Friday, 22 April 2016

'Herbalife (HLF) /MLM:' Ayn Rand came close to predicting this 'new' American-spawned 'Fascism.'

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See original image
April 2016. 
A compelling documentary entitled, 'Betting On Zero,' directed by Ted Braun, debuted at New York's prestigious Tribeca Film Festival. Tickets for the scheduled screenings were all snapped-up, so further (sold-out) performances had to be quickly arranged. The film contained interviews with a significant number of distressed individuals (largely from the Hispanic community). They each bravely confessed to having wasted several years of their lives, and many thousands of dollars, pursuing a so-called 'Multi-Level Marketing Income Opportunity' known as 'Herbalife.' These witnesses now freely-accept that they fell for a particularly fiendish, self-perpetuating pyramid scam. 

Predictably, 'Herbalife's' corporate officers (who refused to take part in the film, but who do appear in it in the form of tightly-scripted interviews previously given to the media), completely ignore the victims' suffering and insist that 'Herbalife' is a perfectly legal, and philanthropic, multi-national, and multi-billion dollar, enterprise founded in California in 1980 and traded on the New York Stock Exchange, but which has been falsely-accused of fronting a pyramid scam by Bill Ackman (a Wall St. hedge fund manager who, in December 2012, bet more than one billion dollars, in a short-selling trade, that 'Herbalife' will be closed-down by US federal government regulatory agencies, and its true stock value, thus, proved to be zero).

HerbalifeFl...pdf(3.35 Mo)télécharger

There was even a group of unidentified 'Herbalife' fans picketing the film, handing out leaflets which instructed viewers not to believe what they were about to see. These tightly-scripted, Orwellian documents (paid for by 'Herbalife' ) stated that 'Herbalife' has millions of satisfied members/customers - not one of whom was interviewed in the film. They also sought to portray Bill Ackman as a villainous stock-manipulator who has secretly-financed his old buddy, Ted Braun, to create a ridiculous black-propaganda film to win his bet. The leaflets falsely-described participants in Ted Braun's film 
as: 'actors.' 

Tellingly, neither Ted Braun nor Bill Ackman has been sued for libel by 'Herbalife' or anyone connected with the company. Neither have I for that matter, and my comprehensive public denunciation of the big 'MLM' lie predates Bill Ackman's own limited intervention by around 17 years.

Prior to Bill Ackman's public challenge (which led to an ongoing investigation by the US Federal Trade Commission and other agencies of law enforcement), the 'Herbalife' Ministry of Truth steadfastly pretended to have 3 millions 'Independent Distributors/Business Owners' operating in more than 75 countries around the world. Subsequently, it has been disclosed that, each year, about 90% of these non-salaried persons fail to renew their annual contracts and are being constantly replaced by fresh recruits. In other words, about 2.7 millions unpaid persons are being quietly churned through 'Herbalife' each year (i.e. about 27 millions per decade). This shocking disclosure led the bosses of 'Herbalife' suddenly to rewrite their Orwellian narrative: persons who were previously cast in the role of (non-salaried) 'Distributors' (sales agents /sellers) are now conveniently-labelled (in all contracts) as: 'Members' (customers/buyers). 

It has also been disclosed that only an insignificant percentage of 'Herbalife' recruits (no matter how they have been labelled) have ever managed to remain under contract for more than 5 years, and that since the instigation of the so-called 'Herbalife Income Opportunity,' effectively everyone who has signed up for it has, in fact, failed to generate an overall net-profit from it and abandoned it. Furthermore, none of this key-information has ever been made freely-available to the public, or to regulators (in a comprehensible form), whilst no mainstream financial journalist has ever taken the trouble to apply common-sense and ask:
  • What is the overall total number of non-salaried persons who have signed contracts with 'Herbalife' since the company's instigation in 1980?
  • What has been the hidden, overall insolvency/churn rate of the so-called 'Herbalife MLM Income Opportunity?'
  • What is the source from which 'Herbalife's' declared multi-billion dollar annual 'sales' revenues has actually been largely-deriving?
  • What possible lawful reason(s) can be supplied to explain why the key-information contained in the answers to above questions should have been hidden for more than three decades?
'Herbalife's' bosses, and attorneys, would lately have the world believe that the overwhelming majority of all the tens of millions of people who have acted as temporary de facto slaves during the last 30-odd years, and who have given more money to 'Herbalife' than they received in return, were really just 'customers' who had absolutely no intention of trying to make any money... they merely 'wished to buy Herbalife products at a discount.' 

Yet the destitute victims in Ted Braun's film (along with more than 1000 others who have to date filed complaints in the USA), all confirm that their underlying motivation in signing up for 'Herbalife' was to earn money and that, in the false-expectation of future reward, they were persuaded by 'Herbalife's' exemplary 'Leaders' to keep purchasing, and trying to 'duplicate, a step-by-step positive plan to achieve financial freedom.' This 'plan' constantly told them 'to cut all negative persons, and influences, out of their lives,' to ignore their losses and to keep buying a fixed-quota of products each month and to spend most of their waking hours attempting to recruit more 'Distributors' who would then systematically 'duplicate' the same self-perpetuating 'positive plan' of self-consumption and recruitment, etc., ad infinitum.

Thus, despite the efforts of 'MLM' bosses to maintain their crumbling monopolies of information, an increasing number of independent observers are finally beginning to ask:

What has really been lurking behind all these 'American Dream' peddling, happy-clappy so called 'MLM' companies like 'Herbalife?' 

More than 10 years ago, I published an essay entitled, 'A common-sense approach to cultism,' in which I made the observation that : 'Totalitarianism itself is enduring, but its camouflage is ephemeral.' However, this analysis was far from being original.

David Brear (copyright 2016)


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Ayn Rand on Fascism

Smith explores Rand’s contention that America was sliding down a slippery slope to fascism.
In a letter written on March 19, 1944, Ayn Rand remarked: “Fascism, Nazism, Communism and Socialism are only superficial variations of the same monstrous theme—collectivism.” Rand would later expand on this insight in various articles, most notably in two of her lectures at the Ford Hall Forum in Boston: “The Fascist New Frontier” (Dec. 16, 1962, published as a booklet by the Nathaniel Branden Institute in 1963); and “The New Fascism: Rule by Consensus” (April 18, 1965, published as Chapter 20 in Capitalism: The Unknown Ideal [CUI] by New American Library in 1967).
Rand knew better than to accept the traditional left-right dichotomy between socialism (or communism) and fascism, according to which socialism is the extreme version of left-ideology and fascism is the extreme version of right-ideology (i.e., capitalism). Indeed, in The Ayn Rand Letter (Nov. 8, 1971) she characterized fascism as “socialism for big business.” Both are variants of statism, in contrast to a free country based on individual rights and laissez-faire capitalism. As Rand put it in “Conservativism: An Obituary” (CUI,Chapter 19):
The world conflict of today is the conflict of the individual against the state, the same conflict that has been fought throughout mankind’s history. The names change, but the essence—and the results—remain the same, whether it is the individual against feudalism, or against absolute monarchy, or against communism or fascism or Nazism or socialism or the welfare state.
The placement of socialism and fascism at opposite ends of a political spectrum serves a nefarious purpose, according to Rand. It serves to buttress the case that we must avoid “extremism” and choose the sensible middle course of a “mixed economy.” Quoting from “‘Extremism,’ Or The Art of Smearing” (CUI, Chapter 17):
If it were true that dictatorship is inevitable and that fascism and communism are the two “extremes” at the opposite ends of our course, then what is the safest place to choose? Why, the middle of the road. The safely undefined, indeterminate, mixed-economy, “moderate” middle—with a “moderate” amount of government favors and special privileges to the rich and a “moderate” amount of government handouts to the poor—with a “moderate” respect for rights and a “moderate” degree of brute force—with a “moderate” amount of freedom and a “moderate” amount of slavery—with a “moderate” degree of justice and a “moderate” degree of injustice—with a “moderate” amount of security and a “moderate” amount of terror—and with a moderate degree of tolerance for all, except those “extremists” who uphold principles, consistency, objectivity, morality and who refuse to compromise.
In both of her major articles on fascism (cited above) Rand distinguished between fascism and socialism by noting a rather technical (and ultimately inconsequential) difference in their approaches to private property. Here is the relevant passage from “The New Fascism: Rule by Consensus”:
Observe that both “socialism” and “fascism” involve the issue of property rights. The right to property is the right of use and disposal. Observe the difference in those two theories: socialism negates private property rights altogether, and advocates “the vesting of ownership and control” in the community as a whole, i.e., in the state; fascism leaves ownership in the hands of private individuals, but transfers control of the property to the government.
Ownership without control is a contradiction in terms: it means “property,” without the right to use it or to dispose of it. It means that the citizens retain the responsibility of holding property, without any of its advantages, while the government acquires all the advantages without any of the responsibility.
In this respect, socialism is the more honest of the two theories. I say “more honest,” not “better”—because, in practice, there is no difference between them: both come from the same collectivist-statist principle, both negate individual rights and subordinate the individual to the collective, both deliver the livelihood and the lives of the citizens into the power of an omnipotent government —and the differences between them are only a matter of time, degree, and superficial detail, such as the choice of slogans by which the rulers delude their enslaved subjects.
Contrary to many conservative commentators during the 1960s, Rand maintained that America was drifting toward fascism, not socialism, and that this descent was virtually inevitable in a mixed economy. “A mixed economy is an explosive, untenable mixture of two opposite elements,” freedom and statism, “which cannot remain stable, but must ultimately go one way or the other” (“‘Extremism,’ or The Art of Smearing”). Economic controls generate their own problems, and with these problems come demands for additional controls—so either those controls must be abolished or a mixed economy will eventually degenerate into a form of economic dictatorship. Rand conceded that most American advocates of the welfare state “are not socialists, that they never advocated or intended the socialization of private property.” These welfare-statists “want to ‘preserve’ private property” while calling for greater government control over such property. “But that is the fundamental characteristic of fascism.”
Rand gave us some of the finest analyses of a mixed economy—its premises, implications, and long-range consequences—ever penned by a free-market advocate. In “The New Fascism,” for example, she compared a mixed economy to a system that operates by the law of the jungle, a system in which “no one’s interests are safe, everyone’s interests are on a public auction block, and anything goes for anyone who can get away with it.” A mixed economy divides a country “into an ever-growing number of enemy camps, into economic groups fighting one another for self preservation in an indeterminate mixture of defense and offense.” Although Rand did not invoke Thomas Hobbes in this context, it is safe to say that the economic “chaos” of a mixed economy resembles the Hobbesian war of all against all in a state of nature, a system in which interest groups feel the need to screw others before they get screwed themselves.
A mixed economy is ruled by pressure groups. It is an amoral, institutionalized civil war of special interests and lobbies, all fighting to seize a momentary control of the legislative machinery, to extort some special privilege at one another’s expense by an act of government—i.e., by force.
Of course, Rand never claimed that America had degenerated into full-blown fascism (she held that freedom of speech was a bright line in this respect), but she did believe that the fundamental premise of the “altruist-collectivist” morality—the foundation of all collectivist regimes, including fascism—was accepted and preached by modern liberals and conservatives alike. (Those who mistakenly dub Rand a “conservative” should read “Conservatism: An Obituary” [CUI, Chapter 19], a scathing critique in which she accused conservative leaders of “moral treason.” In some respects Rand detested modern conservatives more than she did modern liberals. She was especially contemptuous of those conservatives who attempted to justify capitalism by appealing to religion or to tradition.) Rand illustrated her point in “The Fascist New Frontier,” a polemical tour de force aimed at President Kennedy and his administration.
Rand began this 1962 lecture by quoting passages from the 1920 political platform of the German Nazi Party, including demands for “an end to the power of the financial interests,” “profit sharing in big business,” “a broad extension of care for the aged,” the “improvement of public health” by government, “an all-around enlargement of our entire system of public education,” and so forth. All such welfare-state measures, this platform concluded, “can only proceed from within on the foundation of “The Common Good Before the Individual Good.”
Rand had no problem quoting similar proposals and sentiments from President Kennedy and members of his administration, such as Kennedy’s celebrated remark, “And so, my fellow Americans: ask not what America will do for you—ask what you can do for your country.” The particulars of Rand’s speech will come as no surprise to those familiar with her ideas, but I wish to call attention to her final remarks about the meaning of “the public interest.” As used by Kennedy and other politicians, both Democratic and Republican, this fuzzy phrase has little if any meaning, except to indicate that individuals have a duty to sacrifice their interests for the sake of a greater, undefined good, as determined by those who wield the brute force of political power. Rand then stated what she regarded as the only coherent meaning of “the public interest.”
[T]here is no such thing as ‘the public interest’ except as the sum of the interests of individual men. And the basic, common interest of all men—all rational men—is freedom. Freedom is the first requirement of “the public interest”—not what men do when they are free, but that they are free. All their achievements rest on that foundation—and cannot exist without them.
The principles of a free, non-coercive social system are the only form of “the public interest.”
I shall conclude this essay on a personal note. Before I began preparing for this essay, I had not read some of the articles quoted above for many, many years. In fact, I had not read some of the material since my college days 45 years ago. I therefore approached my new readings with a certain amount of trepidation. I liked the articles when I first read them, but would they stand the test of time? Would Rand’s insights and arguments appear commonplace, even hackneyed, with the passage of so much time? Well, I was pleasantly surprised. Rand was exactly on point on many issues. Indeed, if we substitute “President Obama,” for “President Kennedy” or “President Johnson” many of her points would be even more pertinent today than they were during the 1960s. Unfortunately, the ideological sewer of American politics has become even more foul today than it was in Rand’s day, but Rand did what she could to reverse the trend, and one person can only do so much. And no one can say that she didn’t warn us.


'Totalitarianism' is a word which was first coined in the 1920s by the Italian fascists and was not originally pejorative. It acquired its current meaning when it was used in international media articles, again in the 1920s. In the 1950s, Robert Lifton coined the word 'totalist' to replace 'totalitarian.' We can call it 'absolutism,' or 'rule by divine right,' but it's the same phenomenon.

The central point that Ayn Rand was making, and with which I completely agree, is that all forms of self-appointed government which are based on non-rational, dualistic ritual belief, are essentially the same, no matter what reality-inverting title they are given by their instigators. 'Soviet Communism' was totalism dressed up as 'extreme socialism,' in the same way that 'MLM' is totalism dressed up as 'compassionate capitalism.'

It's perhaps the supreme irony of the 20th century that successive US governments committed trillions of tax payers' dollars, and shed the blood of many thousands of US citizens, defending the nation/world against totalism dressed up as 'Nazism', 'Imperialism', 'Communism', etc., but completely failed to identify the same phenomenon steadily gnawing its way into the heart of the republic, simply because it had been dressed up as all 'American Capitalism' and was carrying the Bible.

In 1945, whilst most, contemporary mainstream commentators were unable to look beyond the ends of their noses, with a perfect sense of irony, Eric Arthur Blair a.k.a. George Orwell (1903-1950) presented fact as fiction in an insightful 'fairy story' entitled, 'Animal Farm.' He revealed that totalitarianism is merely the oppressors' fiction mistaken for fact by the oppressed.

In the same universal allegory, Orwell described how, at a time of vulnerability, almost any people's dream of a future, secure, Utopian existence can be hung over the entrance to a totalitarian deception. Indeed, the words that are always banished by totalitarian deceivers are, 'totalitarian' and 'deception.'

Sadly, when it comes to examining the same enduring phenomenon, albeit with an ephemeral 'Capitalist' label, most contemporary, mainstream commentators have again been unable to look further than the ends of their noses. However, if they followed Orwell's example, and did some serious thinking, this is the reality-inverting nightmare they would find.

More than half a century of quantifiable evidence, proves beyond all reasonable doubt that what has become popularly known as 'Multi-Level Marketing' is nothing more than an absurd, cultic, economic pseudo-science, and that the impressive-sounding made-up term 'MLM,' is, therefore, part of an extensive, thought-stopping, non-traditional jargon which has been developed, and constantly-repeated, by the instigators, and associates, of various, copy-cat, major, and minor, ongoing organised crime groups (hiding behind labyrinths of legally-registered corporate structures) to shut-down the critical, and evaluative, faculties of victims, and of casual observers, in order to perpetrate, and dissimulate, a series of blame-the-victim closed-market swindles or pyramid scams (dressed up as 'legitimate direct selling income opportunites'), and related advance-fee frauds (dressed up as 'legitimate training and motivation, self-betterment / mindset programs,' etc.).

David Brear (copyright 2016)


  1. I'm struck by Ayan Rand's description which could be of MLM.

    Ownership without control is a contradiction in terms: it means “property,” without the right to use it or to dispose of it. It means that the citizens retain the responsibility of holding property, without any of its advantages, while the government acquires all the advantages without any of the responsibility.

    1. Anonymous. Correct, this description of a totalitarian system was mainly why I posted an analysis of Ayn Rand's thinking.

      'MLM' cults are totalitarian states in microcosm in which victims have been tricked into believing that they are 'Business Owners.' In reality, 'MLM' victims have been made responsible for their controlled activities on behalf of the group, but have received no advantage. In other words the bosses of 'MLM' rackets have acquired all the advantages without any responsibility.

    2. Thanks I understand Herbalife much more clearly after reading this. You could post an article explaining just that quote from Rand, it really opened my eyes.

    3. I'm pleased to have helped you Anonymous, but it's not that difficult to work out. 'MLM' cults operate just like fascist states. The dictators control everything, but they can never be held to account.

      'MLM' cults have survived, to date, by tricking their victims into believing that they were entirely responsible for their their own financial losses, when these financial losses were actually inevitable by design.

      BTW I should apologise for leaving a typo error in the title of the article which you then repeated. 'Ayan' Rand should have read Ayn Rand.

      I've now corrected it.

    4. Thanks again, these are some of the best insights I've read. Like you've said, Herbalife is Orwellian, 'MLM Freedom is Slavery.' I prefer Orwell to Rand.

    5. Anonymous - Orwell's universal allegory of a totalitarian state was designed to be understood by anyone and to attract a wide readership. I think that Orwell and Rand arrived at essentially the same conclusions.

      It's not difficult to imagine what Orwell's reaction would have been to the 'MLM' phenomenon.

  2. David. Like the anonymous above, I find this article and your comments to be very insightful. It seems to me that MLM companies are completely opposed to social welfare, but they claim to have reinvented capitalism and created what looks just like social welfare. The whole thing is a contradiction in terms.

    1. Anonymous - Thanks. I think you have understood what's going on here, and what I was trying to convey in this article, but few people have taken the trouble to look beyond the ends of their noses.

      So-called 'MLM' has precious little to do with capitalism in the traditional sense of the word, but the reality-inverting 'MLM' fairy story has been written in a 'capitalist' code.

      It is very ironic that 'MLM' cults portray the world of traditional work, leading to retirement on a pension, to be a form of Hell on Earth. Yet the alternative Utopian system which 'MLM' bosses peddle, takes money from those who need to believe in it, but offers them absolutely nothing quantifiable in return.

  3. Thanks for another great piece. Much food for thought and a welcome invitation to step back and look at the bigger picture. Much appreciated.

    1. ambler21 - Thanks.

      Interestingly, Ayn Rand is an icon of certain right-wing elements in the USA. The novels which originally made her famous are, in my opinion, not worth reading, along with much of her later 'philosophy,' but her thoughts on fascism/totalitarianism/collectivism, are exceptional.