Chit funds, cheat funds

Once more a ‘chit fund’ scam has exploded over West Bengal, large sections of the public are furious, and a few heads are beginning to roll, while many others are praying that they are too high and mighty to be singed.

I have been following the pattern since I first started reading newspapers – aeons ago – and some things never change. Let me put them down categorically.

Everywhere in the world (remember Ponzi schemes and Bernie Madoff?), some people want to get seriously rich quick.

A fool and his money are soon parted, so the less foolish among these wannabes make money by exploiting the greed of the more foolish: typically by telling a lot of people they will get back far higher returns than banks and other legitimate/mainstream financial institutions offer if they ‘invest’ in the various ‘business projects’ that these companies claim to have floated. Typically also they are engaged in areas like real estate, movies, sports, the stockmarket, the tourism/entertainment industry, TV/newspapers and so on, if not also in gambling, drugs and the flesh trade.

These scamsters bet on the long established truism about human nature that there’s a sucker born every minute, and mankind in the large never learns from history, so they will never run short of prey. The majority of their victims are poor and lower middle class people – your typical small farmer, rickshaw puller, petty shopkeeper, construction worker, door to door salesman and the like, who could be pitied for lacking the kind of education that would make them cautious about the Big Bad World (and who therefore deserve, and get too little of, protection by the government), but, tragically, there are also a lot of people who claim to be ‘educated’ and ‘experienced’ (at least before their children) and yet are led by their greed and gullibility into burning their fingers badly. Thousands of them in my own town!

As I wrote in a blogpost in connection with Lalit Modi two years ago, you need only four things to get rich quick – arrogance, shamelessness, violence and greed. Well, maybe I’ll add one more: connections in high places.  Absolutely no other qualifications required, and all you need to keep praying for is that luck might not suddenly desert you until you become too big to fail, like the directors of Citibank (or Sahara India?). Within a few years or at most a decade, you will move from slum to five star environs, from your dad’s rickety cycle van to a spanking new Audi or BMW, you will have legions of minions, from armed thugs to trained lawyers and CAs and MBAs to protect your back and do all the legwork and dirty work for you (people who have been to IIT and consider themselves ‘successful’ because you pay them at most a measly couple of lakhs a month: think of those who work for Vijay Mallya or Anil Agarwal of Vedanta fame), you will have sexy bimbos swooning on your arms, you will throw parties where the champagne flows like water even though you might never have passed class eight and you owe billions to millions which you have no intention of ever paying back – and much of society (read the mass media, including and especially the parts of them you personally own) will be going gaga over you as a great success, even a great man. And that success will keep begetting success, because nothing attracts prey to you as the smell of big money being squandered on a lavish scale, no matter how it has been made.

It is not good or wise to blame it all on the politicians, for a number of reasons: a) politicians do not tell people to be both stupid and greedy, b) some politicians actually try to fight the ever-present menace of sharks devouring minnows, and get little thanks for it, c) a lot of people feel politicians have no business trying to teach them to restrain their greed and tell them to be less foolish, d) in a society where almost everybody is trying to get rich quick (so why not the politicians too?) – and given the fact that it has always been very hard to make big money quickly by honest means – a lot of such ‘human interest’ stories will keep happening, because most ‘successful’ people do get rich only by duping the foolish and the greedy, e) politicians, alas, can thrive and even get some good work done only by winking at, if not actually being hand in glove with, the sharks whose sole aim in life is to make money no matter how, that’s the way the world is, f) too few people notice that many of the money bags become politicians themselves, and play a not insignificant role in breaking, bending or changing laws so that they can keep playing their dirty games with less and less to worry about. And to those who say – at age 20 or 80 – that ‘come socialism, and the world will become paradise’, this incorrigible sceptic will retort ‘Ho hum. Read history, or keep dreaming.’

Meanwhile, I started earning my living early, and am nearly high and dry, having followed my own three maxims resolutely: a) make just enough for your needs, keeping an eye on the far future, b) don’t envy and slaver after big money, c) don’t listen to anybody, however fancy his car, his office or his calling card, who offers to make you rich in a year or two. When I have needed worldly advice, I have taken it from the likes of Shakespeare and Ben Franklin and Tagore, not your hot-shot twenty something MBA in finance, be he from Harvard or IIM…and I cannot pass on better advice to those who are coming after me.