I was educated in what could be appropriately referred to as an “under-resourced school system.” I recently thought back to the fundraisers my elementary school resorted to, in which children were enlisted to go door-to-door to sell candy to so the school could—I don’t know really—buy one computer(?).
Even as a kid, something felt off about it. It’s totally possible I was salty that I was never good at selling candy and never got any of the incentive prizes, but it’s also possible that ancient epigenetic memories caused me to feel unease at the possibility of being subsumed alive inside a pyramid (scheme). If the schools did make any money in this scheme, it was certainly not an amount that outweighed the shame of the clearer picture of what was happening: an underfunded school struck a deal with a for-profit company to use children as unpaid door-to-door candy salesman.
Whatever minimal cut the school got somehow justified the whole thing, but how much could that possibly be? Again, we were selling candy bars! We weren’t moving gold, or cars, or bricks of cocaine; the profit for the school was pennies. We were hustled, bamboozled, film-flammed, straight up SCAMMED!
But, in the end, perhaps it was an appropriate education. I’m told the best education is one that prepares you for the real world, and the real world is one in which every man is a lone entrepreneur, hustling or getting hustled in our great “scam economy.”
While I was reading for this post, I found a podcast hosted by Matt Binder titled “Scam Economy.” I haven’t listened to it yet, but it looks promising, and I already recommend it. Based on the show description, the show’s focus seems to be the types of schemes enabled by blockchain technology, like dubious meme coins, NFTs, and other dubious crypto assets.
A brief detour
Let’s peruse some of the most important artwork produced, and I genuinely mean “most important” in the sense that it says more about our time than any other contemporary art I can think of.
This one is called “Trad Heaux,” and she’s part of “The Heaux Collection.” Someone bought her in September 2021 for .5 Ethereum, which at the time was worth ~$3,600. I paid about that for Yasmine’s engagement ring. You tell me who made the better investment.
In case you had concerns about The Heaux Collection not being inclusive, meet Muslim Heaux.
According to the creator (emphasizing the lowercase there), Muslim Heaux is “the only Heaux in the collection with her virginity in tact.” That must explain why she sold for .8 Ethereum in September 2021, making her 60 percent more valuable than Trad Heaux, and if that isn’t illustrative of us becoming a beautiful, accepting multicultural society, then why do I have tears in my eyes?
Enough art (I mean this in a categorical sense).
While some read “scam economy” and immediately conjure up today’s web3, crypto-casino hell, I would like to posit: our economy is mostly scam-based; crypto is just a new take on an old favorite. The scam economy is an immutable law of a capitalist economy, founded on deprivation, coercion and violence, but would have you believe that corporate profits and your well-being are positively correlated. The capitalist scam economy holds a gun to your head and asks if you’re willing to play a part in your own pickpocketing.
Proponents of the current order will tell you that capitalism is responsible for creating the most wealth than any other political-economic system, and that it has catalyzed the most technological innovation. They are right (although most truly revolutionary technology is created in the public sector, where profit motive is less of a constraint, but we’ll leave that alone for now). Another indisputable fixture of this economy is it careening from one boom-bust cycle to another—this is unavoidable when profits are made through rampant speculation on theoretical value—through which wealth is sucked up from households and further concentrated in the hands of capitalists and capitalist institutions.
I’ll try to cover a few types of scams at different levels of the economy that I think are particularly indicative of widespread trends. I hope someone who actually knows what they’re doing provides a more rigorous accounting of how much of our total GDP is scams.
Small-scale hustle mindset scams
These type of scams aren’t really the point of this post, but I think they’re worth mentioning because one feature of the scam economy is the rise in prominence of the dumbest guy you went to high school with. If we stay on this path, you will soon be a serf on that guy’s estate.
To quickly sum it up: the same way people imbue crypto with “value,” certain kinds of (mostly male) influencers have essentially done the same thing with commodities like shoes, watches, cars… you name it.
Sure, collectors’ items aren’t new. I suppose people have been doing it for a long time, but this feels different, mostly because of the speed at which influencers can make a market for items to convince their audience that, if they flip enough Rolex watches, they can become millionaires by 30. Of course, by the time the video is viral, the “buy-high-sell-low” proposition is a lie.
Out-of-control gambling
More people should be concerned about the prevalence of gambling. At the risk of sounding Salafi: I believe that it is a sign of a deficient and deteriorating culture, but this is indicative of a collective moral failure, not an individual one. In a series of dastardly public-private partnerships, the State and casinos are dragging desperate people to be fed to the wolves. Gambling revenues at traditional casinos, online casinos, and online sports betting have been having record-breaking years for the last three years, despite the “economic headwinds” some thought would slow the business. What does that tell you? It tells me that, even though people have less than before, companies that cater to the vice succeeded in sucking money out of emptying pockets, sometimes leading victims to take on debt to stymie their losses or double down. I expect the number of suicides in which gambling debt is a precipitating factor will increase in the years to come.
Despite the dangers, even universities have shed the pretense that their main goal is to educate students by partnering with online sports betting companies.
One of the most concerning aspects of college sports betting is the financial toll it takes on students. On tight budgets, many students turn to risky methods to fund their gambling. Here’s how students find funds to place sports bets:
Use of Financial Aid: 21% of college students have admitted to using financial aid or student loans for gambling. This behavior diverts essential funds from tuition, housing, and food.
Credit Cards and Borrowed Money: Many students use credit cards, loans, or even funds from their families to gamble, resulting in long-term debt.
Cutting Back on Essentials: Students often sacrifice necessities like food or rent to fund their bets, with 29% reporting they’ve spent less on food and 17% admitting to paying bills late to keep up with their betting habits.
The financial strain can be long-lasting, leading some students into debt that follows them for years after graduation. Colleges promoting these betting platforms are fueling a habit that could harm their students’ financial futures and the overall well-being of the college community.
The very institutions that are supposed to stepping stones for ascending the class ladder in the U.S. are instead becoming degree mills that entice children to borrow money they work the rest of their lives to repay, while also allowing their corporate partners to have a go at shaking down the students.
Healthcare for dummies
I’m just going to go ahead and assume that I don’t need to do much legwork to explain how health insurance in the U.S. is one of the biggest scams to ever exist. If you want to understand the fraud in dollar terms, check out Matt Bruenig’s analysis, which shows that the American people effectively burn half-a-trillion dollars a year as a subscription fee to private health insurers (dollars that do not contribute to providing care and would not be sucked out of people’s pockets in a single-payer system).
While insurers have surgically implanted malice in every step of the healthcare process, there are those who seek to capitalize on people’s desperate need for medical attention by undermining healthcare altogether.
RFK Jr. and those like him are going to succeed in convincing enough people that they are actually safer without things like vaccines, medicines, and pasteurization. They want people to believe the same thing about their health that they have already convinced them to believe about financial success: that if you are a virtuous person, then good health will follow; if you are morally deficient, then you will have bad health… and you should eat more fermented bear meat.
As they dismantle agencies like the FDA, I expect to see more influencers peddling “cures” and tinctures with even less heed than they do today.
Government and the rise of the dumbest guy you know
Finally, let’s turn to the government—without which the other scams wouldn’t be possible (granted, if we had something resembling a democratic order with robust institutions, then we’d be insulated from bad-faith actors). I want to specifically talk about Elon Musk’s Department Of Governmental Efficiency (D.O.G.E.).
The populist promise to the citizenry is essentially this: “Hey, your tax dollars are being wasted funding things you never asked for nor need. I want to audit these institutions to make sure you’re getting your money’s worth.” This is, prima facie, not bad. Good, even. However, the problem lies in that fact that the promise emanates from the mouth of Snidley Whiplash.
[Going against the spirit of everything I wrote before] I would bet EVERYTHING I OWN that Musk’s new department will cost taxpayers more money, and will further concentrate wealth in the hands of capitalist elites when they no longer have to worry about pesky things like abiding by safety/environmental regulations as they conduct business. The paradox that Musk refuses to address is this: his plan to audit every agency is going to create immense strain on these bureaucracies as the scramble to build whatever processes his audits necessitate. Not only will this impose a cost (to the taxpayers), but these agencies will be rendered less efficient at their respective primary tasks, further increasing the cost.
From David Graeber’s Utopia of Rules
Bureaucracy, once created, will immediately move to make itself indispensable to anyone trying to wield power, no matter what they wish to do with it.
We have no reason to believe that Musk’s department will do little more than “gum up the works” and make regulatory agencies less capable at regulating. That would be great for Musk, but not so “based” for the people counting on him and Ramaswamy to make them a little bit richer.
The essence of the scam economy is class warfare. It is the hijacking of public institutions by rich elites, ensuring their profits are always protected despite the larger and larger gambles made for short-term gains, the effects of which saps the lower classes of their time, wealth, and vitality. The scam economy winnows stable opportunities, and incentivizes action downstream of desperation that divides us into two categories: conmen or marks.