The Madoffization of Society: A Corrosive Process in an Age of Fictitious Capital

Abstract

In 2009, US financier Bernard (Bernie) L. Madoff was jailed for 150 years after pleading guilty to running a massive ponzi scheme. While superficial condemnation was widespread, his US$65 billion fraud cannot be understood apart from the institutions, practices and fictions of contemporary finance capitalism. Madoff’s scam was rooted in the wider political prioritization of accumulation through debt expansion and the deregulated, desupervised and criminogenic environment facilitating it. More generally, global finance capital reproduces many of the core elements of the Madoff scam (i.e. mass deception, secrecy and obfuscation), particularly in neoliberalized Anglophone societies. We call this ‘Madoffization’. We suggest that societies are ‘Madoffized’, not only in the sense of their being subject to the ill-effects of speculative ponzi finance, but also in the sense that their prioritization of accumulation through debt expansion makes fraudulent practices, economic collapse and scapegoating inevitable.

Scapegoating During a Time of Crisis: A Critique of Post-Celtic Tiger Ireland

“…For Allen (2009: 113), post-crash Ireland is a 'mad, mad world' where all manner of inequities are institutionalised and myths prevail. Monaghan and O'Flynn (2013) would refer to this as a Madoffized society, given the corrosive consequences of ponzi finance.…”

The Madoffization of Irish society: from Ponzi finance to sociological critique

“…The Madoffization thesis offers a lens on the socially corrosive aspects of a debt‐leveraged financialized system that tends towards super‐speculation, instability and crisis on a massive scale (Monaghan and O'Flynn ). The thesis aims to interrogate the fallout from the post‐1970s ‘financial explosion’ (Magdoff and Sweezy ), a process entwined with stagnating economic conditions, upheaval and inequity across the globe (Foster and McChesney ).…”

Arbitrage, uncertainty and the new ethos of capitalism

“…This is evident in explorations of issues such as the macro-level shift in the sector structure of the economy and its effect on the distribution of national income, meso-level shifts in corporate governance, and microlevel developments in credit-financed consumerism and middle-class investment practices (Deutschmann, 2011: 352;see Epstein, 2005;Krippner, 2005;Lapavitsas, 2011;Walby, 2013). A similarly structural focus is evident in neo-Keynesian critiques of financialization centred on the 'regulatory failure' of states to manage the 'efficient' operation of capitalism in the interests of broader social and economic order (Toscano, 2014;Granter and Tischer, 2014;Bechert, 1996;Minsky, 2008;see Keynes, 1965), and neoMarxist critiques of financialization as an intensification of the class-based structural operation of the capitalist mode of production (Arrighi, 2010;Henry, 2012;Monaghan and O'Flynn, 2012).…”