TALES FROM ALBARADO: The Materiality of Pyramid Schemes in Postsocialist Albania

Abstract

The Albanian pyramid schemes (1992–97) drew in almost two thirds of the country's population with the promise of sure financial returns. When the schemes collapsed, many thousands in Albania lost their savings, remittances from immigrant relatives, even their recently privatized apartments. How might we understand such widespread involvement in this high-risk economic activity? Moving beyond explanations that stop at “mania” or “ignorance of market logic,” this article looks to accounts from former participants (kreditors) that emphasize the materiality of the schemes—especially the presence of stacks of cash and the circulation of immigrant remittances in multiple currencies—for a more grounded understanding of how the pyramid schemes actually took hold. The central argument of the article is that the schemes came to fill the gaps between the liberalization of financial markets after socialism and the coeval flows of cash coming into the country beneath the regulatory frameworks of formal financial institutions. The rise and collapse of the Albanian pyramid schemes may then be viewed not as an abstract financial “bubble” but as the result of historically specific “translations” of the wider neoliberal push for rapid and unregulated privatization. As such, these schemes, which were embedded in the particularities of postsocialist transformations, were also active forces that contributed to processes of wealth and value transformations and to the formation of a specific kind of business culture that combines conspicuous consumption with networking and entrepreneurial skills established during the socialist years.