ers, but American exceptionalism, as Balleisen shows, includes a special vulnerability to fraudsters and con artists. As he points out, “Many of the world’s most expensive and ambitious frauds have occurred in America” because “openness to innovation has always meant openness to creative deception.” The country’s lionization of entrepreneurs and inventors creates tempting opportunities for those trafficking in highly implausible scenarios. It has made the U.S. home to genuine innovators, from Thomas Edison to Oprah Winfrey, but it has also facilitated the far-reaching deceptions and empty promises perpetrated by people like Bernie Madoff on Wall Street and Elizabeth Holmes in Silicon Valley. Madoff’s Ponzi scheme was the largest known financial fraud in history, and Holmes’s biotech startup Theranos faces multiple lawsuits and federal investigations after its products didn’t work as claimed. (Holmes and the company deny any wrongdoing.)
Misrepresentations are usually made possible by two factors: their complexity and their proponents’ social craftiness. Madoff and Holmes used both of these to their advantage. When it comes to complexity, the basic principle is that the less people understand of an underlying business proposition, the more vulnerable they are to being taken in by pretenders.