Recovering “Lay Ignorance” in the Stanford Financial Group Ponzi Scheme

Abstract

AbstractThe Stanford Financial Group’s 2009 collapse devastated more than 20,000 depositors across the Americas. News stories portrayed the $7.2 billion fraud as an elaborate production of ignorance, and its middle-class marks as silent dupes. Media accounts thus differed little from dominant schools of ignorance scholarship, which have emphasized how powerful organizations use their expertise to foist ignorance on passive publics. However, the notion that laypeople are voiceless in such processes is empirically and theoretically untenable. Drawing on interviews with 103 defrauded Stanford clients in the US and Venezuela, this article shows that laypeople play an active interpretive and storytelling role in producing “lay ignorance” in the course of transacting with institutions, personnel, technologies, or products they lack the means to comprehend. Repurposing the concept of “jurisdiction,” I frame “layperson” as a role marked by its distance from the forms of authority that comprise expertise. As my comparison of US and Venezuelan investors reveals, laypeople nonetheless stitch surrogate forms of normative and epistemic authority from inapposite sources to produce their “lay ignorance.” The resulting accounts, I demonstrate, draw opportunistically from laypeople’s institutional, cultural, and political contexts.