Sunday, December 29, 2013

Scam Psychology: The Problem of Willful Blindness, Recklessness, and Negligence

The many portraits by Abbott originate from th...
Horatio Nelson, origin of "willfully blind"?
 (Photo credit: Wikipedia)
In studying various reactions to criticism by MLM participants, it is interesting that so many of them are afflicted with "willful blindness", and it is a condition that can cause serious financial and legal problems.

The most popular example of "willful blindness" is an apocryphal story of Admiral Horatio Nelson in Battle of Copenhagen. When given a flag signal by a cautious fleet commander that Nelson may "withdraw at his discretion", and asked by a subordinate what shall he do, Nelson reported raised his spyglass to his blind eye (with an eye patch and all), then replied "I see no signal to withdraw", and continued the attack. The story was often told as if Nelson disobeyed a direct order, but the flag signal is "withdraw with commander's own discretion". This gave us the expression "turning a blind eye", and the term "Nelsonian Knowledge".

In modern times, "willful blindness" is defined as a situation where a participant INTENTIONALLY puts him- or herself in a situation where s/he cannot / does not know the facts that would make him/her liable for civil or criminal acts s/he had participated in. And it is a legal term. For example, traffic mules (those who smuggle contraband across borders) asked to be blindfolded during loading process so s/he does not know what's being trafficked. And thus, s/he want to argue they are innocent victims and thus should not be counted as accessory to trafficking.

The court had NOT accepted this defense, and has taken the position that willful blindness is merely legal sophistry, if it can be proven that the participant knows that such facts exist, and has taken deliberate steps to isolate him-/herself from knowing such facts. This case was even taken up by the Supreme Court back in 2011, when it ruled a file sharing service cannot disclaim responsibility for illegal acts of its users just because it doesn't want to see what's being shared, i.e. willfully blind to the copyright violations.

This is different from recklessness and negligence. Recklessness is knowing such risks of damaging facts do it any way, and negligence is "should have know such risks, but did not".

To illustrate with an example, using the smuggler mule as example:

recklessness: I know it's illegal, I'll take my chances

negligence: I should have known it's illegal, but I honestly thought those were nothing harmful...

willful blindness: I have no idea what they put in my luggage. I never asked. Don't need to know.

And many MLMers suffer from all three: recklessness, negligence, and willful blindness.

Previously, MLM Skeptic have discussed the problem of "avoiding negativity", which has elements of all three: I don't want to know any doubt, there is no doubt, , and if there's any doubt I ignore it. They are a combination of willful blindness, negligence, and recklessness. Thus, there is no surprise that many MLMers, taking this positivity approach to ridiculous extremes, started attacking any sort of criticism and question leveled at his/her MLM as some sort of personal affront to his or her dignity (probably Ikea Effect) usually with the various bad arguments mentioned in this blog, with such bad arguments such as:
This happens even more often where the scheme is just BORDERLINE illegal... there is no clear division of customer vs. affiliate, for example, or the scheme has both legal and illegal components. So all the participants do is concentrate SOLELY on the legal portions, then counter ANY mention of the potentially illegal portions with the various bad arguments above.  They don't want to learn about the potentially illegal portions and how it affects their sales tactics. To them it only slow them down, it's "negativity" to be purged from their mind. They simply "neglect to mention" them.

A scheme that attracts a lot of willfully blind people is Lyoness, a suspect Ponzi scheme under investigation even in its home country, Austria. While a full explanation of how Lyoness works is beyond the scope of this blog post (I recommend you read Oz's coverage on BehindMLM) let's just say it's a shopping loyalty program... except you can BUY your way up the reward levels (it's explained as "down payment" for gift card, which makes no sense at all). The ability to buy your way up makes it a potential ponzi scheme, but most Lyoness participants are willfully blind toward this possibility as they just repeats the potential income (from other people buying their way up or shop their way up) and how big Lyoness is around the world. When asked point blank why have the ability to buy "accounting units" (which can go for thousands of dollars), their reply usually goes "but you don't have to (buy any)", which is, of course, a non-sequitur.  

Beware of anyone telling you to avoid negativity. They are basically asking you to be reckless, negligent, and/or willfully blind. Risk is a part of any business. If you ignore risk, you are a gambler, not a businessperson.

Upcoming article will discuss the difference between "avoid risk" vs. "ignore risk", i.e. Due Diligence vs. Analysis Paralysis. 
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