We Are All Madoffs

Our relationship to the natural world is a Ponzi scheme


| January-February 2010


This article is part of a package on rethinking the economy and how to prosper in the wake of the recession. For more, read Get Rich Now , Empire of the Stunned , and Work Plan .

Everybody hates Bernard Madoff, and for good reason. He bilked thousands of people out of billions, perhaps tens of billions, of dollars, destroyed numerous people’s life savings, and ruined the future prospects of many of those who had trusted him, all the while living in ostentatious, and, it is now painfully clear, despicable luxury.

He did all this via what might be the largest Ponzi scheme in history. There is no question that Madoff was a perpetrator and not himself a victim: He was (and presumably still is) highly intelligent and sophisticated in the ways of the financial world. He knew precisely what he was doing, and did it nonetheless. In addition to celebrating his prison sentence, disinterested observers and victims alike therefore found themselves wondering aloud: What was he thinking? Why didn’t he consider his responsibility to his clients, to their future, and even to his own?

As pleasurable as it is to cast stones at genuine villains, let’s pause, since as they say, people in glass houses shouldn’t throw stones. Because the horrifying reality is that in our fundamental relationship to the natural world—which is, after all, the fundamental relationship for everyone—we are all Madoffs.



As we have all read, Ponzi schemes—named after Charles Ponzi, who, before Madoff, was the best-known practitioner of the dark art—are also called pyramid schemes. A relatively small number of initial investors (the pointy tip of the pyramid) get paid off by money received from an ever larger number of subsequent investors, who can, in turn, profit only if there are yet more investors. By this time, the investors can be identified as “suckers,” because their payoff, instead of being founded on solid reality, depends on another round of entrepreneurial artifice.

Modern civilization’s exploitation of the natural environment is not unlike the way Madoff exploited his investors. It is predicated on the illusion that it will always be possible to make future payments owing to yet more exploitation down the road: more suckers, more growth, more GNP, based—as all Ponzi schemes are—on the fraud of “more and more,” with no foreseeable reckoning, and thus the promise of no comeuppance, neither legal nor economic nor ecologic.














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