All of the derivative products and so on. So the model of financial capitalism is one that doesn't, you often hear a communist saying that in the "real economy" and what they mean by the "real economy" is the economy where things are being made whereas the "financial economy" is an economy where people who have money can make more and they make more by speculating with the money they already have, not by making something that improves people's lives.
I think it's a catastrophe for the world because at the moment when we were having this development that capitalism was improving and still has to improve people's lives in the majority world. The West then turned and developed this model of capitalism which is really about making rich people even richer.
R.K.: Now, I'm going to grab a couple more quotes from your book, "history shows that it was only by strengthening the power of governments acting within the safeguards of representative democracy, the rule of law and human rights protection that humanity has managed to partially overcome oppression by pathological elites."
Then you go a little later on to quote Harvard economist Josh Lerner, "virtually every hub of cutting edge entrepreneurial activity in the world today had it's origins in proactive government intervention." A little later on you say neo-liberalism provided psychopaths and people with narcissistic and paranoid personality disorders with the smoke screen they needed to rise to positions to power in global financial organizations, to loot those financial institutions with the support of government and ultimately to bankrupt the Western financial system. You tied it together there.
I.H.: Well I think that's what's been happening and again it comes back to the very beginning of our conversation you know? That there's the psychopaths that we characterize as being violent and there are psychopaths who are so-called successful and who can get to positions of power and get to positions of authority in situations like the financial sector and so forth. Again there were a few quotes that I had in the book about what the culture is like within the financial services sector, so Yves Smith summarized the environment as one characterized by weak regulation, supervision is inherently difficult, high levels of responsibility are devolved to even relatively junior employees and there are huge incentives fueled by highly aggressive competition for promotion.
It doesn't have to be the people at the top who are the ones who are creating the damage. The financial services, on the whole, financial industry again, and this is being said by people who are in the book, I'm using quote from people who are inside the system and, former Morgan Stanley employee Frank Portnoy said he went in to work and craved the sensation of ripping someone's face off.
You have to be a criminal to be good at this business and to retain supremacy banks had to prey upon their clients. If we go back again to the type of, we talked about culture and culture can either enable these people to operate or you can have cultures in which it's very difficult for them to operate and all the evidence that's coming out about how the culture within the financial sectors industries, a lot of that culture is one in which I'm arguing psychopaths and people with narcissistic personality disorders can thrive.
R.K: Okay, you have a section in your book called Democracy as Protection Against Pathological Elites. Can you talk about that?