Motseki was set for a comfortable life in up-and-coming Leribe after inheriting his father’s considerable fortune following his sudden death in 2012. As an only child without a mother, Motseki had dreams of establishing a real estate business to manage the family’s residential properties. However, as life progressed Motseki married a beautiful woman from Quthing named Naleli, had children and secured employment at a prestigious insurance firm in Maseru. As the years passed, the family’s properties began to dilapidate and in the absence of a company to manage the properties, Motseki gradually sold all the properties.
Motseki’s best friend generously advised him to invest the earnings made from the properties in a well-known pyramid scheme. Their strategy was to generate interest which would enable Motseki to acquire modern property to rent out to high-income earners. However, the collapse of the pyramid scheme three months after investing dealt him a tragedy and inflicted a lifetime scar. He lost everything. “Our entire extended family sees me as an irresponsible son who tarnished his father’s legacy,” explains Motseki.
The tragic tales of financial deceit and treachery are not uncommon in today’s world. A favored pyramid scheme recently announced its plans to “start all over” subsequent to its collapse. It attributed the “decision” to defamatory statements made by the media provoking panic among investors. Remarkably, legions of investors previously deprived of their money are gradually resuscitating the scheme. The said investors uphold the unfounded conviction that the scheme is persecuted because of “jealous” financial institutions such as banks.
“Instead of pointing to the recent collapse, these people are appealing to desperate people to join again. It is unethical and absolutely malicious on their part,” protests a disheartened Motseki. Indeed, behind the smokescreen of justifications, explanations and endorsements hides deceit, illegitimacy and misrepresentation. To begin with, pyramid schemes are founded on Robin Hood values of theft and fraud. However, contradictory to Robin Hood, pyramid schemes do not rob from the rich and give to the poor. Rather, they rob from the poor to give to the rich and rob from the poorest to give to the poor.
A further point of contention is that pyramid schemes are premised on unethical, immoral and corrupt assumptions of wealth. Enthusiasts of the aforementioned scheme often preserved its image by pinpointing messages on its website cautioning investors to “invest extra money”. If I picked up a knife and revealed that I am going to stab you, and then proceeded to stab you, would this relieve me of responsibility for what I have done? The response is negative. Pyramid schemes are an unfortunate pervasion of law that encourage tax evasion and money laundering by often masquerading as philanthropic entities. Motseki enlightens: “The intense public awareness against li push-push(get-rich-quick schemes) did not mean anything to me. I wanted to make money fast. I even told a friend of mine that I did not care if I lost the money.”
The above perspective signifies an underlying challenge of modern society. While the lion’s share of investors, often the most impoverished are incognizant of their role, the rest of the investors deliberately participate in the deception at the expense of the naïve. Generally, with participants of pyramid schemes greed undermines fear to defraud legitimate institutions and sabotage the invisible hand. The element of greed seduces both the greedy and the needy alike. “People used to approach us and tell us that they have made millions but looking back I find their claims misleading. Some would say that from investing M1, 000 they received M90, 000 within a few months. It sounds too good to be true,” asserts Naleli.
If a deal is too good to be true then it probably is. It is purported that an estimated 50 investors committed suicide subsequent to the collapse of a prominent pyramid scheme in Russia. Numerous “victims” from vulnerable social classes invested their entire life savings in a deceptive financial scheme that eventually collapsed. Naleli laments the destructive norm that has parted Basotho from their traditional values. “We have everything today to pull ourselves out of poverty but we choose to be lazy and cut corners. We want things now without working for them,” protests a passionate Naleli.
Lamentably, the veracity of the old English saying “easy come, easy go,” is indisputable. One of the chief challenges confronting participants of pyramid schemes is the inability to invest in long-term projects and create sustainable wealth. Instead, a legion of investors risk financial security to satisfy present wants; they purchase the comfort of material possessions and forgo the security of lucrative long-term investments. Consequently, in the future the thieves who colluded with criminals for financial gain are back to the genesis of their financial woes because ultimately pyramid schemes produce no long-term net gain.
The insidious system robs vulnerable individuals of their financial resources to satisfy the needs of another individual within the same system; they solve a problem by creating another. They blind investors with uncertainty and eventually disappoint. Motseki’s friend assured him of the scheme’s lengthy lifespan. However, as a pyramid scheme expands and gradually becomes unsustainable, even the founders of the scheme begin to lose track of its activities. Why don’t today’s citizens respect their dreams enough to pay the full price for them?
Malevolent pyramid schemes; the illegitimate financial patriarchs serving the greedy and needy have consumed desperate Basotho. Characterized by websites with mutilated English grammar, fictitious returns on investment and dishonest propositions, pyramid schemes have assassinated morality, patience and hard work. Thomas Edison once submitted the notion that “opportunity is missed by most people because it is dressed in overalls and looks like work.”
During these harsh economic times, it is more important than ever for Basotho to instill values of integrity and hard work for tomorrow’s generation to refrain from participating in insidious pyramid schemes but instead, indulge in entrepreneurship and build industry. If you believe in the deception of pyramid schemes rather than diligence, excellence and perseverance, if you spend time preying on vulnerable individuals to participate in systems destined to collapse, then perhaps you deserve to one day bear the brunt of financial loss and treachery.