
How Scams Worked in the 1800s - brahmwg
http://www.npr.org/sections/npr-history-dept/2015/02/12/385310877/how-scams-worked-in-the-1800s
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bendykstra
I witnessed a scam similar to "Horse Trading" while playing Team Fortress 2.
In the game, players can wear cosmetic items. It's just for fun, but the items
can still be worth tens or even hundreds of dollars.

A player joined the server that I was playing on and after a bit asked if
anyone had a certain low-value hat. He said that he was willing to pay the
equivalent of $20 for it. No one did (no doubt he had made sure before
asking.) He left the server and a few minutes later another player joined
wearing that exact hat! A bidding war began and the second player left
approximately $10 richer.

~~~
patmcguire
There's a version of this on EVE where you open up buy orders for something
not offered locally for 10x what it's worth. Then you transfer all your money
to an alt character, so you can't fulfill it, then your alt brings in the item
and offers to sell it for 5x.

~~~
bsamuels
that's the first I've heard of that scam - fascinating.

right now I've got a scammy bit of economic warfare that I wage against
aggressive traders that's proven to be profitable and good at getting people
off the market:

-Locate an item the target is trading in that has a 20-30% buy->sell order spread

-Have a large amount of the item that you want to use to disrupt the other trader - preferably you've bought this item via a buy order and liquidating it at 10% under market price still brings in profit

-Overcut the target's buy orders by 0.01 ISK. Go back and forth a few times, you're trying to establish a rhythym.

-Now start overcutting the target's buy orders by 5% of the buy->sell order spread

-The buy->sell order spread should start rapidly closing - it's absolutely stunning how rarely targets notice that their profit margin is shrinking as you overcut each other back and forth.

-Once you have the target's buy orders within 5% of the lowest sell order price, unload all of your stored good into his buy order.

\--

This method produces multiple positive outcomes:

-Fast liquidation of an asset, sometimes in many multiples of daily moving volume

-Drives drives the price of the item down without having to babysit the orders yourself (the target will do it for you now that he's stuck with all of your item!)

-Discourages margin traders from doing business in certain markets

~~~
kqr
I will never stop being impressed when people throw around (relatively)
advanced technical terms they've learned... by playing video games, whether
it's economy from Eve online or rocket engineering from Kerbal Space Program.

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cs702
The most daring scam of that era is probably the successful raising in 1822 of
£200,000 (a lot of money at the time) from investors who bought a bond issued
by the "Kingdom of Poyais." The bond was floated in the main London exchange.
It might be the only bond ever issued by _a fictitious country_ in history.[1]

[1] [http://www.economist.com/news/christmas-
specials/21568583-bi...](http://www.economist.com/news/christmas-
specials/21568583-biggest-fraud-history-warning-professional-and-amateur-
investors)

~~~
baobrien
According to [1], £200,000 in 1822 pounds is £20,207,734.91 in 2013 pounds

[1]
[http://www.whatsthecost.com/cpi.aspx](http://www.whatsthecost.com/cpi.aspx)

~~~
cs702
According to the Economist article I linked to above, £1.3 million back then,
as a percent of Britain's economy, would be £3.6 billion today, so a bond
issue of £200,000 in 1822 would be over £550 million today. Either way, it's
not peanuts.

~~~
ikeboy
It's difficult to compare amounts between different cultures/countries/times
because money is an abstraction. To the extent people spend on the same
things, you can compare how much each costs, but many of the things previous
generations spent on are either viewed as useless by us, or are considerably
cheaper. (Although even "cheaper" is subjective: we can point to abundance, or
marginal cost to produce in labor or similar more objective metrics to get
around that).

I tend to consider all such statements spanning a sufficiently large time as
guesses.

(For other countries, you need to consider different cost of goods even when
money can be directly converted; you need to consider what's provided by the
government as a cost-of-living deduction, and plenty of other stuff. It's like
comparing interest rates without mentioning the money float or gold standard
when they differ among the two periods you're comparing.)

/rant

~~~
barrkel
On a time scale of centuries, the only real way to compare money is by the
effect it has on other people when you spend it (i.e. how much effort other
people expend when you draw down the claim on future production that money
represents). You can look at the percentage of the population / economy
affected (for large amounts of money), or the absolute number of people
affected (typically measured against of the average wage). When the size of
the population overall is changing, numbers calculated using the two basic
techniques will necessarily diverge. Which number is more important depends on
whether you're interested in relative or absolute purchasing power, which is
context dependent.

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Animats
"Extraordinary Popular Delusions and the Madness of Crowds", published in
1841, is still worth a read. Read about version 1.0 of the classic big scams,
from the South Sea Bubble to Tulip Mania.

~~~
elbrownos
This is a great book. I found the section about the Crusades especially
interesting.

~~~
technofiend
I felt compelled to mention it's available free on Project Gutenberg although
printed copies are also available on Ebay.

[https://www.gutenberg.org/ebooks/24518](https://www.gutenberg.org/ebooks/24518)

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ChristianGeek
If you're interested in the psychology of audience manipulation for magicians,
check out "Strong Magic" by Darwin Ortiz.

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alanwatts
For further reading check out Victor Lustig, the man who sold the Eiffel
Tower, twice.

[https://en.wikipedia.org/wiki/Victor_Lustig](https://en.wikipedia.org/wiki/Victor_Lustig)

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guessbest
This sounds like a startup idea, Uber for Scams. Sign Up to Scam or Tap and
Swindle.

