Tuesday 31 March 2020

"Marauders of Hope" - Indian author, Aruna Ravikumar, describes how the 'MLM' mind virus has infected her country.

A new and strange phenomenon emerges in one of largest countries in the world. It entered almost silently but soon millions of people are affected. From first impressions, it appears harmless and unconventional, even hopeful and positive, yet virtually all that touch it are harmed, resulting in family and social disruption, depression, even suicides. A few people, especially those who helped to bring it into the country, claim that it offers happiness, health and wealth. They say it is the wave of the future, a break from the old ways. These positive and hope-filled testimonials overshadow the tragic experiences of many others. 
It spreads virally from one person to another. Those who contaminate others often do not realize what they have done. Others seem to know, but deny the consequences of their actions, claiming private, individual rights without personal responsibility. The harm, the denial and the lack of understanding cause widespread confusion, conflict and mistrust. 
A small number of journalists, law enforcement officers and other experts examine the phenomenon and identify it as virulent, inherently destructive and illegal. They warn that it attacks the country’s foundation. If it is allowed to spread, they warn, it will distort values and corrupt government, courts, and other institutions. They name the country it came from and call it a form of invasion.
Astonishingly, they are met with a wall of dismissal or are ignored altogether. Trusted national and state politicians inexplicably reject carefully prepared evidence and data from experts and insist there is no proof of a direct connection to harm. They argue that those who say they were harmed likely brought misfortune on themselves. They point to prominent figures who endorse it. They also note the millions of people, including some that were harmed, that do not complain. Some go further to attack the experts, as anti-social, uninformed, and possibly instigated by wicked motives.
This is not the story of the corona virus epidemic or a toxic food or cancer-causing herbicide brought into a country where corrupt leaders ignore science and make money off of illness. It is the story of how multi-level marketing (MLM) schemes, e.g., Amway, Herbalife, etc., got into India and the sad and tragic consequences to that country. It is from the remarkable new book, Marauders of Hope, by Aruna Ravikumar, a courageous Indian journalist, based in the city of Hyderabad in south central India.
Marauders of Hope is described on the cover as “A dissection of multi-level marketing companies’ web of deceit, powerful international lobbies, political patronage and the gullible consumer.” It is the first full-length book from the field of journalism anywhere in the world that addresses the multi-level marketing phenomenon. The book’s Foreword is by Sanjay Kallapur, Deputy Dean, Indian School of Business, Hyderabad. Written in February 2019, Professor Kallapur prophetically likened stopping multi-level marketing to “preventing a disease. First, individuals should take precautions just as they should wash their hands regularly and avoid places that have many infected individuals.
It should be noted that no major book publisher in India was willing to support this book. Based on my experience seeking major publishers for my own books, False Profits in 1998 and Ponzinomics to be published this summer, I suspect rejection is based on fear of harassing lawsuits from MLMs or unfounded assessments that the subject would not produce enough sales. For some publishers rejection is shockingly due to lack of awareness of the MLM phenomenon or interest in this Main Street scourge.
Marauders of Hope was published by The Write Place, a publishing initiative of Crossword Bookstores Ltd. a chain of bookstores in India based in Mumbai.The author characterizes the book as semi-self-published. It is available in hard copy or e-book. The author dedicates it to “victims of MLM fraud all over the world.”
According to MLM promoters, in 2018 there were about 5.5 million people in India who paid more than a billion dollars (a larger dollar figure is claimed for “retail” sales, which are unverified) or around $200 per person. The median per capita income in India is $616 a year. In India, as everywhere else, 99% of all MLM participants fail to gain a net profit each year. 

Invasion and Duplication

Marauders of Hope is a comprehensive overview of how MLM came into India in the late 90’s with Amway as first invader, followed by the usual list of American copycats, Mary Kay, Herbalife, Nuskin and others. Now there are scores of India-based MLMs, all modeled exactly on the American prototypes. Many have organized into a syndicate, a chapter of the Direct Selling Association that pressures the Indian government at state and federal levels, defends MLM against law enforcement and promotes MLM as “direct selling” and a life-saving “income opportunity.” As the number of schemes is increasing, like a virus, MLM is poised to expand exponentially in India.
The primary “customers” that buy MLM products in India, as everywhere else, turn out to be the “salespeople” themselves. As an example of the bogus nature of MLM “products” Marauders of Hope describes how residents in one poor village in rural India were swept up by MLM’s prosperity promises. To gain the bonanza, illiterate recruits were induced to purchase and supposedly sell a “car wash” product. As reported in the book, “… their village could not boast of a single car. Pathetic as it is, companies amassing huge profits from recruitment couldn’t care less. They are happy as long as the distributors keep purchasing ‘promotional kits’ (training material and videos) and the monthly quota of products.”
For me personally, as an American, to read Aruna Ravikumar’s account is to experience both déjà vu and a deep sense of shame. MLM was invented in the USA. Influence-buying with corrupted American officials obtained not only immunity from law enforcement but also the active promotion and protection of the US State Dept. and Dept. of Commerce, which in turn pressure other countries’ governments to allow American-style MLMs. 
Eerily, the story line of MLM’s entry and insinuation into the fabric of India, follows the playbook of how MLM emerged within the USA. It begins with liberalizing economic movements that promised greater freedom and more economic opportunity for all. Nationally-owned industries were sold to private investors. Market solutions were promised for social problems. Poverty would be reduced not by reforms or direct action but as a consequence of business growth. Amway sold itself as one of the vehicles of opportunity, claiming it would help to lift the masses out of poverty. It leveraged American government support for admission into India and then began its American-style propaganda and recruitment. Each recruit was called a “business owner” and pyramid recruiting was described as “entrepreneurship.” Critics were called anti-business or socialistic.
Predictably, reports of losses, disappointment, deceit, and betrayal exploded. This prompted efforts by some courageous attorneys, regulators and police officials to prosecute MLMs under India’s anti-pyramid law, called the Prize Chits and Money Circulation Schemes (Banning) Act, which was passed in 1978, about a decade after similar laws were enacted in the USA in many states. The US still does not have any national statute defining and outlawing pyramid schemes but they could be covered under longstanding criminal fraud laws. India’s national law enables police raids and seizures of property from such schemes and prison for the leaders. 
The story continues along the American experience in which political lobbyists from MLM succeed in somehow exempting MLMs from the very laws intended to restrict them or they manage to shield them with ambiguous or limited court rulings. The media largely comply, spreading the notion that MLM is not a money-circulation scheme because products are “sold.” 
Unlike her journalist counterparts in the USA, author Aruna Ravikumar is unequivocal as to how it is that MLM continues in India, despite the documented deception and enormous losses. 
“Why do we see the same scams re-enacted time and again? How are old players back to their tricks under new names? To the many questions raised there is only one answer: political patronage. Regulatory institutions can do little when those in power decide to help fraudulent companies in an understanding that is mutually beneficial.” 
She also breaks ranks with journalists around the world by treating “MLM” as an overall phenomenon, making no significant distinction among them. They are all essentially the same in her analysis, no “good” MLMs.
Promoted as a legal and conventional business but, uniquely and miraculously, also able to deliver “unlimited income,” which no other business or industry could, MLM spread like a mania across India. It enrolls illiterate villagers and educated urban dwellers as well. Products purchases provide camouflage for the blatant money transfer scheme and the impossible “endless chain” (pyramid scheme) that dooms the vast majority. Half or more of the price paid by the enrollees for MLM’s inflated products is transferred up the chain, concentrating in the hands of top schemers ensconced in America and other countries. The profits to the foreign holding companies (Herbalife, for example, is chartered in the tax haven of the Cayman Islands) and the payments to top pyramid recruiters largely escape Indian taxation.
Also, as in America, India has its champions who have sought to expose the hidden and toxic truth about MLM and to halt its ruinous spread. The book pays tribute to them, including Superintendent of Police in Andhra Pradesh, Raghuram Reddy who arrested William S. Pinckney, the CEO of Amway India, for criminally operating a pyramid scheme. The action provoked an immediate political response against law enforcement. Reddy reported,
“There was enormous pressure with telephone calls being made on behalf of the US Embassy. The media carried front page stories and the entire police department of the state came into focus. I acted on the case with fool proof evidence and was doing what I was supposed to do under the circumstances.”
Among other heroes in India cited in the book is journalist Shyam Sundar, who organized Corporate Frauds Watch, which undertook a study of MLM and offered legal help to victims while also conducting awareness programs. 
“We noticed that these firms not only duped innocent people but also had the audacity to approach courts as if they were victims. In most cases they convinced legal authorities that they were on the right side of law and got a stay on police investigation,” Sundar stated.
Sundar, took special note of the court arguments made by the notorious MLM scheme called Gold Quest when it was prosecuted. (Note: I am personally very familiar with this Gold Quest MLM, aka Q-Net, which has ravaged many other countries. I was invited to deliver a seminar in the nearby country of Sri Lanka in 2005, prompted by activity of that scheme that posed a direct risk to Sri Lanka’s currency which was being siphoned out of the country with the scheme’s inflated gold coins. Attendees also included central bank representative from India.) In the India prosecution, Gold Quest’s high profile attorney was the wife of a former central minister of the Indian government. She used the rationalization so commonly heard in MLM defenses in America of “Goldquest is just like Amway (which is true), so, unless you outlaw Amway, why are you singling out my client?” 
Aruna Ravikumar called this a “brazen defense” that openly admits that all MLMs are essentially identical. It is a public taunt to the government, daring it to act against the entire MLM “industry”, knowing that it will not since it has been bought. Instead, as she explains, Indian authorities (exactly as they do in the United States) maintain “ambiguity” and “space for interpretation” which, in reality, she writes, serve as a “cloak for fraud, and a leeway for regulators and enforcement authorities to defer action.” She concludes that it is “undeniably apparent that as long as the ‘passing the buck’ game was on (in India as it is also in the United States) it was ‘party time’ for the marauders.”

The Greed Claim

Beyond consumer loss, exploitation and deception, economic piracy by the USA, cult persuasion and the further corruption of India’s political and judicial system, there is one more theme woven throughout Marauders of Hope. It is the element of human greed. The manias caused by MLM promises of wealth appear as massive outbreaks of unbridled greed.
Greed haunts all inquiries into the MLM phenomenon. It is used by corrupted legislators and regulators to justify allowing the frauds to spread. It is a key part of the blame-the-victim narrative that shames victims into silence. To identify MLM victims or to associate them, even indirectly, as paradigms of greed is a powerful form of blame. In the Christian tradition, for example, greed is one of the seven deadly sins, along with pride, lust, envy, gluttony, wrath and sloth. To brand MLM victims with this sin is to banish, castigate and separate them from the public at large. In fact, there is no “typical” MLM victim, no identifiable profile. They are us.
Aruna Ravikumar vividly captures and rejects the blanket greed labeling:
“Victims are paying for their own greed. What is so heart rending about their stories?” I overheard a well-to-do socialite say, shrugging her shoulders in disdain when this topic came up in our conversation. Her careless dismissal may seem not quite off-the-mark but with clear evidence pointing to the web of deception, ruined relationships and outright fraud on the poorest of the poor, shifting the onus onto the victims seems grossly unfair.”
From my own two-decade long experience with the MLM phenomenon, I think the greed factor deserves stronger rejection, more clarification and less emphasis. This book makes clear that greed of victims is not primary, yet, reflecting the widespread greed narrative, it opens with a quote about greed from famed social psychologist, Eric Fromm, “Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction.” The first sentence of the Preface reads, “This book is about the unconcealed greed of companies and individuals who reap a rich harvest through fraudulent financial schemes that are a recipe for disaster.”
For my part, I have never found that the ordinary people lured into MLM – and I have talked or corresponded with thousands from many countries – are distinguishable by greed. It does not manifest in any other part of their lives. Far more common is the motive of merely seeking relief or escape from burdensome, sometimes desperate financial conditions. Often they are driven by higher aspirations for their families or even by a desire to make a more positive impact in the world. MLMs entered India by claiming they were bringing modern values and business models that produce profit and prosperity. To be lured by such claims, backed by trusted local authorities, in my view, does not constitute greed.

Cultic Movement

Additionally, sophisticated cult persuasion methods used by MLMs subvert critical thinking and core values. The goal is to separate victims from their own identities and to replace them with a delusional ideology, based on the “endless chain” and magical claims about creating wealth from unquestioned belief and positive thinking. It dresses up deception as “selling” and the commercialization of intimate relationships as “marketing.” When such distorted or contemptible messages are cloaked in these sophisticated disguises and then endorsed by trusted authorities, including religious leaders and admired celebrities, psychological defenses can be overwhelmed.
Individuals are not actually lured into MLM one by one. Their losses are not the personal price for a private indiscretion. MLM recruiting is a global phenomenon, a cultic movement. MLM is a cult of capitalism that has been expanding for more than 40 years. As a cult, it teaches a radical belief system that distorts and exaggerates more conventional beliefs and values that are generally accepted by most people, though likely unexamined. These are the core beliefs that underly our capitalistic system, including personal acquisitiveness, “unending growth”, private gain, supremacy of the “market”, upward mobility, protection of private ownership, etc. Most people measure their self-worth and their place in the world by these values.
MLM manipulates these beliefs and values to cover over its fraudulent pyramid structure and illicit money transfer and then also to cover up the pre-determined losses as a “business” outcome. It distorts and exaggerates the beliefs into a totalistic system with absolute dogmas, promising utopia to those who follow it without question, while claiming to be the purest, truest expression of market capitalism. Its leaders assume the authority of economic gurus. The behavior advocated by this extremist ideology can resemble that of sociopathic CEOs that pursue “return on investment” at any cost or religious extremists who seek to convert the world and permit no dissent. 

Big Lie

Far more relevant for identifying and condemning what particularly distinguishes MLM is Deception. The deceptive methods used in MLM would make Madison Avenue and Ministries of Truth blush with envy. From victims’ very first encounters with MLM when they are solicited, MLM is grossly misrepresented. It is therefore a fact that no one joins an MLM knowing what it really is. Not only are its rigged pyramid model and money-transfer plan hidden, but participation costs, inability to retail the products, and historical loss and quitting rates, are all undisclosed or misrepresented. Many of the “testimonials” about income are fabrications. Even the company names are often withheld.  Of course, the products themselves are grossly over-priced and misrepresented, often with false and dangerous medical claims. More recently, MLMs have become active in promoting ponzi-based crypto-currencies. 
Beyond the deceptions that are spread virally, there are the official false claims issued by MLM’s so called trade association, and often repeated in the news media. These include false “average incomes”, unverified claims of “retail” sales, fake “surveys”, and absurd claims that it is creating “jobs.” During the Corona Virus while people are sequestered in homes, MLM promoters are claiming it is the ideal “business” for “working from home.” During the last Great Recession, MLMs were touted as “safe havens” and a “fallback” for those who lost jobs.
Powerfully aiding the avalanche of deception are the cult methods of persuasion and domination, involving “motivation” rallies, utopian visions, rousing music, chanting, specialized terminology, and constantly repeated lies, based on the truism that a lie repeated often enough becomes accepted as true. Separating victims from objective reality is aided by alienating recruits from families or friends who question the schemes, resulting in what is aptly described as brain washing or thought control. 
The false depiction of MLM as “direct selling” and “extraordinary income opportunity” has been accurately characterized as the classic “Big Lie,” a propaganda technique described by Adolph Hitler as a lie so “colossal” that no one would believe that someone “could have the impudence to distort the truth so infamously.”
For this reason, perhaps beyond her clear-sighted illumination of MLM and her unflinching chronicle of India’s tragic experience, Aruna Ravikumar’s book deserves special acknowledgment. She confronted the Big Lie.
                                                                                    Robert L. FitzPatrick
(copyright 2020) 


'Multi-Level Marketing' Warning.

The following deconstructed analysis has been formulated to sharpen the critical and evaluative faculties of all unwary persons approaching so-called 'Multi-Level Marketing' from the dangerous (subjective) point of view that it must be a business/industry, rather than from the safe (purely-objective) point of view that they don't really know what it is.


More than half a century of quantifiable evidence proves beyond all reasonable doubt that:

  • the widely-misunderstood phenomenon that has become popularly-known as 'Multi-Level Marketing' (a.k.a. 'Network Marketing') is nothing more than an absurd, non-rational,  cultic, economic pseudo-science maliciously-designed to lure unwary persons into de facto servitude, dissociate them from external reality and not only steal their money, but also deceive them into unconsciously acting the role of bait to lure other unwary persons (particularly their friends and family members) into the same trap. 
  • the impressive-sounding made-up jargon term, 'MLM,' is therefore, the misleading title for an enticing structured-scenario of control which has been developed, and constantly acted out as  reality, 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 'Long Cons*'  - comprising self-perpetuating rigged-market swindles**, a.k.a. 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 shills (whose leading-role in the 'Long Con' has been to pretend that anyone can achieve financial freedom simply by following their unquestioning example and exactly-duplicating a step-by-step-plan of recruitment and self-consumption)the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100%.

*A 'Long Con' is a form of fraud maliciously designed to exploit victims' existing beliefs and instinctual desires and make them falsely-believe that they are exercising a completely free-choice. 'Long Cons' comprise an enticing structured-scenario of control acted out as reality over an extended period. Like theatrical plays, 'Long Cons' are written, directed and produced. They involve leading players and supporting players as well as props, sets, extras, costumes, script, etc. The hidden objective of 'Long Cons' is to convince unwary persons that fiction is fact and fact is fiction, progressively cutting them off from external reality. In this way, victims begin unconsciously to play along with the controlling-scenario and (in the false-expectation of future reward) large sums of money or valuables can be stolen from them. Classically, the victims of 'Long Cons' can become deluded to such an extent that they will abandon their education, jobs, careers, etc., empty their bank accounts, and/or beg, steal, borrow from friends, family members, etc.


** The enticing structured-scenario of control fundamental to all 'rigged-market swindles' is that people can earn income by first contributing their own money to participate in a profitable commercial opportunity, but which is secretly an economically-unviable fake due to the fact that the (alleged) opportunity has been rigged so that it generates no significant, or sustainable, revenue other than that deriving from its own ill-informed participants. For more than 50 years, 'Multi-Level Marketing' racketeers have been allowed to dissimulate rigged-market swindles by offering endless-chains of victims various banal, but over-priced, products, and/or services, in exchange for unlawful losing-investment payments, on the pretext that 'MLM' products/services can then be regularly re-sold for a profit in significant quantities via expanding networks of distributors. However, since 'MLM' products/services cannot be regularly re-sold to the general public for a profit in significant quantities (based on value and demand), 'MLM' participants have, in fact, been peddled infinite shares of their own finite money (in the false expectation of future reward). 

Thus, in 'MLM' rackets, the innocent looking products/sevices' function has been to hide what is really occurring - i.e The operation of an unlawful, intrinsically fraudulent, rigged-market where effectively no non-salaried (transient) participant can generate an overall net-profit, because, unknown to the non-salaried (transient) participants, the market is in a permanent state of collapse and requires its non-salaried (transient) participants to keep finding further (temporary) de facto slaves to sustain the enticing illusion of stability and viability.

Meanwhile an insignificant (permanent) minority direct the 'Long Con' - raking in vast profits by selling into the rigged-market and by controlling/withholding all key-information concerning the rigged-market's actual catastrophic, ever-shifting results from its never-ending chain of (temporary) de facto slaves.

Although cure-all pills potions and vitamin/dietary supplements, household and beauty, products have been most-prevalent, it is possible to use any product, and/or service, to dissimulate a rigged-market swindle. There are even some 'MLM' rackets that have been hidden behind well-known traditional brands (albeit offered at fixed high prices). Some 'MLM' rackets have included 'cash-back/discount shopping cards, travel products, insurance, energy/communications services' and 'crypto-currencies' in their controlling scenarios.

No matter what bedazzling product/service has been dangled as bait, in 'MLM' rackets, there has been no significant or sustainable source of revenue other than never-ending chains of contractees of the 'MLM' front companies. These front-companies always pretend that their products/services are high quality and reasonably-priced and that for anyone prepared to put in some effort, the products/services can be sold on for a profit via expanding networks of distributors based on value and demand. In reality, the underlying reason why it has mainly only been (transient) 'MLM' contractees who have bought the various products /services (and not the general public) is because they have been tricked into unconsciously playing along with the controlling scenario which constantly says that via regular self-consumption and the recruitment of others to do the same, etc. ad infinitum, anyone can receive a future (unlimited) reward.

I've been examining the 'MLM' phenomenon for around 20 years. During this time, I've yet to find one so-called 'MLM' company that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity'.

Part of the key-information that all 'MLM' bosses seek to hide concerns the overall number of persons who have signed contracts since the front companies were instigated and the retention rates of these contractors. 

When rigorously investigated, the overall hidden net-loss churn rates for so-called 'MLM income opportunites' has turned out to have been effectively 100%. Thus, anyone claiming (or implying) that it is possible for anyone to make a penny of net-profit, let alone a living, in an 'MLM,' cannot be telling the truth and will not provide quantifiable evidence to back up his/her anecdotal claims.

Although a significant number of 'MLM' front-companies (like 'Vemma', 'Fortune Hi-Tech Marketing', 'Wake Up Now') have been shut-down by commercial regulators, some of the biggest 'MLM' rackets (like 'Amway' ,'Herbalife', Forever Living Products' ) have continued to hide in plain sight whilst secretly churning tens of millions of losing participants over decades.

The quantifiable results of the self-perpetuating global 'Long Con' known as 'Multi Level Marketing,' have been fiendishly hidden by convincing victims that they are 'Independent Business Owners' and that any losses they incurred, must have been entirely their own fault for not working hard enough. 

Blog readers should observe how (in the above linked-videos) chronic victims of 'MLM' cults are incapable of describing what they were subjected to in accurate terms. Even though they are no longer physically playing along with the 'Long Con's' controlling-scenario, they unconsciously continue to think, and speak, using the jargon-laced 'MLM' script - illogically describing themselves as 'Distributors.' 

Chronic victims of blame-the-victim cultic rackets who have managed to escape and confront the ego-destroying reality that they’ve been systematically deceived and exploited, are invariably destitute and dissociated from all their previous social contacts. For years afterwards, recovering cult victims can suffer from psychological problems (which are also generally indicative of the victims of abuse):

depression; overwhelming feelings (guilt, grief, shame, fear, anger, embarrassment, etc.); dependency/ inability to make decisions; retarded psychological/ intellectual development; suicidal thoughts; panic/ anxiety attacks; extreme identity confusion; Post-Traumatic Stress Disorder; insomnia/ nightmares; eating disorders; psychosomatic illness, fear of forming intimate relationships; inability to trust; etc. 

David Brear (copyright 2020) 

Monday 16 March 2020

Coronavirus/Covid-19 sparks media-interest in Chinese 'MLM' racket, 'Tiens' a.k.a. 'Tianshi.'

If I were to say that a Chinese-based cult called 'Tiens,' a.k.a. 'Tianshi' ('Heavenly Lion'), was created 25 years ago, and that gradually (right under the noses of law enforcement agents, regulators, journalists, legislators, etc.), the boss of 'Tiens' has been allowed to register dozens of corporate-fronts around the world without any serious attempt by the authorities to investigate, let alone oppose, these, many people would assume that I was talking about an 'Austin Powers' movie. 

Ironically, if I was then to explain that, far from being imaginary, the mystifying global corporate-labyrinth I am describing is completely-real and that the self-appointed sovereign leader of it, Li Jinyuan, continues to entice millions of vunerable dreamers with an unoriginal comic-book fiction - amassing billions of dollars off the backs of these de facto slaves - many people would now assume that it must be me who has swallowed a comic-book fiction as fact.

Unfortunately (as any advertising executive will tell you), if you want to hide something, then make as big as you possibly can. Furthermore, if you tell a big enough lie and keep repeating it, eventually many people will come to accept it as the truth.


In 2014, 'The Guardian' ran a shocking article which began to uncover the 'Amway' copy-cat 'Multi-Level Marketing' cultic racket that has been hidden behind 'Tiens.' This article focused on 'Tiens' in Uganda, but it also explained how 'Tiens' has acquired a corporate presence in more than 100 countries.

Three years ago, I posted a link to a jaw-dropping hidden-camera documentary which again began to uncover the ugly truth lurking behind the 'Tiens/MLM' fairy story. At that time, I did not receive the slightest enquiry about 'Tiens.'

Recently, however, I have had contact with European journalists looking at 'Tiens,' but only because, in the face of Coronavirus, they have now started to consider the real and immediate danger posed by cultic groups peddling medical and economic quackery, 

An enquirer who wanted to know if 'Tiens' has been active in Britain?, was alarmed to discover that the group currently claims 10 000 UK adherents and that it has been shielded by the 'UK Direct Selling Association.'

Another enquirer wanted to know how 'Tiens' can have survived in China, when 'Multi-Level Marketing' was supposed to have been banned there? 

The same enquirer then asked me (in all seriousness) if I think that 'Tiens' could be a corporate-front for the Chinese-equivalent of the CIA?

David Brear (copyright 2020)

Thursday 5 March 2020

A radical change in the business media's eyes-wide-shut coverage of 'MLM' cultic rackets

Yahoo Finance’s remarkable 3-episode podcast on multi-level marketing, Illegal Tender, Season 4, should be recognized as a milestone in business media coverage of MLM. For the first time – without equivocation and without entertaining even a hint of diversionary and unmerited question of MLM legitimacy – a major business media source has presented the MLM phenomenon straightforwardly.  MLM is revealed as it is,  a financial predator, a cultic pseudo-business, a Ponzi in plain sight. 
Yahoo Finance reporter, Stephanie Asymkos’s podcast marks the first time the business media has dealt strictly in reality about MLM and  acknowledged the real-life experiences of millions of people of extreme deception, psychological manipulation and financial loss at the hands of MLM promoters, with no personal recourse to the courts or government. 
This groundbreaking work in business journalism does have one, only one, predecessor. It was the 2013 CNBC documentary produced by business analyst and journalist, Herb Greenberg, Selling the American Dream.  Greenberg broke from his business media peers by questioning the economic legitimacy of all MLMs. He also revealed the shamefully submissive face of federal regulators. In a shocking on-camera interview conducted by Greenberg, the FTC’s head of consumer protection at that time, David Vladeck  angrily sought to deny that massive consumer losses are evidence of MLM injury or deception. 
Facing an enormous wall of media denial and government protection of MLM, Greenberg had to approach MLM realities as a provocative question, a question that no one had dared to raise, which was whether the entire MLM “industry” is not a real business at all but a gigantic scam. This was courageous journalism. Yahoo Finance’s podcast stands on Greenberg’s work by going  directly to reality, without giving the question of MLM legitimacy any semblance of validity or substance, which it does not deserve.
With rare exceptions (see the work of business writer, Michelle Celarier) the media has a long and painful history of denying, ignoring or routinely describing the entire phenomenon of MLM in false terminology of legitimate  “income opportunity” or as actual “direct selling.” This cannot be explained by lack of information. The facts of 99% consumer loss rates, absence of a retail customer base, industrial-scale deception, regulatory corruption and capture, snake oil products, entrapping pyramid structure, pilfering pay plan  and destructive cult persuasion methods have been documented and available for many years. So how to account for this gross failure?
Having been interviewed by the business news media more than any other person in the world for articles and stories on MLM, I attribute this institutional dereliction to two systemic causes: 

Ideological Bias 

Business journalists in the USA, where MLM was invented and is mostly headquartered, are required by the media institutions they work for to uphold and pay homage to virtually any enterprise that makes someone – anyone – rich and produces profit for shareholders, regardless of means or consequences. This ideological bias reduces business news to reporting financial results selectively and superficially, reducing it to economic propaganda. It requires ignoring or denying wide swaths of reality. It allowed Bernard Madoff’s Ponzi to operate openly for years without examination. It rebuffed credible whistle blowers and ignored a mathematically impossible record of “returns.” It blithely missed the red flags of the looming housing/mortgage/securities crash in 2008. Day-to-day, it treats the abuses and lethal failures of the American health care system, the existence of non-competitive monopolies and duopolies, pervasive low wages requiring millions to hold two or more jobs,  urban housing shortages,  and crushing student debt as normal “market” phenomena. Business journalists wear blinders to the toxic effects of a private prison “industry” on poor communities and society in general.  From fossil fuels that raise sea levels to home evictions and rent gouging by Wall street syndicates, human misery at the hands of virtually any schemes calling themselves “businesses” is largely glossed over or simply ignored.  Ideological bias cannot allow contradiction or failure. 
MLM’s chief disguise is that of a “sales business.” It operates like a fundamentalist religious cult. It  violates laws of supply, demand and market saturation. It has no retail customer base and therefore no price competition.  It even discloses near 100% loss rates of its “distributors,” but since all is done in the name of “business,” the business media  grants immunity from inquiry into its fundamentals. MLM’s “profits” and expansion are lauded as proof of legitimacy. Quota-based purchasing for “income” eligibility based on pyramid recruiting is called “product demand.” Questioning the validity of the MLM “business” – as Herb Greenberg did –  becomes journalistic heresy. 
As part of this ideological bias, journalists must also dignify corrupted regulators as valid authorities. Regulators’ dereliction of oversight and revolving-door work in and out the very scams the are supposed to regulate are treated as normal. Most business journalists bow to this orthodoxy. Those that don’t are weeded out.  

Class/Sexist Bias

As the Yahoo Finance Podcast makes clear, the main targets of MLM deception and predation are women, more specifically working women and mothers seeking to bolster struggling family finances. Some MLMs target immigrant women; others hit military spouses. Millions of men are also entrapped, directly and indirectly, but Stephanie Asymkos’ production acknowledges and focuses on MLM’s primary target population and the cruel deceptions and devious manipulations MLM has designed specifically to defraud working women.
The business media’s bias against women and especially working class women is institutional. Its obsessive focus on male-dominated Wall Street, its clownish male pundits, its worship of male billionaires and CEOs, and revelations of discrimination and abuse within its own ranks that the Me-Too movement has uncovered are only surface indicators. Deeper manifestations include ignoring the plight of tens of millions lower wage workers and the gender-based wage discrimination all women face.
MLM’s plundering of the hopes, needs, and limited options that working women face today is therefore given little consideration by the business media. Losses and failure rates are ascribed to market forces. Rhetoric about “opportunity” is accorded substance without inquiry. The consequences of MLM – alienation of friendships, divorces, addictions, shame, bankruptcies and debt – are written off as costs of “entrepreneurship.” In sum, the business media’s dogmatic orthodoxy that protects MLM is further reinforced by its bias to ignore the lives and economic realities of MLM’s primary victims who happen to be women.
Though news media institutions and the business news media in particular have a sad history driven by these biases and orthodoxy, civil society has found other sources for truth about MLM. Citizen journalists, whistle-blower blogs, website and podcasts have spread the truth in underground fashion for more than three decades, often at the costs of threats, ridicule, lawsuits and job losses. More recently the truth has emerged in popular culture with the John Oliver Show, sitcoms like Schitts Creek, and the Showtime series, On Becoming a God in Central Florida. These popular productions, though offered with humor or fictional drama, have begun to affect the tone of news media coverage of MLM, moving it closer to reality-based. 
The Yahoo Finance podcast, Illegal Tender, Season 4, on MLM is a breakthrough for the business media that will  open the door for reality to replace the fantasy and propaganda that have prevailed.

Robert L. Fitzpatrick (copyright  2020)