Hostname: page-component-586b7cd67f-t7czq Total loading time: 0 Render date: 2024-11-22T05:41:04.976Z Has data issue: false hasContentIssue false

FIELDS OF DREAMS, FIELDS OF SCHEMES: PONZI FINANCE AND MULTI-LEVEL MARKETING IN SOUTH AFRICA

Published online by Cambridge University Press:  19 January 2012

Abstract

The structural conditions associated with increased inequality amidst rapid change brought about by growing financialization and efforts to get the ‘unbanked’ sections of society into the formal financial system have created the conditions under which illegal pyramid and ponzi schemes, fake investment schemes, and legal multi-level marketing companies have been able to flourish. In contemporary Johannesburg and Soweto the originators of money multiplication schemes and the agents who ‘work’ to recruit new members position themselves in this context as financial entrepreneurs and brokers who embody a range of seemingly contradictory discourses, drawing on discourses of ‘empowerment’, ‘self-help’, ‘entrepreneurship’ and ‘religiously sanctioned wealth and prosperity’ in the course of their risk taking in the field of finance. Based on a series of case studies of female agents of ‘push-push’ schemes, the article shows how many of these discourses reflect some of the conditions of contemporary capitalism: citizens are expected to be active investors, active entrepreneurs and hard workers who are able to work from home and without a boss. Moreover, the schemes use sophisticated technologies, marketing strategies and other practices which simulate formality, legality and sincerity – echoing religious practices and discourses. At the same time a set of cultural values and social logics that are not necessarily produced by neo-liberal capitalism and financialization, but are certainly activated by them, makes it hard for citizens to recognize or admit the forms of deception involved, unless deception is seen to be central to the operation of the modern state or the present ‘get-rich-quick’ culture. Risk taking, and pursuit of social mobility, originate in dual economy legacies, with their unfulfilled expectations, wealth disparities and frustrated class aspiration. Participants in pyramid schemes have ideologies combining ‘progress’ with ‘imminent doom’, entrepreneurship with greed: contradictory attitudes reflective of financialization in the broader world.

Résumé

Les conditions structurelles associées à l'accroissement des inégalités en période de mutation rapide résultant d'une financialisation et d'efforts croissants déployés pour intégrer les « sans compte » (bancaire) de la société dans le système financier formel ont créé les conditions favorables à l'essor de systèmes illégaux de placement pyramidal, programmes d'investissement frauduleux et entreprises de commercialisation à paliers multiples. De nos jours à Johannesburg et Soweto, les initiateurs de phénomènes de multiplication d'argent et les agents qui « œuvrent » au recrutement de nouveaux membres se positionnent dans ce contexte en tant qu'entrepreneurs financiers et courtiers qui incarnent un éventail de discours en apparence contradictoires, s'inspirant des discours d’« autonomisation », d’« entraide », d’« entrepreneuriat » et de « prospérité sanctionnée par la religion » au cours de leur prise de risque dans le domaine de la finance. S'appuyant sur une série d’études de cas de femmes agentes de systèmes « push-push », l'article montre en quoi ces discours reflètent certaines conditions du capitalisme contemporain : les citoyens sont censés être des investisseurs actifs et des entrepreneurs actifs, prêts à travailler dur à domicile et sans patron. De plus, ces systèmes utilisent des technologies sophistiquées, des stratégies marketing et d'autres pratiques qui simulent la formalité, la légalité et la sincérité, en écho aux pratiques et discours religieux. Dans le même temps, un ensemble de valeurs culturelles et de logiques sociales non nécessairement produites par le capitalisme néolibéral et la financialisation, mais indéniablement activées par ces derniers, rend difficile la tâche des citoyens de reconnaître ou d'admettre les formes de tromperie en jeu, à moins que la tromperie ne soit perçue comme l’élément central du fonctionnement de l’état moderne ou de la culture actuelle du « s'enrichir rapidement ». La prise de risque et la quête de mobilité sociale émanent de l'héritage d'une double économie, avec ses attentes assouvies, ses écarts de richesse et des classes frustrées dans leurs aspirations. Ceux qui participent aux systèmes de placement pyramidal ont des idéologies qui conjuguent « progrès » et « menace imminente », entrepreneuriat et avidité : des attitudes contradictoires qui reflètent la financialisation plus largement.

Type
Research Article
Copyright
Copyright © International African Institute 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Cahn, P. S. (2008) ‘Consuming class: multilevel marketers in neoliberal Mexico’, Cultural Anthropology 23 (3): 429–52.CrossRefGoogle Scholar
Caremon, B. (2009) ‘FSB acts against Edwafin’, <http://www.persfin.co.za/index.php?fSectionId=&fArticleId=4951600>, accessed 30 April 2009.,+accessed+30+April+2009.>Google Scholar
Cokayne, R. (2009) ‘Charge of fraud laid against Ponzi agent’, <http://www.busrep.co.za/index.php?fArticleId=5042237>, accessed 2 December 2009.,+accessed+2+December+2009.>Google Scholar
Comaroff, J. and Comaroff, J. L. (1999) ‘Occult economies and the violence of abstraction: notes from the South African postcolony’, American Ethnologist 26 (2): 279303.CrossRefGoogle Scholar
Comaroff, J. and Comaroff, J. L. (2000) ‘Millennial capitalism: first thoughts on a second coming’, Public Culture 12 (2): 291343.CrossRefGoogle Scholar
Comaroff, J. and Comaroff, J. L. (2001) ‘Millennial capitalism and the culture of neoliberalism’ in Comaroff, and Comaroff, (eds), Millennial Capitalism and the Culture of Neoliberalism. Durham NC: Duke University Press.CrossRefGoogle Scholar
de Klerk, V. (2009) ‘Edwafin finally under water?’ <http://www.fin24.com/Companies/Edwafin-finally-under-water-20090313>, accessed 12 January 2010.,+accessed+12+January+2010.>Google Scholar
Dickow, H. and Møller, V. (2002) ‘South Africa's “rainbow people”, national pride and optimism: a trend study’, Social Indicators Research 59 (2): 175202.CrossRefGoogle Scholar
Dlamini, J. (2009) Native Nostalgia. Johannesburg: Jacana.Google Scholar
Dolan, C. and Scott, L. (2009) ‘Lipstick evangelism: Avon trading circles and gender empowerment in South Africa’, Gender and Development 17 (2): 203–17.CrossRefGoogle Scholar
Egan, A. (2007) ‘Kingdom deferred? The churches in South Africa, 1994–2006’ in Buhlungu, S. et al. (eds), State of the Nation: South Africa 2007. Cape Town: Human Sciences Research Council.Google Scholar
Epstein, G. (2005) ‘Introduction: financialization and the world economy’ in Epstein, G. (ed.), Financialization and the World Economy. Cheltenham: Edward Elgar.Google Scholar
Extance, A. (2009) ‘Pharma supplier accused of multi-million pound fraud’, <http://www.rsc.org/chemistryworld/News/2009/July/31070901.asp>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
FinMark Trust (2004) ‘Financial literacy scoping study and strategy project: final report’, <http://www.finmarktrust.co.za>, accessed 14 May 2009.,+accessed+14+May+2009.>Google Scholar
Foster, J. B. (2007) ‘The financialization of capitalism’, Monthly Review 58 (11): 112.Google Scholar
Gordhan, P. (2010) ‘Budget speech by Minister of Finance Pravin, 17 February 2010’, <http://www.info.gov.za/speech/DynamicAction?pageid=461&sid=8424&tid=8441>, accessed 22 June 2010.,+accessed+22+June+2010.>Google Scholar
Guyer, J. I. (2004) Marginal Gains: monetary transaction in Atlantic Africa. Chicago IL: University of Chicago Press.Google Scholar
Harris, M. (1997) ‘Monitoring optimism’, Social Indicators Research 41 (1–3): 279304.CrossRefGoogle Scholar
Herrington, M. and Maas, G. (2007) Global Entrepreneurship Monitor 2007. Cape Town: Graduate School of Business, University of Cape Town.Google Scholar
Mkhize, Z. (2006) ‘Address at the Entrepreneurship Seminar, Royal Agricultural Society Hall, Pietermaritzburg, 8 August 2006’, <http://www.info.gov.za/speeches/2006/06082915151002.htm>, accessed 22 June 2010.,+accessed+22+June+2010.>Google Scholar
Ho, K. (2009) Liquidated: an ethnography of Wall Street. Durham NC: Duke University Press.Google Scholar
James, D. (1999) Songs of the Women Migrants: performance and identity in South Africa. Edinburgh and Johannesburg: Edinburgh University Press/International African Institute and Witwatersrand University Press.Google Scholar
James, D. (2011) ‘The return of the broker: consensus, hierarchy, and choice in South African land reform’, Journal of the Royal Anthropological Institute (New Series) 17 (2): 318–38.CrossRefGoogle Scholar
Jordan-Smith, D. (2007) A Culture of Everyday Corruption: everyday deception and popular discontent in Nigeria. Princeton NJ: Princeton University Press.Google Scholar
Kast, G. (2000) ‘Miracle has hopes for the political arena’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=ct200009251955041M624881>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Koehn, D. (2001) ‘Ethical issues connected with multi-level marketing schemes’, Journal of Business Ethnics 29 (1): 153–60.CrossRefGoogle Scholar
Koelble, T. (2008) ‘Market and economy’ in Shepherd, N. and Robins, S. (eds), New South African Keywords. Johannesburg: Jacana.Google Scholar
Krige, D. (2011a) ‘“We are running for a living”: work, leisure and speculative accumulation in an underground numbers lottery in Johannesburg’, African Studies 70 (1): 148.CrossRefGoogle Scholar
Krige, D. (2011b) ‘Power, Identity and Agency at Work in the Popular Economies of Soweto and Black Johannesburg’. PhD thesis, University of the Witwatersrand.Google Scholar
Kynoch, G. (2003) ‘Apartheid nostalgia: personal security concerns in South African townships’, SA Crime Quarterly 5 (3): 710.Google Scholar
La Hausse, P. (1992) ‘So who was Elias Kuzwayo? Nationalism, collaboration and the picaresque in Natal’, Cahiers d'études africaines 32 (127): 469507.CrossRefGoogle Scholar
Magwaza, N. and Broughton, T. (2009) ‘Failed firm to be probed’, The Mercury, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=vn20091130041533727C595243>, accessed 12 January 2010.Google Scholar
Mamaila, K. (2001) ‘SA may crumble with pyramid schemes, says Nia’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=ct20001217221005586K516352>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Martin, R. (2002) Financialization of Daily Life. Philadelphia PA: Temple University Press.Google Scholar
Mokwena, M. (2000) ‘Support streams in for pyramid-scheme “boss”’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=ct20000716214007493P653181>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Moneyweb (website) (2009) ‘SA Ponzi scheme uncovered: up to R215 bn involved’, <http://www.moneyweb.co.za/mw/view/mw/en/page55?oid=296025&sn=Detail&pid=62093>, accessed 12 February 2010.,+accessed+12+February+2010.>Google Scholar
Nkosi, K. and Krost, P. (2000) ‘R3m a day for Miracle kingpin’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=ct20000714201009548P430173>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Nyembezi, S. (2008) [1961] The Rich Man of Pietermaritzburg (translated by Ngidi, S.). Wiltshire, UK: Afflame.Google Scholar
Parry, J. and Bloch, M. (1989) ‘Introduction’ in Parry, J. and Bloch, M. (eds), Money and the Morality of Exchange. New York NY: Cambridge University Press.CrossRefGoogle Scholar
Porteous, D. and Hazelhurst, E. (2004) Banking on Change: democratising finance in South Africa, 1994–2004 and beyond. Cape Town: Double Storey Books.Google Scholar
Roeber, C. A. (1999) ‘Middle-class criminals? The romance of the ether and the city in Zambia’, City and Society 11 (1–2): 99106.CrossRefGoogle Scholar
Sapa (South African Press Association) (2000a) ‘Group demands release of pyramid-scheme boss’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=qw963495900872B265>, report of 13 July 2000, accessed 2 March 2009.,+report+of+13+July+2000,+accessed+2+March+2009.>Google Scholar
Sapa (South African Press Association)——– (2009a) ‘Krion a ponzi-type scheme’, <http://www.news24.com/Africa/News/Krion-a-Ponzi-type-scheme-20090728>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Sapa (South African Press Association)——– (2009b) ‘The R10bn betrayal’, <http://www.thestar.co.za/?fSectionId=&fArticleId=vn20090611051200485C115257>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Sapa (South African Press Association)——– (2009c) ‘Krion group deny guilt’, <http://www.news24.com/Africa/News/Krion-group-deny-guilt-20090727>, accessed 14 May 2009.,+accessed+14+May+2009.>Google Scholar
Sargeant, A. and Msweli, P. (1999) ‘Network marketing in South Africa: an exploratory study on consumer perceptions’, Journal of International Consumer Marketing 11 (3): 5166.CrossRefGoogle Scholar
Smith, A. D. (2000) ‘Township investors riot over lost savings’, The Independent (UK), 18 August.Google Scholar
South Africa – The Good News (website) (2005) ‘South African youth are optimistic about our future’, <http://www.sagoodnews.co.za/the_future/south_african_youth_are_optimistic_about_our_future_3.html>, accessed 11 January 2011.,+accessed+11+January+2011.>Google Scholar
South Africa – The Good News (website)——– (2009) ‘South Africans remain optimistic about economy’, <http://www.sagoodnews.co.za/economy/south_africans_remain_optimistic_about_economy.html>, accessed 11 January 2011.,+accessed+11+January+2011.>Google Scholar
van Onselen, C. (1996) The Seed Is Mine: the life of Kas Maine, a South African sharecropper, 1894–1985. Cape Town: David Philip.Google Scholar
Warby, V. and Bokaba, S. (2000) ‘Fury as cash “miracle” turns to dust’, <http://www.iol.co.za/index.php?set_id=1&click_id=13&art_id=ct20000713214017362L300819>, accessed 2 March 2009.,+accessed+2+March+2009.>Google Scholar
Wilson, A. (1999) ‘The empire of direct sales and the making of Thai entrepreneurs’, Cultural Anthropology 19 (4): 401–22.Google Scholar
Wilson, M. and Mafeje, A. (1963) Langa: a study of social groups in an African township. Cape Town: Oxford University Press.Google Scholar
Woker, T. A. (2003) ‘If it sounds too good to be true it probably is: pyramid schemes and other related frauds’, South African Mercantile Law Journal 15 (2): 237–49.Google Scholar