It's not a "pyramid" scheme. A pyramid scheme involves selling a product - something like knives or energy drink. But the actual thing which is sold are license

It's not a "pyramid" scheme. A pyramid scheme involves selling a product - something like knives or energy drink. But the actual thing which is sold are licenses to sell the product. Each licensee passes some of their profits up to their licensor who is the licensee of someone else and passes along part of that and so on. Eventually the last round of licensees are stuck with product that they can't sell and the upstream licensors are getting rich from the "pyramid" of downstream licensor/licensees recruited into the scheme. A ponzi scheme is quite different. You pretend to invest an initial investor's money. The returns to that investor are paid out of money coming in from later investors. Social security works in this way. The money paid into social security is not invested at all. The returns from social security (money going out to current retirees) come entirely from new investments (money going in from current workers). This is the basic definition of a ponzi scheme. It is a sustainable ponzi scheme so long as taxes collected from current workers exceed benefits paid out to current retirees. The designers of this system did not count on two things: (a) ever increasing life expectancy and (b) the baby boom. The former has increased the length of time each person collects benefits and the latter has resulted in a demographic bulge that is now hitting its retirement years. Thank you Mr. Bismarck![0] [0] https://en.wikipedia.org/wiki/Otto_von_Bismarck#Old_Age_and_Disability_Insurance_Law_of_1889 https://en.wikipedia.org/wiki/Otto_von_Bismarck#Old_Age_and_...