evidence: The way you clean up such a mess is you go to the "net winners"—people that took out more than they put in. If someone put in $5,000 and took out $15,000, you try to recover the $10,000 they took out, over and above their contribution, to be redistributed among those who lost money. Of course, many of the net winners are deceased, have spent the money, etc., etc. But you try to recover what you can. [...] I start a lot of my classes with a discussion of Bernie Madoff and other Ponzi schemes, because they take advantage of people making a key accounting mistake. Think about what Madoff did. He raised money from a bunch of people, he paid some of that money to other people, and raised more money from yet other people. He redistributed value; he did not create any value. This is a fundamental accounting problem that every society has at a very deep level. Who is producing value? What kinds of activities produce value? How do you distinguish things that produce value from things that are consuming more than they’re producing? If we could measure value, we could answer these questions exactly—that is why the measurement perspective on accounting has such an attraction. But in the real world, we just have to do the best we can, sometimes with only vague notions of what we mean.