The history of the term “con artist” illuminates some essential traits of this lamentable profession. Maria Konnikova explains that the first con artist was a Manhattan watch thief who would prey on the goodwill of his victims, asking to borrow their watch until the following day. Of course the watch was never returned and the confidence invested by the victim in the thief was also lost. Indeed the con artist is more of a psychologist than a thief. Con artists will never steal anything from you, says Konnikova, they’ll convince you to hand it over freely.

Maria Konnikova: One of the hallmarks of the good con artist is that it never feels like they're taking advantage of you. They are never taking anything from you. You give it to them willingly. So actually the term confidence artist came out of a man in the 1800s in New York City who would walk around on the streets of Manhattan dressed as a very dapper gentleman and he would approach other likewise dapper gentlemen and say, "Have you the confidence in me to lend me your watch until tomorrow?" What a strange request, right? It's such a loaded question. What kind of a person are you? What kind of a world and society do we live in? Are you abiding by the gentleman's code of conduct? Are you going to trust me? Are you going to give me your confidence? Well, people would give them their watches and he obviously had no intention of ever giving them back. By the time that he was finally caught he had lots of watches to his name and gave birth to the name confidence man.

You give them your confidence; they don't take it. You give them money; they never take it from you. I mean think about someone like Bernie Madoff, people had to beg to invest with him. He would say no. He would turn them away. Sometimes people waited for years before he finally accepted their money. And he did it as if he were doing them a huge favor. “Okay fine I'll take your money.” And they were so grateful. “Please take a more Bernie, take more.” Because he was doing them such a huge favor.

One of the hallmarks of the confidence artist is something called Machiavellianism. It has to do with manipulating people for your own ends; getting them to do what you want them to do but without their knowledge so that they don't realize they're being manipulated; so that they think that everything they're doing is of their own volition. People hate feeling manipulated. The moment you think you're being manipulated you drop out you say “Hey, no one tells me what to do. Who are you to manipulating me?” And so the con doesn't work. So the trick is how do I give you the germ of the idea so that you think it's your idea? How do I set up a situation so that it's your proposal not my proposal so that you're the one who's in charge. You would be shocked if anyone told you otherwise. In fact often times when people say hey do you realize that this might be a con? You'll laugh and you say absolutely not, are you insane? This is totally legitimate. Besides, it was my idea.

We are fully capable of understanding that if something is too good to be true it is, if it's happening to someone else. But when it's happening to us we can't be objective because nothing is too good for us, we deserve it. So you might look at someone else and say “What were your stock market returns last year? That's a little bit crazy. Are you sure this guy is legit?” When it's happening to you you say “Oh I know how to pick them. I invested my money with the right guy. Look at those returns. See, he knows what he's doing.” And if someone tells you aren't those a bit too good? You say “What, are you jealous that you didn't invest with him? You probably are wishing you were in my shoes right now.” We don't listen to reason because we deserve it. We're exceptional so we deserve exceptional things. It's not too good to be true, it's just good. And when things are going well we don't ask questions, we only ask questions when they're not going so well.