Reading list: scams and scammers
This week, after the guilty verdict in the Sam Bankman-Fried trial, I’ve been thinking about scammers.
It’s tempting to portray con artists as supervillains: they lie, cheat, and hurt innocent people while hiding in plain sight. There’s something dark and compelling about watching someone reject the rules and norms that constrain the rest of us, as if insensitivity to shame is some form of black magic.
But beyond the juicy details of the misconduct, there’s a more interesting story, because the real skill of scammers is sensing the precise contours of what other people desire. Scams are like a magic mirror to people’s true desires, revealing the things they cannot resist. And reading about successful people is like taking a look at what the mirror revealed.
In “The trust game”, Maria Konnikova delves into the psychology of how scammers sense our insecurities and use them to make promises their brands want to believe. Sometimes it seems like there are no limits to that power: In one memorable anecdote from the book, a “clairvoyant” convinced a struggling divorced mother to hand over tens of thousands of dollars in cash simply by claiming that the “exercise in letting go of wealth” would bring the professional success and loving relationships the woman so desperately desired.
In financial fraud, the core promise is always essentially the same: profit without risk. But the details of how that promise is packaged are telling.
Bernie Madoff’s Ponzi scheme worked on people who wanted to believe that money and status could buy security: that if you were one of the chosen few who got to invest with him, your financial worries would be gone forever.
Elizabeth Holmes offered something similar: a cargo-cult version of startup culture for investors who didn’t understand the technology but still wanted to share in the wealth of Silicon Valley—and feel as brilliant as the people who made the early promise of Apple had seen. or Googling. “Bad blood,” by John Carreyrou, describes how her investors were so desperate to believe in her, and, by extension, their own sanity, that they ignored warnings from scientists, employees, and even their own family members.
In America, claims of meritocracy have been used in recent decades to justify rising inequality, with the result that being rich is often treated as a sign of intelligence and personal worth, while being poor is often seen as a personal or even moral failure. Madoff and Holmes profited by promising wealth and affirmation to elites who feared that not having enough of one meant they couldn’t really have the other.
Bankman-Fried, on the other hand, seems to have invented himself as the fulfillment of a very different desire: success beyond the boundaries of powerful institutions. As Zeke Faux describes in “Number up”, his compelling book about the rise and fall of cryptocurrency, Bankman-Fried, who was convicted last week on seven counts of fraud and conspiracy, presented himself as a prodigious business genius who had made billions of dollars without having to work for it. a boss, follow social conventions or even wear long pants. In retrospect, it was a perfect pitch for cryptocurrency speculators who wanted to believe that they too could make a fortune without any traditional financial background or connections.
Bankman-Fried linked that to another persona for political and media elites, especially on the left: that of the objectively altruistic billionaire. His public commitment to “effective altruism,” a movement calling for massive charitable giving to do the greatest good for the greatest number of people, implied that he was bound by apolitical norms that would supersede any partisan agenda.
It’s not hard to see the appeal: a politician, nonprofit or media outlet taking money from a billionaire to pursue his priorities sounds transactional and perhaps even corrupt. But taking money from a billionaire to pursue him objectively correct prioritizing without depending on other political forces or market pressures suddenly seems virtuous.
Money plus validation, it turns out, is a combination few people can resist.
Reader Comments: Books you recommend
Rebecca Buiter, a reader in the Netherlands, recommends “Fine, just the way it is” by Annie Proulx:
The short story Them Old Cowboys Songs gave me new insight into what love really means. A little late in life, at 63.
Charlotte Blessing, a reader in the United States, recommends: “Pulling the chariot of the sun” by Shane McCrae:
The memoir is haunting, personal, disturbing and beautifully written in prose. Throughout the book, I felt like the author was sitting next to me, telling his remarkable childhood story. It’s a true story about racism and white privilege, survival and the human spirit. My favorite book of the year.
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