Episode 81: MLM Nation with Bridget Read

Hello, I'm Adrienne Dobb.

And I'm Laura Donegan.

Whether we like it or not, we're in bed with the right.

So, Adrienne, today we are lucky enough to be joined by the esteemed writer for New York magazine, Bridget Reed, who is the author of this really cool new book called Little Bosses Everywhere: How the Pyramid Scheme Shaped America, which is a history of the MLM in the U.S.

And it became, for me, like this kind of crazy Rosetta Stone that unlocked so much about ambition and gender and money and how we think about the future and the good life in ways that can, of course, bring us further from the object of our desires.

And I thought it was just such a fun ride for being such a densely informative book.

So Bridget, I really want to thank you for being here because I'm so excited to talk about MOMs with you.

Thank you for having me.

And what a lovely intro.

I'm so glad that it was fun and dense.

Those are, you know, the two things we want to hear, right?

Well, it's a book that like you move through so many of these scams and you show how this idea of the pyramid scheme sort of had this germ in American culture and then mutated as more and more people copied the same scam and brought it in different forms to different parts of the country and different demographics.

My favorite part was a chapter on Mary Kay and the analysis you bring to how MLMs offered a kind of work that managed to merge secondwave feminist ideas about ambition and paid work as a mode of self-fulfillment with really that simultaneous backlash about attempts to preserve women's role in the home.

But this is a book that does so much more than that.

And it's just a really, really useful like cipher to me for a lot of the ways that, you know, these hopes for the future and these desires for a better life can get weaponized against people in these ways that are sometimes really brilliant in a dark way and also frequently just like so very cruel.

Totally.

And so maybe I'll out myself as not having read the book yet.

Our story with this book is that I think I sent it to Moira being like, we have to do this because like MLMs are a thing that have cropped up on our podcast like in weird places and constantly.

So I was aware of this as like a through line that we encountered and like had never really delved into like, oh, how does this keep coming up?

And then she's like, oh, I'm way ahead of you.

I already have the galleys.

I have it lying at home waiting for me when I get back to San Francisco.

And so I thought maybe I'll sort of play the babe in the woods here and ask you, when does this start?

How old are MLMs?

What's an MLM?

And when do we first get these?

There must have been a time when they were not around, when there was no, you know, downstream or anything.

What was that moment like?

When did they come about?

Yes.

And this is a big question and sort of why I had to write a whole book about it versus a shorter form of exploration.

And so even though I've done this a few times now that the book's been out a month, it always feels inadequate to do the quick and dirty.

So Adrian, I'm going to make you read the book anyway.

Oh, I'm going to.

Because it's just, there's a lot to say, but the sort of shortest answer is direct selling, door-to-door selling existed in the United States all the way back in the colonial era, right?

So as long as the United States has been around, there's been people selling things door-to-door.

And in that early period, direct sellers were very important, you know, bringing goods, ceramics, you know, books, candles, whatever, when the United States was quite rural, right?

So when we were an agrarian society.

And that's really honestly when door-to-door selling peaked ever since it's been something that sort of just declined.

Obviously, as the United States industrialized, we became an urban society, someone going door-to-door selling was very quickly something that was outdated.

And yet it persisted through the 20th century.

And it was not until 1945, in the very beginning of this post-war moment in the United States, where these two men meet.

They're working at the Douglas Aircraft Factory, which is in Southern California.

And they kind of come upon a third guy whose name is Carl Renborg.

And he was one of these door-to-door salesmen who was having a rough time.

He had a homemade vitamin operation, which was itself a sort of nascent industry.

He was selling an alfalfa vitamin where he was making all these outlandish claims about how it could, you know, cure cancer and make you thin and all this other stuff.

Alfalfa, a weird, really recurring theme in the book.

Like, yeah, like alfalfa comes up kind of a lot.

Yes.

Well, and it actually, it's now in vogue again.

It's so funny.

Like, it's one of these, quote, miracle products, which, of course, it's not.

It's simply alfalfa.

But anyway, so these two men are also salesmen.

One is a funeral plot salesman, which was its own very scammy industry.

Wow.

Known for charlatanism, for being exploitative.

And then the other man was a Stanford educated psychologist who studied under Lewis Terman, graduated in the 30s and was a member of these prominent eugenicist circles in the 1930s out West doing research among incarcerated youths.

And then started his own kind of self-help Dr.

Ruth eugenicist pop psychology thing where he was going around and doing occupational counseling, counseling couples, and worked actually with Paul Popineau, another prominent West Coast eugenicist.

So I just, I love an evil Stanford cameo.

It's like another recurring theme on our podcast.

And like in the history of gender conservatism, we also have to talk about the role of our employer.

Right, of course, of course, always.

Well, I think it's kind of impressive that we made it within five minutes of like a scammy Stanford grad showing up in our story.

That's so.

Yeah,

we really weren't going to make it far at all.

And, you know, now Stanford actually has an endowed professorship in the name of Carl Renborg.

Oh.

The vitamin maker, despite him being a salesman.

Renborg was not a doctor, has no advanced degree, in fact, but there's an endowed professorship in Stanford's Disease Prevention Research Center.

So you can make a campus pilgrimage to his endowed chair.

Anyway, okay, to make a long story short, these two men, they see this aging vitamin company and they both sign on as salesmen at a certain point and they see basically a vehicle for taking door-to-door selling, which exists as this kind of antiquated industry.

We have Fuller Brush, Avon.

These are companies you might have heard of.

Their regular door-to-door selling outfits.

It's kind of crappy work.

No one really makes that much money, but it's around.

And they decide instead of doing what normal direct selling outfits do, which is they sell people products at a wholesale discount and sell it at profit, right?

It's basic wholesaling.

They say, actually, we are going to

allow people to buy the products and sell them like a normal company, but also bring on others under them in what's called their downline.

So recruit a team in this business opportunity.

And we're going to reward them based on what they buy and what those people who bring in under them buy rather than in the typical way, giving commissions based on sales.

So they basically take the worst part of door-to-door selling, which is the selling part, which is that nobody, you know, really wants to buy something door-to-door.

It's always been this like weird, kind of scammy and sort of functious thing that nobody wants to do.

And they're going to get rid of that.

So it doesn't matter whether you're actually selling to a customer because we're going to reward you based on what's called purchase volume, what you are buying and then what everyone else under you is buying.

And they say, you know, the genius thing is you're going to be able to make a team and as big as it gets, you will get a cut from what everyone is buying.

And so that's what's, it's called the plan.

The plan.

Well, this is a point you come back to again and again, which is like the core of an MLM and what makes it different than another kind of business is that it does not make its money from actually selling the product to consumers of that product, right?

It makes its money from selling the product to people who are then going to sell the product, right?

So it's not always clear that anybody is using the end product of an MLM, which in this like original case that you outline with our Stanford scammer.

is like an alfalfa based vitamin, right?

But then this can get sort of iterated over and over again and does as like the plan, as they call it, gets mimicked by other businesses, right?

So it can be makeup.

It can be, I think in like the paradigmatic post-pandemic example, it's leggings, right?

But like it doesn't have to actually get used,

which means it doesn't actually have to be very good.

Right.

And that's the number one misconception, which is because people describe MLM and they say you're making sales and you get a cut off of other people's sales that you bring in, but it's not sales.

It's what everyone is buying, which of course is a problem and ends up being a problem once MLM has been around for a few decades because what you're describing is a Ponzi.

It's just a Ponzi scheme where instead of one guy saying, I'm going to take your investment and getting new investors, right?

Which is of course what Charles Ponzi did and how we get the name of a Ponzi scheme,

but it's doing the exact same thing under the cover of selling a product.

But the product is just exactly that, a cover-up for an investment scheme.

You could call it chain selling.

You can call it an investment fraud.

And this, for many reasons that the book gets into, has been covered covered up for years by misinformation and propaganda and political influence.

And so it does feel, it is a hammer that I hit over the head constantly in the book.

Yeah.

Because it's so important to like remember that no sales are really happening here.

Can I ask about the sort of gender politics of all this?

Because it seems to me the...

prototypical sort of 19th, early 20th century salesman was a man preying on housewives, right?

I mean, I don't remember what Willie Lohman sells in death of a salesman, but like you're imagining it's something that like the lady of the house might want.

And like the 19th century kind of Yankee figure, right, was often someone who was selling while the man of the house was away, basically, and came home to something that he didn't feel the family needed, but there was.

But what you're describing now, where in some way the product isn't the makeup or the vitamins or whatever, it's the downline.

It's more marks.

That really seems to open the system up to affinity fraud, right?

Whereas the salesman is is someone who comes to town and is out of town by the time everyone figures out that that tincture doesn't do anything now we're talking kind of things that really are endemic in certain communities and don't almost leave those communities does that seem right definitely and affinity fraud was the name of the game from the beginning which is another way that they were taking this thing that you know in normal direct selling, Willie Lohman is such a pitiable figure because he is at the mercy of

doors slammed in his face, at the mercy of the elements.

You know, it's really work that's quite full of drudgery.

And so instead, the idea was to go to your friends and neighbors and really use these trust networks.

And the first people they recruited, Mittinger and Castleberry, who are the names of those two scammers, and then Renberg is the genius guru.

And it always helps to have a genius guru because the product has to be this amazing thing, right?

It has to be a revolutionary product because otherwise, why wouldn't you just go pick it up in your store?

But they first target white, sort of lower middle class couples in these growing suburbs.

And they're in Southern California.

The suburbs are exploding.

And Castleberry, the psychologist, really takes what he learned doing occupational and marriage counseling and applies it to this new idea for a way to bring in income, a way to move up in class.

And it's very much a gendered operation.

The wife does the initial pitch when the wives are at home during the day doing child care, right?

They don't have to leave the home.

They're not going to an office.

They're not doing clerking or secretarial work.

That's actually happening, right?

In this post-war moment.

Women are going to work, not these women.

And then at night, the husband comes home and closes the sale.

So they're working together in tandem and they really do offer it as a sort of way to move into this new modern era.

You know, the post-war abundance, Eisenhower era is happening and these people are going to take advantage of it, but it's not going to upend their gender relations.

In fact, it's actually going to bring them together and help

quell some of the nervousness that is lingering from the actual war era where women did go to work and women became the heads of households when men were gone.

And there was all this sort of tumult that maybe would have led to a bit of unrest, right, among women and particularly white women and white married women, which are very important in keeping the nuclear family unit intact.

And so that's really absolutely a huge part of how they start MLM before it really becomes dominated by women.

The family that scams together stays together.

Truly.

You make a really good point, Bridget, which is that, you know, during the FDR presidency and the New Deal, there was a fairly strong U.S.

labor movement, and there were all these new protections for employees and new entitlements for employees.

You know, if you are an employer of capital E employees, then you have to be paying into social security for them, right?

And

one thing that direct selling offered was a way to get out from those kinds of obligations for employers, right?

And to create this other class of workers who didn't have the same entitlements.

Yeah, the role that direct selling, so those door-to-door companies before MLM was invented in the 40s, the role that they played in solidifying solidifying independent contractor status as something that exists was not something I knew about before doing the research in my book.

You know, independent contractors existed, but mostly in terms of tort law.

So there was this way to keep people you worked with, you contracted with, from being your full-time employees.

But as you said, Moira, during the New Deal, this became a huge existential crisis, right?

Because so many of these workers were at risk of becoming a huge burden financially to the companies that employed them.

And the direct sellers were a big part of marching down to Congress and saying, no, no, no, you'll ruin our business and you'll ruin, more importantly, the rhetoric was you'll ruin their livelihoods because these people, we rely on a

huge amount of like low-cost workers who are independent contractors.

So turning this, what was very much marginalization into something positive or independent.

And then you could argue that because of that marginalization, direct selling was already something that was kind of feminized and that it was this insecure workforce that was kept out of the typical Fordist sort of wage labor protections.

And that's what also made it ripe for Mitten During Castleberry, right?

Because they're working with people who are lacking federal oversight, lacking protection.

And then they planted this seed of like, no, no, no, this is going to be better for you.

You're not being kept out.

You're not being left out.

You're not being marginalized.

You're being empowered to build your own empire.

And from the very beginning, it is in reaction to the new deal um and then it becomes actually explicitly anti-communist anti-socialist anti-feminist project fascinating yeah the amount that like the john birch society comes up in your chapters is like oh my god yeah i got completely mlm pilled i was like oh my gosh i was like the what's it called it pepe silva oh yeah meme of the guy like drawing all the connections i'm like mlms actually touch on all of these kind of like nefarious developments in the wage labor economy yeah i'm feeling kind of the same way.

Can I ask, is this also kind of a delayed reaction to the end of the Lochner era?

Because it seems to me like the right to contract was this like big way in which labor organizing was forestalled for much of the first third of the 20th century in the United States.

And then with FDR's court packing threats, that sort of ends.

And then it sounds like five seconds later, people sort of fasten onto this.

Is that also what's going on here to kind of preserve a more individualistic form of collective money making vis-a-vis what you would get through a union?

Absolutely.

And the way that MLMs operated then and today are almost a weird funhouse mirror, like demon version of a union because you do have these relationships that are incredibly personal and that are very much indebted to each other in the same way, say, a union steward is to a member, right?

The way that a union uses affinity, an MLM uses, but it is the opposite of collective bargaining because the hierarchy is so strict and every single person has a boss and every single person has underlings.

No one is really aligned on a collective struggle.

You're actually forbid from talking to people who are at your line.

like sort of at the same place as you in the MLM.

It's called cross-lining and you're not supposed to do it.

You're only supposed to complain upward to your upline who can tell you, keep going, it's fine.

fine and downward you're only supposed to pass positivity so it really is like the opposite it's a very it's a dark union you know yeah truly and the politics of the early MLM operators were very explicitly Republican and then they dabbled in this sort of like free enterprisey pseudo-libertarian stuff that was kind of bubbling in the 30s and 40s.

You know, they were associated with Leonard Reed from the Foundation for Economic Education,

but they were also interested in Nixon.

And then they really become aligned with Reagan once Amway comes into the picture.

So that's when they really start mobilizing politically.

But before that, I think it is in a reaction to not just the New Deal, but what the New Deal came out of, which was the Depression, which was this incredible crisis moment where people really did start thinking.

How are we organizing society?

What is our duty to each other?

It was such a bad moment.

It got so bad that, you know, everyone everyone agreed that capital needed to be reined in and that for the collective benefit, capital needed to have controls.

And that seed very much, it is a reaction against that right away.

And how, how do we re-articulate, we can't go back to the Robert Barons.

We can't go back to the Gilded Age because those guys are responsible for the Depression.

They have a bad rep.

We need to somehow rebrand.

very individual Darwinistic capitalism, free enterprise at its most pure expression, but we need to do do it from honestly a populist lens, right?

That this is going to lead to democracy and to the greatest amount of benefit for free individuals.

And that's what they're doing, whether they sort of are as entrenched politically as you might think or not, they're doing that on a rhetorical level by empowering every single person to be the leader of their own Ponzi scheme.

Yeah, there's a conflict at the center of MLMs' rhetoric, right?

Which I think speaks to its like ambiguous or like maybe malleable gendering, which is that on the one hand, MLMs are an

idea for making money that makes you very, very interdependent on other people, right?

And sometimes they will pitch this like mutuality, like we're all going to get rich together.

We're all going to share in this prosperity wherein our own, you know, connections and hard work and our friendships will become a source of our wealth.

Right.

And then on the other hand, there is this intense individualistic messaging as well.

It can be like shifted between like one and the other, depending on which like gender or like which kind of a style they're looking to further their appeal towards.

But there's also this very individualist, like a lot of pioneer rhetoric, a lot of military rhetoric, a lot of sense of the individual salesperson as the master of, I think in this case, usually his own domain, his own fate that can

undercut solidarity independence, because its pitch is independence, right?

Yeah.

The expansion of the machine is the way everyone's going to get wealthy, right?

Bringing more and more people in.

And yet within it, you are fixed.

You are a cog that is very much fixed in the downline.

The downline is so important.

So there is this total contradiction between the growth that will enable us all to change our circumstances and what happens when you join an MLM, which is you are literally choosing a place in a fixed hierarchy where you have people above you who will always be above you no matter what.

And your only consolation is that you can try to build your own little empire under you, which is why it's also like incredibly monarchical.

Like it is, it is a little dynasty kingdom.

Yeah.

And yet it's all this free enterprise, you know, America rah-ra talk.

And meanwhile, the downlines of some of these MLMs have been around for now 50 years.

They are literally dynasties and you can pass it on.

You can die and give your spot in the hierarchy to your offspring, just like inherited wealth.

You know, it couldn't be further from democracy.

What is that line from Homer Simpson?

They look deep inside my soul soul and assign me a number based on the order in which I joined.

Exactly, exactly.

I've never felt so accepted in all my life.

These people look deep within my soul and assign me a number based on the order in which I joined.

Our producer, Mark Yoshizumi, points out that we never plug the Patreon on the main feed episodes anymore.

So here's me plugging the Patreon on the main feed episode.

So we have a Patreon.

That's it.

There are three tier levels.

You get a lot of cool extra stuff, extra episodes.

You get access to our Discord.

I should also mention that we have a merch store.

I think we've never literally mentioned that.

We are very bad at this.

It's at TeePublic, and you can get a bunch of stuff with our logos on it.

Mugs, your hoodies, your t-shirts, I think baseball jerseys are what they're called.

It's cool.

So you should check that out.

And all that makes it possible possible for us to continue doing what we're doing.

A lot of this has been around forever, and it's just kind of so fascinating because so many scams feel short-lived.

You know, I've written a lot on Silicon Valley, which now is also like a scam that's kind of starting to get a little long in the tooth.

But for a long time, it was like, oh, this is either going to like do well or it's going to collapse spectacularly in a hilarious way and get indicted in three to five years.

But these are scams that have been around for a long time.

What are the numbers?

How many Americans are in these?

How ingrained in American life are they?

Do they exist everywhere?

Or are they really, because they come out of these affinity fraud situations, much more present in certain areas?

I know that Provo, Utah is famous for being kind of scam capital USA.

But is that just because they do a little bit more in percentages?

Or are we really talking about certain areas of the country where this is far more endemic than in others?

They are everywhere.

And And I think that we actually have no idea of the real scope.

Oh.

They're very under-reported, underexamined.

All the data we have is self-reported by the industry itself.

And there's actually a battle in the industry, you know, because they're fighting against the perception that they are pyramid schemes, they really want to underplay how many people are involved because they want to seem like they have real customers.

So there is this fight over like demarcating customers from participants because once you understand that almost all of the people who participate are the customers themselves, which is why you've never seen an MLM product in the wild, then that's really more evidence that it's a pyramid scheme.

So, you know, at certain times in the 1970s, one in eight Americans had been involved in one of these pyramid companies.

Now they'll say maybe it's around 7 million, 6 million people a year.

But again, I think a vast undercount because also so many people churn in and out and they'll try it and immediately understand it's a pyramid scheme and stop.

Right.

And there's a lot of shame and sort of embarrassment associated with that.

And then that's just the United States.

And MLM has actually been, the majority of participants have been overseas since the 1980s.

Whoa.

So, global south, Eastern Europe, and now China and India, which are the biggest kind of gets for the industry since those countries have huge populations and had at one point exploding middle-class populations, which is kind of where they go in.

You know, MLM really expanded with US imperialism, honestly.

And the sort of march of the kind of American capitalist order, you can follow MLM, like literally going into the Soviet Union once it collapses.

Like that, that's how much you can kind of track it.

And so unfortunately, it is all over the world.

It is an untold amount of people, not to be scary.

We sold them a Big Mac with one hand and a vitamin supplement with the other.

Absolutely.

Yeah.

Something I loved about the book was like reading along and figuring out where you found a lawsuit.

Cause like so much of your research and so much of the information you're getting because these groups are incentivized to be kind of secretive about their actual operations.

So much of the information you're getting is from like FDA and like FEC lawsuits against these companies and attempts to regulate them to which they will have to like tweak or they'll have to stop making a certain claim or they'll have to like adjust their compensation structure in some way.

And it's clear that like

it's not that there has been no attempt at like a regulatory enforcement.

It's that the line between what is a legitimate business and what is an illegal pyramid scheme seems to be quite blurry and perhaps something that like some regulators are incentivized to like keep blurry.

Yeah, by the time MLMs had been around long enough, because this really was an invention, like no one had paired the Ponzi with a direct sales outfit so elegantly before.

And the plan really did just get copied all over the country, which was another big part of the book is for decades, these companies sort of presented themselves with the kind of ingenious origin story that we get for Apple or for Facebook or whatever, that it's these Mavericks and they come up with this amazing scheme, whether it's Amway, whether it's Herbalife or Mary Kay.

And what I was able to do was track how these people, just like a virus spreading or a map, you can actually just trace how they pick up the plan in one company and bring it to their own.

It really is just like this web of people doing the same fraud.

And so by the time we get to the 70s, when they've been around long enough, it's clear that this is something very harmful.

People are spending a lot of money and they're not making it back.

What they're told about how easy it is to recruit and grow never works the way it says it does.

And some of the companies are scammy enough and they become actually quite masculine during the 60s and 70s.

They do this kind of like alligator shoe gangster thing, the get-rich quick kind of skeevy guy.

Those companies are being built that way, primarily in California, and they attract a lot of regulatory attention.

And so what's happened on the other side is the more conservative companies, which are Amway and Mary Kay, and they're also very explicitly conservative and Christian, they've been sort of seeding political support and basically building up this false divide where those are the bad Apple companies and we're the good companies.

And so by the time the FTC is ready to crack down on the biggest MLM companies in the country, Amway is the most politically influential and powerful.

And if people don't know, Richard DeVos and Jay Van Andel are the founders of Amway.

DeVos is in Betsy DeVos's father-in-law.

And they by then have become huge members of the GOP, like funneling millions of dollars every year.

They've helped start Heritage.

Jay Van Andel is the head of the U.S.

Chamber of Commerce, and they are extremely powerful and influential people.

And the FTC basically says, okay, we've shut down some of the worst offenders.

We're going to allow...

Amway to continue its business model.

They don't even really open Amway's books and they just take Amway's word for it that it has these rules in place that keep it from being a pyramid scheme.

It's called the Amway rules.

They make that decision in 1979 against a huge backlash, this right-wing reactionary backlash that we now call the new right.

Much of it focused on the FTC itself.

So the agency actually making the decision against Amway, which I go into in the book in detail.

Basically, the FTC kind of puts its hands up and says, okay, fine, this business model, we'll let it go through.

Legitimate multi-level marketing exists.

And that is a moment that unleashes MLM across the world through Reagan and Bush One.

There's not a single prosecution against a pyramid company.

And that's when it literally spreads everywhere like a horrible virus.

And so that's the only reason that it's, quote, legal.

MLM's never been on trial.

There's not a SCOTIS decision.

There's no legislation, right?

It's just legal in this gray area.

You say that there's really no numbers on this.

The IRS can't know this kind of thing.

Like, what are the reporting rules around this stuff?

The IRS could actually, you know, tell us maybe how many people are reporting themselves as direct sellers on their taxes if they're doing their taxes.

For many years, MLMs have been accused of teaching people basically how to do tax fraud.

I was wondering about that.

That was the question behind the question.

Yes, exactly.

So in the 80s, actually, right after this decision, the next scandal for the Amway founders was being hauled in front of Congress to testify that they weren't doing tax fraud.

And of course, in Congress, J.V.

Nandel is testifying and they play a tape recorded secretly by agents who had observed a former IRS agent, current Amway distributor, telling people, put your kids as your assistants, write off your dog as your security, you know, basically teaching people how to keep as much money from going back into public coffers as possible.

All of which, maybe just very briefly, because this is also a financial service podcast.

No, it's not.

All of that's tax fraud, by the way.

That's very important.

Yes.

That is literal tax fraud.

Yes.

I mean, one of the things I love about the book is that because MLMs are so exploitative and because so many of their sort of internal mythologies rely upon this like genius founder or genius inventor figure.

It's got so many of these characters where you're just kind of reading and just like slack jawed at the audacity of these fucking people to like commit these

extreme frauds and like wildly lie to and exploit gullible members of their downline and all the way up to like members of Congress, right?

And there's it's all these like little asides in your book where you're like, well, here are the six frauds he committed before he founded MLM.

Yeah, I mean, they're total charlatans.

Yeah.

And MLM is, to me,

in these moments where, and I feel like we're in one now, not to like bring it all the way back to the present, but like, for example, this like abundance discourse and this sort of like, where are we on the left?

What can we do here?

In these moments where it's like, how much do we need to confront capital?

How much do we need to abandon this system that we have?

And if you look at the history of MLM, it's deployed at every moment where that question comes up.

And so the guys that come out in front are these like extreme figures because the movement does need somebody that's going to tell a story because it comes at a crisis, right?

Like that's why the 70s are such an important moment for MLM because stagflation is so bad.

The world economy is so bad where these questions of maybe we will become communist, maybe we will become socialists, maybe we will become feminists, like young people, housewives, you know, the consumer movement, the civil rights movement, these are building against a backdrop of real uncertainty.

And so you need these figures, the people that are going to come out and recruit people to the other side, like, no, we're going to fix capitalism with more capitalism.

They have to be these like incredibly charismatic and sort of deranged figures.

They're the ones who are going to help tell the story to smooth over the contradictions of capitalism.

And MLM really actually makes you pause and say, wait, are they contradictions or are they lies?

Yeah.

And there's this like other side to to it, right?

Because while the people who are telling the story that is supposed to smooth over the contradictions of capitalism are often very charismatic and endowed with this like quasi-pathological confidence or just dishonesty.

There's also the other side, which is the people who fall for MLMs are, I think, often, they reminded me often in your account of the people who get like recruited to extremist organizations or the people who get recruited into like religious cults.

It's like people from demographics or who are personally just being sort of like tossed around by the tides of history, right?

Like people who are of a demographic that is getting exploited or having their status changed in very quick succession.

And I think like the beautiful merger of these two, like the charismatic leader and the like vulnerable demographic comes to us in Mary Kay, who is such a psycho, Bridget.

I like didn't, I did not know anything about this woman before.

Like I just knew it.

I knew the pink Cadillac, like a lot of people do.

Full psycho.

Tell me about Mary Kay because I was so fascinated by her.

Mary Kay is a crucially important figure in MLM because I really think women helped sell MLM in a way that proved existentially, it made it existentially viable in a way that I actually think that if If you only had Amway, the like weird conservative Christian Michigan Calvinists, and then the like scammy guys in San Francisco was a big one called Holiday Magic and another one called Coscot, the California sort of slick suited guys.

I think it might have collapsed because you don't have like a good avatar.

You don't have a sympathetic figure at the bottom to sell this like populist story that you're telling.

They really needed women to sell the story that it was a populist way to transform people's circumstances who deserved it.

You know, single moms, widows, housewives, that they were turning these sort of powerless figures into powerful, you know, American entrepreneurs.

And Mary Kay was an early company.

She started her company in the early 60s.

And again, with this story that was just like, oh, she was in regular old direct selling and came up with this amazing method.

That had persisted for decades.

And it just stuck with me because it was like, okay, if she really did come up with this on her own, maybe MLM isn't just this copied fraud all over the country.

She loves telling her origin story, which is that, you know, she was going to start her own makeup company.

She's in Dallas.

It's 1963.

And her husband, who's a salesman, has helped her, you know, basically plan the company.

And the day before, or some short time before it's supposed to launch, he drops dead at the breakfast table.

Oh, wow.

And so then she's on her own.

She tells this story about how direct selling was something, you know, that she was a single mom, all this stuff.

So she's both, she's very conservative.

She's Baptist Christian.

You know, it's very obvious, sort of her, her kind of cultural politics for sure.

But she's also a little modern in that she is a female CEO.

She starts her company and is telling women, like, you can make your own money.

And she rides that line really effectively.

But what I was able to uncover was that her husband simply trained in another pyramid company before he died and just learned the plan.

That twist at the end of that chapter, it's like, dun, dun, dun.

He worked for NutriBio.

It was so like, because it looked in the history as if Mary Kay had sort of sui generis, like reinvented the wheel all by herself.

And then you discover that the breakfast table dead husband had, in fact, been working for one of these vitamin companies like just six months before he died or something, right?

And he had very clearly just like brought home the plan, this

scam model and like delivered it.

to his wife.

And then after his death, she ran with it.

And they're so smart to go to women because women are are even less, you know, the idea that they're going to scam each other.

And the early coverage of Mary Kay is so telling because even the New York Times is comparing it to Avon, which Avon is at this point regular direct selling.

And the headline of the article is something like, they held a morning party to try on makeup.

Like it couldn't be more frivolous.

And so no one looked at Mary Kay, who was this grandmother, you know, talking about God and the bumblebee, which is her sort of avatar for like a small creature that that like does more than it should biologically or something.

A lot to unpack there.

But anyway, no one would have thought that she is defrauding people left and right.

And of course, her whole story is full of lies.

She was never really single.

There's an amazing, robust Mary Kay Truther community called Pink Truth.

And they long ago uncovered other birth certificates that I was able to fact check and also bring up that she was just constantly marrying guys, which just means that she always had another source of income.

So from the very beginning, the idea that she was making an actual livable income and paying for her children with direct selling alone was never possible.

You know, no one was ever really making money.

One of her early recruits wrote this amazing expose where, you know, Mary Kay's like, she's the ultimate sort of like, we could have me too'd Mary Kay for, you know, this woman says, I'm going to get pregnant.

And Mary Kay's like, why?

You're never going to make any money if you get pregnant.

You know, she's like, don't do that.

She's spiking the punch bowl to try to like loosen people up so they spend more money.

She's ruthless.

She's ruthless.

So in sort of suppressing the fact that these MLMs all learn from each other, basically they rely on a story.

I must admit that I don't know how they self-present at all, but the legend would be something like Mary Kay Ashe, I guess is her name, right?

Yep.

You know, had a store that was so successful that she had to share it with the world.

Is that sort of the way they frame it?

I'm just trying to sort of understand what the fake story even is.

Yeah.

The plan-wise, it's always just that they realize it's the compensation system that's this incredible innovation that's almost on par with like the internet.

Right, right.

And truly, in terms of they've figured out a sales tactic, or they'll even call it a science.

The idea that the compensation structure itself is the innovation.

And usually it follows that same story that the original guys were telling, which is like they're sitting around talking about sales and how, oh, these are all these problems with sales.

And wouldn't it be great if, you know, instead of salesmen, they bring people in.

Salesmen are really good.

And what always happens is, you know, your salesman that you train is so good, but then they get promoted out of your team.

And so you're not getting the credit anymore.

So wouldn't it be amazing if you could keep those salesmen forever?

So it's always some version of that.

And with Mary Kay, it was like all about empowering women who were working at home.

It was giving them flexible work.

And they were incentivized to build a team who were really good.

And of course, that story makes sense if everyone's good at actually selling things.

But if the only thing you have to be good at is inducing other people into the scheme, uh-oh, we're back at a pyramid scheme.

But yeah, that's always the story.

And then there's always this sort of like biblical moment.

And for Mary Kay, you know, it usually involves like, you got to hit rock bottom to go up.

And for her, it was that she was passed over at one of these other companies for a man that she trained who was promoted over her.

So she actually has this feminist lightning bolt awakening where she's like, fuck this.

I'm going to start my own company.

And she's got this twang.

It's a great story.

It's just not true.

Yeah, it's fascinating that you note in the book that Mary Kay starts her cosmetics company the exact same year, 1963, that Betty Friedan, Friend of the Pod, publishes The Feminine Mystique, which is a book about getting women out of a psychically oppressive housewife role and into more meaningful and dignified, like paid work outside the home, right?

That was Betty Friedan's prescription for solving a problem that has no name.

And there's a way in which Mary Kay is taking that advice, right?

She kind of agrees, right?

It's women's entrepreneurship, women as this kind of like pioneering, acquisitive, self-reliant model that we often see ascribed to like the American man.

But at the same time, Mary Kay's gender politics are very, very conservative in this other way, where the woman as the capitalist entrepreneur is being merged with the woman as the like object of beauty, the object of like superior grooming and decorum.

And this is really on display.

at something that you do see like sort of manifesting at some other MLMs, these like large group gatherings where the ideology of the company is sort of like drilled in in this like quasi-religious ritualized way.

But I think Mary Kay does this in a way that was like insane to me, right?

Which is these, they're called seminars in which the top sellers are basically paraded in a beauty pageant, right?

It's like

an insane little performance that they put on.

Yeah, I love the term seminar because it's so deliberately sort of academic almost, right?

But it's a pageant and they're wearing furs and ball gowns and sashes and they're getting awards just like a pageant, which in Dallas, where Mary Kay started her company would have been, right, like very culturally salient, like something people really understood and wanted to be a part of.

And, you know, the women being celebrated, right?

They're top buyers, but we're calling them saleswomen.

Right.

So it's also just transforming what they do and literally turning their exploitation, how much they're buying, which for many of them is like literally credit card debt, you know, nowadays.

And back then would have just been buying and buying vitamins that they maybe stashed in their basements and calling them sales, which like we've just discussed was previously this masculine identity, right?

So to be a saleswoman is very exciting.

And so it's so psychological.

And everyone in the room kind of has to be lying to each other, to themselves, because everyone knows you're just buying.

You know, in Mary Kay, the fiscal year kind of ends right before seminar and it's this like incredible race to buy, buy, buy.

buy, and women are constantly buying on each other's credit cards, taking loans just so they can buy more.

And, you know, again, I hate to tell you, Adrian, but it's all over the world.

It's in Europe.

This is not just on our home turf.

So grim.

Yeah.

So grim.

Our listeners can't see Adrian's look of just like defeated distress on his face.

It's so dystopian.

His face is like crumpled.

into disappointment as over the course of this conversation.

But so one question I had about the seminar seminar is like, that's self-help stuff, too.

I feel like our friends over at If Books Could Kill always make this point that half the self-help books seem to like come, or 90% of self-help books seem to come down on like, hey, if you really want to be rich, give seminars for other idiots.

And then they also, I mean, like, it's the same downline idea, except with like the secret or something like that.

So I'm guessing that that's, that that sort of evolves in tandem.

Oh, yeah.

I mean, MLM actually helped fuel the self-help movement as we know it today.

And also, on the other side, tapped into the self-help movement as it existed.

So

the alignment between multiple marketing and how it takes up from the positive thinking movement is huge.

And by positive thinking, I mean the sort of new thought movement that comes out of the end of the 19th century.

One of the most important female figures of that is Mary Baker Eddy, who founds Christian Science after the Civil War.

And that really comes out of this like anxiety about middle-class Americans, but specifically middle-class women, like as rapid industrialization and you know, all these changes in American society are happening.

Women don't have the same prescribed role that they once did.

Obviously, if you're a working woman and you have to like go work in a factory to support your kids, you have a role and it sucks.

But for middle-class women, like, what are they going to do?

Who are they going to be?

And Christian science, this idea that you can actually change your physical environment with your mind and that all of this unrest inside that you can,

the answer is within you.

We don't have to do anything to change society.

We just have to go inside.

Like, that is where that comes from.

And the way that that then leads into a kind of sales version of that self-help.

One of the biggest books at the time that did this, and again, new thought has a huge resurgence after the Depression when there again is all this unrest.

And one of those is called Think and Grow Rich by Napoleon Hill, which is, of course, like he's a charlatan, abuser, like crazy piece of shit.

Also, like, starts some companies that start to look like MLMs because they're based on recruiting.

But anyway, Think and Grow Rich, like some of the early MLM guys just take that book and copy it and do their own little tweaks.

And those are early MLM books.

Mary Kay does the same thing.

They take his concepts like calling sales sharing.

That's Napoleon Hill.

The go-giver rather than the go-getter, which again is this amazing rebrand of sales.

Like, oh, no, I'm not a go-getter, I'm giving.

I'm not like a creepy salesman, I'm sharing with you.

You know, they take that from her.

And then, of course, in the 50s, Norman Vincent Peale, when he writes The Power of Positive Thinking, that's a huge bestseller.

He's really closely associated with MLM in different ways.

And of course, he becomes Donald Trump's childhood preacher.

And that is where Donald Trump learns positive thinking.

Buckingham.

I told you.

I knew you were going to get there.

And I was like, fuck.

And

Mary Kay, in the 70s, again, another moment.

Like, truly, it tracks over like every time we have a bust where it's like an uh-oh moment in the global capital order.

The self-help movement really explodes.

And the MLM people are huge on that circuit.

They call them positive mental attitude rallies.

And the DeVos and Van Andel people, the Amway people, they pay for it.

They team up with Robert Schuller, who's this California televangelist.

And Mary Kay is big on these circuits.

And they're just like, keep going, keep going.

Nobody questioned anything.

Very specifically, don't join a political movement.

Don't join a union.

Just keep your nose to the grindstone.

And she's a big part of that.

And now that, of course, has exploded.

Like, you know, the world of podcasts, audiobooks, speeches, seminars is its own cottage industry.

And you can directly connect the lines.

And I can do it if you want, or people can buy the book.

But Tony Robbins, directly connected to mlm keith runieri from nixium directly connected to mlm est werner erhard directly connected landmark forum could keep going but i won't but anyway that's how big it gets jesus bridget i think your lunch hour might be wrapping up so we should let you go but i really want our listeners to buy and read your book so i have more people to talk about it with because it is so densely researched.

It is so propulsive.

It is so weird at times.

And it really did just unlock so much about this like nefarious network of American capitalism and the psychology behind it for me.

It feels like when you're at the eye doctor and they like click the lens into place and suddenly you can like see everything.

That's kind of what reading your book felt like for me.

So I really recommend people to pick up Little Bosses Everywhere.

It's a great read.

I initially got the feeling that like, oh, well, the other thing this reminds me of, of course, is investing in Silicon Valley, which often also has the feeling of affinity fraud.

But then I realized, and where also, frankly, the first thing any founder is supposed to do is do a friends and family round, which

feels a lot like this.

On the other hand, you've just described this awful kind of maze that these people have to navigate and this sort of nightmare, sort of hamster wheel scenario, which is horrible when it happens to middle class people and deeply funny when it happens to the rich.

So I do think Silicon Valley at least has the decency to do an MLM on the mega rich, which is in its own way funny.

So thank you, Elizabeth Holmes.

Yeah.

Yeah.

In a rare

to Silicon Valley, thank you for not doing this to America's lower middle class, but just doing it to people with a pool.

Right.

If they weren't also making things that are going to ruin the world, that might be even more funny.

I'll just say, like, I do think there is this

feeling of like, how can a pyramid scheme be useful to us in terms of, you know, being a paradigm?

How can we use it to sort of make parallels?

And

Elon Musk recently and lots of conservatives do this.

He called Social Security a Ponzi scheme, right?

Right.

You know, what's not true about that is, yes, it does depend on future generations who have the ability to pay in.

So in that way, it relies on expansion, but it actually has a growth function, right?

What makes something a pyramid scheme is the growth function is the growth itself.

It's growth for growth's sake.

Now, that's where we can draw a line with maybe not the way necessarily Silicon Valley is actually funded.

If there really is a product that one could argue has a utility and has a customer base, right?

That market, the demand and the supply, maybe it really exists, but it does rely on this like constant gesture to the future and constant gesture to growth.

And that we, if we allow mega, mega, mega growth by individuals, that it will trickle down to us all and deliver this future for us.

And that any attempt to impinge on that growth is detrimental, right?

Like that story with which Silicon Valley justifies all of its harms, that that growth will one day, we will feel the benefits of all of it.

That is the ideology of MLM.

When you get to the end of the day and you look at the structure that you've created where a huge amount of wealth is kept by a tiny group, MLM is what teaches you to say, I'm not going to get mad about that.

I'm going to just build my own under, right?

And even as more and more evidence that none of us have time to build our own Amazon, to build our own Facebook, you know, it's eating us all.

The idea that we're all gonna be able to have equal chance to do that is so laughable, right?

But that's like really what MLM has truly embedded in people's hearts and minds for 80 years and now has escaped containment.

And I really think is what keeps people from getting mad, right?

And taking to the streets when they look at a Bezos or they look at those, you know, true oligarchs standing behind Trump, you it's like, no, no, don't worry, I'm going to be my own girl boss.

It teaches people to quash their own inner descent and to really

keep from seeing brighter futures.

Wow.

This has really been eye-opening and terrifying.

Really uplifting.

I'm so upset already.

I can't even imagine what reading the book's going to be like.

But thank you so much, Bridget, for being here.

And thank you to all our listeners.

Given that we're talking about multi-level marketing scams, please subscribe to our Patreon.

And maybe

downline, you can add a few more people.

We do offer really competitive packages.

Anyway, with that in mind, thank you so much.

Thank you.

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