NY Times, March 12, 2000
RECKONINGS / By PAUL KRUGMAN
The Ponzi Paradigm
Charles Ponzi wasn't the first to try it, but he has joined Dr. Bowdler and
Captain Boycott among those whose names will forever be terms of abuse. And
the classic scam that bears his name -- using money from new investors to
pay off old investors, creating the illusion of a successful business --
shows no sign of losing its effectiveness.
Robert Shiller's terrific new book, "Irrational Exuberance," contains a
brief primer on how to concoct a Ponzi scheme. The first step is to come up
with a plausible-sounding but complicated profit opportunity, one that is
difficult to evaluate. Ponzi's purported business involved international
postage reply coupons. In a more recent example, Albanian scammers
convinced investors that they had a profitable money-laundering business.
Complete article at:
http://www.nytimes.com/library/opinion/krugman/031200krug.html
Louis Proyect
(The Marxism mailing list: http://www.marxmail.org)
