Bernard Madoff will wake up in jail tomorrow morning instead of his Manhattan penthouse. At 70 years of age, he is likely to serve a mere fraction of what could be a 150 year prison sentence, for what has been described as the biggest fraud in history. Over the past decade, Madoff scammed investors, funds, and charities out of $65 billion if an elaborate ‘Ponzi’, or pyramid sheme.
A pyramid scheme is a fraudulent investment plan that delivers high short-term gains by paying back investors with other investor’s money, rather than profits. As long people keep joining the scheme, their contributions pay the people before them. Since no profits are actually being generated, it crashes as soon as investor recruitment slows down, and the perpetrators disappear with the capital.
While it is easy to see Madoff as a rogue and dismiss such schemes as a criminal interest, climate writer Joe Romm suggests that our whole way of life has all the characteristics of a pyramid scheme.
“We created a way of raising standards of living that we can’t possibly pass on to our children” he told Thomas L Friedman in the New York Times. “We have been getting rich by depleting all our natural stocks – water, hydrocarbons, forests, rivers, fish and arable land – and not by generating renewable flows.”
Our consumer lifestyle relies on unsustainable use of resources and cannot continue indefinitely. Just like a pyramid scheme, those arriving last will find there is nothing there. In this case, those will be our children, who may inherit a world devastated by climate change and plundered of its resources. ” Every generation that comes after the Baby Boomers are poised to experience the dramatic changes in lifestyle that inevitably follow the collapse of any Ponzi scheme.”