A Collection of Strange Beliefs, Amusing Deceptions, and Dangerous Delusions

From Abracadabra to Zombies

Book Review

False Profits
Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes

by Robert L. Fitzpatrick and Joyce Reynolds

Charlotte, N.C.: Herald Press, 1997


The best thing about this book is its title, a clever play on the religious undercurrent of the main multi-level marketing (MLM) schemes such as Amway. But the authors' proposal to replace the false hopes of MLM and pyramid schemes with the vacuous platitudes and profound errors of the likes of M. Scott Peck and Marsha Sinetar is not one this reader has any sympathy for. I can't recommend this book in general, but I do recommend it to anyone contemplating joining an MLM business.

The authors argue that the apparent motive of greed, which drives the millions of people who are recruited into MLM schemes, is really a quest for spiritual fulfillment. Those seeking the City of Man are really seeking the City of God. It is true that much of the claptrap and ritual associated with MLM organizations more than vaguely resemble the trappings of evangelistic religions. And it is true that both religious and MLM devotees unabashedly identify financial success with spirituality. Pat Robertson, Jerry Falwell, and all the other hypocrites for Jesus not only do not apologize for their materialistic ambitions, they seem to identify God's love for them with their worldly success. Personally, I liked the old-time religion of the Rev. Ike, a televangelist in the sixties who wore diamond rings on every finger and demonstrated the glories of God in a parade of testimonials of God-inspired money. Ike was no hypocrite. God wants you to be rich, he said. If you love God, he'll reward you with money. Prove you love God by sending Ike money. It was that simple. Falwell and Robertson make the same appeal, only they are much less straightforward about it.

The authors do a good job of comparing the tenets of the MLM faithful with that of New Age spiritual seekers and televangelists. But I think they overstate the case for their notion that seeking financial abundance is (a) identified with (a false) spiritual enlightenment, and (b) a substitute for real spiritual enlightenment. It's true that many MLM advocates talk about "unimagined wealth" but most of those who are recruited into MLM schemes do it to make a few bucks on the side. They may be deluded into thinking that if there's big bucks to be made doing this, surely there will be some chump change left for me. But I don't think the majority join Amway, Shaklee, or any of the dozens of MLM programs selling vitamins and minerals, so that they can retire on easy street without working. Most of them join to supplement their income. They're not after any kind of salvation, financial or spiritual.

That's not to say that there are not MLM advocates who are seeking vast riches and think they're doing God's work as they get rich. When I first put an entry for Amway in my Skeptic's Dictionary it was a short piece based on a funny story I'd read in the Wall Street Journal about a guy who wanted to be the first Amway king of Poland. He told his potential recruits something like "hey, if ten million people can be talked into believing in communism, surely you can recruit six to believe in Amway!" Other than having been tricked into attending a recruiting party by my mother's next-door neighbor and buying some shoe polish from a friend of a co-worker, I didn't know much about Amway at the time. I was soon to learn that Amway people are not ordinary. The vitriolic mail I received was way out of proportion to the article. "Amway" soon became my number one entry: about 4,000 people a month were visiting my Amway page and it seemed like half of them were letting me know that I was a killer of dreams, a destroyer of lives, a negative force in a universe which needed positive light; I was attacked for having evil motives, for trying to ruin the lives of people who were doing their best to succeed. I got a lot of mail from people who told me they were Christians and wished me well as I spent my life working for others while they retired on easy street in their twenties. I got letter upon letter telling me my data was all wrong. They'd be rich while I stayed poor. I posted most of this mail. It now occupies five files, each as long as the current Amway entry, which I revised extensively after doing some more research. I can attest from the mail I've received from many Amway distributors that what Fitzpatrick and Reynolds claim is true about many MLMers seeking wealth and identifying their quest with endearment to God. But it is not true of all of them. Many, as I said, are just looking for way to supplement their income.

False Profits makes a convincing case that no MLM scheme is a good way to go about making money, either a little bit or a lot. That is the strength of this book: it details the economic absurdity of the concept of multi-level marketing. First, there is the comparison with pyramid schemes. The authors examine the history and popularity of such schemes, even among the educated and literate, although they are illegal. Being illegal has never put a damper on these schemes, even among people in law enforcement, who can be as greedy and needy as the rest of us. One thing you will hear from Amway folk is that they are not a pyramid scheme. How do they know this? They know this because some agency of the federal government said so. Some court ruled that since Amway does not charge people either for joining Amway or for the privilege of recruiting others as distributors, it is not an illegal pyramid. What Amway and all other legal MLM businesses are, then, are legal pyramid schemes. False Profits demonstrates the inexorable math, as well as the simple economics of the matter, that MLMs can only provide financial success at the expense of many who must fail. MLMs only sell products because they have to in order to be legal; otherwise, all they would sell is hope. The focus of any MLM is not on selling a product, but on recruiting more distributors who recruit more distributors ad infinitum, but of course there is no ad infinitum and that is why most who join in will not make money in either a pyramid scheme or an MLM sheme.

I would recommend this book only to those who are contemplating joining an MLM business. You should read this book before you get into the business. It will show you that all the positive thinking in the world, all the lies you will have to tell about what you do and how well you are doing it, are not worth it in the end. You will be asked to recruit your family and friends and you will probably end up losing both in your quest for wealth. You will gain a new family, a new community, of equally positive-sounding, energized people who admire millionaires and try to end world hunger, but it will not be worth it. You will buy motivational tapes, pay for motivational seminars, buy motivational books and attend motivational meetings. You will be motivated and energized, but it will not be worth it. You will end up losing friends, family, money and time. You may even be duped into thinking God wants you to be rich and MLM is God's way of rewarding those who love Him, but it will not be worth it. You will be deluded into thinking that the only thing keeping you from your dreams is your attitude. The only thing honest about multi-level marketing is its legality. To find out just how deep the dishonesty and deceit goes, read False Profits.

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more book reviews by R. T. Carroll

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