15 08 10 - 08:14I hear this phrase -- meaning an investment which is paid off by the money contributed by future investors -- thrown around quite a bit. Social Security is a Ponzi scheme, the whole economy is a Ponzi scheme, etc.
What people don't do is turn this same lens on their entertainment sources. These are presumed to have value because people like them and therefore, they're going to be worth something real someday. In the meantime, they're worth monopoly money, but if we just keep the scam going...
The worst is Facebook. It's "worth" $25 billion, in the same way myspace was once "worth" $0.5 billion. This on actual profit of "tens of millions of dollars" from $800 million in money taken in. This is as far as anyone knows all advertising revenue, and advertising is contingent upon being effective. If you advertise for the wrong product in a profitable area, you don't get any actual results, although if you're running multiple ad campaigns, it's hard to tell which one really motivated the sale.
Facebook is in a classic sense not a Ponzi scheme, since you're not putting in money and expecting to profit from other people following your example. Instead, it's a classic speculative investment based on the new American myth that having lots of random people paying attention to something means it's going to be great value as a consumer product advertisement juggernaut. But, as Google found out, often it's a small group who generate a lot of noise but are actually not that important to the society (you can even read the French and Russian revolutions as a comparison, and you won't be far off).
We don't like to admit that we, the consumer, are not the end goal of all nature, science, God, the cosmos and possibly consciousness itself. But by doing so, we're creating de facto Ponzi schemes and overvaluing huge sectors of our economy, much as we did in the "dot com" boom under the deceptive President Clinton, who seemed to think it was OK to shift the economy from making real products into making fantasy products. When George W. Bush took over, the dot-com-ponzi-boom blew up in his face. You'd think he or Obama would be more skeptical about Facebook as a result.