Madoff’s Pyramids. Bernard Madoff’s Deception Shows up Some Others

The article by Jacques Bichot that we publish here is intended to be roundly provocative, offering a timely lesson on the strange operation of “modern” economies. It shows, in fact, that Bernard Madoff was an illusionist on a grand scale and a skilled builder of paper pyramids in a manner that was both brilliant and, at the same time, highly revealing of what is, in the end, quite a widespread practice. Drawing on Jacques Rueff’s distinction between “real” and “false” entitlements, Bichot demonstrates how the latter developed by way of a “financial bubble” that was increasingly disconnected from the real economy. And he shows that, though Madoff was able to create an illusion of individual wealth this way, “so long as there were enough ‘suckers’ to believe in it”, the illusion collapsed when creditors began to doubt him and collectively tried to reclaim their assets. Yet, he tells us, the property market, “funded” pension schemes and even states themselves operate no differently! They produce “false entitlements”, from which members of the oldest current generations benefit improperly, to the detriment of younger and future generations, who will eventually “pick up the tab”. The ideas in this article will certainly provide food for thought, and may even spark some outraged reactions. Futuribles has opened its columns to their author despite their somewhat controversial nature.