At the turn of the 20th century, a con man named George C. Parker sold the Brooklyn Bridge multiple times. In 1920, Charles Ponzi was arrested after swindling millions of dollars in what’s now known as a Ponzi scheme. And, from the early 1970s to 2008, Bernie Madoff made off with around $65 billion of other people’s money. The details of these cons might be different, but the underlying nature of them - hucksters exploiting the trust of their marks - is strikingly similar. So… why do we fall for swindles like these? What makes us so vulnerable? Maria Konnikova, author of The Confidence Game: Why We Fall for It... Every Time, joins us to answer those very questions.
Three Takeaways:
- Turns out, we’re hard-wired to trust people. According to Konnikova, “We actually haven’t evolved to spot deception and instead we’ve evolved to trust.”
- We think that good things are supposed to happen to us. That’s a huge blind spot… one that con men are all too happy to exploit.
- If you want to spot a swindler, think of yourself in the third person. If your coworker had the “inside” deal on some land in Florida… what advice would you give them?
More Reading:
- If you want to learn more about how Bernie Madoff was able to steal so much money, listen to an investigative podcast about it.
- Here’s the study from Pew that shows that trusting societies do better.
- USA Today gives some tips on how to spot a modern-day Ponzi scheme.
- And if you’d like to hear more from our interview, here’s an extra clip of her talking about a navy doctor in the Korean war.
