If you were approached by an ex-con, a high school dropout who said that he had used a little-known and poorly understood property of physics to create a means of transmitting video that was twenty times faster than the fastest method on the market, would you believe him? If so, you’re in good company; Intel networking subsidiary Level One, the video chain Blockbuster, and a handful of venture capitalists also fell for what seems to have been an intricate scam run by a man named Madison Priest (link via Lake Effect). If you approach a situation like that with skepticism, you might miss dealing with the next Philo Farnsworth, but when a someone out of the blue starts promising deals worth hundreds of millions of dollars, it should set alarm bells ringing. Consider Lord Gordon-Gordon, a nineteenth century Scot who went to Canada and the United States and represented himself as an English lord with a vast fortune he was looking to invest in the Americas. As a contemporary (a Northern Pacific Railroad land apparaiser) put it in his 1907 memoir, A Pioneer History of Becker County:
Gordon was wanting to buy 30,000 acres of land and was going to bring a colony of 300 Scotch farmers to occupy the land which was a tempting proposition to the land commissioner… [T]he directors of the Northern Pacific heard what was going on and called a halt, and the Lord Gordon carnival was brought to a close. He was found to be an imposter and a swindler. The land department was $30,000 out of pocket and the high land commissioner was discharged from office. Gordon afterwards drifted back East, beat Jay Gould out of $200,000 United States bonds and then went to Winnipeg, Manitoba, where he afterwards committed suicide as he was about to be arrested for crimes committed in Scotland previous to coming to America.
And Jay Gould was a pretty sharp dealer himself. The prototypical robber baron, Gould had immensed a huge fortune largely means of graft and insider trading. Although he did start Western Union, he also was responsible for the original Black Friday, when his efforts to corner the market on gold failed and the price plummeted. And yet Gould was outwitted by a lowly butler; if you ignore the fact that Gordon-Gordon commited suicide, you have a story more suited to light comeda than opera.
A similarly tragic fate befell Donald Coster the president of McKesson & Robbins, then one of America’s largest pharmaceutical companies. Through a variety of means, some ethical, some not, Coster built McKesson & Robbins into a huge concern, buying manufacturing plants and drugstores throughout the country. Donald Coster was not Donald Coster, however; he was Philip Musica, an Italian immigrant and convicted felon who supplemented his business savvy by cooking the books. When his true identity (and the fact that he had simply invented millions of dollars of revenue) was revealed, he went home to his Connecticut mansion and shot himself. And while Cassie Chadwick, the fortune teller who scammed Cleveland banks out of hundreds of thousands of dollars at the turn of the century, didn’t commit suicide, she died in jail; she represented herself as Andrew Carnegie’s illegitimate daughter (actually, showing a great deal of understanding of human nature, Chadwick let it slip to one or two Clevelanders, swore them to secrecy, and let gossip do its work). Everyone knew that Chadwick was good for her debts because for years no one mentioned the matter to the religious and voluble Carnegie; eventually, however, the house of cards fell apart and Mrs. Chadwick was convicted of conspiracy, dying a year after being put behind bars.
America’s (and my own) continuing fascination with con games and con artists has its roots in cases like these, grandiose scehemes directed against the rich and powerful. The Big Con, University of Louisville lexicographer David Maurer’s wonderful study of con men and their lingo in the first half of the century, doesn’t just talk about the big con, where a mark is sent home to collect the money he will soon be divested of; it talks about the short con, where a mark is simply taken for whatever he’s carrying. You don’t have to be rich and powerful to be taken by the smack (a rigged coin-flipping con) or a bill-changing scam.
And the maxim that you can’t cheat an honest man isn’t true. You don’t have to be dishonest to fall for a Nigerian "frozen assets" hoax, just as immigrants didn’t need to be particularly dishonest in the first half of the century when they bought the Brooklyn Bridge or a magic money-duplicating machine. And that’s why multi-level marketing and slavery reparation tax refund scams are so evil; they aren’t playing on dishonesty, just on ignorance and hope. If America wasn’t the land of freedom and opportunity, its streets paved with gold, no immigrant in his right mind would spend her life savings on a machine that created gold bricks. If the dream of being one’s own boss weren’t hardwired into the American psyche, people would take a look at the claims MLMs make and realize that there’s no way they could make hundreds of thousands of dollars selling blue-green algae or vitamin supplements or fourth-rate home cleaning supplies, especially when they’re paying inflated prices and kicking back a percentage of what they earn. The con games that don’t get made into movies or novels aren’t elaborate scams involving trained professionals and carefully stage tableaux taking down millionaires; they’re about going down and giving a presentation about how hard-working people can realize their aspirations, then walking out with their money and never giving it back.