by Robert L. FitzPatrick
I was quoted and a link to my book, False Profits, was included in a recent article in the Washington Post that probed the aphorism, “Fake It Till You Make It”, which now pervades our culture as a recommended strategy for success.
Where did this slogan come from, author and WP opinion columnist, Helaine Olen asked, and what are the consequences of its message? She drew an insightful line connecting this catchphrase about “faking” and “making” to increasing incidences of white-collar fraud, scams in industry, and to false identities, faux friendship, and “personal branding” on social media. In politics, the ultimate expression of fake-it-till-you-make-it is George Santos who “made it” all the way to Congress, faking almost everything.
Olen traced the origins of fake-it-till-you-make-it to, you guessed it, multi-level marketing, specifically to Amway and MLM felon, Glenn Turner, founder of the Amway-rival, Koscot Interplanetary. Turner disappeared from the spotlight when he along with another rival MLM, Holiday Magic, were federally prosecuted in the mid 1970s for pyramid fraud.
The FTC and SEC shut down Holiday Magic and Koscot but in a politically-drenched decision the FTC allowed Amway to continue. With its main competitors eliminated by government, Amway became the prototype MLM. It exploded in revenue, spread globally and spawned hundreds of clones. Herbalife was started in 1981. More MLMs are formed every year, all identical in structure and financial proposition to Amway, all producing identical consequences – 99% of recruits never profit. Nearly 20 million households a year in the USA suffer losses in “MLM.”
Helaine Olen traced how this seemingly innocuous expression has insidiously normalized unfair and deceptive practices and personal inauthenticity. The term, she explained, formulated to promote Turner’s pyramid scheme, is now commonly stated in the business world as a wily, perhaps the only way to get ahead.
She connected the concept of “faking it” in business to reckless risk-taking with depositors’ money in banking, bogus stock offerings and ponzi schemes on Wall Street, sometimes fake and outrageously priced pharmaceuticals, and the entire crypto phenomenon, among others. All are rationalized as somehow legitimate, if they turn out well, that is, if the fakery is believed by enough people to turn a profit. A fake reality is promoted to produce an imagined outcome. Reality is redefined as what is believed. Persuasion and presentation shape belief and therefore are treated as reality itself, even when “fake.”
When it was first utilized in Amway and Koscot, fake-it-till-you-make-it was not only a mantra but a mandate. Telling the truth that one person’s profit is necessarily the loss for many others and virtually all must lose would mean immediate personal “failure.” The first book to expose deception and loss at Amway, written by Phil Kerns in 1982, is entitled Fake It Till You Make It. The WP article noted that the use of “fake it till you make it” was cited as a evidence of fraud when the SEC prosecuted Glenn Turner’s scheme.
MLM disguises itself in positive, affirmative jargon and pseudo-business terms. In this way, as the article showed, fraud became a “business model”. “Faking” is recast as optimistic vision and entrepreneurial spirit. Phil Kerns quoted a top Amway recruiter, “We don’t lie; we just tell the truth in advance.” As Kerns detailed, the “truth told in advance” is actually a lie that manifests its betrayal and harm to the victim later, sometimes years later. This is the methodogy of all “long cons.”
The Washington Post article accurately connects MLM to the present day “fake it” meme but does not acknowledge the enormous scale at which MLMs drove “fake it” into the culture. As I detailed in PONZINOMICS, Amway, Turner’s Koscot and the Holiday Magic scheme, the first major MLMs, all included powerful indoctrination programs, known for using sleep deprivation, identity erasure, subversion of critical thinking and other forms of mind control. In these types of MLM “training” programs, millions of people have been instructed that lying, called “faking it,” is necessary and justified in recruiting, based on promises of “unlimited income” awaiting those who believe. Failure to believe, not the destructive pyramid, causes failure, according to the dogma taught in the MLM “training” programs.
Based on its pyramid scheme (MLM) origin and its now pervasive usage in business and personal life, Olen argues that “fake it till you make it” deserves a closer and deeper look. For those making this examination, it will inevitably lead to the disturbing discovery of the far-ranging toxic effect of MLM on society.
The FTC’s political decision in 1979 to overrule its attorneys and contradict its standing policy on “endless chain” propositions unleashed more than pyramid schemes into the market. It ushered in the methods and psychology of the fraudster as “marketing.” The influential fallout has blurred lines between medicine and quackery, market pricing and price-fixing, mortgages and liar loans, character and con.
The pernicious power of the “faking it” meme has superseded reality-based economics of delivering value, fulfilling needs or meeting demands. “Making it” has lost connection to methods or consequences. Originally hatched by pyramid scheme operators to disguise and promote a bogus “business opportunity,” fake it till you make it expresses the values and methods of the Ponzi scheme, bait and switch, boiler room, bunco game, sting and swindle.