The Plainest Truth of MLM is the Most Avoided | Pyramid Scheme Alert
The Plainest Truth of MLM is the Most Avoided
A Review of “Selling the Dream” by Jane Marie, published by Atria Books
by Robert L. FitzPatrick, Author of PONZINOMICS and FALSE PROFITS
Author’s Note: Having worked decades when publishers would not publish any “anti-MLM” book, I am very supportive of all new books that offer a consumer perspective and critique of MLM, as “Selling the Dream” does.
Regarding this new book, I was extensively interviewed and consulted for the author’s podcast, “The Dream, Season One.” I provided the podcast producers with years of my research on MLM, its history and politics that are in my book, PONZINOMICS, which was published shortly after I was in “The Dream” podcast in 2018.
This book review responds to questions I am receiving about my views of the new book that is based on that podcast. Beyond more “anti-MLM” books getting published, it is also a positive new development that these books can be critically reviewed by colleagues, as my own book has also been reviewed.
Some have described their personal awakening to MLM’s terrible reality as “peeling an onion.” Discovering the nasty lies on the onion’s surface leads to more and greater lies at the next layer and the next. Others speak of “going down a rabbit hole”, each compartment leading to another containing deeper and darker deceptions. Most people abandon the search when they glimpse the darkness of where it might lead. A useful inquiry requires admitting to not knowing what MLM is and that what is believed might be untrue. Add in need for courage to speak a truth that can lead to scorn and gaslighting.
Having dug deeply into MLM and over a long period (my first national media interview was on CBS 60 Minutes with Mike Wallace in 1999) I liken my own MLM learning path to Dante Alighieri’s epic search for truth that took him through eight levels of Hell. In his famous allegory, The Divine Comedy, written about 1320, Dante descended successively through terrifying regions of evil. He visited the regions of Lust, then down into Gluttony, deeper into Greed, Anger, Heresy, and Violence.
Finally, he arrived at the very bottom of Hell, equivalent in my journey to grasping the true nature of MLM. He came to the regions of Fraud and Betrayal, which are also the core truths of MLM.
These terrible truths are avoided in documentaries, podcasts, news stories, and academic treatments of MLM. Selling the Dream by podcaster Jane Marie offers a lot of good information about MLM while staying safely on that well-travelled path of avoidance. It repeats years-old research from other writers, including much from Ponzinomics, on the origins and history of MLM dating to the 1940s. The stories of the founders of early MLMs are told again. There are the sad stories of victims as told in numerous podcasts. One hapless guy claims he lost $200,000 because he said the products are overpriced and he kept buying MLM “tools” for “success.” Hedge fund manager Bill Ackman’s short-selling fiasco is included. There’s a long repetition about MLMs selling snake oil remedies.
If Selling the Dream were about mouse traps and written to help mice, the book would offer a lot of interesting information about various cheeses and other baits, their quality, taste, color, etc. It would tell the mice some colorful stories about the trap’s inventors. But it would avoid telling the mice right from the start, clearly, and forcefully that the cheese sits on a malevolent device designed to break their little necks! It would not definitively explain that the device is a murderous trap, not a plate of free food, as it is disguised.
There are understandable reasons for avoiding the core realities of Fraud and Betrayal. Facing them can be extremely unsettling. MLM is experienced on a person-to-person basis among those we trust and identify with and may even love. MLM lures each person to betray their own values and personal responsibility and then to betray friends and family.
One way that Selling the Dream avoids the brutal realities is by omitting all history of the anti-MLM movement, the earlier books and websites, the pioneers, and how the lives of whistle-blowers were affected. Websites were shut down. Many were sued into bankruptcy or forced to settle with the coerced promise never to speak of the MLM again. A few left the country. Reputations were trashed. This is how traffickers in Fraud and Betrayal operate. It’s hard to describe that history in an upbeat or snarky tone.
At the levels of law enforcement, political leadership, Wall Street, publishers, the news media and academia, Betrayal involves abetting the Big Lie that MLM is an “industry” based on “direct selling.” Betrayal is withholding the truth that MLM is a calculated trap designed to break necks, financially, not provide “income.” Telling the plain truth of this can make some people in high places unhappy.
The reality of Fraud is avoided for similar unsettling reasons. To acknowledge this core truth means having to drop the popular pretense that MLM is a “complex business” that mysteriously escapes the rule of law, even as it inflicts losses on 99%, year after year. Avoiding the reality of Fraud includes avoidance of the frightening reality of cultic mind control, even as MLM recruits shockingly behave as self-sabotaging robots.
In fact, the basic nature of MLM is obvious, not new, not complex. MLM’s “endless chain” recruiting model, as regulators used to say, is inherently unfair and deceptive. Pyramid schemes purposefully use deception and cause harm. Loss to victims is by design. That design can be deconstructed to show how any enterprise using the MLM model will always produce the same results: loss to 99%. It’s hard to acknowledge this in an entertaining way.
Selling the Dream correctly reports that MLMs are “blame the victim” schemes though it obscures whom to blame. It diverts the focus away from actual perpetrators, the ones Dante put in his lowest regions of Hell.
The first diversion redirects attention back toward all of us humans. The book explains how we can’t seem to grasp exponential math (5x5x5…), making it easy to deceive us with MLM’s “endless chain” proposition. This is not presented in Selling the Dream, however, to call for making such a false proposition per se illegal, as it used to be. Rather, the problem is with us. We just don’t seem to get that it’s “marketing.” Our bad.
Then, we seem to be hard-wired to recoup past losses, or “sunk costs,” leading us to obey, when MLMs tell us, “Don’t quit!” The book also explains that we humans desperately want “community”, even when it is artificial and only lasts the short time of involvement in MLM. We grasp for hope, even false hope. MLM, which the FTC says is “legal,” routinely uses these lures, tricks and promises as part of its “business.” So, the losses we suffer must be on us. Buyers should beware.
The other diversion has to do with law enforcement, in particular the Federal Trade Commission (FTC). Selling the Dream correctly reports the FTC is doing very little to protect consumers from MLM abuse. But it advises not to blame this poor little agency. We should feel sorry for it. It has very limited resources, and many other priorities. It does the best it can, putting responsibility back on us.
Selling the Dream does not explain why the FTC should be in charge. Its job is to regulate “trade.” Fraud is not trade. Pyramid scheme rackets are not “business.” Why doesn’t the FTC just refer evidence of widespread pyramid fraud to the Department of Justice for prosecution? This more powerful path of inquiry is not pursued in Selling the Dream, and the author never plainly or forcefully offers her own position on what MLM is – a business or a disguised pyramid fraud?
Since law enforcement is not to blame, the book asks why doesn’t the market mechanism of “buyer beware” work? By now, shouldn’t there be enough consumer experience and information that most people would not sign up with MLMs? What’s wrong with us that we keep joining these “scams”?
It’s a question I am frequently asked by journalists. It seems reasonable, but it is not based on reality. Yes, a lot of people have listened to “anti-MLM” podcasts, documentaries about “bad” MLMs, and maybe even heard about the 99% losses. But they have real and immediate need of income, and they also hear much louder, more authoritative voices – FTC, SEC, Chamber of Commerce, Department of State, State AGs, Governors, military leaders, pastors, sports stars, celebrities, university professors, major news media – that MLM is “legitimate and legal.” They hear these voices say it’s not a pyramid scheme. It can’t be! Pyramid schemes are illegal. The FTC says MLM is legal. The voices say MLM’s not a cult. MLMs are businesses. Cults are not allowed into the US Chamber of Commerce! Hedge funds don’t buy the stock of cults!
Whom are people to believe, a witty and ironic podcaster or university Ph.Ds, elected officials, beloved celebrities, and law enforcement? And, maybe, just maybe, they are influenced by MLM stocks traded on the New York Stock Exchange or former Presidents even a former Secretary of State working as paid MLM promoters?
Finally, the book laments the special plight of young women today, or struggling mothers, who, sadly, are the main prey for MLM predators. But, between the FTC doing all it can, and our innate weak spots and deep-seated needs, and with the US economy putting more and more of us in the hole, it seems there really is only ourselves to blame if we sign on with MLM.
The book concludes that this is all quite tragic, but also interestingly ironic how the American Dream has become such a sad spectacle, almost a nightmare. And, it admits, it is kind of entertaining to watch these psycho MLM leaders, spouting bible verses and wearing fake eye lashes, exciting so many people, almost into ecstasy. It would make a great podcast, except a really good one was already done, called The Dream.
Robert FitzPatrick (copyright 2024)
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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.
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- 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, 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 technical-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 endless-chain recruitment and self-consumption), the hidden overall net-loss/churn rate for participation in so-called 'MLM income opportunities,' has always been effectively 100% by design.
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 60 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 persons under contract to 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 easily 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' contractors 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 25 years. During this time, I've yet to find one so-called 'MLM' front-company that has voluntarily made key-information available to the public concerning the quantifiable results of its so-called 'income opportunity' in an easy-to-understand format.
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 persons.
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 the average participant 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 in the USA, 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.
Chronic victims of 'MLM' cults are invariably 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, Ambassadors, Business Owners’ etc.'
Chronic victims of blame-the-victim 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 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 2024)
