Why Americans Get Conned Again and Again
For decades, Donald Trump has been compared to the legendary showman P.T. Barnum. Trump himself has publicly embraced being likened to a man described by historians as “vulgar, childish, surely just a little crooked.” His willingness to invoke that set of values—quite different from the Horatio Alger-style “luck and pluck” that serve as an unofficial national ethos—may be what his supporters are praising when they say he “tells it like it is.” His base seems to view his readiness to dispense with ideals and ethics (“anyone would have taken that meeting”) as a sign of fitness to deal with the world as it is: a cesspool of corruption and “carnage” in which only suckers still believe that honesty is the best policy.
At this political moment, few books could be more timely than Fraud: An American History from Barnum to Madoff, by the Duke University historian Edward Balleisen. Other academics have documented the ways that the United States has been steeped in fraud and chicanery from the earliest days of the republic—notably, Stephen Mihm’s outstanding A Nation of Counterfeiters. But Balleisen’s book provides a far more sweeping view than its predecessors, offering a much-needed big-picture perspective. Balleisen never mentions Donald Trump, but effectively contextualizes his ascent by tracing centuries of grift, fraud, and con men in American history.
While Balleisen’s text is often rollicking and engaging, it leads readers to a rather bleak conclusion: Americans don’t really want cheaters and con artists punished, or driven out of national institutions. On the contrary, the historical record Balleisen reviews suggests that many Americans actually admire con artists and seek to emulate them.
Fraud is a phenomenon that knows no borders, but American exceptionalism, as Balleisen shows, includes a special vulnerability to fraudsters and con artists. As he points out, “Many of the world’s most expensive and ambitious frauds have occurred in America” because “openness to innovation has always meant openness to creative deception.” The country’s lionization of entrepreneurs and inventors creates tempting opportunities for those trafficking in highly implausible scenarios. It has made the U.S. home to genuine innovators, from Thomas Edison to Oprah Winfrey, but it has also facilitated the far-reaching deceptions and empty promises perpetrated by people like Bernie Madoff on Wall Street and Elizabeth Holmes in Silicon Valley. Madoff’s Ponzi scheme was the largest known financial fraud in history, and Holmes’s biotech startup Theranos faces multiple lawsuits and federal investigations after its products didn’t work as claimed. (Holmes and the company deny any wrongdoing.)
Misrepresentations are usually made possible by two factors: their complexity and their proponents’ social craftiness. Madoff and Holmes used both of these to their advantage. When it comes to complexity, the basic principle is that the less people understand of an underlying business proposition, the more vulnerable they are to being taken in by pretenders. Schemes involving science or math have been particularly successful because the knowledge needed to evaluate such proposals critically is not …read more
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