The Ponzi Scheme As Way of Life | WHAT REALLY HAPPENED

The Ponzi Scheme As Way of Life

by Sharon Astyk

I’m sorry, I’m having a bit of trouble getting all outraged about Bernie Madoff and his ponzi scheme. Yes, I’m shocked. Shocked and appalled. You mean, someone was offering a scheme in which you pay present day participants with the funds of those who come in later, and then it fell apart. Gosh, that seems so unprecedented.

Yeah, I feel bad for those who were taken in, particularly for charities that lost their funds. But no worse than for those who lost their 401Ks or their pension funds on the stock market, for cities and states that can’t sell municipal bonds, and I feel far worse for the poor, who never had a glimmer of getting to participate in the get-rich-quick ponzi scheme that was a stockmarket that everyone said could have perpetual growth forever.

Madoff may be a criminal, but he’s a criminal in large part because he’s engaging in a particular form of ponzi scheme that we look down upon, one small enough to be called illegal. In general, we’re pretty comfortable with ponzi models -we live, quite happily, in a ponzi economy, one in which the concept of perpetual economic growth is sold, divvied up again and resold. We live in a Ponzi ecology where we borrow constantly against the future to pay for our present affluence.

Is this truly a Ponzi scheme? I think the answer is yes - a Ponzi scheme never really generates new wealth, it simply relies on a constant stream of new money. And since the eco-Ponzi economy relies most of all on reducing the capacity of future generations to live well - because natural resources and associated wealth are already drawn down, I think that it does meet the criteria at both the economic and ecological levels.