“Little Bosses Everywhere: How the Pyramid Scheme Shaped America” by Bridget Read

Hello Friends,I’m finishing up some reading I plunged into seeking answers to the question of why we in the U.S. are what we are now. I previously discussed two books I read, Wild Religion and Cults Like Us. I also listened to an audiobook of Cowboy Apocalypse, but I need to get a look at a print copy before I can talk about it. And since I don’t want to buy it twice, I’m getting that copy through an interlibrary loan. (Yay libraries!)I’m ready to move into somewhat lighter summer reading, and I’ll discuss that soon. But one more thing that’s bothering me about the condition we’re in is how everything feels like a pyramid scheme to me—the way the country runs, the publishing industry, etc. So I read a book about such schemes. Little Bosses Everywhere: How the Pyramid Scheme Shaped America by Bridget Read.“Here are the new little Machiavellians, practicing their personable crafts for hire and for the profit of others, according to rules laid down by those above them.” C. Wright Mills, White Collar, 1951. (Epigraph for Little Bosses Everywhere)Seventy-five percent of the 6.7 million Americans who participate in MLMs are women. Recognizable names are Mary Kay, Amway, Herbalife, Nu Skin, Avon, Shaklee, Primerica, CUTCO. Yet at any given time there are more than 700 operating in the U.S.Industry turnover runs between 50 and 75%. “An AARP study conducted in 2018 … concluded that 7.7% of American adults had tried multi-level marketing at some point or 17 million people.” (11) People who are overrepresented in MLM‘s are Hispanic Americans (more on how they are targeted from John Oliver, below); white, Christian stay at home mothers; and army wives.“If the story of multilevel marketing sounds too good to be true, that’s because it is. The parable of homespun Yankee ingenuity and the power of free enterprise that MLM has been telling for the better part of a century contains inventions and elisions that have gone largely unchecked through 14 U.S. presidential administrations, and may constitute one of the most devastating, long running scams in modern history. …“The $40-plus billion in ‘sales’ with which the industry reports to make up its value are, in reality, purchases made by its own sellers.” (3)In the U.S., MLMs are not required to report the actual income of their sellers. (However, in Canada disclosure is mandatory. There, as an example, 85% of Mary Kay Independent beauty consultants earned zero dollars in commissions in 2022.) Third-party analyses show that 99% of MLM consultants not only do not make money, but rather they lose it.In Little Bosses Everywhere, Bridget Read makes the argument that MLMs are no different from outlawed pyramid schemes, but have been allowed to exist in the United States for more than 100 years through political favor.Pyramid schemes are those where the opportunity is not only to sell the product but to recruit others to do the same, and the product is just a cover for transferring money from people on the lower levels (down line) to people on the higher levels. How MLMs are not considered pyramid schemes has entirely to do with politics and political donations, particularly to the Republican party (although Bill Clinton also seems to have given the nod to MLMs).The most notable MLM ties to the Republican Party are through the heirs of the founders of Amway, Richard DeVos and Jay Van Andel. And yes, Betsy DeVos, former education secretary during Trump‘s first administration, is Richard DeVos’s daughter-in-law. (The DeVos family is rightwing Christian and looks to dismantle public education by using public funds to support religious schools.)While Little Bosses has a large section devoted to Herbalife as well, the section on Amway interested me most because of the Calvinist/Puritan religious philosophy of its founders and current leaders. That Puritan thought undergirds our beliefs today is an argument of the last book I discussed on Be a Cactus—Cults Like Us.“Amway‘s variant of multilevel marketing has a particular branch of American religious conservatism at its roots. The DeVos and Van Andel families were part of a sect within a sect of Protestants called Calvinists or Reformed Christians. Known for their thrift and piety, Calvinist inspired nineteenth-century sociologist Max Weber‘s concept of the “Protestant work ethic”: Webster observed that Calvinists, in part because of their belief in predestination, were fanatic about professional success. Working hard and accumulating wealth were ways to prove that they were among those chosen by God to be saved rather than damned. Though Calvinist make up a small fraction of Christians in America today, the Calvinist tradition is part of the country‘s foundations. The Puritans, who settled the Massachusetts Bay Colony in 1641 were Calvinist, as were founding fathers like Benjamin Franklin.” (123-4)Through political wrangling many pyramid schemes are able to call themselves MLMs and avoid being shut down by the government. The book has a particular focus on the carnage of the Amway corporate and how it has eluded consequences through multi-million dollar donations to Republican presidents and other rightwing politicians. As luck would have it, Gerald Ford was an ally of Amway, which got very lucky when, just as it was being investigated, their man became president. Later, in 1979, when MLMs were investigated by the FTC, they were given a pass in what is now called the Amway decision. Further investigation led, in 2010, to Amway agreeing to pay a $34 million settlement but admitting no wrongdoing.“Back in 1997, when Republicans and Congress helped get Amway a $238 million tax break after the founders gave the party its largest donation ever, Betsy had declared that she and her family expected things in return for their ‘soft money.’ Now with Donald Trump, they were really going to get them.… Trump helped install new federal judges into the courts who are backed by groups the DeVos and Van Andel families had spent many years funding, like the Federalist Society and the Heritage Foundation. Betsy DeVos proved ready to dismantle her own department as a lifelong critic of public education. Some of her majority policy decisions during her four years in office were to expand school choice budgets from public coffers and to severely narrow the scope of Title IX.” (242)The close MLM-political connection (especially Amway-Republican) was also boosted by the 2010 Supreme Court decision in Citizens United. Being allowed to self-report sales allows for false accounting. The money earned on the ‘down line’ is sent up to the DeVoses and Van Andels of the world. After it lands in the pockets of these wealthy folks, they pass some along to groups like the Heritage Foundation (think Project 2025).Interchapters of Little Bosses follow “Monique,” a Mary Kay Cosmetics Independent Beauty Consultant, through her ten years with the group. Her rewards for being a distributor appear to be like scouting badges—she gets pins and jackets designating her place in the company—except that no skill is acquired in earning them, and earning them costs dearly. Only 6 percent of Mary Kay consultants reach the lowest level of leadership. Monique does work her way up a few levels, but she consistently loses money, finally, she estimates, more than $75,000.The bulk of Little Bosses Everywhere is centered on the history of MLMs in the United States and the way they have laid waste to people’s lives. It’s a well-researched book, and to be honest, a bit horrifying. Those who believe most and work hardest appear to end up in the most debt, their credit and lives destroyed. Only those at the top succeed—and this has nothing to do with hard work, though people on the bottom who don’t succeed (statistically, that’s everyone on the bottom) are told it’s their fault.Little Bosses includes both a solid index and hundreds of endnotes. One thing it lacks is a glossary. This is a minor point, but there are so many acronyms here for government agencies and MLM in-group levels (as Amanda Montell notes, cultish groups have their own vocabulary), that it would be nice to be able to refresh whenever one comes up.Here are a few interesting looks into MLMs. The Alyssa Grenfell YouTube channel can be dangerous—you may find yourself far down in the rabbit hole of her regular episodes on being a faithful Mormon/Mormon missionary and then leaving the church.Multilevel Marketing: Last Week Tonight with John Oliver (HBO)(Lots on Herbalife)Why MLM Really Means *Mormons Losing Money* This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit victoriawaddle.substack.com