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Group operation of Ponzi schemes -- more systemically understood?

Global Economy of Truth as a Ponzi Scheme (Part #9)

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Especially valuable in the systems perspective above is the generalization of "money" into an understanding of "energy" -- potentially more general than that recognized in the analysis of ecosystems. This recalls the framework of physics in which "energy" and "information" are instances of a more fundamental understanding precluding simplistic definition. It might even encompass understandings of confidence as experienced (Primary Global Reserve Currency: the Con? Cognitive implications of a prefix for sustainable confidelity, 2011).

Any collectivity can be readily explored as a pyramid -- as with traditional hierarchical models. Given the network marketing argument above, the greater complexity of networks does not preclude the operation of some form of Ponzi game within the group and in relation to membership campaigning. This raises the question of which groups have been responsive to analogues of the above-mentioned "intertemporal budget constraint" (IBC) and the "No-Ponzi-game" (NPG) condition -- especially when the preoccupation is not with "money" but with some other "value".

Instances meriting recognition, beyond conventional understandings of accumulation of wealth, include:

  • accumulation of possessions and property -- as characteristic of the quest for ownership (land, intellectual property, a partner, etc)
  • accumulation of facts, evidence and details -- as characteristic of the sciences, judicial processes of inquiry (and the quest for information by the security services)
  • accumulation of explanations ("answers"), comprehension and insight -- as characteristic of the sciences, religion and philosophy (notably reframed as cultural property, and possibly as secret in some way)
  • accumulation of relevance -- as characteristic of the natural and social sciences, the policy sciences, and institutions of governance (including the security services)
  • accumulation of confidence and trust -- as characteristic of authorities and leaders (professions, banking, law, religion, governance and security services)
  • accumulation of approval, recognition, reputation and credibility -- as with the gathering of followers (including the "likes" of social media) and becoming a star
  • accumulation of contacts and relationships -- especially evident in cyberspace
  • accumulation of merit -- as characteristic of some belief systems, preoccupied with the life hereafter
  • accumulation of privileges and entitlements -- as representative of status and distinction

Framed in other terms, the process can be understood as ensuring "pull-in" ("suck-in"), "buy-in", and "lock-in" -- especially in the light of a marketing perspective or any related gravity model. The promotion of any such process through promise-making and "talking up" a better future, again exemplified by a financial Ponzi scheme, can be explored in terms of "hope-mongering" (Credibility Crunch engendered by Hope-mongering: "credit crunch" focus as symptom of a dangerous mindset, 2008).

Whilst the process at the lowest "trophic" level may be relatively clear, especially when characterized by tangible tokens, far less evident is the nature of what is accumulated at the highest level -- being characteristically intangible, possibly mainly evident in the eyes of the beholder. Indications are offered by the quest for:

  • hegemony / control / dominance / power / monopoly ("cornering the market", "full-spectrum dominance")
  • status / ranking / precedence -- as with the ambition of "being the best" (or "number one"), or "being great again" (as explicitly promised by politicians in the USA, UK, France, and Italy)
  • unity / unification / integration / singularity / know-it-all / overview
  • discovery / curiosity ("been there, done that") -- as with the attraction of the highest mountains
  • rarity, especially with aesthetic characteristics or strength -- as with works of art, a beautiful partner, or the lost (tribes, symbols, treasure, holy grail)
  • authenticity, whther in works of art, iconography, or intercourse of any kind -- especially evident in the case of sacred artefacts fundamental to cultural identity

Such values merit recognition like the strange attractors in the dynamics of complex physical systems (Human Values as Strange Attractors, 1993).

The characteristics of any Ponzi scheme start to be come evident as the number of levels increases, with complementary indications of indifference and erosion of credibility. Potentially more questionable is how the group initiative -- as a "Ponzi scheme" systemically understood -- may then be recognized in terms of indoctrination (imposition of belief, values or norms), as unquestionable groupthink. This is especially relevant to the emergence of "populism" -- a deprecated manifestation of the "lowest" tropic level, disruptive of of the systemic process exploited by the highest level.

To the extent that the exploitative nature of the Ponzi game requires careful disguise, it is appropriate to note how credibility is given to hyperbole and superlatives in advertising and public relations ("the best", "world leader", etc). Especially interesting is the legitmation of puffery.

One intriguing consequence of the operation of such a scheme is the manner in which unrecycled "waste" is engendered and ejected, possibly as toxic products (entering the food chain) or as intractable individuals. The latter weren notably labelled as "deplorables" by Hillary Clinton during the presidential campaign (The New York Times, 10 September 2016).

There is a sense in which much is "remaindered" and "left behind" by such a scheme, as separately discussed (Reintegration of a Remaindered World: cognitive recycling of objects of systemic neglect, 2011). Striking examples are offered by the Great Pacific garbage patch, orbiting space debris, Antarctic research station debris, or tourist waste in areas of natural beauty (Mount Everest, etc).

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