I call to your attention a very informative podcast, not about MLM directly, but one that goes to the heart of all “anti-MLM” discussions: What Is MLM?
The featured podcast is the Intercept, hosted by Ryan Grim, interviewing actor and activist, Ben McKenzie. The episode is entitled, “Is Crypto a Big Scam?”
In 2008, paralleling the spike in MLM recruiting after the financial crash, the “crypto-currency”, Bitcoin, arrived like a savior shrouded in mysteries as to its origins, as MLM still is. Bitcoin was soon followed by hundreds of copycats, just as MLMs proliferate in number. Also like MLM during that terrible time of unemployment and foreclosures, crypto attracted enormous numbers of “investors” seeking the rescue of a new source of income.
Because of their many parallel roles, characteristics and justifications, examining crypto offers another useful way to approach the main question of MLM, What Is It? The purpose and entire narrative of my book, Ponzinomics, are focused on that one question.
Few people understand what crypto is, any more than they understand MLM, but as millions flocked to it, the price of “coins” exploded, which then drew in more to the frenzy, a facsimile of MLM’s pattern of “pop and drop.” In recent years, crypto prices plummeted. Bitcoin lost 70% of its high value. Others disappeared. Millions of coin buyers lost their savings. And though crypto is almost never used as a “currency”, which it claims to be, and therefore serves no social purpose, it now attracts millions of speculators as a “digital asset”, just as MLM continues under shifting identities, “direct selling”, “gig”, “side hustle”, discount buying club, “preferred customers”, as it inflicts 99% loss rates on its investors, whatever they are called, every year.
In the last part of Intercept podcast, Ben McKenzie matter-of-factly explains that crypto “currencies” rely on the same thought-stopping, pseudo-economic pretenses as multi-level marketing does. Each claims to be an infallible financial “system”. If you happen to lose money, therefore, it has to be your own fault or just bad luck. Gaslighting “losers” is built into the worlds of crypto and MLM, and is conducted on a mass scale. Winners prove the system’s legitimacy. Losers only reveal their own pathetic status.
More Parallels and Similarities
- Both crypto and MLM claim to be revolutionary alternatives to basic societal institutions, Livelihood for MLM, and Money for crypto. Crypto claims to be an alternative to the world’s fiat currencies backed – and controlled – by governments and central banks, said to favor elites and insiders at the expense of everyone else. MLM claims to be direct selling, but mystically transformed into a disrupter of all other conventional businesses, able to dispense “extraordinary opportunity” to the public at large, formerly available only to financial elites.
- Like MLM which has received (paid) endorsements from Donald Trump, sports stars and preachers, crypto is hyped (for pay or personal profit) by Matt Damon, Elon Musk and Larry David.
- Both crypto and MLM claim to offer investors total “freedom” with explosive income but also freedom from the bounds of a world order that is locking out more and more people from prosperity.
- In both MLM and crypto, the more people who “believe,” the more value each person’s investment gains. Expansion itself is the source of value, without need of anything inherent or underlying. The main task of existing investors is to convince others to also believe.
- All believers are told they are the smart ones, “winners” who escaped and beat the old system. Those that don’t buy in are labelled fear-driven losers or defenders of the doomed old order.
Ben McKenizie explains how reality of crypto is obscured with the mystifying “block chain”, a “new” technology that is said to be infallible and totally secure, unlike inefficient and vulnerable human-operated methods. As he explains, block chain technology is not that new. It is only an encrypted digital ledger, not magic. Crypto “coins” can be stolen. Block chains have beeb hacked. Other terms such as “decentralized” and “stable” are also debunked in the podcast. Block chain is operated by humans and, despite the hype, it has not yet proven practical for general use in industry.
MLM is similarly mystified with the “endless chain” proposition, presented as a radical new method of marketing. Employing the “endless’ chain as an incentive and a system of transferring money, MLM is the only business on earth claiming capacity to expand “forever”. Everyone on the chain is said to gain not from their own productivity but from the expenditures and work of all the others “below” them, in the future, on the “infinite” chain, making everyone on the chain a “boss.”
Seeming to operate outside laws of economics or math and beyond comprehension of ordinary people, the earthly realities of crypto and MLM actually are almost never examined. Belief in their mystical powers banishes analysis. Discussions are reduced to incidentals, comparisons, speculations, hopes or regrets, all conducted inside the context of their respectively claimed identities of “currency” and “direct selling” and energized by mystical promises and proselytizing followers.
Listen in on any crypto forum; it sounds uncannily like MLM with believers dismissing and gaslighting the critics and the critics divided among themselves over the sources of discontent or solutions – bad players, need for more disclosure, bad apples, inefficiencies, overblown promises, cult abuses, lack of regulation or corruption of government, etc., anything except a common-sense, fact-based analysis of what either MLM or crypto is. Both MLM and crypto are now so huge in volume of dollars invested and numbers of followers – reportedly 20% of US households for crypto, and even more for MLM – and enjoy tacit approval or complicity of law enforcement that even the possibility of a “big scam”, as the Intercept podcast dares to characterize crypto, is unimaginable.