The Village Effect: How Face-to-Face Contact Can Make Us Healthier and Happier (38 page)

The faces of fraudsters Salah Ezzedine (left) and Earl Jones
. (Image and Figure Credits
9.2
)

cognitive shortcuts that allow precious brainpower to be saved for other tasks. But basing decisions on thin slices of information can backfire, as social psychologist Robert Cialdini points out in his book
Influence
. To make that point, he quotes an exchange between the abrasive sixties-era talk show host Joe Pine (who wore a prosthetic leg) and his guest that day, rock musician Frank Zappa:

But “thin-slicing” doesn’t just leave one open to ridicule or deceit. Like other trends that are transmitted face-to-face, social deception can be contagious. I was researching this book during the 2008–09 financial crisis and could barely keep up with all the Ponzi scams that were surfacing in the news. First there was the Madoff scandal, of course. You’ve just read about how upstanding members of the
WASP
English minority in Quebec were swindled by one of their own, as were American Mennonites and Amish, the expat Brazilian community in Boston, and Hezbollah supporters in Lebanon. There were also scams involving Mormons, Chinese Canadians living in Toronto, and members of the Church of the Open Door in Elyria, Ohio. In their scramble to survive after the bottom of the market fell out, did people lose their moral compass? Or had cheating become contagious?

CHEATING GOES VIRAL

After a string of scandals involving corporate cheating at Kmart, WorldCom, Tyco, Halliburton, Bristol-Myers Squibb, Freddie Mac, Fannie Mae, and Bernard Madoff Securities, Dan Ariely, a Duke University behavioral economist, wondered whether someone could catch an immorality bug, the way he might catch his seatmate’s cold on an airplane. In his book
The Honest Truth about Dishonesty
, he explains his question a bit further:

To test whether dishonesty is contagious, Ariely and two colleagues (one of whom was Francesca Gino, the Harvard researcher who found that cheating gives people a little buzz) rigged up the following experiment. Student volunteers received a sheet of paper printed with a series of matrices with numbers in each cell. Their job was to find as many pairs of numbers that added up to 10 as they could. Each number included decimal points, so it wasn’t like adding 2 + 3. Some effort was required. The students had five minutes and could take fifty cents for each correct answer from an envelope they were given that contained ten dollars in cash.

Here comes the interesting part. Three groups had mildly different experiences when taking the “test.” In the control group, students counted the number of problems they had solved, took the cash they were owed, and brought their solved matrices and the remaining change in the envelope to a research assistant to be checked. The second group, called the “shredders,” followed an honor system. Believing they weren’t being observed, these students counted their answers, paid themselves from the envelope, then shredded their work and dropped the envelope with any remaining change in a box by the door before they left. The third group was subjected to what Ariely called “the Madoff condition.” An
attractive confederate was planted in the room. Sixty seconds after the task began, this tall, blond-haired actor stood up and declared, “I’ve finished! What should I do now?” As few of the other students had completed even one pair, much less seven or eight, this was obviously a ruse. The instructor told the actor to shred his worksheet and pay himself whatever he was owed from the envelope. “I solved everything, so the envelope is empty. What should I do with it?” he asked. The instructor told him to put the empty envelope in the box and feel free to go, which the student did, after visibly pocketing all the cash.

So which of the three groups “solved” the most problems? Ariely and his colleagues found that those in the Madoff group summed almost twice as many pairs as those in the control group. They also completed more than the shredders, who had an opportunity to cheat but no model to show them how it could be done—and that they could get away with it.
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If people believe that a man with a soft, feminine-looking face is trustworthy, and if cheating can be contagious, then face-to-face social networks clearly have a dark side. We are easily fooled by signs of shared identity and status, though the brain’s cues about whom to trust—the right facial features and expressions, appropriate eye contact and body language for each context—are notoriously hard to fake. Deploying these signals with panache, perpetrators such as Earl Jones, Bernie Madoff, and Monroe Beachy had long generated the respect due to upstanding members of their communities, and as a result they became insulated from suspicion. Ironically, it was their close, interconnected relationships with friends, family, and financial professionals that shielded them from scrutiny for decades. Trust was embedded in their face-to-face relationships and became transitive, moving imperceptibly from one agent to another in the social network.

Ponzi schemes share many of the same features as other face-to-face social networks. Their size, structure, and the way trust is
transferred are recognizable, so much so that criminologists can now parse drug cartels the way epidemiologists track
AIDS
or suicide epidemics: through nodes in the network. For example, when criminologists Rebecca Nash, Martin Bouchard, and Aili Malm investigated the British Columbia–based Eron Mortgage Corporation, which defrauded more than 2,200 investors of $240 million in the nineties, they discovered that a few key victims had spread the word to their friends and family members. As with the Earl Jones fraud, these 150 bridge contacts, or infectors, as the researchers dubbed them, not only jumpstarted the project but unwittingly gave it a patina of legitimacy.
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Influenced by their personal contacts, dozens of stockbrokers then sold it to others as a bona fide investment opportunity, much the way that Earl Jones’s friends and family members recommended him as an investment and estate planner to their close contacts.

THE FEMALE EFFECT AGAIN

Though this is less the case with drug-related criminal networks, a female effect is key to many Ponzi schemes because they hinge on relationships. For example, 80 percent of Earl Jones’s victims were female. To wit, Mary Coughlan put her daughter onto Earl Jones, and Wendy Nelles, whose mother and Coughlan were good friends, referred her daughter to him, too.

In small groups, women are more eager communicators than men, on average, and more likely to share details or tips about an expert with their close friends and family, most of whom are other women. As their social groups tend to be smaller than men’s, their relationships are more intimate and more intimate information is shared.
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“For most women, getting together and talking about their feelings and what is happening in their lives is at the heart of friendship. Having someone to tell your secrets to means you are not alone in the world,” Deborah Tannen writes in
You Just Don’t Understand
. (Filled with juicy tidbits from Tannen’s own life
alongside her favorite literary quotes, this engaging book creates its own aura of intimacy.)
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But women’s tendency to communicate and confide in each other is more than anecdotal; it’s also validated by reams of data. In a 2012 analysis of 1.9 billion cellphone calls and 489 million text messages from British cellphone subscribers, several European scientists found that women over the age of fifty (Earl Jones’s target group) communicate at a higher rate than men, and primarily with a small group of other women. They were in touch more often with their best friends (who after the age of fifty tended to be their adult daughters) than with anyone else. Meanwhile, throughout his life, a man’s most frequent contact was with a single person, who in many cases also happened to be a woman—his wife.
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As a Ponzi scheme depends on a constant supply of new investors to fund the first ones in on the deal, women are unwitting but effective diffusers. Their personal networks may be smaller, on average, than men’s, but they’re denser and more intimate.
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Tellingly, Jones kept his distance from men, especially those with financial savvy. “He was very careful. He never approached my son Jerry, who’s in investment banking. My daughter was much more trusting,” Coughlan said.

This type of betrayal is more corrosive than identity theft and faceless cybercrime, precisely because the crime spreads through people’s relationships as opposed to the anonymity of the web. There is good evidence, too, that the psychological impact of such predation is felt more keenly by women than by men.
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DUNBAR’S NUMBER

But let’s talk about size. An arresting fact about the Earl Jones and Eron (not to be confused with Enron) scandals is that 150 was the magic number. There were just over 150 victims in Jones’s pyramid scheme before it collapsed, most of whom were members of the same social network, and just under 150 prime connectors, or “infectors,” in Eron. This isn’t some weird departure into numerology, nor
is it a firm rule (Madoff’s victims numbered in the thousands). Still, 150, give or take, has been posited by Oxford evolutionary psychologist Robin Dunbar as the maximum number of meaningful relationships that the human brain can manage.

Dunbar’s Number:
Examples of human communities averaging
150
members

Dunbar is not referring to Facebook or Twitter contacts but to people you know well enough to invite for a cup of coffee—and who would be likely to say yes. I am not alone in having crossed paths with a Facebook friend who showed not a glimmer of recognition as she passed. In contrast, the number of real social bonds a human brain can support has remained fairly static over the past ten thousand years, Dunbar argues, Facebook or no Facebook.
Even if many of our relationships are now sustained online as well as off, and electronic communication coordinates when and how we’ll meet, face-to-face get-togethers are essential to keeping the relationship alive and breathing.
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One study of students leaving home for university showed that friendships require real, face-to-face contact so as not to decay. To put it bluntly, if you haven’t seen a friend for dinner or a movie over the past eighteen months, chances are that your slot in her inner circle has been filled by someone else (though relationships with family are remarkably more durable).
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“Put simply, our minds are not designed to allow us to have more than a limited number of people in our social world. The emotional and psychological investments that a close relationship requires are considerable, and the emotional capital we have available is limited,” Dunbar writes.
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A primatologist by training, Dunbar is a mild-mannered, sixtyish Oxford academic with a graying chinstrap beard, large rimless glasses, and a tendency to sprinkle “as it were” into his speech every few minutes. He should have added “as it were” to that previous statement about the mind: I doubt that he meant our minds were
designed
per se but rather that they evolved over time to support the size and complexity of our social groups. The social intelligence hypothesis explains why primates, and humans in particular, developed brains large enough for them to develop the capacities for language and empathy.
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In order for primates to survive in larger groups, they needed supercharged brainpower to keep track of who was sleeping with whom, who was whose momma, who was the Big Cheese at any given moment (and who he had just deposed), who was his right-hand man and who were
his
allies, and which young whippersnapper was planning to depose him.

But the cognitive demands of living in groups don’t just revolve around parsing the group and remembering who belongs to whom; they’re also about mind reading. In order for a primate’s group size to increase, that species’ cerebral cortex—the thin
sheath covering the brain that is responsible for the ability to problem-solve and imagine what other minds are thinking and feeling—must increase, too.
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