The Law of Scarcity

A man said to a Dervish: “Why do I not see you more often?” The Dervish replied, “Because the words ‘Why have you not been to see me?’ are sweeter to my ear than the words ‘Why have you come again?”’

– Mulla jami, quoted in ldries Shah’s Caravan of Dreams

The Assyrians commanded upper Asia for hundreds of years. The people of Medea (north western Iran) rebelled against them and broke free. The Medes had to form a government and wanted to avoid dictatorships. They feared making one man too powerful. But without a leader, Medea was in chaos. There was constant fighting between the villages. But one man, Deioces, who lived in one of these villages was building a reputation as a fair arbiter of disputes. As the Medeans relied on him more, he became more powerful.

Deioces was overwhelmed with how much work he had to do. He stopped to tend to personal affairs. But his absence brought about chaos once again, and the Medeans quickly learned about the value of the arbitrator. They asked him for help and he agreed, but under strict conditions. He was not to be approached directly, but through messengers, and he had a palace built for him in the capital city. Everyone worked according to his schedule.

The Medes gave him everything he asked for, and he ruled for 53 years. His reign brought peace and prosperity. His grandson Cyrus inherited this power and developed Medea into the Persian empire. This is a story that Greene cites in The 48 Laws of Power; the lesson from this is that Deioces became powerful only after his absence was felt. Before he went to tend to his personal matters, the Medeans took him for granted. The law of scarcity in economics also makes this point. When something is withdrawn from the market, it increases in value. In seventeenth-century Holland, the elites wanted to make the tulip the most valuable flower, and they wanted it to be a status symbol. They pulled the tulips from the market and this sparked tulipomania – the flower multiplied in value.

Use absence to create respect and esteem. If presence diminishes fame, absence augments it. A man who when absent is regarded as a lion becomes when present something common and ridiculous. Talents lose their luster if we become too familiar with them, for the outer shell of the mind is more readily seen than its rich inner kernel. Even the outstanding genius makes use of retirement so that men may honor him and so that the yearning aroused by his absence may cause him to be esteemed.

– Baltasar Gracián

Abundance breeds complacency. Marketers never tell their potential customers that the reduced prices will remain low, or that they will never run out of stock – it’s always ‘only 1 left!’ and ‘limited time offer’. It is human nature to take things for granted. When things are going right, when supplies are plentiful, and when time is abundant, you will not feel compelled to change your behavior.

People become addicted to gambling because of the existence of intermittent rewards. A reward can motivate behavior, but a normal reward is not as powerful as an intermittent reward.

The gap between getting the reward and waiting for another one is the element of scarcity that gets people hooked. The same is true for social media. An example is notifications. Users get notified of ‘likes’ and ‘replies’ after variable time intervals. When 10 people like your post, you won’t get notified of about this as it happens, but you will get delayed notifications of the likes over the course of the day.

In his book Influence, Cialdini tells us the story of a Native American jewelry store catering to travellers to Arizona. The owner of the store noticed that her turquoise jewelry was not moving, so she moved them to a different location. But the change of location didn’t help. One day, she was leaving on a business trip and left a note that instructed her employee to halve the price of the jewelry display. Her employee misread the “1/2”, she thought it said “2” – so she doubled the price instead. When the owner returned, all the turquoise jewelry had been sold.

The perception of customers changed. When they saw that the jewelry was expensive, they figured that it must be valuable.

Going back to the example of scarcity. When an object is rare, it becomes expensive – as the laws of supply and demand dictate. And when something is expensive, it is valuable in the eyes of the people.

The implication isn’t that anyone can be absent and make their absence felt. It is only after that person has created value in a tangible way, that he is missed when he is not present. But after your value has been established, even if taken for granted, your absence will interrupt a pattern of automatic behavior that depended on you.

The Medeans automatically went to Deioses for help, but when he wasn’t there to settle their disputes, this pattern of behavior was interrupted. The trigger in this scenario is the dispute, without which, people would have forgotten about Deioses.

In the jewelry store, the trigger was the increase in price. Usually, things that are more expensive are higher in quality. This correlation has developed into a mental heuristic or rule of thumb. People will assume that anything that is expensive must also be high in quality. Of course, this isn’t necessarily true, but such a simplification of reality can save a lot of time and energy.

The lesson is that we are victims of our previous patterns of behavior. We look for practical shortcuts, even if imperfect. We will trust the rule that expensive is good, and we will give Deoices whatever he wants if he resolves our disputes. It is easier to rely on Deoices than to find a more sustainable long-term solution. This isn’t always bad. There are cases when using shortcuts is wiser than over-deliberating. But becoming aware of how scarcity appeals to the lazy part of our psyche is important to avoid being deceived.

 

Reciprocity (Influence)

Everything turns gray when I don’t have at least one mark on the horizon. Life then seems empty and depressing. I cannot understand honest men. They lead desperate lives, full of boredom. – Count Victor Lustig

The manipulator will prey on countless victims, and does not restrict themselves to only one type of victim. As with an addiction of any kind, after a certain threshold has been crossed, there will be a yearning for a higher threshold. Lustig not only tricked honest men and easy targets, he went for the biggest shark of all, Al Capone, and managed to squeeze money out of him. Frank Abagnale started with small deceptions, and then gradually his ploys increased in complexity and risk.

In one story, described in the 48 Laws of Power, Lustig tells Capone that he can double his money, $50,000, in a couple of months. Capone agrees, sensing there was something different about this man, he was curious to see where this was going. A couple of months later, Lustig appears before Capone with $50,000. Lustig did nothing in those two months. He returned the original sum to the gangster.

Capone expected to either double his money or get nothing at all – in the latter case, he was prepared to kill him. But he was shocked to see the tall man return his money to him. Capone paid him $5,000 out of mere charity. Lustig used selective honesty to disarm Capone, who was surrounded by thieves and liars. Capone couldn’t believe that for once, someone didn’t try to scam him. Lustig was subsequently rewarded for his troubles of doing nothing.

It is easy to kill a bird on the wing that flies straight: not so one that twists. Nor always act on second thoughts: they can discern the plan the second time. The enemy is on the watch, great skill is required to circumvent him. The gamester never plays the card the opponent expects, still less that which he wants. – Baltasar Gracian

The deceiver never does what you expect him to do, that is his strength.

People become cynical about the world because they witness the same disappointing patterns of behavior being repeated. The deceiver uses this information to his advantage, by approaching people of power with something new. You can call it ‘refreshing honesty’, but really, it’s merely change people are after. Repetition is boring. People who behave in ways that are predictable never win favor with anyone. Those that stand out do.

In marketing, the surest way to success is by standing out, hence the premise of Godin’s Purple Cow. You will never deceive anyone if you act and behave like the herd. It is when you take some initiative, when you dare to be different, that others will take note of you.

When you do something that is different, you distract the victim.

The essence of deception is distraction. Distracting the people you want to deceive gives you the time and space to do something they won’t notice. An act of kindness, generosity, or honesty is often the most powerful form of distraction because it disarms other people’s suspicions. It turns them into children, eagerly lapping up any kind of affectionate gesture.

One of the laws in Influence: The Science of Persuasion, is reciprocity. It doesn’t pay to be greedy. The clever salesman knows how to concede before asking for something in return. You don’t have to use this tactic to understand the power that it holds over you. You have definitely been approached by many people who simply give you something for free, without expecting anything in return.

This is how Facebook deceives people. It offers them something new, and valuable for ‘free’. The users become addicted to the platform, and more than pay for the free utility with their time and energy. Lustig paid Capone first, he gave him an honest gesture, he returned to him the full sum of money. In return, Capone gave him $5,000 which is what Lustig wanted all along.

The Need to Deceive

It is not possible to understand good without knowing evil.  It is the presumption of contrasts: without the antithesis of a thing, that thing could not exist. Light cannot exist without darkness. Positive can’t exist without negative. Strong can’t exist without weak. Masculine can’t exist without feminine.

This is because things have to be measured relative to something else, if you are to classify them. Something is only dark if there is something lighter that you can contrast it to. It is not possible to recognize honesty without recognizing deception.

But there is something fundamentally nebulous and nefarious about deception. People avoid talking about it and understanding it.

“That which you most need will be found where you least want to look” – C.G Jung

But ff you ignore the existence of deception and presume that all people are basically good, then you are an easy target for deception. If you aren’t familiar with the ways in which they can deceive you, then there are more ways to deceive you. If you are incapable of recognizing malicious intent, they will be highly capable of recognizing you as a perfect victim.

If you start with the opposite premise, that people are not basically good, the world looks very different. But the paradox is that by seeing the world in this way, you are doing more good than bad. It is the presumption of innocence that destroys people and society.

Psychologist Carl Jung thought of archetypes as sub-personalities that have their own motivations, if you suppress them or refuse to acknowledge their existence, they will find a way to manifest themselves in your life against your conscious will – and could result in neurosis and psychosis. If you project weakness, cowardice, and evil onto the world and deny these sub-personalities in yourself, then you become more likely to become a victim of your unconscious.

the joker archetype lives within you. A part of you enjoys deception. After-all, deception is a lot more fun than honesty. A case in point is games. Every single game that is worth playing contains elements of deception. Whether it is sports or chess or poker or board games – without deception, the game becomes fundamentally boring.

This is what interests me most about deception. People’s lives are routinely ruined by it, and yet the absence of it creates a boring existence. Deception is the root of most of the world’s evils, and yet one has no choice but to embrace it.

 

 

 

 

 

Keep the Imagination under Control

Keep the Imagination under Control; sometimes correcting, sometimes assisting it. For it is all-important for our happiness, and even sets the reason right. It can tyrannise, and is not content with looking on, but influences and even often dominates life, causing it to be happy or burdensome according to the folly to which it leads. For it makes us either contented or discontented with ourselves. Before some it continually holds up the penalties of action, and becomes the mortifying lash of these fools. To others it promises happiness and adventure with blissful delusion. It can do all this unless the most prudent self-control keeps it in subjection.

– The Art of Worldly Wisdom, Baltasar Gracian

Most people thriving within a functional economic system design a vision of an ideal reality they want for themselves. They sacrifice things of value to actualize this vision, and base their self-worth on how successful they are in doing so. Of course, it is useful to engage in this forward thinking process –  without clear goals, and the ability to scrutinize your behavior, you would never make any progress. But there is a danger to succumbing to the arbitrariness of your perception.

Your imagination of what an ideal future should look like is based on a distorted understanding of reality. Your perception of time, your abilities, the actions of others, are all inaccurate. And when you wholly identify with the vision you are seeking, you lose the capacity to deal with reality as it is, becoming a victim of your sea of self-generated illusions. Before trying to rule new kingdoms, you must learn to rule your own. Keep yourself grounded, by controlling how you react to your illusions of reality.

The Art of Deception

Vary the Mode of Action; not always the same way, so as to distract attention, especially if there be a rival. Not always from first impulse; they will soon recognise the uniformity, and by anticipating, frustrate your designs. It is easy to kill a bird on the wing that flies straight: not so one that twists. Nor always act on second thoughts: they can discern the plan the second time. The enemy is on the watch, great skill is required to circumvent him. The gamester never plays the card the opponent expects, still less that which he wants. – Baltasar Gracian

To be effective at deceiving, you must have a different trick every time. The boy who cried wolf wasn’t believed the last time he cried ‘wolf’ because the rest of the villagers were used to this exact lie. Had he tried a different tactic each time, he would have avoided disaster.

The deceiver must always be inventive. In poker, there are many ways to deceive your opponent. Bluffing is the obvious example. Players who bluff often in the same kinds of situations will be easily defended against by the astute opponent. So the bluffer must have other tricks up his sleeve. Sometimes, he should try to disguise a real hand with a bluff-like raise, to make it seem like he’s following the same pattern of behavior. Other times, he can slow play his hands, and in that way, his opponents can never predict if he has a real hand or not.

But notice that the more tricks you have the more unpredictable you are. In any game, if you can keep your opponent guessing about your next move, you will have the advantage.

In chess, there is the story of Bobby Fischer’s famous series against the Russian Boris Spassky in 1972. Fischer lost the first game, but when it was time to play the second game on a different day, he arrived very late to the event – and forfeited the game. Spassky was happy to be two games up, but he was confused about Fischer’s behavior. He wondered why his opponent would concede such an important match in this way.

Spassky was a player that won by making moves that rattled his opponents. Fischer used his own tricks against him, for the rest of the game, Spassky couldn’t get a read on Fischer – the American had the psychological edge. After losing the series, Spassky accused Fischer of cheating, but none of his claims were verified. Spassky retired from chess even though he was still young.

Don’t bullshit a bullshitter – Walter White

Having more tricks not only allows you to have more options to fool your opponent, but it also makes it easier to read your opponent, and recognize when he’s deceiving you. Fischer recognized Spassky’s strategy and implemented it himself.

When the Greeks fought against the Persians in 479-480 B.C in The Battle of Thermopylae, they managed to make a stand against all odds. The Greeks had a much smaller army. Their hoplites were infantry who were physically tough and brave, and they were defending their country from invasion, so they fought to the death. They managed to heroically prevent the Persian victory.

The underdogs won the battle, but not the war. The Persians had a different trick up their sleeve, a very powerful one – gold. While the Persians didn’t have their local hoplites, they bribed Greek mercenaries to fight for them, and it worked. The Persians eventually won the war. They succeeded in creating infighting within Greece. Whenever one Greek city state was doing well, they funded its rivals that would then go to war against the successful city state. And as the dynamics of power shifted, so did the Persian political strategy. The Greeks naturally had conflict with one another, and the Persians used diplomacy as a weapon to exploit this.

This strategy has been used many times in the past, and continues to be used in modern times.Powerful nations that unexpectedly face stiff opposition from an inferior enemy resort to other methods to attain victory. When they realize that fighting honestly is too costly to their society, they create rifts between the groups they are fighting, and this way avoid bloodshed, but achieve their political goals.

The Persians defeated other enemies by inviting them to a feast, offering peace. And when their enemies obliged, the Persians got them drunk and slaughtered them. Nations that rise to power have more tricks than their opposition, they are less predictable. It is why they rose to power in the first place, and it is how they are able to maintain it.

In the first world war, the Germans were shelling the French for days. Then suddenly, they stopped. The French knew all about this. Every time the Germans had stopped before, they had stopped the shelling and mobilized their troops to invade the French territory. The French soldiers, who were in terrible condition, rose out of their dugouts and were exposed in the open field, waiting to counter the German invasion. But the Germans never came. It was a trick. The German planes took note of the French positions, where machine guns were hidden, and other soldiers took cover. The shelling continued for the rest of the day and was more effective than before.

Man’s Life is Warfare Against the Malice of Men

I found this very interesting aphorism by Baltasar Gracian in The Book of Wisdom. 

Act sometimes on second thoughts, sometimes on first impulse.

Man’s life is warfare against the malice of men. Sagacity fights with strategic changes of intention: it never does what it threatens, it aims only at escaping notice. It aims in the air with dexterity and strikes home in an unexpected direction, always seeking to conceal its game.  It lets a purpose appear in order to attract its opponent’s attention, but then turns round and conquers by the unexpected. But a penetrating intelligence anticipates this by watchfulness and lurks in ambush. It always understands the opposite of what its opponent wishes it to understand and recognizes every feint of guile. It lets the first impulse pass by and waits for the second, or even the third.

Gracian is describing a war between the wise hero (Apollo) and the intelligent villain (the python). Sagacity is the intelligence that represents the wise, the good, justice, and truth. Notice how Apollo, like the serpent, is agile. He changes his tactics when required. He is flexible and cunning – the way he chooses to deceive is through truth. But the clever python anticipates and observes these patterns of behavior, not falling for Apollo’s tricks – the python is a master at deception.

Sagacity now rises to higher flights on seeing its artifice foreseen and tries to deceive by truth itself, changes its game in order to change its deceit, and cheats by not cheating, and founds deception on the greatest candour. But the opposing intelligence is on guard with increased watchfulness, and discovers the darkness concealed by the light and deciphers every move, the more subtle because more simple. In this way the guile of the python combats the far darting rays of Apollo.

This can be seen as a battle between good and bad. It may be seen as a representation of the internal battle that takes place within every individual. Everyone has competing sub-personalities, each trying to assert its dominance over the other. The deceptive, serpent side of you wants to guard its victories, it doesn’t allow the reformer in you to reign freely.

“Life is a battleground. It always has been, and always will be; and if it were not so, existence would come to an end.” – Man and his Symbols, Carl Jung 

This battle can also be the one taking place between your conscious self and your ‘shadow’ – as described by Jung.

“In the realm of consciousness we are our own masters; we seem to be the “factors” themselves. But if we step through the door of the shadow we discover with terror that we are the objects of unseen factors.” – The Archetypes and the Collective Unconscious, Carl Jung

Or it can be viewed as resistance: the ruthless, formless, cunning enemy of creativity.

Resistance is the most toxic force on the planet… To yield to resistance deforms our spirit. It stunts us and makes us less than we are and were born to be… As powerful as is our soul’s call to realization, so potent are the forces of resistance arrayed against it. – The War of Art, Steven Pressfield 

In the end, Gracian tells us how the python survives – by anticipating the moves of Apollo, it is always one step ahead. In the eternal battle between good and evil – the good is always the underdog.

 

Appearance (The Prince)

Everyone sees what you appear to be, few really know what you are, and those few dare not oppose themselves to the opinion of the many, who have the majesty of the state to defend them; and in the actions of all men, and especially of princes, which it is not prudent to challenge, one judges by the result. The Prince, Machiavelli 

Appearance is everything. If you are a good person, but others don’t see any evidence for it externally, then they will never assume the best. People have a limited attention span, they cannot afford to spend too much energy into figuring people out – they have more pressing things to worry about. They will take shortcuts, and they will assume that ‘what you see is what you get.’

Thus, how you appear to others is very important. If you are a good person deep down, but you act petulantly and distastefully when in the company of others, no one will assume you are good. If you work very hard at your job, but act humbly and are afraid to speak up, your boss won’t assume that you are secretly a wise sage.

it is unnecessary for a prince to have all the good qualities I have enumerated, but it is very necessary to appear to have them. – The Prince, Machiavelli 

A testament to this rule is thinking about the concept of acting in general. What is an actress? Isn’t she a stranger who is reciting a written text, isn’t she acting in such a way so as to evoke emotions out of her audience? Does she not adjust her tone of voice, know when to pause and know how to cry convincingly?

We take it for granted that this actress is able to suspend belief if only for a couple of hours, but think of the magnitude of her achievement. She was able to convince you that she was a real person, who had a past, and cares about having a future. Acting is the art form of deception.

And now, think about life, how many times you fail to see reality for what it is. You mistake shadow for substance because too often, you see what you want to see, and not what is there.

Armed with this knowledge, you should realize that everyone shares this cognitive shortcoming. It’s not that you are fooled by appearances – everyone is fooled by appearances. How then do become better at deciphering fact from fiction?

I believe the answer is to understand the nature of fiction. This is one of the reasons I started this blog – to understand the nature of deception.

To know what is, you must know what is not. If you are only accustomed to truth, and that your information diet consists of the most factual information you can find, then you are an easy target for the swindlers of the world.

Once you understand the nature of deception and are able to wield it, you will become better at separating truth from fiction. Like martial arts, the goal is not to hurt people, it is to know how to protect yourself and others from those that do hurt people

The other thing to do is to become more in control over your appearance. If you are more mindful about how you appear to others beforehand, you can adjust your behavior when you are with them, or even what you wear. That isn’t to say that while you are with them, you should be asking yourself ‘how am I being perceived right now?’, that only results in social awkwardness. But if you look on the floor, are afraid to make eye-contact, hesitant, have crab-like body language, and dress poorly – then you’re giving others no choice but to ignore you.

If you want to influence others, you have to give them what they want. What they want is an image, and as long as you can paint that image for them, then you can get what you want. And notice that they don’t necessarily know what they want consciously – their desires can be unconscious. So, it is not a question of investigating what they explicitly make clear to you, but finding out what they implicitly desire.

The master manipulators have this power over you, they can get you to behave in ways that you don’t want, because they know how to push your secret buttons. They know what makes you tick, and will use it against you. There are countless examples of this. One story that comes to mind is about Count Lustig, the infamous swindler, told by Greene in The 48 Laws of Power. 

In 1925, five successful dealers in the French scrap-metal business were invited to a highly confidential meeting in a luxurious hotel in Paris. They were meeting with Lustig. The business men didn’t know why they were invited, but were curious.

Lustig explained to them, after they had a few drinks that there was an urgent matter that required the utmost secrecy. He told them that the French government was going to destroy the Eiffel Tower. The business men were under the impression that Lustig was a  government director and took his words very seriously.

Lustig then told them that they were allowed to make a bid for the Eiffel Tower. He gave them some junk information, and accompanied them to an area surround the tower. There, he showed his badge, and humored his friends with stories as they walked around the area. Finally, he thanked them and said he was expecting their offers within four days.

A few days later, the offers were submitted. One man, Monsieur P was told that he won. To complete the deal, he was told he had to appear with a check worth 250,000 francs in the hotel in two days. Monsieur P was excited, he arrived at the suite with the money in hand.

While he talked to Lustig, doubts about this whole operation started to creep in. He wondered if this was a scam, and Lustig’s description of how the tower was going to be scrapped in detail was not convincing him otherwise. He was about to pull out of the deal, then suddently, he noticed a shift of tone from Lustig. The latter complained to him about his horrible financial situation – his low salary and his wife’s desire for a fur coat. Monsieur P realized that Lustig was asking for a bribe and he was relieved.

The situation made more sense to him now. This high government official just wanted his palm greased just like all the other government officials he had met. Soon after, Lustig was paid. The victim of the ruse left the hotel feeling happy only to realize that it was a scam days later, when the government denied any knowledge of what he was talking about. But he couldn’t do anything, since he would ruin his own reputation if people found out about what had happened.

Notice how in this story, it wasn’t only that appearance was important, but the important role Monsieur P’s feelings played. That is the power of the unconscious. While his greedy ambitions were getting the best of him, something about his encounter with Lustig didn’t feel quite right. Lustig didn’t fit the image he had of a government official. But when Lustig told him about his financial problems, he suddenly fit the image perfectly.

In poker, appearance is everything. You have to not only watch the behavior of other people, but you have to watch your own behavior. Since you know others are watching you, knowing how to adjust your actions in a way to fit the narrative that you want your opponents to believe is key.

If you raised the pot four times in a row, then people have the impression that you are loose – reading to play any two cards, even though you may have luckily picked up some great hands in those four rounds. Now on the fifth round, if you pick up an above average holding that you would usually play aggressively, you should tone it down because it is now highly likely that someone will assume you are definitely bluffing this time, and will put you in a tight spot if you make a raise.

The only way to counter Lustig would be to pay attention to your own behavior. When you know what you are giving away, then you can control what Lustig is perceiving. So in the story, notice that Lustig changed his tone just when the businessman was going to change his mind. Lustig sensed a change of demeanor and quickly adjusted.

If Monsieur P abruptly ended the conversation by saying he had to leave and that it was an emergency, and that they would continue this later, then he could have avoided losing his money. But by making his feelings apparent to Lustig, he gave the swindler everything he needed to make his next winning move.