Warning: testosterone can damage your wealth

02 October, 2008, 05:18

What caused the economic crunch? Economists worldwide have been offering all sorts of explanations. One theory suggests it’s all about testosterone. If there was less of it in high-level financial spheres, we’d be a lot better off.

Heather McGregor, Director of the British headhunting firm Taylor Bennett, has been in the business for years. She’s convinced that it’s the thrusting individualism of men, who dominate the financial system, that’s caused the mess.

Her marketing consultant Rosemary Rycroft has held senior positions but is now dividing her time between being a mother and her career. She thinks things may have turned out differently if the global financial institutions were run by women.

“I mean women are much more cautious and careful about what they do and much more nurturing. As much as we’d like to think that this is a new age that there is no glass ceiling for women, it’s still a man’s world whether we like it or not and it’s going to be a long time coming before that’s levelled out. Men are still paid more than women. Why that is I don’t know!”

According to scientific research, men are more inclined to excessive risk-taking due to higher levels of testosterone, which might have led to the disastrous situation on the market. But many still believe this crisis is not about that.

“The women financial experts I know in the City are every bit as aggressive as the men,” said Willem H. Buiter, Professor of European Political Economy at the London School of Economics. “So I think the problem is maybe partly that people in the City self-select for aggressive risk taking and taking bets they shouldn’t be taking, but it’s mainly due to the wrong kind of incentives.

He added: ”So testosterone? Maybe… but I put more trust in better regulation than I put in testosterone suppressants."

Among suggestions that the market has become too primal and too dominated by men, more and more women are prepared to put on a business suit. But the question of whether an influx of talented women into the boardrooms and on to the trading floors would reduce the probability of another financial apocalypse remains open to debate.