Ponzi schemes are named after Charles Ponzi, the American fellow (where else?) who "popularised" them back in the 1920s. In simplistic terms, Ponzi schemes work on the principle of hypnotising gullible sheeple into investing money in a generally ill-defined "business enterprise", promising larger-than-life returns that are usually paid out to the initial "investors" using money mostly acquired from later "investors".These schemes rely heavily on people who possess the deadly cocktail of ignorance and greed - the overwhelming majority of members of our species. To quote Scott Adams, the creator of the cartoon Dilbert: "Nothing defines humans better than their willingness to do irrational things in the pursuit of phenomenally unlikely payoffs. This is the principle behind lotteries, dating and religion." To quote my African-American brethren: word.Having personally known about Ponzi schemes for about 35 years I was taken aback by the recent tragic, yet hilarious, soap opera around MMM, the Russian Ponzi scheme.The most surprising thing has been the chorus of people amazed that there are so many faithful disciples out there vociferously defending it. Duh! Of course Ponzi schemes are profitable - depending on how far up the pyramid you are! They rely almost entirely on the testimonies of people who have profited from them. You'd be a pretty stupid Ponzi scheme operator if you failed to pay a single person.story_article_left1This is why I'm curious about former EFF MP and Black Consciousness activist Andile Mngxitama's highly publicised foray into MMM. Especially his timing. The "official" reason for him joining is that he wants to have personal experience of the scheme. I think it's a calculated stroke of genius. I don't see how someone like Mngxitama, who has such a prominent platform, is going to have a negative experience. I'll put the family jewels on the chopping block and predict that he'll emerge from the "experience" better off than he was going in.You might ask, "How could you have known about Ponzi schemes 35 years ago?" Well, when I was nine years old, I was obsessed with capturing, domesticating and training homing pigeons, just like Mike Tyson. But I was pathetic at the "capturing" part. Enter one Matshidiso, the only son of our helper from Matatiele, who was about two years older than me. Easy peasy, he reckoned. If I gave him 10c, he would return with one pigeon for me. So I extracted one 5c coin, two 2c coins and two half-cent coins from my piggybank and handed them to him.Two weeks went by before I saw him again. Where is my pigeon? No, he said, the breeder wouldn't hear of it. If I wanted my pigeon I had to fork out another 10c so that I could get a pair: male and female.Apparently if they were taken solo they died of heartache. This made a lot of sense. One problem. Ten cents was hard to come by in 1981; the equivalent of a loaf of unsliced brown bread. So I approached my friend Thiza and offered him a slice of my budding pigeon empire.When Matshidiso saw me raise 10c in a matter of minutes, he was emboldened. Why not get a few more okes in on the action? Genqezi, Mfaniza, Phillip, Mfanafuthi, a few other guys and even my elder brother Mazwi were all keen. All in all, we handed our pigeon trader a total of 85 cents.That was the last time any of us saw Matshidiso. Well, all except one other chap whose name escapes me now, who was Mr Moneybags in the days after the Great Pigeon Transaction. Rumours were swirling around that he had been seen walking with Matshidiso in the general direction of the Sishi Supermarket on the day of the pigeon trade.story_article_right2When I told my dad about the great pigeon swindle he looked at me sagely and said: "If it sounds too good to be true, it probably isn't."But the whole world is one Ponzi scheme of gigantic proportions. Take the way we choose leaders. The average age of heads of state in the world is between 61 and 62. There is clearly a system of "Who got there first?" going on, unless the best brains in the world just happen to hover around the sexagenarian mark.For the record, our own average for universally recognised heads of state (at least when they took over) is between 64 and 65. This means that, on average, the president of this country has been hovering around the age of 70, considering how long they "serve".That's a Ponzi scheme right there. And that goes for the cabinet, the judiciary and other state organs as well. We're led by people who "got there first". We, "the people", seem to believe that, given the choice between a "cadre" born in 1988 who holds a PhD in Economics and a septuagenarian who was at the Battle of Cuito Cuanavale in 1988, the septuagenarian is the best candidate for a position in this-or-that committee on economic transformation, based on his excellent ducking skills to avoid his head being blown off, Kalashnikov in hands. He struggled first.You kinda get why good ole Juju got tired, said "Fok, nee man!" and started his own Ponzi scheme. Now he's on top of his own pile in red.For the record, I haven't given up on collecting on my 10c investment in my Pigeon Ponzi Scheme from 35 years ago. Any day now, I expect Matshidiso to appear on the horizon with a thousand pigeons swirling around him.E-mail Ndumiso Ngcobo at ngcobon@sundaytimes.co.za or follow him on Twitter: @NdumisoNgcobo..