Ponzi Schemes, Depression & Joe Versus The Volcano

April 11th, 2017 by Perry

Last month I heard a piece on public radio “Why are we so bad at spotting cons?

(If you’re a friend of mine over the past few weeks, and there has been a lull in the conversation, you’ve already heard this story because I find it fascinating.)

The piece looks at a book called “The Confidence Game: Why We Fall for It…Every Time” by Maria Konnikova and makes a few interesting observations on why people fall for Ponzi schems and cons.

1) People are really bad at spotting lies because people who trust, and societies that trust, generally do better. Also, many lies are “social lubricants” and we would rather believe the lie (your hair looks great) than know the truth.

2) We’re intrinsically hopeful as a species. Most people have an optimism bias. We think that tomorrow is going to be better than today.

3) We’re inclined to believe that we’re exceptions to the rule. “Essentially, we all have a big blind spot, and it’s shaped exactly like us.”

The author suggests as a species we’re trusting and hopeful, we believe good things will happen, we take risks because we believe they will pay off and that is how we advance and succeed. We’re even more hopeful of our individual selves believing we can succeed where others might fail. That’s a positive “Star Trek” type look at humanity.

But this is what I found fascinating:

We are very optimistic as a species. We’re hopeful, you know, that gets us going in the morning. That we think no matter what, tomorrow’s going to be better than yesterday was, otherwise, what’s the point? And you see on scale after scale that people actually have this optimism bias about themselves and about the world. They don’t see reality as reality. They see it as kind of this rose colored glow. There’s really a truth to that cliche that we the world through rose colored glasses. And the only exception are people who are clinically depressed. They actually respond accurately on all self assessments and assessments of the world.

According to this author, the only people with a proper view of reality are people who are clinically depressed. If so, that means people with depression have an accurate view of the world and everyone else perceives a false reality. Thus the natural state of man, our optimism, is actually a mental illness.

I’m not making that argument, but I found it an interesting thing to contemplate. It also makes me wonder if companies should recruit people who are clinically depressed to make strategic decisions. They wouldn’t be bold and expansive decisions; they’d be “safe” decisions; but they might be based on reality. And if that happened, would the companies then need to fire the person if they ceased to be depressed?

Could be an idea for a sci-fi story. A corporation forces employees into depression to properly view reality and make decisions. The hero ceases to be depressed but must fake depression in the routine HR tests. Eventually, frees the other employees from depression controls and they take control of the corporation. Their new optimistic decisions result in a total failure and collapse of the corporation. Yet amidst the ruins, they’re hopeful about tomorrow.

Come to think about it, overcoming depression resulting in the destruction of a company (and an island) and then being lost at sea with an overwhelming optimism of tomorrow is roughly the concept of one of the greatly underrated movies addressing the comedy of existentialism: Joe Versus the Volcano.

Here are some choice quotes from Joe Versus the Volcano:



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