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5/11/2009

Ponzi vs. Pyramid

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MarketWave Article #: 46
   


Silent Sirens
The Scarcity of Women Among the Scams

By Len Clements © 2007

As told in Homer's Odyssey, the song of the Sirens was so enticing that all those who sailed past their island's shore would be compelled to dive into the sea, to their ultimate destruction. The great Ulysses himself had his men bind him to the mast of his ship and fill their own ears with wax to avoid the lethal temptation of the Siren's song.

There are as many snakes within the MLM industry as there are atop the head of Medusa, and they sing their own alluring song leading us to believe our ship has come in - then once aboard, driving it straight into the rocks. But unlike Homer's Sirens, this chorus is made up predominantly of men.

Literally hundreds of scams, money games and pyramid schemes have come and gone over the years, and I'm hard pressed to come up with a single one that was operated by a woman. Women certainly may have participated, but more from the perspective of victim than perpetrator. The closest I can come to an exception is Martha Crow, who was indicted in the Gold Unlimited case over a decade ago. But even she was more guilty by association, or marriage in this case (she was the wife of the company founder and developer, David Crow).

Even the recently eradicated "Women Helping Women" pyramid scheme was, when it's various incarnations are traced backwards to it's origin, founded by a man. Based on the classic "Airplane Game", a naked pyramid scheme popular in the 1970s, this more feminine version was born in Toronto, Canada in the late 1990s. It was originally called "The Dinner Party" (where new inductees were referred to as "appetizers") which morphed into "A Woman's Project" only after a small group of women adopted the "gifting club" concept as a way to generate funds for local charities. Even when women do start pyramid schemes it's to help other people make money! Yes, there were other women who later corrupted the scheme's altruistic intentions by redistributing the monetary "gifts" among themselves, but this only begs the question; how many levels down from the apex of a pyramid does one stop becoming the perpetrator and become the victim? The "Women Helping Women" scheme stretches back many years, and those women who were recently prosecuted were well down the chain.

Even if other exceptions can be found, for every woman in a garish orange jump suit picking up trash along the interstate (which is the greater punishment? Ladies, discuss...) there are ten men to thump the scales of justice to the other side. And this applies to not just bunko & bunkum and confidence games, but literally all types of unethical behaviors, illegal or otherwise. For example, researches found that 50% of all women have, at some point in their lives, cheated on their husbands or boyfriends. Not surprisingly, it was 70% for men. However, 80% of women fantasized about cheating on their significant other, while this was true for 98% of men. Women are even less likely than men to cheat in their imagination! In defense of us men (it's a tough job, but someone's gotta' do it) this survey might also reveal that only 2% of men lied on the question, while 20% of women did. But I doubt it.
Interesting side note: 50% of men who had a "feeling" their spouse was cheating was correct. It's 85% for women. Not sure if that means women really are more intuitive, or guys are just less observant (show of hands if you think it's both - mine's up). I got that stat from manhaters.com, so either way let's add a grain of salt.

In a survey of almost 10,000 American high school students, 98.6% of girls agreed with the statement "It is important to be a person of good character." Only 95.7% of boys said they agreed (or, more likely said "sure dude, whatever"). Of those same students 26.1% of girls disagreed with the statement "A person has to lie or cheat sometimes in order to succeed." Only 17.8% of boys disagreed (especially when they were talking to the girls). Cheat on a college entrance test? Two-and-a-half times as many guys "strongly agreed" it was okay. And more to the point: "People who are willing to lie, cheat or break the rules are more likely to succeed than people who are not." Men who agreed: 28.2%. Women who agreed: 16.0%. This may explain, at least in part, why there are twice as many men arrested for larceny than women.

Another interesting side note: Percentage who admitted to lying on the above survey (actual question): 31%. Of them 33% were boys, 29% were girls.

There are myriad reasons why men are much more likely than women to commit a violent crime (eight times more likely in the case of murder) besides a divergence in ethics and honesty. But even the gentler, more cerebral white collar crimes and misdemeanors are predominantly committed by men as well. For every one Martha Stewart there are 4.4 Michael Milkens, literally. Among the 1,016 prisoners held in federal penitentiaries in 2000 who were incarcerated for white collar crimes, only 230 (22.6%) of them are women. Only 7% of the population of all minimum security prisons in the U.S. are women (It's 5.4% for medium and maximum security lock ups). Of all consumer complaints filed with the Internet Fraud Complaint Center in 2001 where the gender of the perpetrator was defined, 82.3% of them were men.

For the record, women make up 51.1% of the U.S. population (140 million women, 134 million men, 6 million lonely pro-polygamists).

Research also reveals that the number of women committing white collar crimes (i.e. work place theft, embezzlement, fraud, forgery, etc.) has increased considerably over the past twenty years - by about 30%. One popular theory suggests that the increase in single-mother households (3 million in 1970, 10 million in 2000), and women's increasing socioeconomic independence from men, have both contributed to women's willingness to commit pecuniary crimes. In other words, because a man isn't around to support them, a woman is more economically motivated to lie, cheat and steal to get by. On the surface this would seem to indicate the ethics edge women have over men might be eroding. But alas, even this apparent foible in the female favor is fallacious. While it is a statistical fact that the number of white collar crimes by women over the last 20 years has indeed risen by about 30%, over roughly the same period of time the number of women in full-time executive, administrative and managerial occupations has also increased considerably - by about 30%. More women are getting busted for white collar crimes simply because more women are now in a position to commit white collar crimes.

There's just no two ways about it - most crooks are, were, and likely always will be, men.
This begs another question. Why?

Looking at this logically (I'm a man, I'm good at that), we can safely assume the perpetrator of an economic crime either sincerely believes they are doing no wrong, or they are acting with full knowledge that their scheme will cause harm to others. So if a woman starts a pyramid scheme, for example, believing it will cause no harm to others, she must be really horrible at math and be utterly void of any common sense. It's pretty obvious, after all, that most people will lose money in a pyramid scheme. It takes a pocket calculator and third-grade level math to figure this out. Some suggest women are not as good at math as men because, in general, they score lower on math proficiency tests. However, over all the less politically correct decades such studies have been performed women have, again in general, not had mathematics emphasized as part of their grade school and high school curriculum. When math scores of men and women of equal education levels are compared the difference is virtually nil. What's more, today the number of women taking advance math courses (trigonometry, calculus, analytic geometry, etc.) are significantly greater than men! IQ scores show no significant difference in intelligence levels between genders, and there's much anecdotal evidence to suggest that replacing a Y chromosome with an X may give one a slight edge in the common sense department. Quick, name the last woman to start a war (Helen of Troy doesn't count). Okay, here's an easier one: Name the last man to try to jump the Grand Canyon in a rocket powered motorcycle. Common sense isn't quite as often an oxymoron when applied to the gals.

So going with the alternate assumption that those who start pyramid schemes, or any kind of monetary scam, do so with full knowledge they will cause harm to others, why are women so much less inclined to do so?
My theory? Empathy.

Empathy and sympathy are often, and incorrectly, used interchangeably. Although closely related, they are not synonymous. Sympathy is the feeling of compassion or sorrow for another's pain. Empathy is when you feel the same pain.

So you see, us guys are fighting millions of years of evolution here. We are inherently wired to be the hunter, the provider, the taker. Even the taker of life, whether it be to defend one's territory, or simply to provide food for the clan. Men had to get over how the poor deer would feel as we're slaughtering it not long after the amphibious thing that would become a deer first stepped hoofed fin on dry land (that's a long, long time ago). We've had to learn to ignore the feelings of our enemies as we clubbed them to death or filled them full of spears, arrows, and eventually bullets. It's hard to kill things you feel empathy for. This might explain, at least in part, why only 13% of those in the military, or 4.6% of licensed hunters are women. Or, why over three times as many men are diagnosed as psychopaths (the inability to feel empathy towards others). Not only are more psychopaths men, they're also a lot better at it. The "Psycho Hall of Fame" includes such charmers as Timothy McVeigh, Ted Bundy, Adolph Hitler, John Wayne Gacy, Jeffrey Dahmer, and a long list of others. Arguably the most famous female psychopath would be Aileen Wuornos, which most folks would have never heard of had Charlize Theron not won an Oscar for playing her in a movie.

While men have spent the last million years killing and conquering, women have been back in the cave caring and nurturing their young. After tens-of-thousands of generations closely monitoring the state of babies and young children who can't yet communicate verbally, you get pretty good at being empathetic. So, in general, it's much easier for women to feel how the person they are about to swindle is going to feel once the dirty deed is done.

When it comes to scam artistry the statistics may certainly favor women proportionally, but even among men the pro (-ffessionals) vastly outnumber the con (-vics). The jerks just stand out. They're more newsworthy and, well, they're just a lot more interesting. When was the last time you heard this promo: "Men who don't cheat on their wives, work hard for their money, and raise well mannered children - next, on Oprah!" Unfortunately, being special just isn't - special. Ninety-nine point nine nine nine nine percent of men living in 1920s America were not named Carlo Ponzi. Even the percentage of male corporate CEOs who are honest and ethical would still have a nine in the ten's digit. The percentage of honest male politicians is... uh... okay, maybe that one's not the best example.

Having said all that, within the network marketing industry today the Siren song is still too often sung in a deep baritone. While instinct and genetics may be an explanation, it's not an excuse. Perhaps empathy need be forced at first, but it is something that can be practiced and a greater sense of it can be acquired, and with no reduction in testosterone levels. You can still enjoy a Bud and a Bears game and be an empathizer. Try it, guys. Next time the nose tackle breaks his leg, try to feel his pain.

Don't worry, ladies. We'll get the hang of it.


 

  Since 1989, Leonard Clements has concentrated his full-time efforts on researching and analyzing all aspects of Network Marketing. He is a professional speaker and trainer, and currently conducts "Inside Network Marketing" seminars throughout the world. Len is the author of the controversial book "Inside Network Marketing" (Random House) and the best selling cassette tapes "Case Closed! The Whole Truth About Network Marketing" and "The Coming Network Marketing Boom." He is a court recognized expert in the field of network marketing.

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