No Illusions Podcast #59 – Benjamin Walker, Psychopathic Entrepreneurs

PhD student Benjamin Walker and Business Psychology professor Chris Jackson conducted three experiments using more than 600 people from the general population. They found that people with psychopathic traits can make great entrepreneurs because they are not afraid to fail or make bold and risky decisions.

My concern, though, is that although psychopaths might make great entrepreneurs, once they get wealth and power as a result of their entrepreneurial activities, they can end up doing more damage to society than good. But what do we do about it? How do we protect society from psychopaths?

 

Below is Benjamin’s recent three-minute pitch about the subject of his PhD.

psychopath hopkins

How To Embezzle $100 Million

Step 1. Start a financial services firm.

Step 2. Make sure you are the only person in the company who sees the bank statements.

Step 3. “Using a combination of Photo Shop, Excel, scanners and both laser and ink jet printers… make very convincing forgeries of nearly every document that came from the Bank.”

At least, that’s how Peregrine CEO Russell Wasendorf Sr. did it – for over 20 years.

He wrote a suicide note explaining the whole scam before attempting suicide. He failed at that and has now pleaded guilty to fraud and embezzlement.

What about the Regulators? Why didn’t they catch him?

“It was relatively simple to deceive the Regulators” according to Russ. Good to know.

He ended his suicide note with “I am ready to die. I guess this is the only way out of a business I hate so much.”

It’s a far cry from his most recent “Chairman’s Letter”, where he wrote

“At PFGBEST, our consistent hallmarks remain: respectful and conscientious care of customers and their accounts; a keen sense of their evolving needs; and, the talent and resources to provide analytical, flexible and customized solutions.”

Guys like Wasendorf are fascinating to me. How high would he score on a test for psychopathy? Surely he would score highly on many of those factors.

You have to wonder how many CEOs, politicians and entrepreneurs are psychopaths? And what is it about capitalism that allows them to prosper?

Of course, the history of socialism and communism has it’s fair share of psychopaths as well. Why is it so hard for us to design a socio-economic system that weeds out psychopaths?