I meant to do a post about Bernard Madoff/Mr. Merdle when the story of Madoff’s $50 000 000 000 Ponzi scheme was breaking, but Paul Krugman beat me to it. ***Little Dorrit spoiler alert*** But now that there’s been a suicide, I suppose it might be worthwhile to point out further similarities. What Krugman and his 76 commenters thus far have picked up on is the sudden revelation of  a massive financial fraud which ruins people of all kinds. None of them mention Merdle’s real-life inspiration, John Sadleir. In fact, I was only able to find two google hits for sites connecting Madoff to Sadleir. One is an article from the London Times on the recent dramatization of Little Dorrit on BBC. The other is a blog by Professor Emeritus (of biogeography) Philip Stott. (As it turns out, Stott’s previous blogs are devoted to global warming skepticism. Check out his SourceWatch entry, including his rebuttal.) I reproduce here Stott’s conclusion to his blog post:


The Way We Lived – And Live


So, for “pecuniary crises”, plus ça change, whether in life or in literature. 


Dickens concluded the speculations of the mob about the nature of Mr. Merdle, and of his untimely death, with these uncompromising words: “the late Mr. Merdle’s complaint has been, simply, Forgery and Robbery.”


“He, the uncouth object of such wiide-spread adulation, the sitter at great men’s feasts, the roc’s egg of great ladies’ assemblies, the subduer of exclusiveness, the leveller of pride, the patron of patrons, the bargain-driver with a Minister for Lordships of the Circumlocution Office, the recipient of more acknowledgment within some ten to fifteen years, at most, than had been bestowed in England upon all peaceful public beneficiaries, and upon all the leaders of all the Arts and Sciences, with all their works to testify for them, during two centuries at least – he, the shining wonder, the new constellation to be followed by the wise men bringing gifts, until it stopped over certain carrion at the bottom of a bath and disappeared – was simply the greatest Forger and the greatest Thief that ever cheated the gallows.”


Interestingly, similar scandals surround Augustus Melmotte, the mysterious, foreign-born financier, in Anthony Trollope’s satirical novel, The Way We Live Now, of 1875. In this, just as with Dickens, Trollope is venting his spleen on the pervading dishonesty of the age, both commercial and political.


Plus ça change, indeed. “For the love of money is the root of all evil” [1 Timothy 6:10]. 

But as a not-too-close reading of the block quotation would indicate, though, Dickens there is not condemning “pervading dishonesty” or “the love of money” so much as the love of  status. Merdle is the “new constellation to be followed by the wise men bringing gifts,” having been approved of by “great men” and “great ladies.” People trusted Merdle not because they were greedy or dishonest, but because they were credulous of somebody who could receive “wide-spread adulation” from Important People.

Compare this with the recent words of a Boston businessman on Madoff:


One Boston businessman who invested in Madoff’s fund said it was marketed as an exclusive investment opportunity, where only the wealthy and well connected could gain access. The businessman said it took a full year of lobbying to become a client of Madoff, and only with the input of other large investors who helped persuade Madoff to accept his money.

“You wouldn’t imagine Ponzi artists would make it so hard to invest,” the businessman said, speaking on the condition of anonymity because, like many wealthy Madoff clients, he did not want his losses publicized.


And with an 1856 article on Sadleir in The Leader, “The Art of Sadleir’s Book-Keeping” (via British Periodicals): 

If a man looks wealthy–has good plain, but “distinguished” clothes,–comes in his brougham or on horseback,–is known to go in high company,–or especially, if he is a Member of Parliament, with a probability of entering office, the herd will always vote with him, will always show their perception of distinction by appointing him to a high post,–will make him director, manager, anything,–and will trust him with their souls.

Plus ça change? Well, Sadleir’s fraud was estimated at 500 000 pounds or so–worth about 40 000 000 pounds now, according to measuringworth.com–i.e., only a few thousandths of Madoff’s scheme protected by regulatory dodges.

Welcome to the new nineteenth century. Rich people can still plunder the ignorant/avaricious/credulent, but on a much larger scale, and now they can even get others to do the suicide part of the job.