MLMs are the mirror-world version of community organizing
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
In her unmissable 2023 book Doppelganger, Naomi Klein paints a picture of a "mirror world" of right wing and conspiratorial beliefs that are warped, false reflections of real crises:
For example, Qanon's obsession with "child trafficking" is a mirror-world version of the real crises of child poverty, child labor, border family separations and kids in cages. Anti-vax is the mirror-world version of the true story of the Sacklers and their fellow opioid barons making billions on Oxy and fent, with the collusion of corrupt FDA officials and a pliant bankruptcy court system. Xenophobic panic about "immigrants stealing jobs" is the mirror world version of the well-documented fact that big business shipped jobs to low-waged territories abroad, weakening US labor and smashing US unions. Cryptocurrency talk about "decentralization" is the mirror-world version of the decay of every industry (including tech) into a monopoly or a cartel.
Klein is at pains to point out that other political thinkers have described this phenomenon. Back in the 19th century, leftists called antisemitism "the socialism of fools." Socialism – the idea that working people are preyed upon by capital – is reflected in the warped mirror as "working people are preyed upon by international Jewish bankers."
The mirror world is a critical concept, because it shows that far right and conspiratorial beliefs are often uneasy neighbors with real, serious political movements. The swivel-eyed loons have a point, in other words:
Once you understand the mirror world, you start to realize that many right wing conspiracists could have been directed into productive movements, if only they'd understood that their problems were with systems, not sinister individuals (this is why Trump has ordered a purge of any federally funded research that contains the word "systemic"):
This also explains why the "tropes" of right wing conspiratorialism sometimes echo left wing, radical thought. I once had a (genuinely unhinged) dialog with a self-described German "progressive" who told me that criticizing the finance industry as parasitic on the real economy was "structurally antisemitic." Nonsense like this is why Klein's "mirror world" is so important: unless you understand the mirror world, you can end up believing that "progressive" just means "defending anything the right hates."
Historian Erik Baker is the author of a new book, Make Your Own Job: How the Entrepreneurial Work Ethic Exhausted America, which has some very interesting things to say about the mirror world:
https://www.hup.harvard.edu/books/9780674293601
In a recent edition of the always-excellent Know Your Enemy podcast, the hosts interviewed Baker about the book, and the conversation turned to the subject of pyramid schemes, the "multilevel marketing systems" that are woven into so many religious, right-wing movements:
MLMs have it all: prosperity gospel ("God rewards virtue with wealth"), atomization ("you are an entrepreneur and everyone in your life is your potential customer"), and rabid anti-Communism ("solidarity is a trick to make you poorer").
The rise of the far right can't be separated from the history of MLMs. The modern MLM starts with Amway, a cultlike national scam that was founded by Jay Van Andel and Richard DeVos (father-in-law of Betsy DeVos).
Rank-and-file members of the Amway cult lived in dire poverty, convinced that their financial predicament was their own fault for not faithfully following the "sure-fire" Amway method for building a business. Andrea Pitzer's gripping memoir of growing up in an Amway household offers a glimpse of the human cost of the cult:
Amway – and MLMs like it – don't just bleed out their members by convincing them to buy mountains of useless crap they're supposed to sell to their families, while enriching the people at the top of the pyramid who sell it to them. The "toxic positivity" of multi-level marketing cults forces members deep into debt to pay for seminars and retreats where they are supposed to learn how to repair the personal defects that keep them from being "successful entrepreneurs." The topline of the cult isn't just getting rich selling stuff – they're making bank by selling false hope, literally, in Hilton ballrooms and convention centers across the country, where hearing an MLM scammer berate you for being a "bad entrepreneur" costs thousands of dollars.
Amway destroyed so many lives that Richard Nixon's FTC decided to investigate it. The investigation wasn't going well for Amway, which was facing an existential crisis that they were rescued from by Nixon's resignation. You see, Nixon's successor, Gerald Ford, was the former Congressman of Amway co-founder Jay Van Andel, who was also the head of the US Chamber of Commerce, the most powerful business lobbyist in America.
At Ford's direction, the FTC exonerated Amway of all wrongdoing. But it's even worse than that: Ford's FTC actually crafted a rule that differentiated legal pyramid schemes from illegal ones, based on Amway's destructive business practices. Under this new rule, any pyramid scheme that had the same structure as Amway was presumptively legal. Every MLM operating in America today is built on the Amway model, taking advantage of the FTC's Amway rule to operate in the open, without fear of legal repercussions.
MLMs prey on the poor and desperate: women, people of color, people in dying small towns and decaying rustbelt cities. It's not just that these people are desperate – it's that they only survive through networks of mutual aid. Poor women rely on other poor women to help with child care, marginalized people rely on one another for help with home maintenance, small loans, a place to crash after an eviction, or a place to park the RV you're living out of.
In other words, people who lack monetary capital must rely on social capital for survival. That's why MLMs target these people: an MLM is a system for destructively transforming social capital into monetary capital. MLMs exhort their members to mine their social relationships for "leads" and "customers" and to use the language of social solidarity ("women helping women") to wheedle, guilt, and arm-twist people from your mutual aid network into buying things they don't need and can't afford.
But it's worse, because what MLMs really sell is MLMs. The real purpose of an MLM sales call is to convince the "customer" to become an MLM salesperson, who owes you a share of every sale they make and is incentivized to buy stock they don't need (from you) in order to make quotas. And of course, their real job is to sign up other salespeople to work under them, and so on.
An MLM isn't just a pathogen, in other words – it's a contagion. When someone in your social support network gets the MLM disease, they don't just burn all their social ties with you and the people you rely on – they convince more people in your social group to do the same.
Which brings me back to the mirror world, and Erik Baker's conversation with the Know Your Enemy podcast. Baker starts to talk about who gets big into Amway: "people who already effectively lead by the force of their charisma and personality many other people in their lives. Right? Because you're able to sell to those people, and you're able to recruit those people. What are we talking about? Well, they're effectively recruiting organizers, people who have a natural capacity for organizing and then sending them out in the world to organize on behalf of Christian capitalism."
Listening to this, I was thunderstruck: MLM recruiters are the mirror world version of union organizers. In her memoir of growing up in Amway, Andrea Pitzer talks about how her mom would approach strangers and try to lead them through a kind of structured discussion:
Everywhere we went—the mall, state parks, grocery stores—she’d ask people whether they could use a little more money each month. “I’d love to set up a time to talk to you about an exciting business opportunity.” The words should have seemed suspect. Yet people almost always gave her their number. Her confidence and professionalism were reassuring, and her enthusiasm was electric, even, at first, to me. “What would you do with $1 million?” she’d ask, spinning me around the kitchen.
This kind of person, having this kind of dialog, is exactly how union organizers work. In A Collective Bargain, Jane McAlevey's classic book on labor organizing, she describes how she would seek out the charismatic, outgoing workers in a job-site, the natural leaders, and recruit them to help bring the other workers onboard:
Organizer training focuses on how to have a "structured organizing conversation," which McAlevey described in a 2019 Jacobin article:
“If you had a magic wand and could change three things about life in America [or her town or city or school], what would you change?” The rest of your conversation needs to be anchored to her answers to that question.
The MLM conversation and the union conversation have eerily similar structures, but the former is designed to commodify and destroy solidarity, and the latter is designed to reinforce and mobilize solidarity. Seen in this light, an MLM is a mirror world union, one that converts solidarity into misery and powerlessness instead of joy and strength.
The MLM movement doesn't just make men like Rich De Vos and Jay Van Andel into billionaires. MLM bosses are heavy funders of the right, a blank check for the Heritage Foundation. Trump is the MLM president, a grifter who grew up on the gospel of Norman Vincent Peale – a key figure in MLM cult dynamics – who tells his followers that wealth is a sign of virtue. Trump boasts about all the people he's ripped off, boasting about how getting away with cheating "makes me smart":
The corollary is that being cheated means you're stupid. Caveat emptor, the motto of the cryptocurrency industry ("not your wallet, not your coins") that spent hundreds of millions to get Trump elected.
Tech has its own mirror world. The people who used tech to find fellow weirdos and make delightful and wonderful things are mirrored by the people who used tech to find fellow weirdos and call for fascism, ethnic cleansing, and concentration camps.
In Picks and Shovels, my next novel (Feb 17), I introduce readers to a fictitious 1980s religious computer sales cult called Fidelity Computing, run by an orthodox rabbi, a Catholic priest and a Mormon rabbi:
Fidelity is a faith scam, a pyramid scheme that is parasitic upon the bonds of faith and fellowship. Martin Hench, the hero of the story – a hard-fighting high tech forensic accountant – goes to work for a competing business, Computing Freedom, run by three Fidelity ex-employees who have left their faiths and their employers to pursue a vision of computers that is about liberation, rather than control.
The women of Computing Freedom – a queer orthodox woman who's been kicked out of her family, a Mormon woman who's renounced the LDS over its opposition to the Equal Rights Amendment, and a nun who's left her order to throw in with the Liberation Theology movement – are all charismatic, energetic, inspirational organizers.
Because of course they are – that's why they were so good at selling computers for the Reverend Sirs who sit at the top of Fidelity Computing's pyramid scheme.
Hearing Baker's interview and reading Pitzer's memoir last week made it all click together for me. Not just that MLMs destroy social bonds, but that within every person who gets sucked into an MLM, there's a community organizer who could be building the bonds that MLMs destroy.
The very first thing is a 70’s commercial for Amway. Wow. I had forgotten about Amway. That was a thing for while. I haven’t checked but I bet they are still around.
Of course the whole thing is great. I do love the sleepcore channel.
I think they're the Amway of the occult and are legends in their own minds. They do not abide by universal or natural laws and have been a pest since exploration/renaissance era. I don't know why they aren't able to see the worthless the laughing stocks that they are. Only the weak and evil roll in dark matrix circles...
I have to thank you for something kind of strange. A coworker (who was rude and caused problems and didn't care) left our job a couple of weeks ago. I just heard what her new job is and immediately went "hey WAIT A MINUTE, why do I know that name???". Realised I read it on your blog, rediscovered it, and had a fit. It's Amway. I hope it doesn't ruin her or anyone THROUGH her. Thank you for blogging about it/your ex-roomate and making people aware of what it is so we know to stay away from it. :)
Oh your poor ex-coworker. She sounds terrible, but nobody deserves that (except maybe Jeff Bezos). Stay well clear, anon- happy I could help!
Please share everything you know about MLMs I love learning things
Thank you for asking! I’ll start with a TL:DR for everyone: Never join an MLM. Over 99% of participants LOSE money (and time! And friends!).
A Multi-Level Marketing Company (MLM), also sometimes called Direct Selling, is essentially a barely-legal pyramid scheme. Sales reps can either make money by selling a product or by recruitment of new sales reps.
MLMs make money off of people joining the MLM, even if those sales reps never sell anything, because the sales reps have to buy the product from the company before they can re-sell it. Therefore, they focus a LOT on recruitment (pyramid scheme).
Some famous MLMs you may have heard of: Amway, Mary Kay, Herbalife, Avon
We can prove the 99% Lose Money number pretty easily. If you are to only learn one fact to teach others, then look up Amway (the biggest MLM)’s Income Disclosure statement, which they publish themselves, on their own website. Screencap below:
This is PRE-business expenses that sales reps pay out of pocket, and still the average annual GROSS income made by the TOP 10% of the company is LESS than minimum wage. After expenses, you can see yourself how almost everybody loses money. (The money people lose goes to the ppl at the VERY top of the company; it’s not like when a normal small business fails.)
Below the cut is a lot more info, although not close to all I have collected.
Screencap summary of Amway's Income Disclosure:
Half of the TOP 1% made less than 55K pre-expense; studies show even they generally LOST money, or made very very little after expense (the top 0.5% actually makes any money, and the 0.05% make a LOT of money)
The TOP 10% earns, on average, LESS THAN MINIMUM WAGE ($15K), with less than half of the TOP 10% making over $4.6K PRE-EXPENSES
Less than half of the TOP 50% makes more than $631 A YEAR. PRE-EXPENSE.
(Also, they cut the bottom 1/3 out entirely, so the 50% referenced is 50% OF the top 2/3. I’m actually OK with this, as long as it’s acknowledged, for better reporting. The bottom 1/3 were “inactive” and possibly not trying to participate in sales. The top 2/3 still sucks.)
I made a very sloppy visual to restate the data, in case it helps anyone:
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Another example is the Mary Kay public income disclosure [for Canada] (another very popular MLM).
Again, pre-expense, though also pre-retail sales (more in paragraph below)
The top 0.05%(!) makes average commissions of $124K
The level below that, Independent Sales Director, only 1.7% of the company, makes less than Canadian Minimum wage in commissions
98% of the company, very clearly, makes anywhere from $0 per year, to at most an average of $206 DOLLARS A YEAR (pre-expense, pre-sale)
Mary Kay works a little differently than Amway, where once you purchase a product, MK truly does not know or care what happens to it at all. If all of these people actually sold all the products they bought, it’s possible they made supplemental income, but data shows that most LOSE money on actual sales.
Let’s focus on Mary Kay for a moment, because their structure means the ONLY money the company ever receives was given to them BY their sales reps. So they’re easy to follow.
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Why do sales reps lose money on sales?
The market is oversaturated. They have 3.5 MILLION reps trying to sell the same product* - meaning they either can’t sell, or they have to greatly discount the product
Many MLM products are more expensive than the same product elsewhere
They constantly refresh their line of products, so the inventory reps already have is now worth less and harder to sell
Sales reps must buy a minimum amount of new product each month to keep certain perks, even if they haven’t yet sold their old product (min $225, with much higher amounts sometimes necessary to keep status)
*What makes MLMs legal (thanks to lobbying, mostly) is that they HAVE a product, which sales reps buy from the company. I’m careful not to call these people employees, as they are technically independent consultants, and thus don’t receive employee benefits... like a guaranteed income, or healthcare, or anything. If you google “Mary Kay employees”, you will find data on their ACTUAL employees, who do actually make money. This is clearly not the case for their sales reps (table above). Mary Kay has about 5K ACTUAL employees, and 3.5 MILLION sales reps.
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So how do sales reps make ANY commissions?
If you convince people to join Mary Kay, MK will give you a cut (commission) of what they spend at the company on product
Since this is the main way to make money, reps are incentivized to recruit as much as possible
They are also incentivized to LIE about how much money they’re making, so people will stay with the company. I’ve read stories of reps renting a fancy car from time to time to convince the people below them that they’re making money
Clearly, thanks to the income disclosure, we can see that they aren't making much money on commissions, either
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How are sales reps buying more product if they lose money being in an MLM?
Reps are encouraged to dip into their savings, with the promise of a greater payout later. If they don’t have any, they can open Mary Kay CHASE VISA card, and charge all the products they will never re-sell to it
Many people end up in heavy debt
Unfortunately, a lot of people don’t track what they’re spending vs earning until it’s far too late
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What else do reps lose?
Time: Selling is actually a very small part of the business. A lot of time is spent FINDING people to sell to, organizing classes, restocking inventory, recruiting new members, traveling, going to conferences, and more.
Mary Kay’s motto is, “God First, Family Second, Job Third”, to imply that this is something you can pick up part-time, but that’s simply not true
Relationships: Most people try to sell to and/or recruit their friends and family first, which can put a strain on relationships. Additionally, due to debt and/or need to borrow money to buy more products, many have damaged relationships with those close to them, including their spouses, who share the debt.
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How else does Mary Kay make money?Don’t worry, it’s not all from sales reps buying their products! (Sarcasm. Please worry.)
Website + ability to process credit cards: This is essentially an annual membership fee - to access the MK website to buy their products (to re-sell), or to take credit cards as payment, you pay an annual amount to Mary Kay
Business Cards: More petty costs
Conferences: Sales reps are greatly encouraged to pay to attend sales conferences to learn more about how to be a great salesperson. (BONUS: you will encounter many cult-like tactics here, to keep you IN the MLM)
Jackets: Congrats! You’ve been promoted and you are now permitted to wear the Red Jacket! It costs $100. If you get promoted to NSD(?), you get to wear a fancy suit that changes every year and costs $1,000 each year!
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How else does Amway make money?
Bonus because they are egregious
Sales Reps replacing everything they own: Amway sells a LOT of different things. How can you sell anything if you haven’t tried it? If you really want to succeed at Amway, get rid of EVERYTHING you own that Amway also sells. Make sure everything you own is sold by Amway (people do actually follow these instructions! Cult-like tactics are used)
Training Materials: They make a lot of money off of selling training materials to their sales reps. Aren’t making money? It’s because you don’t WANT to succeed, clearly, if you aren’t buying all the training materials you can get your hands on
Haha maybe more than you've bargained for. I wrote this all at once late at night, but I'll look it over later to check for any potential errors and link more sources.
