The Hour Between Dog and Wolf
Renaissance Humans, #54
Quick author’s note: I found out yesterday I was accepted into the Military Writers Guild. I am excited to contribute—I think the Guild model offers us a Networked form of cooperation and collaboration in the Attention Age, helping us transcend the Tribal, Institutional, and Market forms that Dave Ronfeldt discusses in the TIMN framework.
The Military Writers Guild gathers writers committed to the development of the profession of arms through the exchange of ideas in the written medium. Through its members, the Military Writers Guild encourages an open dialogue from diverse perspectives to support the study of military affairs, spread knowledge of the military profession, and increase the assistance available to those writing in the national security space.
And now, on to our scheduled programming.
“The hour between dog and wolf, that is, dusk, when the two can’t be distinguished from each other, suggests a lot of other things besides the time of day…The hour in which…every being becomes his own shadow, and thus something other than himself. The hour of metamorphoses, when people half hope, half fear that a dog will become a wolf. The hour that comes down to us from at least as far back as the early Middle Ages, when country people believed that transformation might happen at any moment.” ― Jean Genet, Prisoner of Love
Is there a relationship between human biology and our decision-making ability?
John Coates says yes. A former derivatives trading desk head turned neuroscientist, he opens the book with a fictionalized vignette of a Wall Street trading house to highlight the drastic changes in body chemistry humans undergo during stressful events—in particular, decision-making under conditions of uncertainty. The vignette reveals how corporate cultural incentives blend with the biological stew circulating inside the average twenty to forty year old male trader.
This creates the ideal condition for irrational exuberance during market upswings and excessive pessimism, withdrawal, and depression during downturns—a learned helplessness where traders feel they have no control over their lives.
Coates traces the tendrils of thought about man’s behavior back Aristotle, who didn’t draw such a stark mind/body distinction as those thinkers who came after. Aristotle viewed human beings as holistic systems in which perfect reason was impossible to attain due to the nature of emotion. Today, scientists are learning more about the role biology plays in how humans perceive reality and make decisions, and are once more warming to the holistic view.
Three situational factors cause a spike in cortisol (the stress hormone) in the human body—novelty, uncertainty, and lack of control. The presence of one or more of these elements has a marked effect on decision-making. With the spike in cortisol comes a lowered appetite for risk. Coates highlights advances in sports psychology that reveal that it is possible to train to adapt to these factors in much the same manner as muscles are conditioned by physical exertion.
This has interesting implications for efforts to create more resilient humans, sometimes termed “stress inoculation.” Advances in our understanding of mind and body can be leveraged into training scenarios to improve performance and resilience.
In one section, he alludes to the benefits of “thermal stress” in increasing human resilience:
“One type of toughening regime is especially intriguing, and that is exposure to cold weather, even to cold water. Scientists have found that rats swimming regularly in cold water develop the capacity to mount a quick and powerful arousal, relying on adrenaline more than cortisol, and to switch it off just as quickly. When subsequently exposed to stressors they are not as prone to learned helplessness. Some tentative research has suggested that much the same thing occurs in humans. People who are regularly exposed to cold weather or who swim in cool water may have undergone an effective toughening regime that has made them more emotionally stable when confronted by prolonged stress. It is surmised by some researchers that the exercise itself, coupled with acute thermal demands, provides these people with an enviable pattern of stress and recovery. Perhaps the same effects could result from the Nordic practice of a sauna followed by a cold plunge.”
In another passage, he points to the presence of a “testosterone feedback loop” in primates as a contributing factor to irrational exuberance in market performance. Coates shows how, when two primates compete, their bodies surge testosterone into their system, to assist in the struggle to come. The winner receives an additional spike in the hormone, while the loser’s quickly dwindles away. This is also known as the winner effect, a well-documented outcome of perceived victory in some sort of competitive endeavor—the winner gets increased testosterone, the loser increased cortisol.
As male Wall Street traders execute profitable trades, their confidence and aggression are heightened by the flush of additional chemicals triggered by success. In an organizational construct that rewards short-term profits and bold action, this is a recipe for disaster.
Coates’ main point is a warning about overconfidence, and how biological processes within the human body facilitate that overconfidence. He asserts woman and older men (roughly defined as over 50) are not subject to the same fluctuations of testosterone, and advocates their addition to teams involved in high-risk decision-making. Men experience a slow decline in testosterone from their mid 20’s onward—the reason older men are not as susceptible to its influence.
This reminds me of a quote attributed to Plato, regarding the “passion” of emotions caused by hormones such as testosterone:
“In particular I may mention Sophocles the poet, who was once asked in my presence, How do you feel about love, Sophocles? Are you still capable of it? To which he replied, ‘Hush!’ If you please: to my great delight I have escaped from it, and feel as if I had escaped from a frantic and savage master.’ I though then, as I do now, that he spoke wisely. For unquestionably old age brings us profound repose and freedom from this and other passions.”
Likewise, women produce one-tenth the amount of testosterone a similar aged man does. Coates asserts men and women make decisions with an eye toward different time horizons. He cites a 2001 study which examined thousands of single male and female financial traders over a six year time period. The women in the study outperformed the men by 1.4 percent, and some researchers point to the fact they traded their accounts with much lower frequency than the men. So while women may take longer to make decisions, they took risks, and did so in a more long-term, strategic manner than the men.
The idea that the varying biological processes of men, women, and older men can produce different risk evaluation across the groups is a thought-provoking chemical-based take on the concept of “Groupthink”, where a desire for conformity and group cohesion overrides critical analysis.
In a thought-provoking book, John Coates urges readers to follow the age-old adage to “Know Thyself”—and part of that is an understanding of the chemistry swirling inside the body. It has a marked impact on perception, resilience, and evaluation of risk.
He advocates a return to a holistic conception of the body and mind, rather than the Cartesian dualism separating the two.
Finally, Coates recommends diversity of ages and genders on teams to add stability to high-risk decision-making, and temper the pull of body chemistry on reason and rationality.
I’ve had this book on my bookshelf for awhile but haven’t jumped into it. Maybe this is the nudge I need.
Congratulations Adam!