Economy
Related: About this forumCan someone here explain to me
(like I am five y/o) why The Stock Market and Private Insurance are not Pyramid Schemes. Thanks.
SummerSnow
(12,608 posts)Proud Public Servant
(2,097 posts)A pyramid scheme involves people who join the scheme effectively rewarding the people who got in ahead of them. The scheme collapses when there is no one left to be brought in.
Private insurance could be likened to gambling, but not a pyramid scheme. The insurance company is betting that the number of people wishing to indemnify themselves against losses will exceed the cost of actual losses. Usually, as in most gambling, the house wins; sometimes (i.e., Hurricane Sandy), they lose.
I don't even have a good analogy for the stock market, but it's certainly not a pyramid scheme. The vanilla trading of stocks isn't even gambling, though other aspects of trading (e.g., short selling) surely are.
Tuesday Afternoon
(56,912 posts)it's Agents via a type of pyramid scheme.
And insider trading also seems to work on the same premise, to me.
COLGATE4
(14,732 posts)commission at the time they sell a policy, and then get another commission every time the policy renews. The more new policies, the more the agent makes in the year (s)he writes the policy and every year the policy is renewed. If the policy isn't renewed, no commission is paid. There's no 'pyramid' there.
Insider trading is carrying out a transaction in stock based on knowledge not available to the average investor. As such it is criminal. Again, there's no 'pyramid' here - just an illegal action which often lands the inside trader in jail.
Tuesday Afternoon
(56,912 posts)Under them , yes ? And I like the way you use the word -often- and aren't their sales/payments based on a percentage of what the agents under them sell or no?
COLGATE4
(14,732 posts)about it that equates to a 'pyramid scheme'. I think you need to read up on what a Pyramid (or Ponzi) scheme actually is. In short, it's a scheme to lure investors by promising to pay them an unrealistically high rate of return on the money they lend you. The old (first) investors are actually paid the promised return (for a while) by using the money obtained from newer investors. Eventually the scheme's inventor can't bring in enough new money to keep paying off the 'investors' and the scheme collapses. Viz. Bernie Madoff.
Tuesday Afternoon
(56,912 posts)They sell a product ,,, ?
COLGATE4
(14,732 posts)information to the contrary, in which case I would suggest you immediately contact the Michigan Attorney General's Office.
Tuesday Afternoon
(56,912 posts)and/or a billion dollar pyramid scheme ...
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=5950929
COLGATE4
(14,732 posts)(and its founders, two of the biggest Republican financial supporters in Michigan) doesn't make the activity illegal. These guys developed the Amway "model" of business, a set=up which generously rewards those few at the top while screwing the majority of those lower down. That is however nothing different from the way most corporations work these days. Calling something is a cult is very much in the eye of the beholder.
Tuesday Afternoon
(56,912 posts)moral and/or ethical. The way these types of business pay their employees is feudalistic. They are leeches on society.
COLGATE4
(14,732 posts)a pyramid scheme which by definition is illegal.
Tuesday Afternoon
(56,912 posts)COLGATE4
(14,732 posts)Tuesday Afternoon
(56,912 posts)COLGATE4
(14,732 posts)applegrove
(118,778 posts)Last edited Sun Dec 14, 2014, 03:01 PM - Edit history (1)
point humans stopped thinking about actual things all the time and started to be able to process fictions. These fictions allowed people to bond in much bigger numbers. Religion is a fiction. So is corporate cultrue. So is philosophy. So is much of what we believe in. Science is not. I thought it was in interesting point.
Tuesday Afternoon
(56,912 posts)Where you are going ... Fiction ... Yep
Tuesday Afternoon
(56,912 posts)applegrove
(118,778 posts)interesting.
Tuesday Afternoon
(56,912 posts)I hope that you are enjoying a Happy Holiday Season, applegrove