Abstract
Many people have desired to become wealthy with a minimum of effort. Shrewd con artists exploited such desires. The get-rich schemes reveal dubious ethics on the part of both scammers and putative victims. Ponzi schemes not only provide insights into private scammers but also afford a comparison between business and government ethics. State governments displayed questionable ethics in running their lotteries; the federal government’s social security program also had its ethical blemishes. Businesspeople might insist that government ethics attain the level of business ethics.
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Notes
- 1.
- 2.
John Law also criticized state-run lotteries (Murphy 1997, 40).
- 3.
Nor do state lotteries provide free drinks and chits for meals.
- 4.
For another example of a long-running Ponzi scheme, see the case of John G. Bennett Jr. The pedigrees of his victims are impressive (Stecklow 1995, A1 and A8).
- 5.
Tamar Frankel discussed similarities between Ponzi schemes and stock market traders (Frankel 2012, 98–99, 152).
- 6.
For Madoff’s response at his sentencing, see Friedman and McNeill (2013, 92–93).
- 7.
An investment record with nary a losing transaction is akin to Disney’s labeling of all their movies as “classics,” no one, not even the Bard himself, has such a track record. Perfection is for suckers.
- 8.
One could dub this the “Bigger Fool” investment strategy; you are safe as long as there is a bigger fool following you, willing to buy or participate in a game of musical chairs, assuming one has possession of a chair when the music stops.
- 9.
Hillary Clinton’s alleged cattle futures deal presumably had a doppelganger, who did the reverse of turning $1000 into $100,000.
- 10.
Fannie Mae and Freddie Mac were already notorious for their accounting frauds in 2003 and 2004; using the argument that they made housing more affordable proved a useful distraction from the two entities’ dubious behavior (Wallison and Calomiris 2008, 5, 8).
- 11.
As late as August 2008, Senator Christopher Dodd (D-CT) was opposing Republican efforts to approve new legislation reforming the GSE (Wallison and Calomiris 2008, 5). Another Nobel laureate, Paul Krugman, either misunderstood or was being disingenuous in stating in July 2008, “Fannie and Freddie had nothing to do with the explosion of high-risk lending.” He claimed that regulation of Fannie and Freddie in the wake of their accounting scandal had worked: “You could say that the Fannie-Freddie experience shows that regulation works (Krugman July 14, 2008, A17; Wallison and Calomiris 2008, 6).”
- 12.
The Federal Housing Administration had long discriminated against African-Americans and helped ensure white-only neighborhoods and suburbs. Loewen (2005, 128–129, 209–210, 257–258) details the sorry historical legacy.
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Surdam, D.G. (2020). Get-Rich-Quick and Ponzi Schemes. In: Business Ethics from the 19th Century to Today. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37169-2_10
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