Exposing the Fraudsters
With mass deceit portending a coming cataclysm, who do we blame?
In 193 AD, Rome’s Praetorian Guard, a collection of senior soldiers acting as its secret service and intelligence apparatus, assassinated Emperor Pertinax over disputes with their pay and privileges.
Their plan was to auction the empire to the highest bidder.
Julianus had the deepest pockets. In selling him something they knew wasn’t theirs to sell, the Praetorian Guard committed an act of fraud.
He was never recognized as Emperor, instead swiftly deposed and executed. A vicious civil war followed, with five different men laying claim to power in less than a year.
While the causes of Rome’s collapse a few hundred years later are too complex to be summarized, entrenchment of such financial graft and political corruption among its elites was a big part of the story.
This is just one of many instances across history where the notorious rise of fraud has preceded a huge meltdown.
Violent conflicts are preceded by political instability, often resulting from misappropriation of resources. Fraud erodes trust in institutions.
Economic collapses also arise from mass deception. The economic downturns which precede them are chaotic hotbeds of fraud driven by both desperation and predation.
Whenever we’ve seen social unrest, upheaval, or intractable division, fraud has played a major role in getting it started and keeping it going.
These days, there is a universal sense of anxiety about the declining health of our political processes, social cohesion, and economic sustainability.
We tend to attribute these problems to particular causes. We think disagreements over this or that issue are pushing us toward some sort of collective shipwreck.
I think it can all be explained in that single word, fraud.
By this I don’t mean exclusively the criminal act of fraud, but the popularity of its many ugly cousins.
Fraud, to simplify its legal definition, is intentional misrepresentation.
It comes in two flavors.
Either someone says something they know is untrue, or they say something they believe is true without having reasonable grounds for that belief.
If I say to you “elephants can hang from cliff sides with their tails tied around daises,” I am making a misrepresentation. Either I know I’m lying or I have avoided the facts which would’ve made me know. Either way, I’m a fraud.
Legally, someone has to rely on a misrepresentation and suffer damage as a result for the fraudster to be held liable.
But in everyday life, we all get damaged constantly by fraud. We need to care about it and think more about the implications.
Consider again the simple definition of what constitutes fraud.
An intentional misrepresentation made by saying something you know is untrue or something you lack the reasonable grounds to believe.
And now tell me we’re not absolutely drowning in it.
Fraud has become a normalized fact of everyday life. We expect it.
Fraud has captured the traditional sources of fact and authority, leaving us virtually nothing trustworthy.
Everywhere we look, in our professional, personal, public, private, financial, and even recreational lives, we are confronted with lies.
It starts to make sense why there is a historical correlation between the rise of fraud and things coming apart.
By destroying trust, security, and assumption, fraud fractures the psyche.
The sheer mental exertion required to constantly discern and evaluate gaps between words, actions, and truth is exhausting. Every fragment of information is called into question.
We become hyper-vigilant and insecure. Like jaded veteran cops in a crime-infested metropolis, we come to view everyone as suspicious.
Widespread distrust bends the culture. Eventually, absent the calming cold of truth, suffocating dread takes over, eventually giving way to frustration and rage.
Politicians pretend to care while using their power for personal gain. They say things they know aren’t true. They exaggerate issues. They stoke fears and blow dog whistles. They distract and divide us.
Government promises us more while delivering less. Inspectors General protect organizations while faking accountability. The Freedom of Information Act creates friction and opacity with resources granted to accomplish the opposite.
Legislators pass laws to be “tough on crime,” while withholding the resources to enforce those laws. Meanwhile, so many laws have been created without any being repealed that we are all guilty of multiple felonies every day, which gives government the power to arbitrarily investigate and imprison.
Legislators pretend to care about divisive issues but leave them untouched to reap fundraising benefits. Immigration is a solvable problem misrepresented as an unsolvable one — a fraud of inaction.
Media pretends to report while riling and instigating. Knowing misrepresentations piss everyone off, driving clicks, views, and revenue. We lose trust in the whole circus, resorting to alternative sources who lie even harder.
Banks charge fees for fake “services” they don’t perform. They raise loan rates and lower savings rates. They bury clauses deep in hundred-page contracts that trigger surprise charges. Back-loaded mortgages shackle people to upside-down houses under the pretension of enabling ownership.
What does an “influencer” know about the biochemistry of skin hydration?
What does a reality TV personality know about relationships?
What does a cologne model know about environmental conservation?
None of them know anything. But these are the sources we are given, because dermatologists, therapists, and scientists don’t sell.
Nor do they convey the unrealistic ideal celebrities convey, showing us a perfectly manicured slice of what is usually a much more ordinary and often unfulfilling life.
This misrepresentation is particularly damaging in the way it programs us to believe anything short of a perfect ideal amounts to failure. People feel inadequate when actually their lives are almost certainly more happy and useful to society than those of their celebrity heroes.
And then there’s the corporations behind a lot of this rubbish. They represent themselves as stalwarts of growth while cultivating burnout farms of overwork and misery.
Declining wages drag commerce down while triggering more government assistance.
Corporations cover over this with stunt PR moves.
“Hey, look at us, we’re boosting real estate development to create more low-cost housing … but we pay our employees too little to afford the houses we’re building.”
Our capitalist system gives businesses advantages so they can position labor and capital to support broad-based economic growth and progress.
It is a misrepresentation to pretend you will create jobs and feed commerce by gaining those advantages when you actually intend to reduce jobs and reduce pay to enrich a narrow band of stakeholders.
There’s a lot more.
Military departments, politicians, industrial lobbies collude to separate American taxpayers from their wallets, pretending we need an overabundance of hyper-expensive weapons which may or may not be relevant in the next war, if they even work as advertised.
Simultaneously, they pretend the cost of supporting and caring for the people who fight and win wars can’t be sustained. But they don’t believe that, or they’d be less willing to keep committing us to wars of choice with no clear strategic rationale.
Who benefits from a national security policy which overspends and overextends? Among many others, multi-national corporations who operate in the global commons and in developing countries, where our presence and readiness provide the security they need to thrive.
Yet this element of the spending equation is never mentioned by elected officials, who rely instead on raising fears of vague foreign aggression.
This leads to you and me paying for dinner when many others enjoyed a much larger share of the feast.
Enron pretended to be an energy company when it was really just a trading and financial services company. As the implications of that truth crept toward daylight, Enron embraced full-on criminal fraud to conceal its debt. This led to the biggest collapse in corporate history.
Nothing has changed in the years since.
We have self-labelled aircraft manufacturers who are really just supply chain managers.
We have self-labelled social media companies who are really just adware.
We have insurance companies that don’t pay insurance claims.
We have utility companies who pollute and lie about it. Manufacturers who skimp on worker and product safety and lie about it. Our commercial world is rammed with business that don’t do what they purport to do, or can’t make money doing it correctly.
Multi-level marketing is the king cobra of these snakes. A milkshake company that doesn’t make money on its milkshakes, but on the fees paid by people recruited into selling milkshakes, and the proceeds they pay to buy milkshakes to sell. Whether a particular marketer crosses the line into criminality isn’t the point. The “business model” is a misrepresentation.
Employers say they care about people. Right before laying them off.
Companies give researchers grant money. So long as the findings align to their interests.
At least we have impartial finders of fact out there called judges. They can help us peer through the thickening fog of lies.
Except they can’t. Judges, whether elected or appointed, pretend impartiality while injecting bias into their rulings.
Take a look at the ideological consistency of the opinions of Supreme Court Justices over the years. Setting aside personal bias is the exception, not the rule.
Now go back and review the saccharine reassurances of independence and objectivity would-be Justices rendered in their confirmation hearings.
They were dishonest because the process required them to be. And this is a clue in understanding where all this mass deceit is coming from.
Trudging through such a morass of fraud, it’s easy to feel like a victim. Then again, most perpetrators convince themselves they’re actually the victims. And we’re no different.
Tracing the path of normalized fraud in our society, government, economy, and institutions, the various snail-trails of slime lead to the same place.
We can’t blame politicians, multi-level marketers, mailmen, or milkshake salesmen for the crippling dishonesty fracturing our collective psyche and paralyzing collective action.
We can only blame ourselves.
We are dishonest.
We steal benefits. We bring fake lawsuits. We defraud insurers. We sell cars that have been crashed and repaired without disclosing it. We squeeze merchants for discounts and reimbursements we know aren’t deserved. We share passwords for streaming services. We pirate software and entertainment.
The list goes on. And this is merely the tip of the shitberg.
These days, the sheer scale of individual fraud is escalating as social media gives us new dimensions and abilities to defraud one another in myriad ways.
We pretend to be dispassionate while confirming our biases. We avoid inconvenient facts while pretending to understand. We pretend to be advocates for various causes when we really just want attention to compensate for various holes in our lives.
We express love of country while defiling its ideals. We express patriotism while harboring hatred for countrymen.
We misrepresent our lives by showing selective fractals. Many drop the half measures and pretend to be someone else completely.
Americans condemn the drug trade. Their demand is the reason it exists.
Americans condemn various "objectionable” activities such as pornography and infidelity. Yet the statistical reality is many millions of critics and participants are the same people.
We've always had individual views which vary among us.
These days we have the chance to misrepresent ourselves in new ways, which layers dishonesty atop our differences. This deepens divides. It makes us distrustful of one another. It makes us fearful of one another.
We are in a quiet war of the mind, and it's all enabled by fraud.
Go ahead and tell me you don't do any of this. And I will go from suspecting to knowing for sure that you’re a fraud. Just like me.
Whether our individual addiction to fraud is a cause or effect is unanswerable.
But the evidence suggests we are awash in fraud because it’s exactly what we want. It’s what we pay for. We’re demanding it, and the various markets that attend to us are supplying what we demand.
We vote for demagogues. We watch fake news. We fund influencers. We buy tickets to pro wrestling. We click on ads. We prefer Love Island over actual love.
It’s us, Dear Brutus, not our stars.
We are complicit in the many frauds. We materially support the many frauds.
Which makes us the real fraudsters.
We have normalized dishonesty in every day life, in things large and small. By tolerating, preferring, demanding, and participating in it, we hasten the cataclysm it portends.
Curbing it means removing the incentives for fraudulent behavior.
We can imagine ways to do this. Businesses could be taxed according to how responsibly they treat workers. Multi-national corporations could be tethered to security spending. Media outlets could be regulated. Government institutions and norms could be reformed. In some ways, we've been here before and we know this is surmountable. It took three decades of continuous decline to get here. In three more, we could get out.
But that’s unlikely, because everything we need to do starts with trusting and working collectively through institutions we vehemently distrust.
But if ever we are to trust those institutions again, the collective will to rebuild and reform them must come from us. They will not self-correct.
Having internalized dishonesty as the path to fulfillment of their interests, they will continue apace until the incentives shift.
Now the good news.
Anything scarce becomes more valuable.
Honesty and transparency will become more valuable in this environment. And that gives each of us the individual incentive to reflect on how we can contribute to a less fraudulent society.
Before it's too late.
TC is an American writer.
You perfectly articulated a lot of what I have been thinking. I would add to this list of frauds the crisis of sick care and declining health (in the US). The solution to all of this starts with each of us. Will there be enough of us willing to change?