You ever wonder about the first person to ever do a particular thing?
Because you’ve got to figure that everything that people do was,
at some point in the past, done by someone for the first time. I’m thinking mostly
about things that require some thought and planning — not things we do instinctively,
or in reaction to something else, but things that we do, but could just as easily not do.
Like the first person to ever eat a lobster. Nowadays, eating lobster is
perfectly normal for most people — for a lot of folks, it’s highly desirable,
people pay a lot of money to eat a lobster. But the first time a human being ever ate a lobster?
That was a choice. They had no idea what it was gonna taste like! They must have been hungry.
Or, what about the first person to ever run a pyramid scheme?
Did they just kinda pat themselves on the back for thinking of a clever new way to rip people off?
Or were they able to catch at least a fleeting glimpse of the new world to which they had just
given birth? Did they realize, on any level, to any degree, that they had just ruined the future?
I’m not that mad at them — if they hadn’t ruined everything in this particular way, someone else
would have come along to ruin everything in another way, or maybe exactly the same way,
I don’t know. Besides, we’ll probably never know who the first pyramid schemer actually was.
We do know about Adele Spitzeder, who operated an early Ponzi scheme.
How early? She started it thirteen years before Charles Ponzi was born!
Oughta call ‘em Spitzeder schemes! Anyway, a Spitzeder scheme, or Ponzi scheme if you must,
isn’t exactly the same thing as a pyramid scheme, but if you squint and tilt your
head to the side, and the light hits it just right, ehhhh, it’s close enough.
Adele Spitzeder was an actress, but in 1869, when acting was no longer paying her bills,
she opened a private bank in Munich, Germany. She attracted customers by promising them a
return on their investments of ten percent a month. Seems like a laughably obvious fraud to
us sophisticated 21st century types, but Spitzeder preyed on the poor, most of whom were illiterate,
some of whom gave her their entire life savings because they were desperate and they didn’t know
any better. Spitzeder’s bank was a total fraud, but she kept it going by paying
existing investors their promised returns from the investments of new customers.
That “robbing Peter to pay Paul” aspect is the defining characteristic of what we
unfairly know today as a Ponzi scheme. There is no actual return on any investment,
the schemer is just using the money they get from the people at the back of the line
to pay the people at the front of the line in order to create the illusion
of a return on their investment, while also taking a healthy cut for themselves.
A pyramid scheme works in a similar way — the revenue doesn’t come from making legitimate
investments or selling products — sometimes there aren’t even products at all. The revenue comes
from new people continuously being convinced to buy in, lured by the promise of big bucks to come.
It’s an awful, exploitative form of fraud, and a pretty lousy thing to do to somebody, and,
I mean, you wouldn’t think to look at her that Adele Spitzeder
would do something like that. This is a picture of her from her acting days.
I look at that picture and I think, “Oh, she seems like a nice lady.”
But looks can be deceiving. For instance, the first time I saw S.E. Cupp I thought,
“Oh, she seems like a smart lady.” Turns out — nope!
Because Adele Spitzeder did do something like that. And even though she only got
away with it for a few years, and was sentenced to three years in prison after she got caught,
lots of other people since then have also done something like that. I don’t know if Adele was
the first to try a scheme like that — she probably wasn’t — but let’s pretend she was for a minute.
Do you think she had any idea what she was letting loose in the world? Do you think
she wondered or worried about how dangerous this idea that she was introducing truly was?
Creating a scam that targeted the poor and the gullible? Robbing farmers and widows of what
little they had to fill her own pockets? Forging a template that would be re-used by fraudsters
around the world for generations: Ponzi, Madoff, multi-level marketers, cult leaders,
televangelists, people who prey on the lonely, the disconnected, the credulous, the desperate,
promising them wealth, freedom, a better life, and all it will cost them is a little
bit of money now, and some more money later, and more later, and of course, their trust.
How many billions of dollars have been transferred from the hands of people who
needed them to the hands of fraudsters who are following a road map Adele Spitzeder drew? Do you
think she thought about it? Did it ever occur to her? Did she realize she was inventing the
ultimate grift, the cruel false promise that would, in many ways, define the modern world?
Or, did she look around one day and find herself a woman — and most likely a gay woman,
as well — I didn’t mention that — living in a society that sought to subjugate and
persecute her for her gender and her sexuality, growing older, watching her options dwindle,
and decide to do what she had to do to give herself the live she thought she deserved?
It wouldn’t make what she did right — nothing would. But it would make it a bit more . . .
human. She was trying to secure a place for herself in a world that is set up to punish and
destroy people like her. She didn’t realize she was opening Pandora’s box. She was just looking
for some comfort, some relief, some freedom — the same things she promised the people she swindled.
That would make her a lot like the first person who ate a lobster.
She didn’t expect all of us to start eating them. She was just hungry.