up approach and kept a discreet silence.
"There was something different about life then," Bakewell wrote this weekend. "People had a sense of the right to privacy... It was assumed that affairs arose from the dynamic of human relations – the unavoidable attraction of more than one person in one's life – and were viewed benignly until people began to get hurt."
Since those days, infidelity has rather gone off the rails. It may be that, away from priapic footballers and weinering politicians, some honourable affairs, passionate and sad, are taking place, but Bakewell is right: the attitude which surrounds the love life of others has changed. The sense of sympathy, the awareness that, even in the best-ordered lives, people can fall in love with the wrong person at the wrong time, has faded. The modern view is prim and unforgiving. We are fascinated by the sex lives of others but, even as we ogle, we tend to take a position of bogus moral superiority.
A man who messes up his marriage by falling in love with another woman is, it is unquestioningly assumed, a rat of misbehaviour who should forever be distrusted. The career of Robin Cook never quite recovered from the way his marriage ended, and that of Chris Huhne may be heading in the same direction.
The betrayed wife is offered an unattractive choice. Either she can make a career out of her victimhood, writing about the awfulness of men in public life every time a new scandal appears in the press. On the other hand, if she fails to rage and vow revenge in a satisfactory manner, she is likely to be treated with particular contempt. She is a doormat, that undignified and old-fashioned thing, the Stand-By-Your-Man wife.
Even when public marriages come to an end in an apparently civilized fashion, as in the recent case of Trevor Nunn and Imogen Stubbs, the public view of them is sceptical, faintly incredulous.
Some might argue that we have become more sensitive in recent decades, that we understand the pain and hurt which betrayal can cause, and are no longer prepared to stand by and accept it. If we did, we would somehow be complicit in the act of infidelity.
With this new moral vigilantism, a Pinter-Bakewell affair would have not the slightest chance of remaining private. A conscientious friend would feel obliged to have a quiet word with a journalist whose paper, again with the most elevated motives, would run a campaign of disapproving revelation.
These are the morals of a Victorian novelette. Any kind of human muddle involving the competing demands of love, desire, loyalty, fear and daring is reduced to the level of villain or victim, bad or good.
Yet what a shallow, priggish view of love, of men and women, these assumptions represent. How absurd – and how dreary – it is to believe that to be decent and honourable, a person should always live and love according to the same unbending precepts.
As Pinter, like all great writers, knew, there is often something true, tragic and noble in betrayal.
A Pinter-Bakewell affair would have not the slightest chance of remaining private
Tuesday, 14 June 2011
There are signs that, as in so many areas of modern life, standards of infidelity are in decline. An American congressman called Anthony Weiner has admitted having taken photographs of his crotch and sent them to a number of women he had never met. Here it has been reported that a famous footballer had an affair with his sister-in-law which had resulted in an abortion.
No wonder that audiences are flocking to the Comedy Theatre to see Betrayal, Harold Pinter's famous play from the golden age of adultery, the 1960s, based on his equally famous affair with Joan Bakewell. For the seven years during which they were seeing each other – in the biblical sense – both were glamorous public figures, yet they managed to keep their love out of the public gaze. When, eventually, some of their friends realised what was going on, they took a grown-up approach and kept a discreet silence.
"There was something different about life then," Bakewell wrote this weekend. "People had a sense of the right to privacy... It was assumed that affairs arose from the dynamic of human relations – the unavoidable attraction of more than one person in one's life – and were viewed benignly until people began to get hurt."
Since those days, infidelity has rather gone off the rails. It may be that, away from priapic footballers and weinering politicians, some honourable affairs, passionate and sad, are taking place, but Bakewell is right: the attitude which surrounds the love life of others has changed. The sense of sympathy, the awareness that, even in the best-ordered lives, people can fall in love with the wrong person at the wrong time, has faded. The modern view is prim and unforgiving. We are fascinated by the sex lives of others but, even as we ogle, we tend to take a position of bogus moral superiority.
A man who messes up his marriage by falling in love with another woman is, it is unquestioningly assumed, a rat of misbehaviour who should forever be distrusted. The career of Robin Cook never quite recovered from the way his marriage ended, and that of Chris Huhne may be heading in the same direction.
The betrayed wife is offered an unattractive choice. Either she can make a career out of her victimhood, writing about the awfulness of men in public life every time a new scandal appears in the press. On the other hand, if she fails to rage and vow revenge in a satisfactory manner, she is likely to be treated with particular contempt. She is a doormat, that undignified and old-fashioned thing, the Stand-By-Your-Man wife.
Even when public marriages come to an end in an apparently civilized fashion, as in the recent case of Trevor Nunn and Imogen Stubbs, the public view of them is sceptical, faintly incredulous.
Some might argue that we have become more sensitive in recent decades, that we understand the pain and hurt which betrayal can cause, and are no longer prepared to stand by and accept it. If we did, we would somehow be complicit in the act of infidelity.
With this new moral vigilantism, a Pinter-Bakewell affair would have not the slightest chance of remaining private. A conscientious friend would feel obliged to have a quiet word with a journalist whose paper, again with the most elevated motives, would run a campaign of disapproving revelation.
These are the morals of a Victorian novelette. Any kind of human muddle involving the competing demands of love, desire, loyalty, fear and daring is reduced to the level of villain or victim, bad or good.
Yet what a shallow, priggish view of love, of men and women, these assumptions represent. How absurd – and how dreary – it is to believe that to be decent and honourable, a person should always live and love according to the same unbending precepts.
As Pinter, like all great writers, knew, there is often something true, tragic and noble in betrayal.
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