Many years ago, a friend persuaded me to join him to attend a seminar where I was first introduced to the concept of OPM, or "Other People's Money." The event was little more than a sales pitch for one of those notorious "pyramid schemes" - it was energetic enough to pull in a lot of new people by fielding a wide array of products and many evangelically enthusiastic recruiters. The atmosphere felt charged with passion and excitement, like a religious revival - a snowballing movement that enticingly offered to recreate the world.
At the time, I found myself put off by the concept of "using OPM" to grow rich. When people at the top of the pyramid leach resources from the people at the bottom with false promises that smells like fraud to me - it's not coercive, but it is deceptive. One concept the glossy flyers and bubbly sales pep talks never mentioned was the problem of market saturation. Obviously, when a line of products has too many salespeople, newer recruits find that people who want the product have already bought it from another friend - after a certain point, lower members of the pyramid scheme begin to lose when they purchase inventory on good faith and can't sell it no matter how hard they try. Eventually they begin to feel like they've been suckered, and the pyramid crumbles from the bottom up.
Pyramid schemes that grow too aggressively don't seem to last very long before they go boom. When enough customers are unhappy with a company, the market may respond by shunning or boycotting products, publishing counter-advertisements in the form of complaints or grievances, or even filing class action lawsuits. Not surprisingly, a few years after my brief involvement I received notice of a class action lawsuit against this organization… it appears the people at the top possessed the same blissful ignorance of economic principles as the people at the bottom. People who found themselves drawn in later didn't get rich, but I suspect they got smart a lot faster than the people at the top did.
I wonder if that fabulously wealthy messianic pyramid builder still leads a jet-setting, toy-collecting existence on his sprawling estate in paradise - I doubt it, though. More likely he has a weekly guest spot on some obscure cable TV show featuring lifestyles of the formerly rich and shameless. It seems sad in a way - quite possibly he believed his own upbeat marketing gospel, and his optimistic vision of wealth and success for all who followed him wasn't deliberately deceptive. Some scams seem well-intended, as "Social Security" shows. However, it would appear that the longest-running pyramid schemes have to be carefully designed to maintain a "benign" deception, like "Social Security."
Money is naturally interactive - it exists to facilitate liquid transactions so we don't have to trade cows for cars, or cow parts for car parts. A sound currency enables us to buy and sell things to people who may have nothing we require in exchange, and it allows other people to transact with us without organizing elaborate and inconvenient trades. Money flows from one hand to another to fulfill a purpose for which it originated, so using OPM is a common practice and not necessarily an undesirable one. People can grow rich using OPM in non-coercive ways - interest and dividends collected on savings and investments are a common way many of us derive benefit from OPM. In taking a loan one uses OPM, while the lending institution ultimately uses the loan-taker's money by charging interest.
Sometimes we willingly pay other people to mind our business, too. A person might feel very happy to hire a competent doctor, a lawyer, or a nanny. People trust professionals to help in areas that require specialized knowledge, and a professional practice must benefit clients (or at least appear to do so) when clients are free to walk away from services and providers. When advice, help, attention, or management is desired by the recipient and freely solicited, providing it is a service - forcing help or attention on an individual who doesn't want it is not. A gigolo provides service, while a rapist does not. The difference is significant and accounts for a large part of the problem inherent in "services" provided by government, and the greater a government's privileged monopoly on the use of force, the more treacherous a "service provider" it becomes in killing off competitive services.
Many of us lead productive lives minding Other People's Business, assisted by a peaceful and voluntary means of exchange. One keeps accounts for other people, one cleans other people's houses, one provides medical care, another cuts hair… and somehow, it seems to work better for us when government doesn't step in the way. Obviously, humans do find productive means of minding Other People's Business. Choice and agreeable terms have a lot to do with that. Needing a plumber doesn't mean I want to throw my doors open to anyone with a wrench - giving me a right to mandatory "service" whether I want it or not does not reflect my concept of freedom. Freedom to choose is not the "freedom" to have others' choices or services forced on me - even when that "service" is supposedly "free."
People can and do sustain profitable businesses by minding OPB in a competitive and voluntary market. If you're skilled at minding some facet of OPB, people may pay you handsomely and willingly for your service. However, if your clients are not free to walk away and your attentions to OPB are unsolicited, that is not "service" no matter what the politicians and bureaucrats call it. You've cornered a market and corralled "clientele" by using coercion - you have no incentive to improve or innovate, or even remain customer friendly. You are not subject to the amiable market controls that prevail in a free market, where services are optional and providers compete - and businesses are efficiently but tolerantly regulated by customers, competitors, and laborers who wield power to choose.
Where government exists, it should stay in the business of minding government, instead of abusing OPM to pay for its mindless and aggressive intrusions into our lives, our businesses, our records, our children's heads and schools. People who use government muscle to accomplish their noble deeds and implement their grand visions of society… well, I find it hard not to feel sorry for them because so often they know not what they do. For those of us who find ourselves on the receiving end of the shortsighted OPB minders among us, it often feels hard to bear that in mind. If people are open to reason, they're open to persuasion - and the ancient pyramid scheme that is political government will eventually get smart from the bottom up.
Someday, perhaps the dollar will be sound once again and have "Mind Your Business" on it where that creepy old eye atop a pyramid used to be. Wouldn't that be nice?
published at Endervidualism on 1/20/05