|Top Institutional Holders of Herbalife Ltd. (HLF)|
As if to prove the validity of the above statement, yesterday, Igor Greenwald published (in Forbes Magazine) possibly the most thoughtful mainstream article on the perplexing subject of 'Herbalife,' to date.
Mr. Greenwald has demonstrated the (all-too-rare) capacity to put his ego on one side and start to do some serious thinking. He has bravely confessed to being initially incapable of accepting Bill Ackman's analysis of 'Herbalife' - as an entirely-valueless corporate structure hiding a vast pyramid fraud in plain view of the regulators - until he examined the evidence.
Yet even Mr. Greenwald (who is one of the first financial columnists to step up to the plate and condemn 'Herbalife' as a pariah of a company which should not be touched with a barge-pole, mainly because investors might very-well lose their shirts) hasn't yet embraced the fully-deconstructed explanation of how the reality-inverting 'MLM income opportunity' racket has functioned. Hopefully, free-thinking financial commentators like Mr. Greenwald will now examine the wider-evidence and deduce that 'Herbalife,' and numerous other 'Amway' copy-cats, have all been the essentially-meaningless names over the entrances to essentially-identical pernicious cults built to the age-old totalitarian (or totalistic) pattern.
Before certain readers of this Blog throw up their hands in horror and ask: What qualifies this guy, David Brear, to be making pronouncements on the subject of totalitarianism?, I should confess that I've not been working entirely alone. If I have seen further: then it was by 'standing on the shoulders of giants.'
Professor Robert Jay Lifton
In 1961 (after many years of field-research, interviewing US servicemen held prisoner during the Korean War), Robert Jay Lifton (b. 1926) published, ‘Thought Reform and the Psychology of Totalism.’ In this standard, medical text-book, Lifton identified 8 ‘themes’ which, if present in any group, indicate that its members are being subjected to a mixture of social, psychological and physical pressures, designed to produce radical changes in their individual beliefs, attitudes and behaviour.
|Prof. Margaret Singer|
Another giant in the field of academic research into the cult phenomenon, is Prof. Margaret Singer (1921-2003). Her major work which was published in 1996, is 'Cults in Our Midst.' (http://en.wikipedia.org/wiki/Cults_in_Our_Midst). In this, Prof. Singer set out 'six conditions' in which totalistic thought-reform can be achieved:
- 1). Keep the person unaware of what is going on and how attempts to psychologically condition him or her are directed in a step-by-step manner.
- 2). Control the person's social and/or physical environment; especially control the person's time.
- 3). Systematically create a sense of powerlessness in the person.
The members serve as models of the attitudes and behaviors of the group and speak an in-group language.
Strip members of their main occupation (quit jobs, drop out of school) or source of income or have them turn over their income (or the majority of) to the group.
Once the target is stripped of their usual support network, their confidence in their own perception erodes.
As the target's sense of powerlessness increases, their good judgment and understanding of the world are diminished. (ordinary view of reality is destabilized)
As the group attacks the target's previous worldview, it causes the target distress and inner confusion; yet they are not allowed to speak about this confusion or object to it - leadership suppresses questions and counters resistance.
This process is sped up if the targeted individual or individuals are kept tired - the cult will take deliberate actions to keep the target constantly busy.
- 4). Manipulate a system of rewards, punishments and experiences in such a way as to inhibit behavior that reflects the person's former social identity.
The target's old beliefs and patterns of behavior are defined as irrelevant or evil. Leadership wants these old patterns eliminated, so the member must suppress them.
Members get positive feedback for conforming to the group's beliefs and behaviors and negative feedback for old beliefs and behavior.
- 5). The group manipulates a system of rewards, punishments, and experiences in order to promote learning the group's ideology or belief system and group-approved behaviors.
The only feedback members get is from the group; they become totally dependent upon the rewards given by those who control the environment.
Members must learn varying amounts of new information about the beliefs of the group and the behaviors expected by the group.
The more complicated and filled with contradictions the new system is and the more difficult it is to learn, the more effective the conversion process will be.
Esteem and affection from peers is very important to new recruits. Approval comes from having the new member's behaviors and thought patterns conform to the models (members). Members' relationship with peers is threatened whenever they fail to learn or display new behaviors. Over time, the easy solution to the insecurity generated by the difficulties of learning the new system is to inhibit any display of doubts—new recruits simply acquiesce, affirm and act as if they do understand and accept the new ideology.
- 6). Put forth a closed system of logic and an authoritarian structure that permits no feedback and refuses to be modified except by leadership approval or executive order.
Members are not allowed to question, criticize or complain. If they do, the leaders allege the member is defective, not the organization or the beliefs.
The targeted individual is treated as always intellectually incorrect or unjust, while conversely the system, its leaders and its beliefs are always automatically, and by default, considered as absolutely just.
Conversion or remolding of the individual member happens in a closed system. As members learn to modify their behavior in order to be accepted in this closed system, they change—begin to speak the language—which serves to further isolate them from their prior beliefs and behaviors.
Building on Lifton's and Singer's solid foundation (and after much research) I concluded that pernicious cultism is an evolving criminogenic phenomenon which can be briefly defined as:
'any self-perpetuating, non-rational/esoteric, ritual belief system established or perverted for the clandestine purpose of human exploitation.'
However, since phenomena cannot be accurately defined; I set down the following, essential, and universal, identifying characteristics of a pernicious cult and I published these in 2005:
- has a grandiose sense of self-importance.
- is preoccupied with fantasies of unlimited success, power, brilliance, beauty, ideal love, etc.
- believes that he/she is special and unique and can only be understood by other special people.
- requires excessive admiration.
- strong sense of self-entitlement.
- takes advantage of others to achieve his/her own ends.
- lacks empathy.
- is often envious or believes that others are envious of him/her.
- arrogant disposition.
Classically of a pernicious cult, the narcissistic instigator/leader of 'Herbalife,' Mark Reynolds Hughes (1956-2000), and his narcissistic successors, have sought to control all information entering not only their adherents' minds, but also that entering the minds of casual observers. This has been achieved by constantly denigrating all external sources of information whilst constantly repeating the group’s reality-inverting key words and images.
|'MLM Income Opportunity' cultic racketeer, Michael Johnson.|
|A pay-through-the-nose-to-enter 'Herbalife' orgy of deluded self-gratification|
(20 000 deluded 'Distributors' Barcelona 2011)
All voices of dissent were banned
In many respects, the mere fact that 'Herbalife' continues to be reported on business pages, is a victory in itself for the bosses of the group. Predictably, these world-class inverters of reality keep constantly-repeating the key-words: 'Business Model' , 'Direct Selling' and 'Products' - in a transparent attempt to maintain their rapidly-crumbling monopoly of information.
In reality, because the overwhelming majority of 'Herbalife' products have (due to their banal quality and exorbitant fixed-prices) only been bought by adherents of the group, they might as well have not existed. Their real function has been to launder illegal payments into, and prevent investigation of, a classic pyramid fraud. This is why I usually refer to illusory 'MLM products,' as 'wampum.' Indeed (as Bill Ackman's researchers quickly-discovered) if anyone should be so foolish as to want to acquire 'Herbalife' or any other 'MLM' wampum (but at a fraction of its original fixed-price), there is always a mountain of it going begging on e-bay.