More than half a century of quantifiable evidence, proves beyond all reasonable doubt that:
- what has become popularly-known as 'Multi-Level Marketing' (aka 'Network Marketing') is nothing more than an absurd, cultic, economic pseudo-science.
- 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 rigged-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, programs, recruitment leads, lead generation systems,' etc.).
- Apart from an insignificant minority of exemplary shills who pretend that anyone can achieve success, the hidden overall loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.
David Brear (copyright 2017)
Today, 'MLM income opportunity' is a lie which has been repeated so often, that many people around the world (sadly including, regulators, legislators, journalists, academics, etc.) have come to believe that it must be true.
This week, the question of exactly where and when the ritualisation of the pernicious 'MLM' fairy story began, has again been raised.
About 20 years ago, I was told by a retired US Food and Drug Administration Attorney that (as far as he was aware) the phrase, 'Multi Level Marketing,' had first appeared in print in the early 1950s (or possibly even in late 1940s) in a privately-owned American magazine, 'Nutrilite News.'
|Prof. William W. Goodrich|
Interestingly, however, the peddlers of the 'MLM' fairy story have preferred not to reveal exactly where or when the thought-stopping jargon term, 'MLM,' was coined or who actually coined it, because 'Multi-Level' was adopted to hide the fact that these schemes are 'Infinite Level' and are, therefore, intrinsically fraudulent.
Carl F. Rehnborg (1887-1973)
|Carl F. Rehnborg and his first family, circa 1920|
Throughout the 1940s and 1950s, 'Nutrilite' was already a highly-controversial trademark owned by Carl F. Rehnborg (a.k.a. 'Dr.' Rehnborg), a previously-penniless, American former salesman (of Swedish/German descent) who'd acquired a considerable fortune by reinventing himself as a historically-important, visionary-scientist, autodidactic scholar and philanthropic businessman. Attorneys at the US Food and Drug Administration Bureau of Enforcement (who applied common-sense, as well as the law, and successfully-challenged the authenticity of some of Rehnborg's many absurd lies in the federal courts during two decades), privately knew him to be nothing more than one of a trio of sinister quacks protected by an echelon of aggressive attorneys who had combined, and updated, the medicine show and Ponzi-scheme to reflect the spirit of the age.
Former penniless science-fiction author, turned multi-millionaire, cultic racketeer, L. Ron Hubbard, posing as a historically-important,visionary scientist and philanthropist who had discovered the secret of how ordinary humans can become healthy, wealthy happy and free super humans. Hubbard was prepared to share this secret with anyone (for a price).
Tellingly, Rehnborg's own comic-book version of his life and achievements as set-down in various non-independent propaganda films and publications (including a book signed by his son, and heir, Sam Rehnborg), reads uncannily like the autobiography dreamt-up by 'Scientology' instigator, L. Ron Hubbard (a man who was once famously described as 'a combination of Baron Münchausen and Adolf Hitler'). Unfortunately, just as with the followers and casual observers of Hubbard, the only information made available to the followers and casual observers of Rehnborg, has been carefully controlled and all other sources systematically excluded, and condemned, as fake.
- tried, but failed, to prevent Messrs, Mytinger and Casselberry from making exaggerated 'cure-all' claims about 'Nutrilite.'
Carl F. Rehnborg circa 1939
Like L.Ron Hubbard, no independent quantifiable evidence has been produced to prove that Rehnborg was qualified (let alone expert) in anything, other than lying to vulnerable people to get their money. Again, like Hubbard, Rehnborg's lies, and exaggerations, usually contained elements of the truth. Apparently, he did once work as a salesman for 'Carnation Milk' and the 'Colgate & Co,' and he was in China during, and after, WWI, but all the other exciting episodes in his various occidental and oriental odysseys are largely anecdotal. However, the truth about Rehnborg’s convoluted ‘Rags to Riches’ American fairy story, is an entirely different matter.
Anyone with an ounce of common sense could immediately tell that Rehnborg’s ‘invention’ was just another essentially-inert potion (in the absurd tradition of the medicine show); a random mixture of cheaply-procured common substances with an expensive price tag. It had probably taken Rehnborg 6 hours to concoct, not 6 years.
By 1939, Rehnborg had spotted the existing term, 'Nutrilites' (probably in an old scientific magazine). So he legally-changed the name of his pay-to-play game of make-believe to the technical-sounding ‘Nutrilite Products Company Inc.’ and moved his quackery onto an almost unprecedented scale. Soon, Rehnborg was legally employing dozens of white-coated workers in purpose-built industrial buildings in Buena Park, California. He also acquired an alfalfa farm near to the city of Hemet in California's San Jacinto valley, but it is unclear exactly where he suddenly found all the necessary capital to pay for these impressive sites and their modern equipment. To his followers and casual observers, Rehnborg’s activity looked like any other lawful enterprise. His staff were ordinary honest folk, to whom the truth was also unthinkable.
At this time, Rehnborg rechristened his potion ‘Nutrilite Double X (‘XX’) Supplement.’ He now proposed to offer it as two ‘complimentary products’ in one pack - comprising little green bottles of bright red ‘Multivitamin Capsules’ and boxes of pale-coloured ‘Multi-Mineral Tablets.’ The product was deliberately designed to look modern and scientific (like a proprietary medicine), but, tellingly, the price was fixed at just less than $20 a box (the equivalent of several hundred dollars today).
|Perhaps it's just a coincidence, but in 1940 Charlie Chaplin's celebrated satire of 'Nazi' Germany, 'The Great Dictator', had transformed the Swastika into the 'Double Cross.'|
Rehnborg claimed that the ‘XX’ brand-name was derived from the Roman numeral representing twenty. It should have been read as ‘double cross;’ for when the former toothpaste salesman’s pricey wampum was routinely analysed by independent chemists working for the FDA, it was discovered that (although it contained essentially what it said on the labels and was quite harmless) ‘XX Supplement’ really did mostly comprise a random mixture of cheaply-procured, common substances in which vitamins and minerals naturally occur (dried vegetable extracts: alfalfa; parsley; watercress; yeast; etc.). FDA experts later estimated that ‘XX Supplement’ cost no more than a few cents a pack to produce. Thus, FDA lawyers must have known that Rehnborg was, in fact, using authentic pharmaceutical equipment to mass-produce a precisely-measured, harmless placebo, but labelled as a ‘Health Tonic’ (a meaningless term), and peddling it at an exorbitant mark-up (certainly, more than 1000%). This crack-pot pseudo-scientific swindle, which was tantamount to a self-styled 'alchemist' stamping a valueless amalgam of base-metals, 'Pure Gold,' and selling it for the price of pure gold, could have been quickly nipped in the bud, simply by charging Rehnborg with criminal fraud. Apparently, prosecutors never considered the possibility that they might be dealing with someone with severe psychological problems whose own inflexible delusions were contagious. Instead, at first, FDA lawyers felt obliged to take no action; reasoning that, by truthfully listing the banal ingredients, but avoiding making any specific therapeutic claims, on his packaging, Rehnborg had found a loophole in federal laws concerning criminal misbranding of medicines. As result, an up-dated version of an age-old fiction was permitted to be mass-marketed as fact to an unsuspecting public. Unfortunately, the lack of any rigorous, official challenge only brought its author more credibility. Not surprisingly, a host of copy-cat 'Unique Vitamin and Mineral Health-Tonic’ scams quickly sprang up.
|William W. Goodrich|
|Carl.F. Rehnborg circa 1947|
In 1951, after a series of lawsuits, appeals and counter suits (in which Mytinger and Casselberry hired top lawyers who portrayed their clients as American capitalist heroes being crushed by Soviet-style bureaucracy), the FDA obtained (on behalf of the people) a permanent Supreme Court injunction against ‘Mytinger and Casselberry Inc.’ preventing ‘Distributors’ from referring to 50 publications making false claims about ‘Health Tonics and Food Supplements’ (including various ‘Revised Editions’ of ‘How to Get Well and Stay Well’). FDA agents soon found that the injunction was being flouted. As a result of mounting complaints, they infiltrated the organisation (as potential recruits) and recorded deluded proselytisers chanting the same cure-all mantra about ‘XX Supplement.’ Faced with more litigation and fearing that their monopoly of information might be lost, in 1954, Rehnborg, Mytinger and Casselberry hired a leading advertising agency which handled the clean-cut, but fading, Hollywood star, Alan Ladd. Along with his wife and children, Alan Ladd then briefly-featured in a kitsch 'Nutrilite' advertising campaign - published in various mainstream magazines right up until 1959. Alan Ladd (who secretly suffered from chronic depression and who had problems with alcohol and narcotics) was, however, soon to be air-brushed out of the 'Nutrilite' fairy story.
Almost certainly in an attempt to dodge the permanent US Supreme Court injunction, in the Mid 1950s (using his third wife's name), Carl Rehnborg introduced yet another grossly-overpriced, effectively-unsaleable investment commodity into the 'Nutrilite/MLM' fairy story - 'Juvalite / Edith Rehnborg Cosmetics (ERC).' This would later be rebranded 'Artistry.'
|Richard DeVos and Jay Van Andel (2nd and 3rd from the right, front row), Carl F. Rehnborg (immediately behind Van Andel, second row), circa 1950.|
The classic movie, 'Elmer Gantry' (released in 1960), was written and directed by Richard Brooks and is loosely-based on a novel of 1927 by the Nobel prize-winning author, Sinclair Lewis. In the Movie, 'Gantry' (played by Burt Lancaster) is a grinning charlatan in a loud suit - a hard-drinking whore-chasing travelling-salesman, who, for sexual and financial motives, attaches himself to the beautiful 'Sister Sharon' (played by Jean Simmons), the focus of a profitable 'Tent Revivalist' group working the Bible-Belt during Prohibition (1920-1933). 'Elmer Gantry' keeps his grin, but he dons a sombre suit and black hat, and is reborn as 'Brother Gantry' 'Charismatic Preacher' and 'Moral Crusader'. He soon discovers that he has the power to create mass-hysteria, and reap tens of thousands of dollars, by manipulating individuals' existing beliefs and instinctual desires. At a key-moment in the movie, a Protestant Minister (bedazzled by 'Brother Gantry's' offer to fill his church coffers) abandons the traditional Christian message and proclaims: 'Business is business, that's the American Way'.
Initially (and with an irony that is close to exquisite), in order to dodge being drawn into the ongoing FDA investigation of 'Nutrilite,' De Vos and Van Andel got rid of the pills and potions and now laundered all the unlawful investment payments into their copy-cat, dissimulated, rigged-market swindle, behind the claim that they were selling a laundry detergent (i.e. banal, but effectively-unsaleable, non-'medicinal' pseudo-scientific wampum of their own fabrication). Again, the updated snake oil stain remover was deliberately designed to look modern and scientific, whilst De Vos and Van Andel grinned from ear as they too steadfastly pretended that these strangely-familiar, cheaply-procured mixtures of common substances, were all-American, exclusive, good-value and unique.
Not surprisingly, this tragicomic judgement was seen as an open-invitation to thieve, and, consequently, a whole host of 'Amway' copy-cat 'MLM' rackets soon began to appear.