I am making this post because it seems that the concept of "ponzi scheme" is being thrown around a lot. For those not familiar with the term, a Ponzi scheme is an investment operation where the guys on top get paid from the guys below.
Those who believe in the distinction of the ponzi vs "legitimate business" argue for the existence of a tradable product in the latter, with the profits being distributed accordingly depending where one is found in grander scheme of all. In a ponzi they claim, the bottom guys just provide capital to the guys on top based on an empty promise. Financial capital as I will demonstrate below is not the crucial part — hence the erroneous label of ponzies.
For one to understand the premise that everything is a ponzi scheme, one has to understand the nature of capital. Contrary to common belief, capital is not only financial but also social and intellectual. They work together like a holy trinity — one reinforcing the other. I explain my rhyme of thought in the post A New Way to Think About Capital
Thing is, there is always a product in every single operation even if that product is the people themselves. If you are in doubt, ask Zuckerberg and how he manages to gather your social and intellectual capital for free in order to monetize his social media empire. You are more or less the product being sold. If Facebook goes kaput one day, he will escape with the profits and you will get absolutely nothing other than some "dividends" in your social and intellectual life.
Let's be honest here. Based on the nature of our economic dealings the entrepreneur, the boss, will always manage to keep the largest chunk of profits for themselves. This is true whether we examine a random government or a corporation. The main benefactors are the ones floating atop and morality has little to do with anything. Those who pay and lose the most in respect to their overall capital are the ones sustaining the pyramid — hence the scheme.
If a government goes down the average citizens that graze at the bottom will pay the price with taxes, salary cuts or job loses. The guys on top are already out reinvesting their money elsewhere. This is also the reason why the number of billionaires has doubled since the last economic crash.
If banks fail, same thing happens. The bankers get bailed out from yet another ponzi schemer — the government. The same participants, the citizens, pay. As for legibility? A bank offers nothing but credit. No real value, nada. A government produces absolutely nothing, yet they are all financed by the labour of the citizens, the only ones providing real value.
Now, I am well aware that value is entirely subjective — hence why capital is divided in social, financial and intellectual. My point here is to demonstrate that everything around us is based on a ponzi scheme and that morality has nothing to do with it. People don't usually realize this because they get caught up in the moral part of the argument — a myth provided from the master ponzi schemers themselves — the government.
Some people still believe that everything going on around them is not always about money and greed and that state entities are not in it for the profit but to protect them. They also forget that the government gets the privilege to call everybody else Ponzi scammers, except themselves. A government is nothing more that a legitimized Ponzi scheme.
For better or worse, everything is about greed, whether we like it or not. Every single person on the face of this earth is pursuing their own selfish interests and wants to profit as much as possible. Sure, we are not greedy, is always the other fellow right? This form of mentality though, is what allows the biggest scammers to control the game.
One of the most attacked sectors in regards to accusations of "Ponzi schemes" is the one of cryptocurrencies. Surprisingly, it might be the only one that can eventually escape from this pyramidal fuckup due to the mechanics of decentralization. Not yet but we are getting there.
Next time someone accuses the blockchain sector for fraudulent activities, ask them to list you where their tax money are distributed. For those in the private sector, needless to say that those at the bottom do the most work and provide the most value while those on top "manage" — really the most useless positions are all dressed up in fancy suits.
The world is a very simple place to understand once we dismiss the myths and bullshit around us. It requires a rational mind that doesn't easily stray towards biases and pre-conceptions. Due to the nature of demand and supply as well as the diversity of human desire — we are all constant victims of various ponzi schemes. Most of the time, they are inevitable to escape. The whole point would be to understand ones place on the pyramid and act accordingly. After all, those who get fucked the hardest are those who don't know they are in it.
