NYT: Biology & Wall St. ?!

“Understanding the effects of human biology on the [financial] markets should profoundly change how we see them, and their pathologies” writes John Coates, a research fellow at Cambridge University and a former derivatives trader, in the opinion section of last Sunday’s New York Times.

If you just read that statement and wondered what the connection is, your reaction is an accurate reflection of an ‘invisible hand’ at work, but not the one coined by Adam Smith.  Rather, the average level of understanding about body mechanics and biology, as well as a lack of awareness about the various ways such knowledge can be put to use, is astonishingly low considering that our bodies are our one constant companion during our lifetimes.

“What happens to you body when you take risks?  What happens to it when you make or lose money?  Economics  rarely asks these questions,” writes Coates.  “It tends to view the assessment of financial risk as a purely intellectual affair, involving the calculation of asset returns, probabilities and allocation of capital.  It is economics from the neck up.”  Indeed, most of society’s pursuits in business, education, health care, city planning, social media, politics and leadership, amongst others, have historically been practiced from the neck up.  “For the first half of my career in public and non-profit leadership, I thought my body was merely something to hang clothes on!” recently shared Susie Richardson, of Facing History and Ourselves.

The fact that our biology’s affect us is well proven; the extent to which this plays out in shaping how we make decisions, individually and collectively, is just beginning to be considered across varied disciplines world-wide.  John Coates’s forthcoming book “The Hour Between Dog and Wolf: Risk Taking, Gut Feelings, and the Biology of Boom and Bust,” conferences like Being Human 2012 and the fact that words like “brain plasticity” and “yoga” are often used in the same sentence illustrate that this kind of thinking is beginning to become part of a common curiosity, if not vernacular.

Yet the trend is new and the appropriate frames for thinking about body literacy are slow to catch on.  Introducing such considerations into our public discourse is the most important initiative of “We Are=Movement.”  The fact that we are often met with blank stares is, in fact, encouraging.  Statements like “I don’t get it, what do you mean that ‘physical movement affects me’?” affirm the need.

Mr. Coates’ article is a perfect response to the above question.  Coate takes us on a roller-coaster ride as we observe the reactions of a Wall Street trader who hears a rumor that could have major ramifications for the market.  He tracks the physiological changes of this man in a way that gets the readers’ own blood pumping.  (Material for a whole other article about mirror neurons and empathy!)   Coate’s observations and conclusions about biology and society are significant.  “[Traders] are under the influence of some naturally produced narcotic, one that can transform them into different people,” he writes.  “I have come to think of it as the ‘molecule of irrational exuberance,’ and to take seriously the possibility that during bubbles–and crashes–the financial community turns into a clinical population.”

What is most inspirational about Mr. Coates’s article is that he makes the leap from observation and consideration to suggested action.  He lists ways that the pathology of the financial markets could change, and thus change the ramifications of decisions of traders on the general public.  Such thinking can, and ought to be, applied across varied disciplines.  The state of our collective health, from back ache and childhood obesity, to unemployment and general discontent, affirm that our society can greatly benefit from becoming body-literate.  When speaking to experts in the movement worlds–doctors, dancers, movement therapists, sports scientists–the response is often an exuberant “I’m so glad you’re doing this, this is so needed!”

We Are=Movement applauds those who are making the transition from awareness & understanding about themselves to a change in their actions.  As Coates concludes, “we should recognize, on a personal level, that ‘know thyself’ means know your biochemistry.”

Read John Coates’s article “The Biology of Bubble & Crash”