7.29.2018

Pyramid schemes.

I first became interested in the weirdness of pyramid schemes when friends of my parents, a couple I've known since I was fourteen, invited me to participate in one. The wife - we'll call her Karen - approached me at a gathering one afternoon and said that, based on what she knows about me, she thought I'd be interested in an opportunity in the community. She phrased it as a way to help, to foster education, to guide young people.

In my mind I envisioned a non-profit group desiring to help kids develop the tools and knowledge for success in school and beyond; and she was right, that is right up my alley. Unfortunately, the reality was furthest from that.

What is a pyramid scheme? It's a business model that recruits members using the promise of payments in return for enrolling additional members. Since there are fees and dues for participating, the more members you recruit, the more money you make, as the money heads straight up the pike. Because this is an unsustainable practice, pyramid schemes are illegal in the United States.

You may have heard of Amway, which got taken to court in the 1970s, or more contemporaneously Herbalife, which (until recently) was in the process of a possible take-down by Pershing head Bill Ackman. (Watch the documentary Betting on Zero) Additionally, well-known companies like Mary Kay and Avon are often lumped in under the designation. I won't be getting into the legitimacy of specific companies here; often a Google search is its own reward.

My personal experience is based on an organization with rabid defenders and as such, I won't be mentioning it by name.




I met with Karen and her husband "Bill" at a local coffee shop a few weeks after her initial conversation with me. This was already out of my normal routine, as I usually am uninterested in participating in anything involving commitments to other people; but since I wanted to pretend to be a little more human, and I know Karen and Bill so well, I figured this was as good an opportunity as I was going to get.

I noticed pretty early on in our discussion that this was not about a local non-profit. Bill had resources at the ready - a few books, a DVD, some pamphlets - which rang a weird bell in my head. Our discussion was more of a business presentation, and eventually Bill got out his iPad and played a youtube video created by the organization.

I grew sadder and sadder as I watched the video - I was familiar with the huckster vibe of the founder's spiel, all vagueries and promises, lots of mention of wealth and being your own boss and living the dream, and then that magical word 'recruitment.' There were testimonials by four different couples (of course they were married - more on that later), and what I still chuckle about two years later is how one of the guys just kept talking over his wife and she was doing everything possible to keep the frustration off her face.

Karen and Bill had brought me to the coffee shop to recruit me into their pyramid scheme. Two very telling bits of conversation stick in my mind: the first is when they kept prodding me to admit that I wanted to be wealthy, that I wanted to quit my job (which I actually love) and gain financial independence via this group. And I honestly just kept saying no, wealth is not my goal in life, my goal is personal happiness. 'Well, wouldn't financial freedom help you achieve that?' they pressed.

The second was I naively assumed that since they were so gung-ho about their group, that they had achieved success. 'So, you guys are doing pretty well with it then?' I said. And Karen paused. She had to think about how to frame it - because the answer was ultimately no. They had been involved with this group since it had a different name back in 2008; they truly believed (or at least said they believed) in the leader's promises and ethics; but seven years later they had not gained financial freedom. Seven years of trying to make it in a pyramid scheme.

Seven years stuck in a scam.

***

There are pyramid schemes - those that produce a product to sell but are still based on recruitment - and there are pyramid schemes, which focus solely on recruiting and literally do not offer their own tangible product. This organization belongs to the second group, in my opinion the most insidious.

How do people keep falling for a company that doesn't even pretend to sell a product? Quite simple. They use the core methods of cult recruitment, sprinkled with lies and mis-directions. People who are susceptible to cult behavior will more naturally fall in with a pure pyramid scheme.

First there is this notion that every single human being desires immense wealth and material gain. In the video I watched (and in the meeting I attended - more on that later) that was the main assumption. You want money. You want lots of it. You want so much money you never have any 'worries' again. You want fast cars. You want big houses. You want private schools for your kids. You want the plastic surgeries and the trips to Vegas and the $5,000 bottles of wine. But not just you - every single human being desires these visible trappings of wealth. Every single human being. Therefore, you would be an idiot not to join! You say you don't want wealth? You like your job? Your life is fine as it is? Are you insane?? You want wealth. Period.

Then there is the proposition that there is no one on earth who would not benefit from and be successful in the scheme. Anyone from the janitor to the bank president has a place in the pyramid scheme. After all, who doesn't want more money, right? You can never have enough. College kids would benefit. Single mothers would benefit. Symphony conductors. Train conductors. Grandmas. Engineers. The recently laid off. Look to your left - then to your right - that person can be successful in the scheme. Every single person on this planet can participate and be successful in the scheme .No one on earth can be left out of recruitment.

Additionally you find the use of vague, populist ethics thrown in - why wouldn't you want to be healthy/rich/successful? - in an attempt to keep you from remembering that you are the captain of your own fate and you decide what you do and don't value for yourself. Hey, this is America - we are defined by living the good life. Nobody wants to struggle or be unfulfilled - why would you? Why would you want to go to a job day after day when you can never work again? Why would you want to depend on some faceless corporation for your paycheck? Why would you want to drive the same old car for four years when you can have a new one every year? To put it slightly more insultingly - why wouldn't you want to join our group and live the dream? What's wrong with you?

Most of the time quite clearly as an afterthought, watered down religion will be tossed in in a bid to capture those whose fealty lies with something more personal and lasting, like their god. The allegedly successful members always attend church. They're always married with a brood of kids. They mention 'praying' for their life to change before the pyramid scheme came along. In the video I watched the leader eventually said, out of nowhere, something about God having a plan for his life. But this isn't a Christian or a Mormon organization - they just know that pretending to worship the same god you do makes them seem safe, and moral, and familiar.

Those success stories, by the way, are always charismatic people. They're not shy or introverted with no desire to give huckster speeches to large groups of people, let alone approach complete strangers in a Starbucks for the purposes of recruitment. You would think that alone would show that pyramid schemes are actually not for everybody but rather a specific type of sales personality. But no. And instead of saying 'that's true, not everyone can do sales and recruitment,' Karen and Bill just circled me back to 'do you want to be rich?' The implication being I should want to do whatever it takes to be rich, even undergoing tasks I'm ill-suited for and being dishonest with myself and ultimately unhappy.

And that is the scourge of 'recruitment,' and why pyramid schemes must engage in cult tactics. The only way to make the kind of money that is promised is to try and recruit every single sentient being you come across in your day to day life, and the only way to justify such behavior is to believe that everyone wants it, everyone needs it. No one is allowed to exist outside of this dysfunctional, disgusting definition of humanity.

***

After the coffee shop meeting Karen convinced me to give it one more shot, and attend one of their weekly meetings. 'Why the hell did you go?!' you shout. 'Were you taken in?!'

Nope. Three reasons. One, Karen and Bill are so otherwise normal and awesome that it was very difficult for me to believe that they were truly part of something this bad. I still trusted them a bit. Two, I had never been presented with a true pyramid scheme before and still thought there may be a product somewhere that I could get behind (you know, like how Mary Kay sells actual makeup!). Three, I was morbidly curious.

The 'meeting' was in a conference center at a hotel in a neighboring town. And it was not a 'meeting.' About 200 members gathered in this large room and milled around, forcing themselves to be the model of sociability and salesmanship by introducing themselves to newbies and encouraging longer-standing members, all with a sort of shell-shocked look glinting in their eyes if you looked close enough. Some of that may have had to do with the insanely loud music that was being blasted in - like, really? Are we being hypnotized??

The meeting started at about 8:30pm - yup, you read that right, and the speakers did not start till almost 9:15pm. The reason Karen and Bill gave me was that the organizers wanted to give the members time to get home from their actual jobs (that they had to have because membership in a pyramid scheme wasn't working), and to have dinner with their families and whatever. It was supposedly all about looking out for them. In reality, it was a test of dedication, a tactic used in every cult. No one needs to be out at these meetings till ten and eleven o'clock at night - especially those with jobs and families.

I hate meeting people and I really hated being there and knew before the speakers started that this was the end of the line for me. The speakers themselves were annoying - they had gained financial independence, were rolling in dough, vacationing in the tropics, they were friends with the founders, etc. (Honestly I wonder if these people are just paid by the organization to tell these stories. Who can verify them?)

The second speaker, a big guy who wins people over by telling jokes, used charts and graphs to show that the organization wasn't a pyramid scheme - it was multi-level marketing! It was more like a ladder. Ohhhh. Okay. Then he insisted that normal businesses are the pyramid schemes, with there being more people in lower positions and those few higher up making the most money, and that this group totally isn't because anybody can make it. Except of course that's bullshit. What makes pyramid schemes illegal is the focus on recruitment in order to survive in one. There may be a hierarchy at my job, but I don't have to recruit a single person and I get a solid paycheck every two weeks in spite of that fact.

Despite this same lie being told in every pyramid scheme, the hucksters still continue to tell it and with very little modification.

And it's very easy to see the impossibility of the necessity to survive solely on recruiting. On a very small scale your efforts may seem to pay off in the beginning, but the longer you go the more you must be susceptible to the unsustainability of it. Those you recruit, for example, will more than likely flame out and you'll lose that revenue stream. Then you have to start recruiting again to fill those spots, when the utopian promise was that once you recruit five people, they will recruit five people, and they will recruit five people, while you sit back and watch the money start to pile up. No. You will be recruiting forever - just like Karen and Bill.

What's worse is the tacit implication that if you aren't succeeding, it's your fault - it's not because you're in an organization where over 90% of members never make a living wage. Once you are convinced that you are the problem, there is possibly no end to the sacrifice and self-flagellation in which you will engage in order to measure up, to finally reap the rewards that you've been told are just around the bend. And the organization will just keep taking your money and telling you to try harder.

The product I was hoping to see? Doesn't exist. Instead there were self-help type materials that members were expected to buy - thus creating another revenue stream for the organization. Incredibly, I was told I would have to purchase them from Barnes & Noble; they weren't even available through whatever website this organization had. And I could find no link to these materials in anything the speakers went on about. So essentially they've created an artificial cover of selling a product (this is the "business opportunity" you're supposed to take on) when the goal is, as always, recruitment, not sales.

***

The cult characteristics are clear. Cults cannot survive without members. Therefore the rule is that everyone wants what the cult provides (belonging, salvation, wealth, etc.); everyone would benefit from it, therefore you'd be just nuts not to join; faint reverberations of Judeo-Christian (or sometimes Buddhist) ethics are necessary to widen the net of new members; outsiders are unenlightened or dangerous, so do not commune with them (even family and spouses); and tests of dedication are necessary in order to break you down and make you desire the comfort of the group and leader more and more.

Sacrificial obligations are evident as well, the easiest being your money. There isn't a terribly high bar to clear to enter the organization's scam, but it was higher than I could afford at my salary at the time. This only allowed Karen and Bill to reiterate again that I was the perfect candidate - I clearly was in desperate need of more money! Besides, don't you have to spend money to make money? Yes, sometimes. But not on a cult.

Probably the trait I hate most in cults, and cultish religions, is that no matter what you say, a committed member of the group will have a rebuttal. Not based in fact, of course, but assumptions and excuses. The information wasn't presented to you correctly - that's not how all meetings are - did you read the whole book? - we're just trying to better ourselves - how else will you be the best you can be if you don't listen exclusively to our message? - your friends just don't want you to prosper - your husband is being a negative critic - if it's not successful why do we have so many members? - and on and on and on and on till you want to puke.

As mentioned, one of the most telling aspects of a cult (and this includes cultish religions) is that once you are a member, you must break ties with even the most personal relationships in your life if they do not support your membership. You must only socialize with other members. Surely Karen and Bill's group doesn't go that far?

On the ride home from the bunk 'meeting,' Bill gave me his last-effort pitch, letting me know it would only cost $137 or whatever to start down the road to all that wealth. I politely declined for the eighty-fifth time and said goodnight. I have not heard from them since. That probably doesn't seem like a huge deal, or even evidence, but there are others who tell the stories.

And there are others who speak out, for example here and here. Pay special attention to the comments, as you will see the fierce defenders coming out of the woodworks with their assumptions and excuses - and many, many sad stories told by people who can see this organization for what it truly is.

I am frankly appalled at the type of personality that is required to run such a scam on so many people, to use cult psychology in order to maximize profits at the very top, and to refuse to take any responsibility whatsoever for being a piece of shit human being. Many people are susceptible to these kinds of groups for a variety of reasons, and they and their trust and their money and their need for belonging are preyed on without so much as a hint of remorse. (For an excellent book about the psychology of cults, read The Wrong Way Home by Arthur Deikman)

This is America, and life is hard. We all have desires that are very difficult to realize. The fairy tale abides no formula; luck is perverse. But we must be realistic and accept these things, and learn to discern what is and isn't in our best interests when seeking a path to a better life. You know as well as I do, that if something seems to be too good to be true - it is.

Stay safe out there.

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