The Danes had their heads inside a functional magnetic resonance imaging scanner (fMRI), which recorded some of their brain activity. The researchers also asked each volunteer some questions, including ‘How did it make you feel?’ All of this, says the document, ‘confirmed that participants felt less comfortable during observation of destroying actions performed on money’. An additional finding: the volunteers felt more ‘aroused’ when watching anything happen to money than when watching the same things happen to worthless paper.
The scientists find the brain scans to be especially interesting. The activity patterns, they say, are similar to something they’ve seen before: the ‘use of concrete tools, such as hammers or screwdrivers, has been associated with activation of a left hemisphere network including the posterior temporal cortex, supramarginal gyrus, inferior parietal lobule, and lateral precuneus. Here we demonstrate that observing bank notes being cut up or torn, a critical violation of their function, elicits activation within the same temporo-parietal network. Moreover, this activation is the greater the higher the value of the banknote.’
They caution that the story must be more complex, that your brain probably regards money in several – differing – ways. They note, for example, the existence of published studies that ‘suggest that money can also act as a drug’.
Team member Chris Frith, by the way, was part of a group that gathered evidence about the brains of London taxi drivers being more highly developed than those of their fellow citizens. That study’s findings, honoured with the 2003 Ig Nobel Prize in medicine, appear to be unrelated to these later cautions.
Becchio, Cristina, Joshua Skewes, Torben E. Lund, Uta Frith, Chris Frith, and Andreas Roepstorff (2011). ‘How the Brain Responds to the Destruction of Money.’ Journal of Neuroscience, Psychology, and Economics 4 (1): 1–10.
Lea, Stephen E. G., and Paul Webley (2006). ‘Money as Tool, Money as Drug: The Biological Psychology of a Strong Incentive.’ Behavioral and Brain Sciences 29: 161–209.
Maguire, Eleanor, David Gadian, Ingrid Johnsrude, Catriona Good, John Ashburner, Richard Frackowiak, and Christopher Frith (2000). ‘Navigation-Related Structural Change in the Hippocampi of Taxi Drivers.’ Proceedings of the National Academy of Sciences 97 (8): 4398–403.
The Invisible Hook of Pirate Economics
Pirates are a practical lot, at least in theory. The theory was supplied in 2007 by Peter T. Leeson, an assistant professor of economics at West Virginia University. He is of the opinion that pirates pioneered some basic economics.
In a study called ‘Pirational Choice: The Economics of Infamous Pirate Practices’, Leeson ‘investigates the internal governance institutions of violent criminal enterprise by examining the law, economics, and organization of pirates’. These were the classical pirates of the seventeenth and eighteenth century, especially those who practised professionally in and around the West Indies and in the waters around Madagascar. Leeson’s study appeared before chestsful of information began to surface in 2008 and 2009 in Wall Street, in the City of London, and at other romantic places where peril and opportunity drive many a captain of finance to pursue plunder.
‘Pirate governance created sufficient order and cooperation to make pirates one of the most sophisticated and successful criminal organizations in history’, writes Leeson. ‘To effectively organize their banditry, pirates required mechanisms to prevent internal predation, minimize crew conflict, and maximize piratical profit.’
Pirates, he argues, invented a system of checks and balances ‘to constrain captain predation’, and devised democratic constitutions to ‘create law and order’ among themselves. ‘Remarkably,’ points out Leeson, ‘pirates adopted both of these institutions before the United States or England.’
These pirate practices of the past now read like a ‘best practices’ primer on economics and finance. Successful buccaneers learned how to manage organizational growth: ‘Many pirate crews were too large to fit in one ship. In this case they formed pirate squadrons ... Multiple pirate ships often joined for concerted plundering expeditions. The resulting pirate fleets could be massive.’ They recognized that the big pirates had to be restrained from completely plundering the treasures of the little pirates under their command. Leeson uses simplified mathematical models to explain how this was achieved. ‘Consider a pirate ship of complete but imperfect information with a captain and two “factions” of ordinary pirates that together comprise the ship’s crew’, he says. ‘The captain moves first and decides whether to prey on the crew or not. If he preys on both factions simultaneously, they join together to overthrow him, so this is not an option he entertains. He can only prey on one faction at a time.’
The study works out the theoretical consequences, and summarizes them in two graphs captioned ‘The Threat of Captain Predation’ and ‘Piratical Checks and Balances: Constraining Captain Predation’. Examining the lines that connect the various nodes, one can follow the workaday machinations of pirate economic life, and see how these resolve into multiple equilibria and a collection of expected ‘payoffs’.
A note on sources from ‘Pirational Choice’
One sees at a glance how organizations of pirates come (in Leeson’s theory) to restrain or deflect themselves from destroying their own organizations. They enable themselves to keep working for the greater, more effective plunder of the larger, non-pirate community.
Leeson, Peter T. (2010). ‘Pirational Choice: The Economics of Infamous Pirate Practices.’ Journal of Economic Behavior and Organization 76 (3): 497–510.
–– (2007). ‘Trading with Bandits.’ Journal of Law and Economics 50 (2): 303–21.
–– (2009). ‘The Invisible Hook: The Law and Economics of Pirate Tolerance.’ New York University Journal of Law and Liberty 4: 139–71.
––, and C. Coyne. ‘The Economics of Computer Hacking.’ Journal of Law, Economics and Policy 1(2) 2006: 511–32.
May We Recommend
‘How Smart Are the Smart Guys? A Unique View from Hedge Fund Stock Holdings’
by John M. Griffin and Jin Xu (published in the Review of Financial Studies, 2009)
The authors, at the University of Texas at Austin and Zebra Capital Management, report: ‘We provide the first comprehensive examination of hedge funds’ long-equity positions and the performance of these stock holdings ... Overall, our study raises serious questions about the proficiency of hedge fund managers.’
Rock, Paper, Monkeys
Among scholars of the game of rock-paper-scissors, only a tiny minority also study monkeys. This fact, by itself, may explain why no studies were published until 2005 about what happens when monkeys play rock-paper-scissors.
Daeyeol Lee, Benjamin P. McGreevy, and Dominic J. Barraclough of the University of Rochester, in New York, wrote that first, and so far the only, report on the subject: ‘Learning and Decision Making in Monkeys during a Rock-Paper-Scissors Game’. Lee, the lead author, has since moved to Yale University, where he is an associate professor of neurobiology.
The test subjects were male rhesus monkeys. No one explained to them the rules of the game: that rock breaks scissors, scissors cut paper, paper covers rock. The scientists wanted to see whether and how the monkeys would learn from the brute experience of playing game after game after game. Whenever a monkey did well, it got a sudden, sweet reward: a little drop of juice after each tie, two drops after each win. It received nothing – not even faint boos – after a loss.
For reasons unstated, the scientists chose not to use real rocks, paper, or scissors. Instead, they rigged a computer to display crude patterns of dots and circles. Different patterns represented a rock, a sheet of paper, and a pair of scissors. The monkeys were not informed as to which symbol stood for what object.
The monkeys were treated in a manner that is familiar to many hard-core computer gamers. Each sat in a chair, facing a monitor that flashed the symbols for rock, paper, and scissors. Rather than being asked to make the traditional physical gesture for
rock, paper, or scissors, the monkey was expected to cast its gaze towards the symbol of its choice. The scientists tracked each monkey’s eye movements, using a German-manufactured Thomas-ET49 high-speed video-based eye-tracking machine, and digitally recorded the entire sequence of each monkey’s choices.
There were only two monkeys. They worked hard.
One monkey played rock-paper-scissors for forty-one days, making a total of 87,200 choices, an average of 2127 rounds every day. The other monkey played for fifty-two days, making a total of 82,661 choices, an average of 1589 rounds per day. Over the long haul, each monkey chose paper about as often as it picked scissors. Both monkeys displayed a slightly irrational aversion to rocks.
The scientists used economics theory to critique the overall performance, saying: ‘Each animal displayed an idiosyncratic pattern substantially deviating from Nash equilibrium.’ The Nash equilibrium was conceived by John Forbes Nash, who was awarded a Nobel Prize in 1994 for his ‘pioneering analysis of equilibria in the theory of non-cooperative games’. He was also the subject of the 2001 film A Beautiful Mind.
Because only two monkeys were tested, Daeyeol et al. admitted that it ‘was difficult to conclude’ exactly which strategies a monkey uses to play the game. ‘This’, they write, ‘remains to be investigated in future studies.’
Lee, Daeyeol, Benjamin P. McGreevy, and Dominic J. Barraclough (2005). ‘Learning and Decision Making in Monkeys During a Rock-Paper-Scissors Game.’ Cognitive Brain Research 25 (2): 416–30.
Soviet Underwear Read
Olga Gurova studies the cultural history of underwear in the Soviet Union. ‘When I am talking about Soviet underwear’, she says, ‘I mean the underwear that appeared after the 1917 Revolution.’
Gurova is based at the Academy of Finland department of social research. In 2005–06, she spent a year in the US as a Fulbright fellow, and her public lectures helped to fill the information gap that developed during the Cold War.
In the 1920s, Soviet magazines touted a ‘regime of cleanliness’ for the proletariat. ‘Underwear’, explains Gurova, ‘was a compulsory part of that regime.’ A goal was established: everyone should have at least two sets of underwear, and should change sets at least once every seven to ten days. Mass production was cranked up, underclothing the populace in officially healthy, comfortable, hygienic long johns, boxers, undershirts, and bras. Gurova’s research shows that most of these items were ‘spacious’, and that ‘there was no big difference in design between male and female underclothes’.
Having pored over masses of documentation, Gurova infers that during the 1920s ‘Soviet underwear was not about sex, it was about sport’. Sports outfits – T-shirts, shorts, and sleeveless shirts – became the basic prototypes. Petticoats, seen as bulky and old-fashioned, faded from the scene, as did corsets. Underwear design quickly adapted to better serve Soviet women’s wide-ranging physical activities in the factory and the kitchen. In contrast to most European countries, reports Gurova, ‘the Soviet revolution canceled corsets and dressed women in bras more quickly’.
Gurova hypothesizes that, after the 1920s, there were three major periods in the history of Soviet underwear. The 1930s and 1940s were characterized by a Joseph Stalin speech, in 1935, proclaiming that Soviet life was becoming more abundant and joyful. Women’s underwear became somewhat feminine. For both sexes, undergarments could now be in certain colours. According to Gurova: ‘If previously they were white in color, according to hygienic reasons, later they become black, vinous, khaki or dark blue, and the explanation was the opposite than previous: dark colors become dirty slower.’
In the 1950s and 1960s, Premier Nikita Khrushchev increased Soviet interaction with other countries. Clothing styles were on Soviet minds. Soviet stores offered a wider, if not quite dizzying, array of consumer items. Soviet underwear became ‘a means of personal expression’.
The final period, the 1970s and 1980s, was marked by consumer goods shortages – and by a government campaign against obesity, with the slogan ‘To be plump is no good’. For many citizens, Gurova says, ‘it was hardly possible to buy undergarments that fitted well’.
It was here that the Soviet peoples showed their resilience. Gurova says that ‘manipulations with clothes at home became very popular: people sewed clothes, repaired them, and constructed new clothes from the old ones ... The Soviet man overcame the shortage, personified and privatized those standard clothes.’
These are the barest facts. Dr Gurova plans to cover them more fully with a book.
Gurova, Olga (2005). ‘Making of the Body: Cultural History of Underwear in Soviet Russia.’ Paper presented at the Russian, East European, and Eurasian Center, University of Illinois at Urbana-Champaign, 29 November.
In Brief
‘How Hello Kitty Commodifies the Cute, Cool, and Camp: “Consumutopia” Versus “Control” in Japan’
by Brian J. McVeigh (published in the Journal of Material Culture, 2000)
Evidence: Hello Kitty ‘bankbook and bank card’
Foucault on Management
Of all the football leagues for all the players in the world, the Australian Football League is the first to sponsor research that overtly applies the work of the French philosopher Michel Foucault.
Australian football is not soccer, nor is it American football. It is, fans and players like to point out, based on a different philosophy from anything else that answers to the name ‘football’. The Australian game even answers to its own, special nickname: footy. Australian behaviourists Peter Kelly and Christopher Hickey elucidate one aspect of the game’s philosophy in a study they call ‘Foucault Goes to the Footy: Professionalism, Performance, Prudentialism and Playstations in the Life of AFL Footballers’.
They went public with their work in 2004, when both were based at Australia’s Deakin University. Kelly has since moved to Monash University. He is also an honorary senior fellow at the University of Hull, UK. Both men are conversant with the thoughts of Michel Foucault, the bespectacled, bald philosopher who died in 1984, the year the Essendon Bombers won the footy championship, coming from four goals behind at the three-quarter mark of the ultimate game to decimate the defending champions, Hawthorn Hawks.
Foucault famously said, ‘Madness, death, sexuality, crime; these are the subjects that attract most of my attention.’ Several million footy-mad Australians would say much the same, be they supporters of Geelong, St Kilda, Adelaide, Carlton, Collingwood, or any of the eleven other clubs in the Australian Football League.
Kelly and Hickey say their research is ‘informed by Foucault’s later work on the care of the Self to focus on the ways in which player identities are governed by coaches, club officials, player agents and the AFL Commission/Executive; and the manner in which players conduct themselves in ways that can be characterised as professional – or not’.
That is a mouthful. It comes down to using Foucault’s philosophical ideas to help footy clubs choose players who will be worth the clubs’ substantial recruitment and salary investment.
The ideas are drawn primarily from Foucault’s ‘The Ethics of the Concern for Self as a Practice of Freedom’ and ‘Subjectivity and Truth’, essays he wrote late in life, during the period when the Australian Football League was still calling itself the Victorian Football League.
Then, player salaries were lower and footy clubs were almost carefree in their risk-management practices. Nowadays, the write-off cost of a defective or disruptive footy player is bigger, and thus so are the worries of prudent footy executives. Foucault helps them tackle those worries.
Elsewhere, the business community has been, on the whole, slow to adopt Foucault’s contributions to the philosophy of accounting. But the Australian Football League has built itself a platypus of a game by incorporating odd elements from the most unexpected places. It is unafraid to throw something different – even a dead French intellectual icon – into its business plans.
Kelly, Peter, and Christopher Hickey (2004). ‘Fouc
ault Goes to the Footy: Professionalism, Performance, Prudentialism and Playstations in the Life of AFL Footballers.’ Paper presented at the TASA Annual Conference, Latrobe University, December.
A Good Head Shape for Business
A new line of American-British research suggests that the shape of a chief executive officer’s head can indicate how well his firm will prosper. The shape also predicts whether or not the chief executive will act immorally.
The research offers a mathematical tool that financial analysts can add to their professional kit bag: the chief executive officer’s facial width-to-height ratio. The ‘chief executive facial WHR’, for short. The research and its financial implications are outlined in a study called ‘A Face Only an Investor Could Love: CEOs’ Facial Structure Predicts Their Firms’ Financial Performance’, to be published in the journal Psychological Science.
The authors, Elaine Wong and Michael Haselhuhn at the University of Wisconsin-Milwaukee, and Margaret Ormiston at London Business School, explain the significance of their work. Prior researchers, they say, failed ‘to empirically identify physical traits that predict leadership success’ or predict ‘the ability of leaders to achieve organizational goals’.
Their discovery, in their view, constitutes a breakthrough: ‘We identify a specific physical trait, facial structure, of leaders that correlates with organizational performance. Specifically, chief executive officers with wider faces (relative to facial height) achieve superior firm financial performance.’
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