Ponzi schemes and powder tax

I went to a birthday party recently, and when I mentioned to a group of people that, as well as AML-ing, I also write historical fiction about financial crime (if this is a surprise to you, you can dash over to my author’s page), someone asked me why I find history – and specifically the history of dodgy dealings in Regency London – so interesting.  And it came to me: it’s because it is both different (the setting) and familiar (the methods).  They say that history repeats itself, but when it comes to financial crime, it is so repetitive and so predictable that it is almost scary.

For instance, I spent much of yesterday reading about taxation in England in the 1820s – you probably did much the same yourself.  Delving into a subject is always, but always, fascinating – even taxation.  (Did you know that there was once a tax of a pound a year on the wearing of hair powder?  This eventually did for wigs and powder, and in came the short, neat, natural style favoured by Beau Brummell and the other dandies.  The only ones left in powder were the menservants in grand houses, whose masters wanted to demonstrate their wealth and were happy to pay for each man to be legally powdered, as it were.)  Anyway, in my reading of Dowell’s “A History of Taxation and Taxes in England from the Earliest Times to the Present Day” [the “present day” being 1884…] I came across this in the chapter on the taxation of coaches – in essence, equivalent to modern vehicle excise duty: “A considerable impulse was given to coach-building in the metropolis by the demand for coaches caused by the rapid enrichment of speculators in the numerous projects of a gambling nature that developed in South Sea Scheme times – nouveaux riches who delighted thus to display their wealth in Hyde Park, where the coaches of the ‘stock-jobbers’ became conspicuous objects.”  Does the phrase “Flaming Ferraris” come straight to mind for any of you?  Braces and Beemers?  (Although the direction of vehicle tax towards the provision and maintenance of roads came much later – coach tax was originally introduced in 1747 to pay for the Brits to take part in the War of the Austrian Succession, and increased in 1776 to meet the expenses of the American War of Independence.  There’s an idea for the next government to consider: pay your road tax and fund a war.)

Of course, what makes financial crime so predictable and inevitable is human nature.  We are a greedy species, always wanting more, and our greed often makes us credulous.  Whether it is the South Sea Bubble or Bernie Madoff’s Ponzi scheme, there will always be those who can realise that a good way to make a quick buck is to convince lots of other people that you can make a quick buck for them.  As they hand over the money you can treat yourself to a fancy coach or a team of powdered footmen – and after that, you start to think about laundering the rest…  To find out how they did that in Regency London, you’ll have to read my novels – and to explore how they’re still doing it today, well, just keep reading this blog!

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2 Responses to Ponzi schemes and powder tax

  1. Claire says:

    It’s a bit scary how history repeats itself. Just the same crimes but in a different, more modern environment. I must say I love how Mr Plank does his investigations the good old-fashioned style. No google research, no smartphones and instant posting photos to Twitter,… I can’t wait for his next adventure!

  2. Hello Claire
    Yes, I find it fascinating how – despite so much evidence – we humans seem unable to learn the basic lessons: “You reap what you sow”, and “If it looks too good to be true, it almost certainly is”.
    And “Plank 3” is now well underway, so it’s full steam ahead for an October publication date!
    Best wishes from Susan

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