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This still doesn’t make things look less like a scam. An anecdote of where the scheme worked for some people in the past is a very common thing for a scammer to

This still doesn’t make things look less like a scam. An anecdote of where the scheme worked for some people in the past is a very common thing for a scammer to tell future victims in order to persuade them into the scam. Example: [Person A] was a single parent living paycheck to paycheck, then they started selling [pyramid product X] and now they’re sending their kids through collage on the profits alone. Shareholders not making money is akin to saying that pyramid scammers don’t make money, off course they do... Otherwise they wouldn’t be spending their time and energy doing this. Every dollar you earn by doing nothing is a dollar made by someone else they didn’t get.

dragontamer 6y ago
There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. A pyramid scheme is literally the "Wicked and Evil" 3rd servant from the parable of the talents. They waste the huge pile of money by burying it and not really making it work for their masters. The expectation of the Stock Market is to do something with the money. For Amazon, the IPO allowed them to buy servers. For Google, same thing: tons of computers cost tons of money. For Tesla, they bought a Nevada Factory. The money disappeared into a Factory, and then the Factory made money later (which is then used to increase the value of shares and make everyone who participated richer). ---------- This is allowed in part, because it works. It makes society stronger. It rewards risk-takers who would otherwise do nothing with their money. It provides thinkers with money and capital when they need it most. If the scheme doesn't work out, the investors lose, but they're still happy that they got to partake in the experiment. Stocks are the original "Kickstarter". And I argue that they're far more fair than kickstarter. Owning a vote for the board-of-directors + a share of the promised dividend is worth a hell of a lot more than stupid keychains.
- runarberg 6y ago
  > There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. Agreed, the stock market is not a pyramid scheme. I only used pyramid scheme as an example for a scammer’s rhetoric. However it still looks like a scam to me (albeit not as bad of a scam as the average pyramid scheme is). Having worked for a company which increased in share prices exponentially while I worked there on minimum wage, I cannot agree with the statement that the shareholder/worker relationship made “everyone who participated richer”. The average worker certainly didn’t. The only people that got richer were the shareholders (and perhaps some contractors). I experienced this exponential growth as a scam. The value of my work was being extracted into rich people’s pockets. See the stock market might look to an outsider as an arrangement where everyone benefits, but to a worker it always looks like a scam. Especially when you consider an alternate arrangement where the shareholder returns control of the profits of the company back to the workers after they’ve made up the money they gave originally to the business plus some fees and interest. The very fact that the shareholders keep control even after they’ve made their fare share of the profits, multiple times over, is what makes this look like a scam in the eyes of the workers.
  - dragontamer 6y ago
    Exponential growth is promised to investors, to entice investors into giving money to a company. Sometimes, shares and options are offered to workers (very common in SV), but honestly I'd probably take the cash most of the time. The promise of future money is best left for rich folk who can afford to lose that pile of money. For workers like me (and probably you), the cash deal is better. If you disagree, feel free to work for a myriad of startups who are offering stock instead of cash. But yeah, its an option. Not an option I'd personally bet on... but if you really wanted to be rewarded in shares instead of money, the opportunity for that is all over the place.

dragontamer 6y ago

There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. A pyramid scheme is literally the "Wicked and Evil" 3rd servant from the parable of the talents. They waste the huge pile of money by burying it and not really making it work for their masters. The expectation of the Stock Market is to do something with the money. For Amazon, the IPO allowed them to buy servers. For Google, same thing: tons of computers cost tons of money. For Tesla, they bought a Nevada Factory. The money disappeared into a Factory, and then the Factory made money later (which is then used to increase the value of shares and make everyone who participated richer). ---------- This is allowed in part, because it works. It makes society stronger. It rewards risk-takers who would otherwise do nothing with their money. It provides thinkers with money and capital when they need it most. If the scheme doesn't work out, the investors lose, but they're still happy that they got to partake in the experiment. Stocks are the original "Kickstarter". And I argue that they're far more fair than kickstarter. Owning a vote for the board-of-directors + a share of the promised dividend is worth a hell of a lot more than stupid keychains.

runarberg 6y ago
> There's no payoff for a pyramid scheme. They just pile money somewhere, without actually doing anything with it. Agreed, the stock market is not a pyramid scheme. I only used pyramid scheme as an example for a scammer’s rhetoric. However it still looks like a scam to me (albeit not as bad of a scam as the average pyramid scheme is). Having worked for a company which increased in share prices exponentially while I worked there on minimum wage, I cannot agree with the statement that the shareholder/worker relationship made “everyone who participated richer”. The average worker certainly didn’t. The only people that got richer were the shareholders (and perhaps some contractors). I experienced this exponential growth as a scam. The value of my work was being extracted into rich people’s pockets. See the stock market might look to an outsider as an arrangement where everyone benefits, but to a worker it always looks like a scam. Especially when you consider an alternate arrangement where the shareholder returns control of the profits of the company back to the workers after they’ve made up the money they gave originally to the business plus some fees and interest. The very fact that the shareholders keep control even after they’ve made their fare share of the profits, multiple times over, is what makes this look like a scam in the eyes of the workers.
- dragontamer 6y ago
  Exponential growth is promised to investors, to entice investors into giving money to a company. Sometimes, shares and options are offered to workers (very common in SV), but honestly I'd probably take the cash most of the time. The promise of future money is best left for rich folk who can afford to lose that pile of money. For workers like me (and probably you), the cash deal is better. If you disagree, feel free to work for a myriad of startups who are offering stock instead of cash. But yeah, its an option. Not an option I'd personally bet on... but if you really wanted to be rewarded in shares instead of money, the opportunity for that is all over the place.