Factually! with Adam Conover - Everything in America is a Pyramid Scheme Now with Bridget Read

Episode Date: August 13, 2025

Pyramid schemes have been a comedic punchline for ages now, but they’ve never been more relevant. Not only is there still a thriving culture of multi-level exploitation in this country, but the dark spirit of pyramid schemes has wormed its way into countless aspects of American life. This week, Adam speaks with Bridget Read, writer at New York Magazine and the author of Little Bosses Everywhere: How the Pyramid Scheme Shaped America, to discuss how our country became one big pyramid scheme. Find Bridget’s book at factuallypod.com/booksDownload Cash App Today: https://capl.onelink.me/vFut/2vjj5nrh #CashAppPod. As a Cash App partner, I may earn a commission when you sign up for a Cash App account. Cash App is a financial services platform, not a bank. Banking services provided by Cash App’s bank partner(s). Prepaid debit cards issued by Sutton Bank, Member FDIC. Visit cash.app/legal/podcast for full disclosures.--SUPPORT THE SHOW ON PATREON: https://www.patreon.com/adamconoverSEE ADAM ON TOUR: https://www.adamconover.net/tourdates/SUBSCRIBE to and RATE Factually! on:» Apple Podcasts: https://podcasts.apple.com/us/podcast/factually-with-adam-conover/id1463460577» Spotify: https://open.spotify.com/show/0fK8WJw4ffMc2NWydBlDyJAbout Headgum: Headgum is an LA & NY-based podcast network creating premium podcasts with the funniest, most engaging voices in comedy to achieve one goal: Making our audience and ourselves laugh. Listen to our shows at https://www.headgum.com.» SUBSCRIBE to Headgum: https://www.youtube.com/c/HeadGum?sub_confirmation=1» FOLLOW us on Twitter: http://twitter.com/headgum» FOLLOW us on Instagram: https://instagram.com/headgum/» FOLLOW us on TikTok: https://www.tiktok.com/@headgum» Advertise on Factually! via Gumball.fmSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This is a headgum podcast. Searching for a romantic summer getaway. Escape with Rich Girl Summer, the new audible original from Lily Chew. The exquisitely talented Philippa Sue, returning to narrate her fifth Lily Chew title. This time, Philippa is joined by her real-life husband, Stephen Pasquale, set in Toronto's wealthy cottage country, aka the Hamptons of Canada. Rich Girl Summer follows the story of Valerie, a down-on-her-luck event planner, posing as a social light's long-lost daughter, while piecing together the secrets surrounding a mysterious family

and falling deeper and deeper in love with the impossibly hard to read and infuriatingly handsome family assistant, Nico. Caught between pretending to belong and unexpectedly finding where she truly fits in, Valerie learns her summer is about to get far more complicated than she ever planned. She's in over her head and head over heels. Listen to Rich Girl Summer, now on Audible. Go to audible.com slash rich girl summer. Hello the truth. I don't know the way. I don't know what to think.

I don't know what to say. Yeah, but that's all right. That's okay. I don't know anything. Hello and welcome to Factually. I'm Adam Conover. Thanks so much for joining me on the show again. You know, for as long as I've been alive, pyramid schemes have kind of been a punchline, right?

sort of known as this scam from the past that embodies the worst and dumbest attributes of capitalism, where the boss finds someone to exploit and then tells them that the only way they can profit is by finding someone else to exploit and kicking back the profits from all those suckers back up to the top, right? We've heard a pyramid schemes. We know that they're bad. We imagine them as being illegal in American society, right? Well, even though this exact structure is technically illegal,

the influence of this perverted business model on Americans, a society, and our economy is massive. And today, pyramid schemes are still with us in the form of shady but not necessarily illegal multi-level marketing companies. MLMs make money by selling products rather than just by recruiting new members, but they're fundamentally structured the same as pyramid schemes. You join into an MLM by buying products from the company to quote unquote sell, but then you mostly spend your time recruiting others under you to do. the same and kicking all of the money back up to the top. Now, these companies can supposedly sell consumers everything from knives to cosmetics to health supplements, but to the people who work for them, what they're really selling is a dream of financial success and independence.

And we see their influence all over our economy, from hustle culture to social media, to our very politics itself. So we need to start asking, where did this perverted, corrupted form of capitalism come from and how has it embedded itself into the very foundations of our society? Well, our guest today wrote a fascinating book on this topic. Her name is Bridget Reed. She's a writer at New York Magazine

and she's the author of the new book, Little Bosses Everywhere, How the Pyramid Scheme Shaped America. I found this conversation incredibly fascinating. She really convinced me that the multi-level marketing scheme embodies everything that is wrong with America today. It's very logic has infested

not just our political, but our economic. culture as well. Now, before we get to this conversation, I want to remind you that if you want to support the show, you can do so on Patreon. Head to patreon.com slash Adam Conner. For five bucks a month, can do every episode of the show,

ad free. We also have an awesome online community. We'd love you to join. And if you want to come see me on the road, and I hope you do, I'm taking my brand new hour of stand-up comedy all over the place this fall. I'll be in Indianapolis, Indiana,

from August 14th through 15th. I'll be in St. Louis, Missouri, from August 16th through 17th. I'll be in Oklahoma, in Oklahoma City and Tulsa from September 11th 14th, Brea, California, September 22nd, Tacoma, Washington, and Spokane, Washington from October 17th through 25th, I'll be at the Funny Bone in Des Moines in Iowa on November 5th, the city winery in Atlanta, Georgia on November 6th, Philadelphia, Pennsylvania on

November 13th, the Lincoln Theater in Washington, D.C. on December 4th, and bottle rocket in Pittsburgh, PA on December 5th and 6th. And also, we're setting up a new show in L.A., we're going to have that date for you very soon. If you want to get those tickets at tour date, said to Adamconover.com. I'd love to see you out there and give you a hug at the meet and greet after every single one of my shows. And now let's get to this week's interview with the fascinating Bridget Reid. Bridget, thank you so much for being on the show. Thanks for having me. I'm really thrilled to have you. You have a new book out about

multi-level marketing schemes in America and pyramid schemes. How pervasive are these in American society? We really don't know is this short answer because, you know, we have, there's a multi-level marketing industry. They have a lobbying group. It's, you know, as legitimate as any other American industry on Capitol Hill and they release information. They say there are between 6 and 7 million, maybe average participants in this industry in any given year. But people churn in and out so often. I mean, in the 70s, there were statistics that one in eight Americans were participating.

Whoa. And that was, you know, over 40, 50 years ago. So I, untold millions. and millions is the answer. And anecdotally, I mean, it's pervasive in society, you know? And what is bad about this industry? I mean, let's just start. There's got to just be one simple thing that's bad, right?

Well, what you said in the beginning and describing it, it's about multiple marketing schemes and pyramid schemes, you know, already, right? That's sort of you're setting up, are they different things? Right. And my book really argues that they're the same. They're the same thing. They're functionally not different and that, in fact, multi-level marketing has never really had to prove itself as a legitimate business that operates in a different way from a pyramid scheme. And that's really what the book is exploring.

And I went into it, not necessarily believing that and just trying to make sense of this thing that is full of contradictions and very strange and sort of loosely scammy, but almost in an Americano, way. Like, it's a homegrown scam that we just sort of accept. And I was, but wait, also, like I said, they have this lobbying group. Also, they give hundreds of millions of dollars to politicians. Also, they've powered some of the most powerful people and wealthiest Americans, including Donald Trump. And so how can it be both? Yeah. And so that's really, the whole project of the book is actually to answer that very question, what is bad about them and why? So a pyramid scheme is something that everybody understands is bad. A multi-level marketing company is like just at this point a deeply ingrained part of the American economy, millions of participants lobbying as

fundamentally part of the economy as any business. You're saying they are one and the same, that in fact, multi-level marketing companies are simply pyramid schemes. There is a lot of evidence that, yes, there really is no multi-level marketing and pyramid schemes. It's a distinction without a difference. So tell me what is the classic pyramid scheme to get us started? Sure. So a pyramid scheme is basically a Ponzi scheme that just uses the sale of a retail product as a cover-up. And it sort of takes the main function of a Ponzi and almost democratizes it so that you have a million Ponzi's who are all salesmen. So if we start with the Ponzi scheme, that's your classic Bernie Madoff.

That's a Ponzi scheme. You're taking in new investors and you're using the new investors' money to pay off the old investors. Exactly. And the problem is you're not actually providing any returns and eventually you run out of people. Right. So it's just classic robbing Peter to pay Paul. And maybe you make up whatever your incredible proprietary investment scheme is. So for Charles Ponzi, for whom the scheme is named, who was a scammer in Boston in the early 20th century,

he, like, made up that he was doing some sort of stamp arbitrage internationally, and that's where he was getting the return. But in fact, he was just, of course, taking in new money from investors. And Bernie made off, same thing. You know, he had his- I think Charles Ponzi probably had a delightful accent. Don't you imagine him as being like, hey, I'm not doing a stamp arbitrage. Right, right, right, but with a little Ben Affleck and they're, like, doing a Dunkin' Donuts. Hey, you got to, hey, how you like my scheme?

Since he was in Boston for so long. Yeah, so that's a classic. Ponzi scheme. And what happened in the 1940s was these two salesmen who have their own uniquely interesting and relevant histories. One was a funeral plot salesman, a notoriously scammy and exploitative industry selling funeral plots. And the other was a Stanford educated psychologist and prominent eugenicist. They, they, they, came together and they discovered that there was this vitamin company, this homemade vitamin salesman named Carl Renborg, and this is all in Southern California, that he was

selling vitamins and they figured out, we're basically going to take this man's door-to-door business, which wasn't doing well. It was called Neutralite. And we're going to invent a new sales scheme. And what they eventually did was they imported the Ponzi and basically applied it to this rec selling outfit. So how neutral I worked is instead of just buying vitamins at a discount and selling them to customers, that's your classic, you know, door-to-door selling operation. They said, okay, instead we're going to reward salesmen on what they buy, not what they sell

to customers. And every salesman is going to have the opportunity to build his team, which is called a downline and make money off of what they all buy. So if you're signing up for the opportunity, you're buying a bunch of vitamins a month. You want to sell them in theory, but it doesn't matter. What they decided was, we're just going to reward salesmen based on what they buy. And they called it purchase volume. And that's the invention of what they called pyramid profits. How are they rewarded if they're, you know, I'm the salesman, I'm buying some amount of product. What's the reward? The reward can't exceed the value of the product I just bought. If you are inducing enough people with you to do it, you will be rewarded

based on that. So in that original scheme, basically the more you bought, the more you would get back from the company. They called it a refund at the time. They were just straight up about it. Like I said, they used the word pyramid. If what I'm talking about sounds like a pyramid scheme, well, they literally I would call it a pyramid scheme. It was. But at the time, we didn't have pyramid schemes. If everyone below me buys the product, then I get a refund on their purchases, which is not my original capital investment. So then I'm receiving a refund on someone else's money, and that's how I profit is the sales. Yes.

So you might buy in the original, you know, just to join the scheme, you might spend a few hundred dollars. And then what they decided was if you reached a certain amount, you know, 15,000. $1,000, that's what your group under you is buying, you're getting 2% back on that amount every month. That's not very much. It's like a credit card reward. But think about it. The thing that was the amazing thing about the invention and that what made so many

people want to join is it could go on forever. Right. So it's not just going to be $15,000 a month. You could build a downline buying hundreds of thousands of dollars worth a month. Right. But the classic problem with the pyramid scheme is you have the exponential. number of people who increase, right? Like it seems like I'll go on forever, but once you get to like seven or eight layers

deep of people, you run out of people on planet Earth. Yeah, it's immediately mathematically impractical, a pyramid or a Ponzi for that reason. Because we always run out, everyone's always running out. It's never as easy as you think to find a new recruit. And very quickly when the first, when neutralite this company where these guys invented the profits pyramid, very quickly. those couples who joined first because it was in 1945. So the first people who joined were white heterosexual couples in like the suburbs.

Very quickly records show that they were moving on because they had, you know, saturated the area, right? So this thing expands really quickly. And then, of course, really successful salesmen who had learned this profits pyramid, which they also called someone ominously the plan. They just were like, we're going to start our own and immediately started copying. And that's when you get multiple companies doing this and they become a real problem within a few decades. And that's where we get the term pyramid scheme. So who's actually profiting from this?

Like clearly the people who have started the company and are receiving every dollar of sales are profiting. But are any of the levels below them profiting? Sure. If you're able to build a big downline, if you get in or. early enough, you're going to do really well because you are being rewarded based on what everyone under you is buying. Now, what they do that's ingenious is they immediately call those purchases sales. So as this thing spreads, they're saying, oh, we're a vitamin company and we have, you know, whatever million dollars in retail sales, which at the time was a big amount.

You know, so there, it looks just like a vitamin company that you could compare to, you know, At the time, there was Bayer. There was work. You know, the pharmaceutical companies we have now, they were selling vitamins. Yeah. So everyone was really excited to see this successful little startup from California by these, like, you know, three self-sufficient salesmen doing millions of dollars in sales. But, of course, all they were tracking was what they were selling to their participants. The retail sales amount was always just hypothetical, a guess.

if they were really selling in taking those vitamins in turn and selling them to real customers. Yeah, I mean, that's the real question is that, okay, I'm the company. I'm selling it to a salesman who that salesman is signing up other salesmen and that's the pyramid and they're getting a cut of all the salesmen below them. But like are they presumably at some point, it's like you're going to sell it to customers. You're going to sell it to people who just want vitamins. Was that happening? Presumably.

But no, I mean, that's, and they're really open, you know, as much as, so, So Neutralate was eventually bought by Amway because the founders of Amway, Richard DeVos and Jay Van Andal, DeVos is in Betsy DeVos. That's her father-in-law. They were very early recruits of Neutralite in Michigan. And they, you know, eventually bought out Neutralite. And so a lot of what we know about the early company comes from the Amway records that they've released. And they were really open about the fact that this. was this purchase volume was their invention.

And so they actually took the worst parts of sales. We're just selling the actual product and got rid of it. They were like, it's going to be amazing. I mean, this whole problem with sales and selling and, you know, door to door selling at the time was a shitty job always. It was a shitty job. I mean, death of a salesman comes out in 1947, you know, around the exact same time that these guys invent this door-to-door selling operation that ostensibly is going to make

millions of people rich forever. I mean, it's a joke. I'm also thinking about like Dale Carnegie, right, which, I mean, I read how to how to win friends and influence people like over a decade ago. And it's actually a very useful book, right, as one of the first self-help books. And actually, it's got really good advice in it. It's a, I thought it was excellent. But it's also framed around this idea of sales.

Like it is sort of geared at salesmen, as was a lot of other sort of self-help promotional literature. You combine that with death of a salesman. You really get this sense of like in the early 20th century, there was just this sort of frenetic activity around the idea of selling stuff. How do you sell? Like be a sales guy. And all that means is convincing other people to buy things.

And this is simply, I guess, what an easier method of convincing people to buy things. Because you're not convincing them to use the product. You're convincing them to use your method of making money, right? You're convincing them to buy into your philosophy of sales, not in the product itself. Right. And how to win friends and influence people came out at the tail end of the depression. So actually when sales was experiencing a huge crisis in that this, you know, the massive

American consumer economy that had powered the incredible growth of the last, you know, almost more than a half century, right? Because after the Civil War in the United States, when, you know, we go from being. this agrarian republic to being a consumer economy. We have industrialization that creates, you know, massive manufacturing. We get cities, like just so much growth in upheaval from this consumer economy and making stuff for for customers and selling it, right? Yeah.

What happens in the Depression is, is a huge upset. Yeah. And there's a lot of, you know, almost an identity crisis nationwide of like, you know, know, are we actually going to all be delivered by this, by this incredible economy? Or are we, are we losing out? Are we at risk? And so the fact that those, you know, that kind of book, like, prospered in that, in that uncertainty. I think multi-level marketing, like, it makes sense that it was invented around the same time because it was like, oh, we're going to take this sort of awful drudgery. And door-to-door selling was really awful.

And we're going to actually, you can get really rich. Yeah. And we're all going to get rich and you can bring people with you. It's really, it's a fantasy. Yeah. And it was a fantasy. But it's an answer to a real anxiety at the time. Yes.

Yeah. Yes. And there's all kinds of, you know, the political, the politics underpinning that, these guys who invented it even before Davos and Van Andel, who then became very politically active in the Republican Party, the inventors were also, they were free enterprise guys. They, you know, in this post-war moment where they invented multiple marketing, you know, the Cold War was about to start. There was really, that anxious moment, there was a lot of pressure to produce, you know, American democracy as the preeminent global force, right? I mean, that's what is about to,

sort of start in that era, we're in the age of abundance. And it's the sort of golden American economic era. And a big part of that is anti-communism, right? Is this free enterprise, American version of capitalism we want to dominate the world with this version of, you know, private ownership, you know, that at the time wasn't a really important battle. And these guys were absolutely on the side of, you know, free enterprise that we're not going to go the way of socialism. We're not going to go the way of communism. You know, the New Deal, a few decades earlier, had sort of reset things a little bit in that capital and the capital's class was reigned in, right, by all the transformations of the New Deal. And these guys were definitely

on the side of some early, you could call them libertarians. You could call them libertarians. You You could call them sort of the new right, re-enterprice radicals. But they were certainly, they wanted to cede the idea that rather than collective struggle, the best way to lead the best life was to be your own little capitalist and start your own little empire, which, of course, is exactly what a pyramid scheme does, right? Or in multiple marketing, you are one little cog in a massive pyramid, but the inducement is that you can be the top of your own pyramid under you, even if you're at the bottom of someone else's, you know?

Right. We all will have the opportunity to be this little prospector and build our own empire. Oh, my God. I mean, this is very early in this interview. You've already connected, like, the sort of false promise in the multi-level marketing scheme to the false promise of capitalism, which is that even though you're on the bottom, you are also on the top, you know, even though someone. one's boot is on your neck, your boot can be on someone else's, you know, you can also be a boss

even though you're a slave. Exactly. And that is, that is made literal in this, in the structure of an MLM. Folks, this episode is brought to you by Alma. How often do you feel hurt, like really genuinely heard? For a lot of us, the answer is not enough. It can be so isolating to feel unheard. or like you're lacking a sense of connection in your everyday life. And this only feels worse if you're struggling with your mental health. And that's why I want to tell you about Alma. Alma makes it simple to find a licensed therapist who really gets you, someone who can offer support tailored to your specific needs and goals

and make sure that you are actually being heard. In fact, 83% of people who see a therapist through Alma say their provider is the right fit. And Alma therapists bring real experience to the table. On average, six years of it, with 20% practicing. for over a decade. They're easy-to-use directory lets you filter by things like gender, specialty, ethnicity, and more

so you can find someone you truly connect with. You can even schedule free 15-minute consultations to make sure it feels right before committing to a session. Better with people, better with Alma. Visit helloalma.com slash factually to get started and schedule a free consultation today. That's hello-a-l-m-a-com slash factually.

Are you as freaked out by phone scammers as I am? I mean, every day I get weird little messages about insurance for a car I don't own or a lost package I never ordered. Now, I never fall for any of these because I am a very intelligent and discerning, but I am getting older and stupider. And I might be just around the corner from being cranky old man Kanover who those young Rapscallions can easily fool out of his hard-earn bucks, you know?

And I'm not about to put my life saves into a coffee can and bury it under the fireplace. Modern times require modern solutions. And that is why I love Cash App. With Cash App, you can spend, save, and live your life knowing your money is right. where you left it with advanced built-in security, protections you can count on, and help when you need it. Spend with peace of mind today and order a cash app card in the app or at cash.com slash card.

Cash app does more than you think when it comes to having your back and making sure your money stays your money. If you direct deposit at least $300 in paychecks each month and use the cash app card for purchases, you can unlock up to $200 in free overdraft coverage. If you overdraft unexpectedly, there are no hidden fees. manage your money on your terms and take advantage of free overdraft coverage up to $200 on Cash App today. For a limited time only, new Cash App customers can use our exclusive code to earn some additional cash for real.

Just download Cash App, use our exclusive referral code factually in your profile, send $5 to a friend within 14 days, and you'll get $10 dropped right into your account. Terms apply, that's money, that's Cash App. Cash App is a financial services platform, not a bank. services provided by Cash App's bank partners, prepaid debit cards issued by Sutton Bank, member FDIC, instant discounts provided by Cash App, a Block Incorporated brand, visit Cash.app slash legal slash podcast for full disclosures. You know, as summer heats up, I always try to cool down my spending to make way for a big AC-laden electric bill. But you know what was burning up my bank statements for most of this year? My old wireless bill. If you want to

put the big chill on your wireless bill, make the switch to Mint Mobile. Did you know that with Mint Mobile, you can get the coverage and speed you're used to, but for way less money. No, seriously, like way less, like right now. Mint Mobile is offering three months of unlimited premium wireless service for $15 a month. So unless you like spending too much money, a switch to mint means high speed data and unlimited talk and text delivered on the nation's largest 5G network, all without overpriced coverage or unexpected overages. When I go on tour, I'm on my phone a lot, like a lot, a lot, and having great coverage

and unlimited data keeps me connected, keeps me working, and keeps me sane. I'm not sure what I'd do without it. And now with Mint, I get to keep my very livelihood and sanity, but at a much more reasonable price point. So this year, skip breaking a sweat and breaking the bank, get this new customer offer and your three-month unlimited wireless plan

for just $15 a month at mintmobile.com slash factually. That's mintmobile.com slash factually. Upfront payment of $45 required, equivalent to $15 a month, limited time new customer offer for three months only speeds may slow above 35 gigabytes on unlimited plan taxes and fees extra see mint mobile for details when i think of pyramid scheme what i think of is when i was a kid i believe i i got a letter in the mail that was like a male pyramid scheme where it's like if you send a dollar to everybody up and then you send this to a hundred people

and you inform them to send a dollar to you and everybody on the way up we'll all make a lot of money and I remember as a kid you don't really think these things through I'm like oh that kind of makes sense right like oh maybe this would work until you know

kindly adults probably a parent explained to me this makes no sense A you'll run out of people very quickly but B what possible inducement does anyone have to mail a dollar up right like why not just start it yourself and, you know, start a brand new one.

Why are you mailing dollars to anybody? And therefore, why would anyone mail dollars to you? Right, right. Which, of course, is why then chain letters, which is what you're describing. Yes. Chain letters break very quickly because people realize, oh, this is stupid. Yes. And they stop.

But yet people try. Yet they were very common in those days. And chain letters are really old. Yeah. Part of reporting this book and actually just figuring out what is a multililal marketing company. What are pyramid schemes? What's a Ponzi? What's a chain letter? All of these are, I argue, types of financial fraud. We have, we don't have a lot of history, academic research or journalistic research on white collar crime and financial frauds compared to other types of crime

in general. And so a lot of that is really hard to pin down. And because financial frauds are also in this category called affinity fraud because they rely on our relationships, our neighbors, our friends, our family. They are also, it's almost like these are types of crimes that are, they're almost like folk crimes, you know, they happen on such a grassroots level that it's also, you know, chain letters are, they've been around since the late 1800s and the Ponzi probably comes from the chain letter because it's the same type of, um, that fraud by expansion, it's the same, it's the same sort of engine of growth, which is just more and more people paying in. And you're right that the math has always been the same.

And you can, I looked up really old newspaper articles where the columnists are saying, this makes no sense. Because immediately, as it mushrooms, you reach everybody in the world very fast. If this really expanded the way you said, everyone in the world, billions of people would be reached by like day 20 or something. Yeah. And that math was really known. So what these guys did who invented the pyramid scheme was the thing, that inducement, that problem that you put your finger on, that was the product. By adding this incredible product that you were selling and that you were a salesman, that's what people, that was the sell, that was the pitch. If you sat there and said, okay, so you're going to make money just by bringing other people into

this scheme, you would say, okay, that's not a real business. Right. But if you say it's because you're going to be incredibly successful selling these vitamins. Yeah. And immediately, once you join, you realize it's not through vitamins, it's through recruitment. But that was what they did differently. And they invented it, and it took decades for the authorities to figure out that what was really growing was the recruitment. But it's that addition of the product, which at the time vitamins were this kind of like new miracle product. And you can see MLM snaking through new industries, you know, in the 80s and 90s, there's.

selling home internet and home phones and now they're selling it's back to wellness and they sell you know collagen or you know whatever see moths whatever like the newest kind of wellness thing is because you have to have this product that's going to power your empire yes um and so yeah the the chain letter it really is no different than the chain letter and we know that that's fraud um and so they really did what was genius was that they invented this idea that if you have a product that's wanted enough, that you actually can do this demand forever thing that you know intellectually is a pyramid scheme.

But you're sold by that idea that you're just going to be such a good salesman that it really can go on forever. So you said that the original neutralite, was that what it is? Neutralite, yeah. Which is that still around? The brand name's familiar.

Amway sells the vitamin. So Neutralite is an M-Way brand. Got it. It's just, I mean, I think also if these companies probably pick up on each other's names, Nutrisystem, Herbalife, like all these various. Right. And, you know, not to spoiler alert, but they all also just come from the same place. Like, Herbalife can be traced directly to Neutralite,

like almost like a little map or a virus if you want to be negative about it. It's like a century-old scam. So, but you said that Neutralite, it became a real problem. It would move from community, community to become a problem. It was the classic pyramid scheme. And you're saying MLMs are the same as pyramid schemes. So what I'm wondering is, was there a period at which people caught onto this?

It was enforced against. And then did they work out a new evolution of it to escape detection? Yeah. So neutral light, like I said, immediately anybody that joins a scheme like this, They quickly realize that it's like being the, even being the most successful recruiter, building a giant downline. It's like being the highest roller versus the casino. You know, the house is still always winning. You always are constantly buying.

You know, even the most successful recruits have to buy every month products. And so you can imagine that if you're an MLM company, you're really the one winning out because these people are buying your. crappy products from you every month and all pyramid schemes, all MLMs, the products are really expensive and they're like just shitty white label, whatever, you know, or, and they just get increasingly insane. Like in the 90s, there was one early 2000s that actually proliferated in L.A. a little among celebrities. Oh my God, I'm not going to remember the name, but it was $99 a soy juice in a glass bottle. So it's like, it's like ridiculous stuff always, overpress. Anyway.

That sounds like you can buy that at Arawan today. Yes, exactly. But you're not being told that you can make a fortune buying it and selling it, right? Aeroon is just like, hey, it's probiotic. That's why it's $99. They're not just trying to get you to sell it to someone else. It's a sucker in a different way. But so anyway, really quickly neutrally it spawns others.

Yeah. And Amway, those guys started doing their own thing in the late 50s in Michigan. And they're these like Calvinist Christians, very conservative. On the other side of the country, primarily in California, guys started their own pyramid schemes that were much less prudent about how scammy they were. They came up with new innovations where you could just, instead of buying in at a sort of normal amount, maybe $100 and then increasing your investment over time, it was very obvious. They said, okay, you can just buy in.

for $10,000, you know, and you'll basically be availed of already these like higher commissions and, you know, they'll basically slot you into your own downline. So that's very obviously a pyramid scheme. Yes. You're buying a ton of products. Yes. And it gets you the right to recruit others. Like that is the definition of a pyramid scheme. So anyway, so these companies through the 60s and 70s explode across the United States. And that's when, that's why we have the term pyramid scheme. It's all over the national news. Walter Mondale takes it up on the floor of the Senate because this is around the same time

that consumer rights as a kind of category of activism is becoming a thing. This is against the backdrop of the stagflation of the 70s. So as the economy worsens, these pyramid schemes are exploding because more people are looking for work. It looks like white collar work because you're a salesman. So as stagflation is making unemployment hire, more Americans are looking for opportunities to own their own business, which MLM reports to be. You're a small business owner. You're an independent contractor.

So anyway, MLM, which at the time is calling itself chain selling, calling itself direct selling, they actually invent the term multi-level marketing to distance themselves from these bad companies. I didn't realize that this was a moment in, like, American culture. Yeah. I always, like, I knew pyramid scheme is like a bad word, right? We know that that's bad. But I thought it came from chain letters, Ponzi schemes, like, like, specifically, you know, give me money and get someone else to give everyone. I didn't realize that it was these product selling companies and that there was a cultural

revolt against them. 100%. People said, these are bad. Oh, I mean, and this is like, I mean, such a lesson in reporting a book like that. in how often we forget history and, you know, just how powerful propaganda can be. Because what happens in the 70s is a bunch of companies, these companies that are sort of doing it a little more aggressively. There's one called Costco, which is a wild one.

That guy starts his own MLM company that's just selling self-help called Dare to Be Great. It's like just selling advice on how to be an entrepreneur. Yeah, and he's, like, busing, you know, busing people to these golden opportunity tours all over the country in these hotel ballrooms and they're, you know, mortgaging their homes, putting down their life savings to join this company. Oh, my God. I mean, I already thought that part of the self-help, look, I, there's some part of the self-help industry. I don't mind. I've read plenty of good self-help books. I've always thought the sort of conference you pay a lot of money to go is scamming people.

But combining that with multi-level marketing is an insane. It's so much more connected than you even think. Wow. One of these early companies was called Neutrobio. The guy that one of the main executives was this man named Jim Rohn, who was an evangelical preacher. He has since passed away, but he was really successful. He became a main executive of Herbalife.

He was their international business philosopher. I don't know if he was ever on the payroll, but they used him for speeches because he was an amazing, sort of speechifying guy. His protege is Tony Robbins. Wow. One of the early, a guy who joined Amway in the 70s or maybe the 80s was Keith Reneery, the head of Nixium. Wow. So, I mean, and there's more.

And by the way, the connection to evangelical movement, which is, you know, has plenty of scammy, you know, televangelists around this period. And like, so not just cults, not just self-help, not just MLMs, but also just organized religion. as a social structure that is based on constantly getting new people in the door and proselytizing, getting people to believe. Wow, this is like a sort of unholy nexus of American social manipulation and scamming. It really does just go everywhere.

Wow. But to answer your question in a really long-winded way. Please. So over the 70s, pyramid schemes, big problem. Yeah. And what has happened at the same time is the Amway guys, as well as Mary Kay, who is a Baptist grandmother from Dallas who builds her company.

She learned the plan, same exact thing from her husband, who was in Neutrobio, that other company. But she tells this story that she just, like, came up with the business at the breakfast table. But they're all literally just copying the same thing. But anyway. So there's this sort of set of bad apple companies and good apples. So at this point. Yeah, the, the, if you got to call yourself a good apple. Right.

No, I'm a good apple. Well, there, hold on a second. You know, it's almost, it's like, it's like maybe how today, like a crypto company, right? Like, we have the ones that want to be legitimate and say, oh, we're for regulation, you know, you have your finance, you have your, whatever, the, the sort of legitimate. And they like to, they're very for enforcement against the meme coins or like the shit coins or whatever, like that, oh, no, no, we're not doing what they're doing. Right. And so at this point, Amway, the Amway founders are incredibly wealthy, and they're very powerful. They're huge funders of the Republican Party.

They help electoral Reagan. J. Van Indel is the head of the U.S. Chamber of Commerce. They help start heritage. And they amass a huge amount of political influence. And they're really helping build this, you know, Reagan backlash, what we now call the new right. So really that free enterprise stuff, which I was mentioning in the 40s was a little bit reactionary, you know, against the New Deal, against the sort of welfare state, social security, these things that are American and even conservatives typically defend, right? But now we've got this political movement that's pseudo populist that's supposedly saying, no, no, no, we've gone the wrong way. We need to go back to free enterprise.

We need to, you know, get rid of some of this regulation. we need to lower taxes, they are a huge part of that movement. So what happens is when the FTC finally goes after Amway, which is basically like taking on the biggest fish, you know, once it's gotten rid of some of these scammer companies, one's called Holiday Magic, like, and those guys are, those are just like fun scammers. Like, you could just do a whole episode on these guys because they're just insane, like crazy people. Amway, the FTC goes after Amway, and it's against the back.

a huge backlash against the FTC itself where this movement, this deregulatory movement has taken on the FTC and they want to pull the FTC's funding. It should sound familiar today, you know, the idea that the FTC is full of bureaucratic waste, that they're micromanaging American entrepreneurship, that we're, you know, wasting money on regulation, blah, blah, blah. So basically the FTC in 1979 puts its hands up and says, okay, fine. You know, we've sued Amway for being a chain selling operation, but we're going to let the business model go. And they basically say,

okay, Amway broke some anti-trust rules, but they allow the business model to be legal. And at this point, it's called multi-level marketing. And Amway basically in this investigation, in the FTC's case, argues that it has some rules in place internally

that keeps it from being a pyramid scheme. Yeah. That kind of, it requires participants to sell products. FTC doesn't look at their books, doesn't prove that they're enforced. Wow. And just accepts, it's one guy, you know, he's a law judge accepting, you know, making the decision. This is not a trial with a jury. And he basically says, okay, fine, we take Amway's word for it. There is such a thing called legitimate multiple marketing. It is different from a pyramid scheme. And that's that.

You know what is so funny is literally earlier this afternoon sitting in that same chair, I had FTC chair, Lena Khan, former FTC chair, Lena Khan. She was here 90 minutes ago. The episodes will come out in different weeks. I don't know what order they'll come out in. But when we were talking about, you know, how the Reagan era defanged the FTC and this is like a fascinating wrinkle in that, that one of the reasons it was defanged was because of the rise of these very predacious. companies that the FTC was trying to regulate, and those get in with the Reagan administration and take the FTC apart. The other comparison that comes to mind is the way that the Church of Scientology went after the IRS in, what was it, the 80s or 90s, because, you know, the IRS was like going to pull the, I forget if the Church of Scientology was already tax exempt or if it was going be pulled or if they were trying to get tax exempt status, but basically the Church of Scientology goes to like all out war with the IRS, like harasses and abuses them. And the IRS basically gives up and says, oh, fine, it'd be a religion. And that was like the historic victory on the part

of the Church of Scientology. Like that was the policy, some bureaucrat gives in and says, just fucking leave me alone for a second. And then this scam is allowed to proliferate. And this is the same moment for for MLMs with the FTC. Yeah, it was the path of lease resistance. And that is truly the only real sort of, it's not even a law, right? It's a, it's a gap. It's a gray area that was allowed to, it's a, because all that decision did was set a precedent, right?

We didn't, Congress didn't pass legislation on MLMs. There wasn't a SCOTUS decision. You know what I mean? It's a, it created this opening. And then, you know, once Reagan was in the White House, all the way, 15 years from, from Reagan through Bush 1, not a single pyramid company was shut down. Wow. The FTC did not file a single case. Then it starts back up again slowly with Clinton.

And we get into kind of the familiar pattern of the FTC going after a few of these companies a year and the scammiest, nastiest, craziest ones. Like there's this guy, Bill Gould. Well, I don't even remember the name of his company started. He has two Ds on the end of his name for dollars. Like he added an extra D. And, you know, these like crazy recruiting footage where he's like, you know, just like calling a woman a bitch. Like who's signed up for, like just those are the guys that, you know, get shut down all the way up through herbal life. When the FTC goes after Herbalife also doesn't shut down the company, right?

Finds it $200 million, but does not go after the business. model. And so that's really where we are. You know, apart from moving, is there anything more stressful than trying to get yourself a new car? I mean, which one do you pick? How do you know if it's right for you? It's like staring into an infinite automotive hall of mirrors. Well, with car gurus, you can make that experience less circus funhouse and more just regular fun. Car gurus can lead you out of the maze of misleading prices and hidden fees so you can shop with confidence. You'll find real price analysis, vehicle history, and price drop alerts.

Car Gurus has over 4 million listings more than any other major online auto marketplace in the U.S., so you never have to worry about missing the best deals. When you're ready to buy, Car Gurus also connects you with trusted dealerships to ensure a transparent and hassle-free buying process. So it's no wonder similar web estimated traffic data shows Car Gurus is the number one most visited car shopping site. buy or sell your next car today with car gurus at car gurus.com. Go to car gurus.com to make sure your big deal is the best deal. That's C-A-R-G-U-R-S dot com, car gurus.com.

Folks, today I'm really privileged to tell you about a sponsor that's on a mission to help those most in need of immigration assistance. They're called Acacia Center for Justice. If you're a lawyer who feels called to fight to protect due process, Acacia's unaccompanied children program is your answer. explore their nationwide provider map and find an organization near you to get involved at acacia jossus.org slash defend kids. In this moment of heightened attacks on immigrant rights, children's rights are under threat too. It's hard to fathom, but sometimes children are forced to make

the hard journey to the United States to seek safety all alone. Many even begin their journey with their parents only to be separated along the way. America's immigration system does not meet their courage with compassion. Instead, these kids are treated. like criminals. They're not guaranteed legal representation, and many are forced to do the impossible to defend their own case in immigration court, no matter how young they are. The Acacia Center for Justice builds, strengthens, and expands immigrant legal defense programs across the country. Lawyers employed in the unaccompanied children program provide free representation to break this cycle of injustice. So if you're a lawyer who feels called to fight to protect due process,

the unaccompanied children program is your answer. Unaccompanied kids need a lawyer like you. Explore their nationwide provider map and find an organization near you to get involved in your city at acaciajustice.org slash defend kids. That's acaciajusis.org slash defend kids. So this suite of companies that comes out of the Ponzi scheme is an outright scam when it begins. American culture and government revolt against it. Name it the pyramid scheme, which embeds itself in American culture as this is bad. The industry then responds by changing the name a little bit, reconfiguring its business model a little bit,

getting involved in politics, and manages to legalize itself, essentially. And so this is essentially a criminal enterprise that managed to go legitimate just enough to embed itself in the American economy in a way that's now much harder to remove. But that's what we're talking about. Yeah, I mean, I believe that, I mean,

I don't even believe there's much evidence that they operate similarly to criminal enterprises. I mean, there are constant lawsuits filed, you know, by distributors when they can. MLM companies have really draconian arbitration and, you know, and basically contracts that prohibit dissent in any way they can. So lots of times distributors can't even file lawsuits because they've already agreed to arbitration. Even if they feel they've been and defrauded. But, you know, Amway, what's amazing is right after the 1979 decision, the lawsuits open where distributors are just being very upfront about what has always, how they've always operated, which is it's just people buying stuff. Nobody's selling anything.

Amway, you know, then there's lawsuits that the big, biggest, most successful downlines start filing against each other. Wow. And they're just saying openly, you know, this is a pyramid scheme, and I was cut out of it. You know, give me my cut. You know, Amway engages in litigation with Procter & Gamble because in the 90s, Amway distributors start spreading rumors that Procter & Gamble is run by Satanists and that the guy in the moon, the logo of Procter & Gamble, is the devil. And P&G sues them.

And they're in this, like, crazy decade-long litigation, and they hire G. Robert Blakey, who's a Duke law. professor, no, Notre Dame, law professor, anyway, he's the guy that came up with the RICO Act, he invented RICO, and they say, please look at Amway and how Amway structured. And he delivers this report where he says, Amway operates like the mafia. Wow. You know, and again, it doesn't change. Like, when the FTC did sue Herbal Life in 2016, they, what they alleged was that, you know, nobody is selling products.

People are just buying them. And, you know, they were able to say that the overwhelming majority of participants, this is from the lawsuit itself, lose. So it's never changed. But that allowing the idea that legitimate multilateral marketing exists, it's, you know,

this guy in the book, a regulator since retired, called it the box. It put It created a box for the law and for regulation. Precedent is really powerful. Yeah. So the business model has been legalized. And so now the government just has to go after.

Oh, we'll find you a bit. You went a little bit too far. I mean, as you're talking about the FTC going after Herbalife, I mean, Herbalife is the, their name is on a sports arena in Los Angeles. You know, the Los Angeles Galaxy. Absolutely. If you need a... David Beckham.

If you need a reason to hate the Los Angeles. this galaxy. One reason is they've got a fucking pyramid scheme on the front of their jerseys. And I know people who are like, they ruin my parents' life. I can't root for that team because they have a pyramid scheme on the front. So let's talk about the actual impact on people who participate in these things, you know, because maybe we got, we started a little bit at the top here. Let's talk about the bottom. Like what is it, how do they recruit people and what happens to the people who are recruited? So different, you know, multiple marketing companies, like, it's almost like everyone's got their own flavor, you know, and there are, you know, between

700 and 1,000 operating in the United States alone. So, like, the companies we've been name checking are, like, the biggest. But you could join one that's just called, like, there was one a few years ago that there's a great This American Life episode about it called, like, wake up people. You know, they have, they just, there's constant sort of churn of these, of these little ones. But anyway, so they all sort of have a different vibe. The book tracks one participant, her pseudonym in the book, is Monique, who joined Mary Kaye when she got out of the military. And MLM really proliferates among Army wives kind of famously because women are very much and have been the kind of main recipients of the pitch.

because they need flexible income from the most, right? They're doing childcare at the same time as they need to bring in money. And because the business model is built on exploiting social connections, right? Absolutely. Which is something that women develop, right? Totally. And very quickly, you know, I said earlier that the first MLM participants were sort of suburban couples, like very, leave it to beaver. But already by the 60s, women are really the predominant force in MLN.

and the industry is delighted to say that it's helping women. You know, it's a little, like, feminism light. Like, it's certainly not feminist, but it's allowing, you know, for a bit of liberation, you know, women. Yeah, girl boss. Exactly, exactly. You know, adding to their sugar bowl, whatever. And so that remains, she joined Mary Kay.

In part, also, she was a really big target because she had a fixed income. She had disability and retirement from the military. So certainly not enough to live on, which is why she was looking for work. She leaves the military. She's in Florida. And she just meets this woman at a business networking event who says, like, let me give you a facial. It's not a facial. Mary Kay participants are not trained facialsists.

You do have to go to facialist school. Okay, I didn't know. Yeah. Yeah, you got to, there's some level of, you know, you're learning. You have a trade. So she really is just learning how to apply these products. And, of course, this woman says, you know, join this business opportunity. Yeah.

Don't, you know, buy the products. And like, side note, I tried to just buy Mary Kay products in New York. Oh, yeah. You would think I was trying to get to the moon. It was the most difficult thing in the world. You were trying to be a customer and actually buy the thing. Yeah. I mean, you can, you go on the website and you like put your zip code in.

you're getting all these saleswoman and I was texting all of them. They don't want to sell the products. If I had said I'm interested in becoming a saleswoman, a saleswoman, so I ended up. That's fascinating. I did hear from a woman named Joyce in Bay Ridge and we had a Zoom makeup demonstration, which was very odd. And she had to send me the samples herself, which of course, again, she's a small business owner. She's an independent contractor.

She's paying for all of that. So you can see how the retail business is not worth it. So anyway, she joins Mary Kay, this woman, Monique, and very, very quickly, she's induced. So she joins with maybe $100, $100, but really quickly they tell her, okay, you got to buy more products because, you know, you need to sell them and you got to use them to sell them. And in the Mary Kay plan, you get more shit if you buy more. So you are actually like, you can win a vacuum or a Roomba or whatever. And there's status, right? There's social status.

Yes, you get a, you immediately get to a certain rung. Yeah. And then all the way up the ladder is like that, right? Until you become a director. And when you're a director, you have to have a group of like 24 women and you have to be buying $13,000 or something every month. But you get to be a director and you go to Dallas for the seminar and all this stuff. So over the years, I mean, she's spending, you know, she ends up spending $75,000. over a decade.

Wow. And maybe made, maybe made $1,000 ever. Wow. And immediately that becomes apparent that she's never going to make it in retail because it's so hard to sell makeup. I mean, they're telling her to go to Target.

You can buy makeup in Target. Why would you buy makeup from a random woman in Target? How do you even sell? You can't sell another. You can stand around Target and sell your own products. Oh, well, you're just doing what they call warm chatting. So you start a conversation like, oh, I'm in the beauty industry.

Are you looking to make an extra income? They tell you to literally go to Target and start conversations with. Target, Starbucks. To turn them into saleswomen. Yes, well, right. Because immediately you learn that, you know, even with Mary Kay, you get a 50% margin. So she's maybe buying a lipstick for $9 and selling it for $18 ostensibly. First of all, you'd have to sell a ton to make even like a dinner, you know, to pay for dinner for a week, right?

but also she's she's paying for shipping on the retail amount she's paying tax on the retail amount so they even eat into that little margin you're getting so so very quickly you learn in MLM that the products the products are not where it's at yeah where it's at is recruiting but don't the people who are participating in this you know when they're they're receiving the sales pitch you're going to buy these products from me and then you're going to sell them don't they realize well hold on a second there's no consumer like i can't imagine these these are not like completely ignorant idiots participating in this no the opposite and and and that's why in the book i really get into it in a granular way with her because it shows how you know you're

when you when you're given the picture you're exactly right they call it sales you're they she thinks of all these women as selling a ton of makeup what she learns as soon as she joins is that in Mary Kay, just like that, those guys invented it in the 40s purchase volume. In Mary Kay, they call it production. So immediately when she buys her $1,800 worth of makeup, that's the first big inventory purchase she buys. In the Mary Kay system, and I have seen this because I saw her back office website, they call it production. Right away, Mary Kay counts that as she has sold $3,600 worth of makeup at the retail price. A fictional transaction that has never occurred.

Huh. And they do that all the way up. Mary Kay does not keep track of what its saleswomen are actually selling. And so once you learn that, of course you, it's like you right away, even the most well-intentioned saleswoman sees that no one is selling. Yeah. And so what Monique ended up telling me directly was like, you're lying to yourself right away. And then you're lying to other people right away. Because if you're standing in Target saying, join this business, it's so successful.

I'm a great saleswoman. Meanwhile, you know how hard it is to sell. But you're trying to move this product that you've bought. You're trying to make your money. You've just spent $1,800. So you're induced to lie almost immediately. Wow. So is it sort of if you get people to accept a lie immediately, then you've filtered out

everyone who won't accept the lie. Now you only have people who will fall for it. It's a, it's a, it's a risky strategy, but it sort of reminds me of, people talk about this with Donald Trump, where once he gets people to accept the lie that he really won the election or something that large, once you've accepted that lie, you'll accept anything smaller, right? Yeah, and I think that it's all, it is, nowadays, MLM recruiters are really skilled in sort of using that self-help, self-help financial. advice talk that has now sort of become endemic, I think, online and then TikTok, whatever. You know, this is an investment in your business. You have to spend. You know, they'll watch TikTok videos of these like entrepreneur guys saying, you know, I lost my first million, you know, I lost a million dollars before I made 10 million. You know, so they have adages for absolutely

everything. And she goes to her uplands and says, I'm not selling. And they say, you know, pray. Like, God is going to bless your efforts. But what she ends up doing is what is constant in MLM, which is just buying on behalf of other people just to get to those higher levels in the company's compensation plan. Yeah. So she's just getting social security numbers from friends and family who will give them to her who are like, I'm not going to buy products, but like I'll let you use my identity. And buying on her own credit card to make her quotas. Wow, because she needs to show that she's selling to other. that she's buying, that other people are buying from her.

Yes, she needs to have sort of a downline amount. I think I said it was 13,000. At each level, you know, you need to buy more and more. And you need to show that your group is buying more than more. But all you need to do is just have some fake women buying. But I'm sorry, what could induce her to do this? Because she said she's not making any money. And on some level, she knows it's a lie.

so what is the, to go to your friends say, can I just use your social security number so I can like buy a bunch of product to do this thing? Like, it's not even offering you you know, a personal transformation like Scientology is or something like that. Well, it is because at the same time,

you know, this woman and there's a lot of stories like this, you know, she didn't have community. She was in the military, kind of spat out. And the company really preys on offering that kind of, is a version of solidarity. They have a little studio where the women gather every week. They have a constant cavalcade of meetings.

You're constantly chatting. They all have their own chatting apps now. You're reading books. You're listening to podcasts. You're talking about them. Community. And then you get to go to these ceremonies where you're, you know, she didn't care that she was spending money because then at the end of the fiscal year, she was walking across

a stage in a sash and being celebrated and it's like an incredibly for vulnerable people for people who feel undervalued or devalued by society by American society that's it's an it's an incredibly powerful feeling and Mary Kay who's her own sort of girl boss villain in her memoir she writes about just realizing that women just wanted to be recognized you know It's incredibly powerful. And then, yeah, I mean, it's all on this horizon that, like, one day she would make it back. Like, once she built a downline that was so big that eventually she would be able to make it back. And there's people up the chain saying, oh, my God, my life is so much better now.

What you're describing is something I think about cults or other, you know, flimflam artists a lot of the time is they succeed by giving something people that they genuinely. emotionally emotionally need, you know, like there's a genuine emotional need that the person has that is genuinely being fulfilled support and approval from your community and a feeling of progression and all these sorts of things. And she's experiencing that, but at the expense of exploitation that, hey, we figured out how to give you an emotion, but emotions are fundamentally free to give you. And all you need to give us is all of your money on, like, unlimited amount. But they are providing something real that these folks need. And that's what sucks them in.

You know, I am doing an event tomorrow with Lux magazine, which is a Marxist women's magazine. And, you know, talking about it from a labor perspective, it's almost like the dark, funhouse mirror version of a union. because the solidarity is sort of turned on its head where, yes, there's this incredible connection because every single person has a boss and every single person is a boss. And so there is this incredible, like they're very effective

when they're run correctly because they're so coercive. And, you know, you have part of the reason you need to be rewarding people is you are exploiting the shit out of them, very literally, right? Like this woman's losing money. So all of that love and the,

love bombing that happens in MLM is so powerful because you have to keep people moving. Right. Or they're going to sit around and realize, well, wait, why am I, why have I lost all this money? And so, you know, when I, I went to an MLM convention myself, I went to a Mary Kay convention in 23. I just sort of snuck in in Dallas. And I really was sitting around thinking, like, these women, if they put their, this energy towards accomplishing, like, I don't know. signing petitions on something? I mean, they would be incredibly effective,

but instead it's all internal. All of it is about if you have not succeeded in this thing, it's not because it's a scam from the very beginning and has been since the 40s and it's set up for you to fail. Yeah. It's because you aren't good enough. You're not hustling hard enough. And so it's this incredibly individualistic message,

and they're just constantly thinking, how can I be better next year? How can I be better next year? And so it's like all of this incredible energy, for the future, but it's curdled inward. Well, you saying the word solidarity, I'm a union member, and the word solidarity is like the most important word. And I think it's like the most important word for our entire politics moving forward.

You know, I think it's very powerful. I never thought of it in those terms. And that really opens a lot to me because I knew this idea that, okay, it's your own fault if you don't do well. And so, come on, don't you want to get your numbers up? Like, hey, you know, I thought you were a girl boss, et cetera. but the the power of being in an organization where you have common purpose with everyone is so powerful you know that is in our in our union that's what enabled us to go on strike for

five months right because we're a community of writers and we all are in it together and we all know each other and we're you know we're able to do things that we wouldn't do otherwise because we have the power of that community and we're telling each other no you are strong enough. I'm there for you. And that is something that people want to live up to. They want to live up to that experience of solidarity. And so, you know, we have very, you know, unions will like, you know, sort of quote unquote punish people for scabbing or whatever. But in reality, it rarely happens when you have a strong union because people want to live up to the community. Like that social bond is so strong. And in a union, it's due to something positive. But in this case, it's sort of the

same emotion, but turn towards self-exploitation, towards saying, like, no, you want to live up to what the group expects of you. So you, you know, if you fail, it's your own fault, but you're not going to because you're part of this group. All you got to do is get a little more money, put a little more money into the system. Yeah. It's a dark version of a positive thing. And it's a, it's the opposite political, it actually has the opposite politics, right? because what a union does is puts everyone on an equal playing field. If you're a member, you pay dues and that's what collective bargaining is, right? When you have your contract, members are all achieving the same thing.

And so there's a leveling there. And in MLM, you are literally a cog in a machine in a fixed hierarchy. Like, that's what the downline is. You know, if I recruit you, I will always be your upline. Yeah. And it's incredibly anti-democratic because you are actually a member, but your worth is only what you're producing. It's only as good as your production. It's incredibly Darwinian, right, where it's like what can, what is she doing every month?

If she's not doing anything for us, she's not worth anything where, you know, if you're a member of an organization with the collective benefit, of course you want to be a good member and you want to be a member in good standing. But the bar for that is pretty much membership, right? You don't have to be contributing. Like, it's all about, you know, giving somebody that benefit simply because they're in this community with us, right? And so what's sort of insidious and crazy once you track it is MLMs have deployed their members for politics, but very much for right-wing politics. you know, the Amway founders, when they've, you know, powered the Heritage Foundation, Barb Van Indel, Gabby, J. Van Nandall's daughter is the chair of the Heritage Foundation. They basically helped author Project 2025.

Wow. So what you have is what the Amway guys are doing through the 70s and 80s and beyond, they are basically helping pass laws and change policy in a way to tear, at the collective fabric we just described, right, to, to push for privatizing industries, help deregulate, to lower taxes, to lower, you know, to tear at the limited child care, health care benefits we do have, right? So that people are, there's less, all the tiny sort of shreds of collectivism we have, they want to get rid of, right?

So that we're all these little economic action. Yeah. We don't have a collective social safety net to speak of. Yeah. What do we have our ability to be independent contractors and to start our own little empires, right? And then as that stuff sucks more and more, as our, you know, social fabric is less helpful to us, right?

As people are more frustrated, then they are turning away from collective struggle. And there's more evidence that, oh, maybe I'll prosper on my own. You know, I don't need all the kind of, all the protections of the government. I don't need benefits. Actually, that makes me a slave. I'm going to be freer if we have none of that. And I'm just my own, my own boss. And I can build my empire that way.

You know, it's the same message in the 70s. It's the same message in 2008 with the Great Recession. And it's the same message during the pandemic. where we're seeing the cost of a society that is less and less taking care of each other, right? That is more and more individualistic. That is, does not have collective benefits, doesn't protect us just because of we're, you know, we live here, right? Yeah.

Where we're more and more what you have access to is based on what you produce, right? We're seeing the effects of that. And instead, MLM is this incredibly powerful propaganda that helps seed this idea that the way we're going to get out of that is just more individualism. Actually, the government is to blame for that. And we are, you know, it is keeping us down. And so any regulation, any impinging on individual profits is going to harm all of us. Meanwhile, what's happening is we're turning into a pyramid shape, right?

I mean, the people at the top have so much more than the people at the bottom. We have Jeff the Bezos is and the musks. and they are actually turning the, you know, disparity in this country is looking more and more like a pyramid scheme. And yet, we're not supposed to look up and say, that's unfair, what the hell is going on, or look at each other and say, like, whoa, this seems wrong. We're supposed to just concentrate on what we can build down. Yeah.

One day I will be, it's okay. It's okay that Jeff Bezos is that rich because I have the opportunity to get rich that rich one day. Yeah. Not, not thinking that, well, maybe he's getting rich because we're not. You know what I mean? That his enrichment relies on all of us making less and less. Yeah.

That's the... What you're illuminating is the dark solidarity that is at the core of the psychology, you know, that's core to both MLMs and capitalism overall. You know, I love the show Shark Tank, you know. And I love the show Shark Tank because I think it is it is capitalism presenting the best version of itself. And it's really a pleasure to watch. You know, it's a pleasure to maintain the fantasy. And part of the fantasy is that Mark Cuban, who's a billionaire, talks to somebody who's like, you know, I quit my job and I sunk all my money into, you know, building a better yo-yo, like in my garage, you know.

And Mark Cuban says to this poor sucker, right, who has been tricked into, you know, trying to start a, you know, trying to start an entrepreneurial business, like, I respect you, you know, like you have my respect for what you're trying to do. I'm out, but good luck to you. Right. And that, and that's like sort of almost the best moment when they say, not for me, but you know what, I keep going, right? And as though they are somehow on the same footing, right? And they are if you, if the argument is that the marketplace when removed of all impingement, all, anything to hold back the market. And this is, and this is, from like a, you know, very free market perspective that it is perfect and it makes us all perfect in that it's we're competitors.

Right. And the reason Mark Cuban has what he has is because he's a better competitor than you, right? I mean, that's what makes it fair, that those are equal actors on the market and he has performed better and the outcome is better for him. I mean, that's what makes it fair. That's the American dream. but what MLM kind of opens up and sort of lays bare is that, you know, actually may, perhaps the market doesn't just reward sort of good behavior, right? Perhaps the market is rewarding bad behavior.

Bad behavior. And, you know, I think that there's, there's, right now we are in another crisis moment that's like, what is going to get us out of this? Yeah. And if we follow the pattern of MLM, there's like this one side that's basically like, we're going to fix capitalism with more capitalism, you know? We're going to, we're actually, actually capitalism has been held back and we need to unleash it more. Yeah. When I think time and time again, there's just so much evidence that actually what's happening is, you know, the opposite where we've been sort of duped into thinking that there's just always going to be more around the corner, more abundance, more, more profits.

And we just have to be able to harness them, you know, not that we're being stolen from, not that resources are being hoarded and not that those people are getting so rich on our own exploitation, right? It's just like, no, no, no, we just have to be able to take our turn. Yeah. I mean, you've convinced me of your thesis, which is that the MLM, you know, is sort of as taken over American society as core to, you know, our current pathologies, that it's sort of this capitalist cult, right? Like a cult structure, but within the structure of capitalism, that's like a nakedly, mathematically impossible and fraudulent enterprise that legalizes itself,

embeds itself in the American political system, influences an entire wing of our politics to the extent that it now, you know, has taken power and has restructured our entire conception of our own economy to go along with its premises. I mean, we live in a giant MLM now. Is that basically the contention? You've convinced me of it. Yeah, I mean, what MLM has enjoyed since that 1979 ruling is impunity. And I think that that's what is shared by, you know, in the, in the portrait of Donald

Trump being inaugurated in front of a phalanx of tech oligarchs, right, if we're using that word, what they all want, whether they have a legitimate business that's meaning, like, they have a real product with customers, right? Yeah. Many of them do. But what they want is impunity. Yeah. They want to set their own rules.

What literally the MLM industry calls self-regulation. MLM has a self-regulatory council. And those are, that's really the, they work with the Better Business Bureau, but that's really like among the only oversight we have of the industry. And it's just the industry itself, right? I mean, that's what crypto, tech, any of these industries, AI, they want to self-regulate, right? They want to set their own rules. And the argument is if we don't allow them to, we're not going to get the innovation.

We're not going to, you know, we're going to keep society for moving forward. We're not going to suffer. We're not going to get the shitty makeup. Right? And it really is this, like, the argument is that the gamble is worth it because we're going to have more, we're going to, you know, experience more harm if we keep these people from innovating. You know, and it's, it, they want that wild west, that gray area that MLM has enjoyed for so long to really be what all of kind of corporate America can enjoy. And that, you know, not to like put my tinfoil hat on, but it's kind of on, you know. Yeah.

How do we fight back against it? I mean, I mean, people, most people seem aware that MLMs are bullshit, right? It's, at least in my part of the world, it's pretty common knowledge. You know, people make fun of Amway. People know pyramid scheme, right? People know herbal life, et cetera. There's lots of people who fall for it, but it is, you know, people, people know what MLM means, I think. And yet it has become so endemic.

So how do we start to take it apart? When people get out of MLM, I mean, there's lots of different ways that happens. But they run out of money? Well, you, well, now that we have so many different ways to, you know, go into debt. Right. That's pretty hard. Um, it's really because they, they see the sort of veil drops and they see them, that they're being exploited. And it, they, they, they have a tiny note of injustice, you know, and it's like, it can happen in many ways. Like this woman, Monique, it was because she got sick, um, or she was in the hospital for, for health reasons. And her upline was just constantly texting her about sale, you know, about, about new recruits. Yeah.

or, you know, selling the Mary Kay opportunity. And she just realized that this person that she thought loved her, that was her friend, only cared about her in this capacity. Like, she was, she was inhuman. She was, she was a big part of this machine, you know, which is why not to go all the way back to the very beginning. But the fact that what I uncovered in my research that one of these guys was a eugenicist, I mean, that to me is, gives the whole game up right there. This is a person who believed in an ideology where certain human beings are valuable and have subjectivity and others are actual slaves. You know, they have undesirable characteristics and they are only good for their productive capacity. Yeah.

That's what MLM does, right? It turns people, you're only good if you're paying in. You only are only good. And the way that you can get out of that is getting other people to pay in. It's teaching how to deal with. your own exploitation by exploiting others. And so once you can flip that and sort of find yourself again, I think that that, I mean, that is the common thread that wakes people up from it. Unfortunately, people go on to join other MLMs because they think that, oh, it works for some

people. I just, I mean, Donald Trump was the face of two MLMs. I don't think you can blame people for taking a long time to think that it's legitimate. You know, we were saying it's right wing and it is predominantly, but like Bill Clinton recorded a pro MLM video for the direct selling caucus, which is the association, which is the lobbying group, the other DSA. In 1996, Madeline Albright was a pain. He did it in 1996? While he was president?

He recorded a little video for them saying, you know, this is the, you're the embodiment of the American dream, blah, blah, blah. Like when Michelle Obama showed up at the Oscars or whatever, or some, like that's a I just recorded a video that they sent to all the participants. But still. Madeline Albright was a paid Herbalife spokesperson. Wow. Constantly, all kinds of performers, comedians go perform at the conventions.

I'll take that gig, yeah, sure. I mean, it's, they can pay. They can pay. So it is actually bipartisan. I mean, the, you know, decision not to shut down Herbalife, that was, you know, during the Obama administration. So it's a bipartisan, we are, we've now reached. bipartisan territory. Yeah.

So, I mean, yeah, I think spreading just the truth of what this, where this industry comes from, I would challenge anybody who has been successful in it to be really honest about the people under them. Like, even if you have seen success, is that because you've brought in tons and tons of people over the years who haven't been successful? And I would challenge them, what does that mean about your definition of success? If your success requires an. untold amount of people who sucked at this.

Wow. Yeah. What kind of success is that? I think that that would be interesting. Do you think there's ever a chance of dislodging it? I mean, I think about the Church of Scientology again, which, you know, won this IRS case, right? And now basically it just has sort of, it's basically stopped expanding. They just like, they don't really proselytize.

They just got their big, the buildings, they got their private jets. Yeah, it's a real estate holding company. It's a real estate holding company. it is a cult, but everyone's just kind of like, eh, it's more trouble to get rid of because they'd fucking fight you tooth and nail and like, okay, we'll just accept that like there's 5,000 people spread throughout America

where we're getting soaked by Scientology, however many there are, and whatever, and we'll make some podcasts, and that's all that's going to happen. That seems like basically where we're at with Scientology, right? But is our, you know, is our MLM similar where it's just like, man, they fucking won and they're part of the economy now,

and what are you going to do about it? Well, your previous guest, Lena Kahn, tried to make some new FTC rules. So every so often the FTC has tried to make rules that, you know, trade rules that would really make it very difficult for MLM to recruit the way that it does. That was during, you know, the Biden administration. Lena Kahn has gone. Many of the other commissioners are gone. I don't know the fate of those rules as they kind of make their way through the bureaucracy. I have a lot of doubt that they would, if they end up being made, that they will be effective.

Yeah. Given that the- All the right-wing donors who are currently watching their downlines might be upset. The FTC just has not signaled that that's a priority. The FTC in fact is like going after trans kids right now. So like they're not really interested in, you know, bringing down Betsy DeVos's family business. I don't think, I think they're going to get a phone call to say the least if they try to do that. But, you know, we haven't even touched on this. And this is, like, a whole other book, which is that MLM is all over the world.

So it started here. But since the 80s, the most participants have been overseas. Yeah. So, like, the most harmful places are where people are really desperate to get in on this idea that American wealth is going to come to them, right? So, like, in the early 2000s, well, first, in the 90s, when the brink. Berlin Wall fell, MLM streamed into former Soviet countries. And so pretty much everywhere, you know, American style capitalism has flourished or tried to flourish. You can find MLM. So in the 2000s then, China and India were the biggest markets. Wow. And so, yeah, I mean,

it's all over the world. Most people in MLM around the world are not here. You know, they are in countries in even worse circumstances than ours, where poverty is. even harsher, and that to me is where, you know, it actually makes Scientology look like a silly problem. Oh, yeah. In terms of, you know, the harm being done to people paying in, there's like an anecdote in my book about an Indian town or the whole town joined Amway to sell this product that was a car window washer fluid and not a single person owned a car.

Wow. You know, it's like, it's, it's incredibly, um, upsetting and disturbing. But, of course, they get so much credibility that these are American companies. Yeah. So, yeah, I mean, it's a big old problem. I don't know, I don't know how we're going to get out of it except to, honestly, like, here, what would get people out of it, what would help is, like, free child care. Right.

You know what I mean? Free, like, just better welfare. Like, this was a woman who left the military. She was gainfully employed in what helped push her toward an exist. an experience like this was feeling desperate. Yeah. So, like, help people when they're getting out of the military. Help college students when they have debt, right?

Like, if we weren't, and that's what I was saying earlier about this, like, really insidious, awful pattern where we're, like, getting rid of that social welfare. And so we're funneling people into the marketplace. Yeah. And then waiting for them in the marketplace are scams. You know, that sucks. People, as I said before, this is providing people. people's real needs, their emotional needs, their need to feel that they're progressing in life,

their need to have a prosperous future ahead of them, their need for emotional support from their community and all these sorts of things. And the problem is we've taken away those opportunities for those, to get those things in a real way from people. In addition to the financial support and the financial desperation, and if we're actually able to fulfill those needs for people in genuine ways, such as in a union, for example, or through, you know, a social safety matter. et cetera, or real community, then, you know, we take away the pull towards the dark twin.

Oh, I mean, MLM, one of the big, check out Project 2025, check out the whole document, search for independent contractors. Now, you might not think that's a huge priority. The term direct selling, which is like what the industry uses now, because MLM is now a bad word, right? They were like, uh-oh, they caught on to that one. Now we're going back to direct selling. It's in Project 2025.

Wow. As like protecting direct sellers. Wow. And that's because, I mean, the, the idea that we're, you know, all going to be gig workers, nobody's going to be a full-time employee. Nobody's going to be in a union. I mean, Amway families have been working against right-to-work in Michigan and elsewhere. I mean, working for a right-to-work, excuse me, working against organizing and union power all over the country for decades. And, I mean, the whole industry.

And some of the successful lawsuits against MLMs have been challenges to their employee status. arguing that these are employees and you got to pay benefits on them. Yeah. So it's very much, it is a labor conversation. And I, yeah, I mean, the. What an interesting idea, though, maybe to end us and maybe it's a fantasy.

But when you have all of these people who are being exploited by this organization and have solidarity with each other, but again, this sort of like dark version of solidarity, if you could somehow flip a group of them to have real solidarity, with each other and say, you know, fight back against this organization and unionize them. Maybe it's a fantasy because they are so deep in the ideology, but like it's, it's a tempting,

opportunity, perhaps, like, because it's, there is something good about that social organization that is powering, you know, their exploitation. If you could somehow turn it. Yeah, it's, I think of it more honestly, like a parasite that's attacked a good host. Yes, yes. Is our relationships with each other, our closeness and our desire to improve our collective lot maybe, but what's been taken is taken over is that collective aspect and that it is all this individualistic. And I mean, truly, what it is, it is, it is an anti-democratic propaganda machine because you are really taught to like, think of yourself, think of your upline as, as you're like a king.

Truly, it is the opposite of American and the American dream. And the Amway dynasties, they are, by now, the families that's profited in Amway, they still own those downlines. You can give them to your children. Yeah. It is an inherited wealth. Wow. They are little dynasties with nobility, inherited nobility.

Like the Amway founders are kings that have just. kept this little kingdom. Wow. And so, you know, people think, well, why do Trump supporters? They're being, they're being exploited by these policies put forward by by MAGA. Why do they support Trump? You know, it's the same thing in MLM. Melinda Cooper, who's an academic who's written a lot about, well, in some ways about the DeVos family and various, you know, things they are trying

to accomplish in terms of tax law to make people pass past to enable wealth to be passed easier without having you know being taxed she has said that what amway so successful at is everybody roots for the boss the workers root for the boss I mean that's really where we're at yeah and to figure out on the left how to undo that how do we understand that we can't all be the boss. Yeah. Somebody's lying. Somebody is the real boss.

Yeah. And so how do we, exactly what you're saying, turn that energy toward a real, you know, truly enabling us all to transform our circumstances than to live better lives, you know? What an incredible flip. Let's, let's end there because the idea that capitalism tells us each of us as a boss and what solidarity requires is to say, no, no, no, no, no. There's one boss, and then there's the rest of us. But if the rest of us get together, except we're not bosses, we accept that.

But we band together in our subservience or our bottomness, we can, you know. Our equality, let's say. Our equality, yeah. Well, you know, like our. We're all bottoms. Bottoms unite. We're anti-tops. But yeah, yeah.

That's a really powerful message. It comes right back to the title of your book, Little Bosses Everywhere. Thank you so much for coming on the show. What an incredible vision of this. I feel a little like a crazy person, like telling you, you know, like someone you might walk by in Times Square that's like standing on a box and just talking and like whatever part of the conversation you end up hearing for me is like because I really could go on and on about it.

But thank you for listening. It's incredible to have you here. Of course, people can pick up a copy of the book. If they're as fascinated by this as I am at factually pod. dot com slash books or special bookshop where else can people find your work on the internet um i am a features writer at new york magazine that's my primary writing job and so i write all kinds of articles about other scammers and crazy people and powerful people and people who want to be powerful and you can find me there um yeah amazing thank you so much for being here bridget thank you

my god thank you once again at bridget for coming on the show i hope you enjoyed that conversation as much as I did. If you want to pick up a copy of her book, Little Bosses everywhere. Once again, the URL is factuallypod.com slash books.

And just a reminder, every book you buy there supports not just this show but your local bookstore as well. Of course, if you want to support the show directly, head to patreon.com slash Adam Conover.

Five bucks a month gets you every one of these episodes ad free. For 15 bucks a month, I'll read your name in the credits. This week, I want to thank, we're choosing them at random

this week. I want to thank, keep masks in health care. Great name. Great way to get me to read that important message. I want to thank Maya Lynn. I want to thank Tucci Sue.

I want to thank Solar Yeti. Philip Andrew Sodgren, Tara Wilson, Brennan, Peterman, Ultrasar, Josh Davies, Lois Bell, and God King, Engineer of Beaverkind. Thank you so much, God King, Engineer, Beaverkind. If you want me to read your silly username, real name, or political message at the end of the show,

head to patreon.com slash Adam Conover. 15 bucks a month gets you that, but we'd love to have you support at any level. Of course, if you want to come see me on the road, head to Adam Conover.net for all my tickets and tour dates. Of course, I want to thank my producers, Tony Wilson, and Sam Rowdman. Everybody here at HeadGum for making the show possible, thank you so much for listening, and we'll see you next time on Factually. spans, which is everyone. I mean, you're probably trying to skip this ad right now, but don't,

because you now legally have to listen to the show. That's how law works. Next we have is very simple. Each episode has three short segments. For instance, Lisa Gilroy and I write insane revenge, Yelp reviews for callers who had bad experiences with a business. The Doe Boys play a game called Meal or No Meal, and Steph Tolliv and I go head to head on a thought-provoking game called Guess That Sound. The show is as dumb as it sounds, and we probably have more fun than we should. But it's a great time, and you should listen or watch new episodes of next we have every Thursday on YouTube or your favorite podcast app. One, two, day. Hello, I'm Joe Mercosuracey.

And I'm Russell Daniels. And we're the co-host of The Downside. Now on Headgum, we are a safe place to complain, be negative, kvetch. We don't like toxic positivity. No. Because it's toxic. We're not going to sit there going, hey, look on the bright side. Enough on the bright side.

That's all anyone's talking about these days, the fucking bright side. So tune in to some of your favorite comedians, some celebrities like Caleb Huron, Brennan Lee Mulligan, Alana Glazer, Busy Phillips, and Dan Soder. We let them come on and we let them share what shitty about their life. We look at the things that seem nice on the surface and we go, why is it shitty underneath? It's a fun time, but it's a place you're going to listen and go, oh, thank God, I'm not any of those three people on that show right now. Yeah.

I feel better about my life. please subscribe to us on Spotify, Apple Podcasts, PocketCast, or watch us on YouTube. New episodes every Tuesday. This is The Downside.