FTX shows ‘fake it ’til you make it’ is really so 18th century
Well before Sam Bankman-Fried, a Scotsman in France tried to take advantage of financial stress for his own benefit. Why, then, must we relearn a difficult lesson over and over?
The collapse of cryptocurrency exchange FTX and the mesmerising rise and fall of its founder, Sam Bankman-Fried, is only the most recent episode encapsulating the perils of financial innovation.
At this point, it should be easy for regulators, financial institutions and investors to spot an obvious Ponzi scheme. Why, then, must we relearn a difficult lesson over and over?
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Harold James is professor of history and international affairs at Princeton University.
