© 2017, Tereza Kuldova

 

 

Founder: Tereza Kuldova, PhD

‚Äč

 

University of Oslo

Norway

 

tereza.kuldova@iakh.uio.no

 

 

 

Ponzi Schemes, Neoliberalism and Harm 

 

 

Kate Tudor

 

 

Within recent years, the term Ponzi scheme has often been invoked to describe a range of financial models in the mainstream economy and has been used as a means of symbolising the inherent instability which underpins contemporary economics. In its original meaning, however, the term relates to a particular model of financial fraud. Following the criminality of Charles Ponzi in the early twentieth century, fraudulent high-yield investment schemes which offer investors unfeasibly lucrative rates of return on deposits are often known as ‘Ponzi’ schemes. One of the defining features of this form of fraud is the way that new deposits are used to make interest payments to previous investors, meaning that such schemes are dependent on the need for relentless expansion in order to prevent their collapse. In practice, the ubiquity of Ponzi schemes is often masked by the great variation in the types of investment opportunities offered to potential investors and by the diverse nature of the contexts in which they occur. However, Ponzi fraud has become such a commonplace feature of the economic landscape that professional investors seeking to capitalise on the opportunity of short-term strategic gains, have come to include them in their investment strategies.  The scope and scale of Ponzi schemes unearthed within the last decade, such as the crimes of Allen Stanford and Bernie Madoff, demonstrate the way in which acts of economic predation have been allowed to penetrate to the heart of the global financial establishment. In addition to these fairly spectacular large-scale frauds involving multiple billion dollars, UK authorities have warned of the proliferation of comparatively smaller scale Ponzi schemes which are understood to capitalise on diminishing public confidence in mainstream financial institutions. Using in-depth qualitative interviews with those who have been convicted for their perpetration of Ponzi fraud, the current project seeks to explore the motivations behind these acts in a way that transcends superficial notions of greed and pathology. Instead, the accounts offered by participants are contextualised within the economic and cultural contexts in which they occur allowing for an analysis of the way in which contemporary economic arrangements are deeply related to the creation of harmful subjectivities and behaviours.

 

https://www.sunderland.ac.uk/about/staff/social-sciences/kate_tudor

 

Kate Tudor currently works at the University of Sunderland as a senior lecturer in criminology where she teaches criminological theory. She has previously worked in a number of UK universities where she has taught criminological and social theory and modules which relate to crimes of the powerful and political economy. Her research interests are fairly broad but largely relate to the way in which individual subjectivity and behaviours are shaped by the wider political, economic, social and cultural environment in which they are situated. This has led her to consider the relationship between crime and political economy, consumer culture, entrepreneurialism and identity. Most recently, she has completed a research project which sought to understand the motivations behind engagement with investment fraud within late-capitalism and which gathered data from those who had been convicted for their participation in acts of economic predation using in-depth qualitative interviews.