Relax, Everything Is a Ponzi Scheme
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.
I have a childhood friend who literally refers to everything as a Ponzi scheme, much of it is out of humor. However, very much really is.
Anything that has the "greater fool" theory at work is essentially a Ponzi scheme. Take the stock market. You need someone to pay a higher price than you did to make money, greater fool.
I have been involved in markets for years and in the end I know it's a zero sum game. I make money when someone else is the greater fool. Sad, but reality.
I am not sure I can agree completely with the zero sum theory since capital keeps increasing all the time. But, you are spot on with this
Many people have trouble getting this. Especially those who haven't traded or hadn't had the opportunity to have a business of their own. If one works for salary they are pretty much blind to what really goes on around them.
In a zero sum game, why would the value of the SPX increase over time and not be stagnant?
:'D
:)))))
If you replace "from" with "at the expense of" or "reducing the income of" or even "while greatly annoying" then these pyramid structures become visible everywhere, and they include, ever increasingly, companies, and also Steemit, as the clusterfuck the Trending-Page circle jerk has become demonstrates.
It seems to be inevitable whenever money is involved, so best, like you say, be aware of your place in it and act accordingly.
Applying circle-jerk standards to this post, or even meritocratic ones, it should make $600 at least. You are definitely not in the best bit of the pyramid! You need to start kissing arse 8-P.
I think at some point those who delegate their power will come to understand that some people simply don't car about the platform but feeling their own pockets. I know whales with power that don't publish daily and rather take their "share" of rewards without draining the pool. Most though do exactly like you are saying. Best I can do is send this comment to the top.
Thank you for your appreciation. I 've seen many posts like mine getting cents, much like I used for almost a year. If I had power I would reward them. Curators should read and comment everything they upvote. I think this is how value will be show and appreciated. Otherwise, we are just chasing away the chicken with the golden eggs. People will fly away and talk about their bad experience.
Unfortunately, this is the case, but maybe the next hardfork will make things a bit more level. But I absolutely agree that the type of value aggregation at top of pyramids of all sorts at an expense at the base is ubiquitous around this.
Would a hard limit on the max a post could earn be a step in the right direction?
Why I never . . . I thought "Bobby catches a frog" was worth the $600.00 it made :)
So many human structures are pyramids. And I don't mean monuments, but structures like corporations. Yeah, the people on the bottom are working hardest and getting the least for their efforts, but that's capitalism and every other ideology. It seems to be a product of human nature. It would be nice if there was something more egalitarian and compassionate, but the same thing has been going on for millennia. It used to be devils and witches; now it's aliens and conspiracies and ponzis. But the view is the same. Giving people some education and mobility is the best we've been able to do so far.
Very well put. Everything changes yet everything stays the same.
Even MORE well put.
thank you
That's true, I have worked in it for one year, got out with 50k, lucky for me, but not for my friends and relatives, they got cheated and lost their money. and I lost my respect among them for money, still feel guilty, though I wasn't the one who cheated them intentionally.
I feel the same, there is no head to cut.
Loved it, I mean whatever they do, Nobody ask them any questions
That's why I never joined the corporate world, Was not able to make it to the top, Not wanted to be used for someone else's dreams and profit, love my life as it is.
Yes and because of their ignorance they cry the most at the end, like it was someone else fault when they were greedy too.
Thanks for making this post, it was like you have written whatever I have been thinking for a year.
very well said. thank you for sharing such a structured response.
your welcome, when I read a post that I like so much, I response in the same way.
Oh it got just another name nowadays - ICO :)
lol. I was trying hard not to say that in the post. I thought people would pick it up :)
Before I started reading, I was sure this would be your main topic. Waited for you to talk about it until the very last paragraph :)
Very well-written. Kind of makes me want to shut my trap calling all these new crypto ICOs "Ponzis." You are absolutely correct. Without decentralization, everything is a damn Ponzi.
It's extremely interesting and scary that capital no longer has an intellectual component. It seems like in todays environment all you have to do to be a billionaire is have access to the credit markets. At that point you can borrow money so cheaply you can literally buy an entire industry cough warren buffet cough.
Most industries have become moot, ineffective, and dormant. The banking sector profits from this beautifully.
All of this can easily be summed into simple terms; we don't have capitalism anymore. The country is teetering on the verge of fascism, if we haven't arrived there already. And we all know how sustainable that is.
Yeap, more or less useless corporatism. Fancy empty suits circle jerking.
"The world is a very simple place to understand once we dismiss the myths and bullshit around us."
Too true. Very much the same as Plato's Allegory of the Cave. Well written.
thank you
You killed it, you killed it, you killed it....this is the kind of content that should be given public notice...
Thank you man. Glad you liked it.
Looking forward to another piece....got to keep it coming....probably "how we can profit from the ponzi scheme"
well, that's about you depending on which form of capital you mostly value.
once its money that I can spend, does not matter the source, I have an open ear