pplpod

Bill Gates has been two very different public figures: the desk-pounding monopolist of the 1990s and the sweater-wearing philanthropist trying to eradicate disease. This episode argues that both run on the same engine. It begins in a Seattle household where card games and swims to the dock at Hood Canal were contests with penalties for losing, then moves to the Lakeside School, where a 1968 rummag...

In 1984, Dr. An Wang was the fifth richest person in America, worth about $1.6 billion and employing 30,000 people. Born in Shanghai in 1920, he immigrated to the United States in June 1945, finished a Harvard doctorate in applied physics by 1948, and went to work with Howard Aiken. There he co-invented the pulse transfer controlling device, which solved the destructive readout problem and made ma...

In February 2016, hackers tried to steal roughly $1 billion from the central bank of Bangladesh without ever entering a building. Malware suspected to be a Dridex variant had been sitting inside Bangladesh Bank's systems since January, watching employees and learning the exact syntax of the SWIFT messaging network. Then, on the night of February 4th into the 5th, as the Bangladeshi weekend began,...

Double your bet after every loss, and the first win recovers everything plus a profit equal to your original stake. The Martingale system, which dates to 18th century France, sounds like a law of physics, and it found a natural home at the roulette table, where red or black comes close to a coin flip. This episode shows why it is a trap. The guarantee holds only for a player with unbounded wealth,...

Every evening the news reports what the Dow did, as if it were a precise reading of the American economy. The number comes from a newspaperman's pencil arithmetic. Charles Dow, a reporter, and statistician Edward Jones founded Dow Jones and Company in 1882 and ran a two-page bulletin, the Customer's Afternoon Letter, around a Wall Street that was opaque to outsiders. That letter grew into the Wall...

On Christmas Day 1864 in the American South, a turkey cost $155, a ham $300, a cake of soap $50, and an ordinary suit of clothes $2,700. The money behind those prices was the Confederate States dollar, the grayback, first issued in April 1861 when the Confederacy was two months old. It was a bill of credit with no gold or silver behind it. Most notes promised payment six months after the ratificat...

On August 18, 1913, a roulette wheel at the Monte Carlo Casino landed on black 26 consecutive times, odds of roughly one in 68.4 million. The crowd that gathered was sure red was due and pushed millions of francs onto it as the streak ran on. They lost fortunes to a belief that random events keep a ledger. This episode takes that night as the entry point to the gambler's fallacy, using a simple co...

In 1899, as railroad tycoons and steel magnates crowded into rooms once reserved for old money, Thorstein Veblen published The Theory of the Leisure Class and gave the spectacle a name: conspicuous consumption. The new rich had no lineage to display, so they displayed waste, in money and in time. Like a peacock's tail, the cost and impracticality were the whole message. This episode starts there a...

Textbooks tend to describe wampum as a kind of early money. For the peoples of the northeastern woodlands who made it, that misses nearly everything. White beads came from the inner spiral of the channeled whelk and dark purple ones from the quahog clam, each drilled by women artisans using a wooden pump drill tipped with quartz, then strung and ground smooth with sand and water. As anthropologist...

In 2013 Costco CEO Craig Jelinek suggested to co-founder James Sinegal that the quarter-pound hot dog and soda combo, stuck at $1.50 since 1985, might need a price increase. Sinegal cursed him out for even thinking it. The combo loses money every year, as does the $4.99 rotisserie chicken, and that is the design. A loss leader is priced below cost so that the rest of your cart pays for it, and ret...

The phone battery that fades the week a new model arrives and the printer that refuses to scan without cyan ink belong to a philosophy with a century of history. It began in the 1920s car market. Henry Ford built the Model T from durable vanadium steel and wanted it to last forever, which left a saturated market with nobody needing a replacement. Alfred P. Sloan Jr. of General Motors answered with...

The traditional piggy bank asks a child to protect and feed a ceramic animal for months and then destroy it with a hammer. That paradox is the point. Collectors call it a still bank, a vessel with no moving parts where money goes in through a slot without effort and comes out only by sacrifice. This episode treats it as an ancient commitment device, the same trick as freezing a credit card in a bl...

In 2006 a Coca-Cola executive secretary named Joya Williams and two accomplices offered the company's trade secrets to Pepsi for $1.5 million. Pepsi called Coca-Cola, then the FBI, and undercover agents posing as rogue Pepsi executives closed the trap. That moment of honor between enemies opens a history that starts with two Southern pharmacists: John Stith Pemberton, who created Coca-Cola in Geor...

The citizens of Monaco have never been allowed to gamble in the casino that made their country famous. That rule goes back to the beginning, when the House of Grimaldi was nearly broke. In 1848 the towns of Menton and Roquebrune declared independence, taking with them the olive oil and fruit taxes that funded the state. Prince Florestan froze. His wife, Princess Caroline, looked to the spa and gam...

Among the Kwakwaka'wakw, Haida, and Tlingit peoples of the Pacific Northwest coast, status came from emptying your pockets. The potlatch was a winter feast held for births, deaths, adoptions, and weddings, hosted by a kinship house of about 100 members under an aristocrat regarded as the living incarnation of its ancestral founder. To an outsider it looked like a party. In practice it was a legal...

The law of demand says people buy less of something as it gets more expensive. Veblen goods break that rule. Named for Thorstein Veblen, whose 1899 book The Theory of the Leisure Class dissected the Gilded Age mansions of the Carnegies and Vanderbilts, these are products whose high price is the main feature. A luxury watch keeps the same time as a $10 pharmacy digital, yet cutting its price could...

In 2006 Andrew Mason got so frustrated trying to cancel a mobile phone contract that he built a website for collective action. The Point launched in 2007 with a million dollars in seed money from his former employer, Eric Lefkofsky, and its users promptly ignored the social causes and used it to organize group discounts. In November 2008 the pivot became Groupon, and its first deal was two-for-one...

A kid's baseball goes through a bakery window, and someone in the crowd shrugs that at least the glazier gets paid. In 1850 the French economist Frédéric Bastiat took that reflex apart in his essay That Which Is Seen and That Which Is Not Seen. His shopkeeper, James Goodfellow, spends six francs replacing a pane his careless son broke, and those six francs never reach the cobbler or the bookseller...

In July 2010 a trader named Anthony Ward bought 7 percent of the world's annual cocoa production, pushed prices to a 33-year high, and earned the nickname Chocfinger. He was attempting one of the oldest and riskiest plays in commerce: cornering a market, gaining enough control of an asset to dictate its price. This episode explains why the strategy nearly always destroys the person who tries it. B...

Sony brought Betamax to market in 1975 and briefly owned all of home video. By 1988 it had agreed to build VHS machines under its own name. This episode dissects how that happened. Sony had shown its Beta prototype to rivals in 1974, expecting them to adopt it. JVC, then a subsidiary of Matsushita, refused and developed the Video Home System instead. Betamax delivered a sharper picture, about 250...

The balance on a banking app looks like cash in a vault. Most of it is out in the world as mortgages and business loans. That is fractional reserve banking, and it means no bank can pay all its depositors on the same day. This episode explains why a bank run follows from that fact. The Diamond-Dybvig model shows that joining a run can be perfectly rational: if you expect others to withdraw, your b...

Given a crisp five dollar bill and a torn one, most people hand over the torn one. Gresham's law is that instinct at the scale of nations: when the law forces two unequal kinds of money to pass at the same face value, people spend the worse and hoard the better. This episode starts in Tudor England, where Henry VIII secretly replaced about 40 percent of the silver in English shillings to pay for h...

Binion's Horseshoe Casino in Las Vegas once displayed one hundred $10,000 bills in a thick acrylic case: a million dollars in a stack you could hold in one hand. This episode explains where such notes came from and why they vanished. Large denominations, meaning $500 and up, date to the Revolutionary War. North Carolina authorized a $500 note on May 10, 1780, and Virginia reached $2,000 in 1781. T...

By March 1956 a 50-pound bag of onions in Chicago sold for 10 cents, less than the burlap sack that held it. Seven months earlier the same bag had cost $2.75. The collapse was engineered. The Chicago Mercantile Exchange had turned to onion futures in the 1940s after its butter trade dried up, and by the mid-1950s onions made up 20 percent of its volume. In the fall of 1955, traders Sam Siegel and...

The message starts with a friendly hello from an old friend and ends with an invitation to be your own boss. Behind that pitch is a study of 350 companies finding that at least 99 percent of recruits lose money. This episode examines how multi-level marketing sustains a multibillion-dollar industry anyway. The compensation plan pays a little for retail sales and far more for the downline, so selle...