Little Bosses Everywhere: How the Pyramid Scheme Shaped America by Bridget Read • Crown, 351 pp.
There were many coalescing forces that brought Trump back to power in 2024. Big Tech executives wanted to invest in fintech and AI without worries about regulatory barriers and to receive lucrative defense contracts without protesting employees. Private investment firms wanted access to retirement accounts without scrutiny. Oil companies wanted to roll back environmental rules and kill EV mandates. But one crucial part—arguably essential to Trump’s own political ideology—was an effort to make the government more open to grift and graft. To make it easier to fleece marks with impunity.
Incredibly, of all of these elite projects, the last may have been the easiest to sell to the masses. At least initially, much of the deregulation of predatory schemes has been cheered on by the victims of the scams at issue. The MAGA base is full of memecoin investors on the verge of losing their shirts and MAHA moms praying that bullshit unguents will prove effective against previously eradicated plagues.
Why? They felt in on it. MAGA successfully built a cross-class coalition around a shared story of liberation from the fetters of woke moralism and scientific restraint. To be “based” or “red-pilled” was to be allowed to harass women and spread racist hate without fearing “cancellation,” to embrace the notion that science-based public health is a lie to sell pharmaceuticals, to be able to gamble on crypto or sports or whatever else one pleases. This was a coalition of transgression and impunity. “Your way out of their system,” as the Coinbase ad campaign puts it.
As with much of the Trump phenomenon, what is going here is especially perverse, but it is not sui generis.
Back in 2012—when good ol’ Mitt Romney was running on the Republican ticket—Rick Perlstein argued that lying and con artistry have been a core part of conservative movement-building since its founding. In an essay that seems more penetrating with each passing year, Perlstein contends that a key part of the way that conservative elites communicate with their sympathetic masses is by stitching together a welter of often transparent lies in order to build solidarity around a skeptical relationship to liberal-dominated mainstream forms of making sense of the world. Some of these lies come in the form of political appeals or purported reporting, but many come in the form of sales pitches. Often, they are mixed together: right-wing publications and mailing lists have long been stuffed with advertisements for get-rich-quick schemes that take advantage of secret knowledge that know-it-all liberals don’t want you to have access to.
Perlstein identified two functions for all of this lying in conservative movement building. One is that it has built connection by creating a mutually reinforcing epistemic community. “Each constituent lie is an instance pointing to a larger, elaborately constructed ‘truth,’ the one central to the right-wing appeal for generations: that liberalism is a species of madness—an esoteric cult of out-of-touch, Europe-besotted ivory tower elites—and conservatism is the creed of regular Americans and vouchsafes the eternal prosperity, security, and moral excellence of God’s chosen nation, which was doing just fine before Bolsheviks started gumming up the works.”
Yet many of the untruths in question are obviously false, unlikely to be believed by either speaker or listener. Perlstein hypothesized another reason to explain these kinds of claims: demonstrating a willingness to deceive and even to defraud has been a way of signaling that one is part of the in-group. “Lying is an initiation into the conservative elite.” It is also a way of moving up the hierarchy of conservative institutions. And, for consultants and influencers, it is a way to make money. In other words, it’s like multilevel marketing. In fact, it often is multilevel marketing.
If all that is true, one might think that attending to the history of multilevel marketing may help us better understand our political moment—and potential ways out of it. Bridget Read’s recently published Little Bosses Everywhere provides just the foundation we need.
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The scale of the MLM industry should not be underestimated. According to the Direct Selling Association (admittedly not a neutral source), the U.S. direct selling industry generated over thirty billion dollars in revenue last year. If the U.S. direct selling channel were a single company, it would rank among America’s top twenty retailers.
What makes an MLM distinctive is not what it sells but how it sells. Rather than hiring salespeople as employees who work together in a department under the company’s supervision, an MLM sells its products to authorized dealers who can make money by reselling the product at a markup and by recruiting other authorized dealers. A salesperson who recruits is known as a “sponsor” or “upline,” while the recruited salesperson is a “downline.” Sponsors act as suppliers to downlines and thus can make money by reselling to a reseller whether or not the products are subsequently resold to somebody who uses them. A downline can recruit her own downlines, which both expands her own market and, ipso facto, expands her sponsor’s market. After a few generations of recruitment, the structure of salespeople looks like a big…well…pyramid, with the original uplines making money from all of their downlines and their downlines’ downlines and so on.
Today, MLMs would object to referring to this structure as a pyramid scheme, but as Read shows, they embraced it for decades, even using it as a sales pitch. They only stopped doing so in the 1970s, once regulators began to converge on the conclusion that pyramid selling was per se unlawful. Not that they changed their business model when they did so. But we’re getting ahead of ourselves.
Read traces the pyramid sales strategy back to 1945, when a struggling vitamin manufacturer called Nutrilite signed an exclusive distribution contract with a sales company called Mytinger & Casselberry, Inc. Carl Rehnborg, the founder of Nutrilite, Lee Mytinger, and William Casselberry were all well versed in the traditional “direct sales” strategy that we now associate with door-to-door peddlers, Tupperware, and Avon, in which a company hires independent contractors to sell its goods and pays them a contingency fee. That business model offloads plenty of risk onto sellers by making their compensation depend on sales rather than minimum wage laws—and, according to Read, direct sales companies fought hard for the “independent contractor” exemption in Taft-Hartley, which excluded such salespeople from the protections and regulations of the NLRA. The trouble, however, was that offloading risk wasn’t enough when almost nobody wanted to buy expensive nutritional supplements of questionable efficacy. But Mytinger and Casselberry had a new idea. Don’t sell the vitamins; sell the “business opportunity” of reselling the vitamins. As long as a potential buyer could be convinced that they could find somebody else who would buy the vitamins (at a markup), she could be convinced to buy them. Mytinger and Casselberry sweetened the pot by giving sellers commissions on their downlines’ sales and creating bonuses for high recruitment of downlines. They called this basic model “The Plan.”
The Plan worked so well that it birthed an entire industry. Several M&C downlines went on to start their own pyramid selling organizations—most notably, Richard DeVos and Jay Van Andel created Amway in 1959. And other direct selling companies—such as Stanley Home Products (which pioneered the “party plan” later taken up so effectively by Tupperware)—began to try out their own version of The Plan. These companies also inspired their own imitators: Mary Kay Ash, the founder of Mary Kay Cosmetics in 1963, had worked as a Stanley Home Products saleswoman and had been married to a Stanley Home Products executive.
Common to all these companies was not just a novel method of organizing a sales force. It was also a culture of evangelism, a commitment to spreading the values of entrepreneurialism. Sellers were (and are) encouraged to think of themselves not as workers, dependent on credentialed superiors to structure their day and determine the trajectory of their career, but as independent owners of small businesses. To be a salesperson is to take responsibility for one’s own life, a choice with both pragmatic and existential stakes. As sociologist Nicole Woolsey Biggart put it in her indispensable 1989 study, most MLMs are “founded on organizational ideologies, holistic belief systems in which products and the act of selling are merely manifestations of a superior way of life…that has the power to transform lives in physical, emotional, and spiritual ways.” These ideologies are often passed down as the quasi-holy word of the charismatic founder of the MLM in question, and founders (and their chosen successors) host massive gatherings that combine corporate-style rewards for high sales with near-revivalist self-help uplift.
As Read shows, this style of salesmanship and culture building owes a great deal to the Positive Thinking movement that has shaped so much of contemporary religious and spiritual culture and (as Madeleine Baker’s fascinating recent book explores) management theory. The basic idea that drives this movement—that the key to success is “manifesting” it into existence by force of will—grew out of the New Thought tradition of the late nineteenth century, whose early proponents included Phineas Quimby and Ralph Waldo Trine. It was popularized in the twentieth century by Napoleon Hill, whose Think and Grow Rich (1937) became a foundational text for the self-help industry, and came to be called “Positive Thinking” after Norman Vincent Peale published his bestseller The Power of Positive Thinking in 1952. Peale was, notably, the Trump family’s pastor: Donald Trump’s parents drove into Manhattan every Sunday to worship at Peale’s Marble Collegiate Church, and Peale officiated Trump’s first wedding. The tradition has since been repackaged in many guises—most recently as The Secret and the Prosperity Gospel.
Following Biggart’s suggestion that MLMs organize their sales forces like social movements, we can usefully understand Positive Thinking’s relationship to MLMs as akin to Marxism’s relationship to (radical) labor unions. It motivates effective organizing by giving both the lead organizers and the rank-and-file an understanding of why it makes sense for them to engage in a shared project and take the personal risks that they do, even as it draws on an account of social reality that can be used by people whether or not they are part of that project. Those who use this ideology to make sense of their work with MLMs will also use it to make sense of other social relationships. And those who accept the ideology because it is common in their community will find the MLM pitch more amenable.
The Positive-Thinking-soaked culture of MLMs creates fertile ground for conservative political culture. It encourages participants to think of themselves and everybody around them as potential entrepreneurs, just waiting to be converted to the cause. MLMs tend to spread through communities, creating regional pockets in which many people are part of one or more MLM. Saturation does not beget growth, but if everybody shifts money and goods back and forth and nobody questions the basic story, the illusion can be maintained.
Moreover, this culture of entrepreneurialism has often been paired with a culture of patriarchy and support for socially conservative values more generally. Three out of four MLM sellers are women. Sales pitches are often explicitly gendered in an anti-feminist way. Many companies focus their recruitment on married women, encouraging them to think about selling as a supplement to a husband’s (presumptively primary) income. Sellers are encouraged to ask their husbands’ permission, to treat them as collaborators, and to put caring for their families before business.
MLMs combine this political culture with political advocacy. Those at the top of the pyramid donate generously to politicians and invest heavily in lobbying. Although some of this influence has been bipartisan, MLMs have long been deeply entrenched in the Republican Party.
Amway is an instructive example. Its founders, Richard DeVos and Jay Van Andel, were both dedicated Christian conservatives and donated hundreds of millions of dollars to the Republican Party and conservative movement organizations. In 1980, they were the fourth and fifth biggest spenders of independent funds for Reagan, while the DeVos family used its leverage in the 2016 primary to convince Donald Trump to appoint Betsy DeVos, the radical Christian school choice advocate, as Secretary of Education. Those lower down on the pyramid are also enlisted in the struggle. Efforts to crack down on an MLM are often met with angry responses from masses of sellers who do not see themselves as victims but rather as people whose income is threatened.
An MLM, then, is an especially effective institution for creating social hierarchies that channel money upward while creating an acceptance of—and a willingness to fight for—that hierarchy among even those on its lowest levels. Members are simultaneously rebels against the mainstream, insofar as it involves bureaucratic bosses and nagging regulators, and militant defenders of the mainstream, insofar as it involves capitalism, Christianity, and patriarchy.
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All of these features have obvious relevance for the maintenance and mobilization of a right-wing social base. But we have not yet considered the most revealing dimension of these organizations for our current moment: MLMs are, by and large, a con. They are not a good way to make a living—indeed, most sellers lose money. And many MLM products are somewhere between overpriced and snake oil. The joyful loyalty they produce, then, is not actually a way of improving members’ material reality. It is to a shared illusion.
MLMs are not pure pyramid schemes. A pure pyramid scheme involves no products at all: just the recruitment of new members, who pay in money in the promise that they in turn will be paid out when members are recruited after them. The problem with these schemes is that it’s impossible for everybody involved to make money on them—let alone to make a steady living over time. Eventually, you run out of people to recruit. The only way to recruit people, then, is to get them in on it early or to obscure the nature of the scheme. (As Ponzi, Bernie Madoff, and many others have done by falsely claiming to be investing the money).
MLMs, by contrast, use the chain recruitment process of a pyramid scheme, but they do so in order to build a network of people willing to buy and to attempt to sell a particular set of products. In doing so, they create a productive ambiguity. At one extreme, the product sales force could be mere kayfabe designed to obscure a pure pyramid scheme: nobody actually uses the products, purchasing is just a laundered investment, and those at the bottom are left holding unsalable inventory. At the other extreme, chain recruitment could be a technique for building an enthusiastic sales force for a product that many people use and value, with recruitment incentives as a sideline akin to referral bonuses.
As you can imagine, there has been much wrangling about which type of operation any given MLM is running. Over the years, many MLMs—including many quite successful ones—have been shut down by regulators on grounds that they are, in fact, pyramid schemes. Even those that have survived enforcement actions have done so on evidence that looks flimsy in retrospect. The publicly available income disclosure statements of major MLMs consistently show that very few (as few as 1% of) MLM sellers make more than minimum wage, and most seem to lose money on net. Whether that meager trickle comes from genuine product sales or from recruitment remains contested (Read leans toward the latter conclusion).
Surely, MLM sellers do not fail to notice that they are not making much money. So why do they stay? Well, most don’t. Turnover is very high—upwards of 95%.
For those who do stay, one part of the puzzle seems to be that they feel trapped. They’ve invested in inventory, so they don’t want to abandon ship before offloading it. They’re also being hounded by their upline, and they want to please her. On top of that, they are given plenty of reasons to blame themselves rather than the MLM for their failure. They have, after all, been surrounded by—and at least partially bought into—an ideology of success as a result of individual attitude and failure as evidence of negative thinking. Sellers have no access to data about average sales, which uplines have every reason to obscure, and to even begin to compare notes with other sellers might be seen as giving in to unacceptable doubts.
More generally, as Erving Goffman observed years ago, when somebody has been a “mark” for a con, she has told herself a story about the wisdom of the scheme and her shrewdness for participating in it. She has built up some of her identity around the value of the scheme. To be faced with the possibility that she has actually been taken for a ride is to face “a process of self-destruction of the self.” And when—as is often the case—a seller lives in a community with many people who are participating in the same scheme, she would not only have to rethink her relationship to herself but face the possibility of being an outcast.
Further, many MLM participants genuinely believe in the value of the products they are selling. They are usually users of the products themselves. But why? The cleaning products that Amway sells and the makeup Mary Kay sells are perfectly serviceable, but they do not have any special features or cost advantages that make them a cut above other soaps and cosmetics. Nor do users of these products generally justify their preference in those terms. Rather, they talk about how using the products make them feel special and part of a community. With cosmetics MLMs, the sales pitch, often accompanied by a makeover and lessons in how to select products, focuses on feeling beautiful and treating oneself with care.
For MLMs that sell nutritional supplements, the importance of a product feeling like self-care is even more important. The pitch for these products—which are, at best, placebos—is that the mainstream healthcare system is deeply inadequate and perhaps even fraudulent. Using these alternative and more “natural” approaches to caring for oneself allows one to tap into hidden sources of wisdom. This pitch works, in part, because many people have negative experiences with science-based healthcare institutions. It also works because one can feel healthier and more in control just by making choices that feel healthier. What one buys is a story that one can tell oneself about taking back control of one’s own health.
The similarity to MAHA is not coincidental. MLMs surged during the COVID crisis, and nutritional supplement sellers were in the vanguard, spreading conspiratorial ideas about the mainstream public health response as part of their sales pitches. Indeed, it was this surge that first made Read take notice of MLMs and inspired her to dig into their history.
Which brings us back full circle to Perlstein’s hypothesis that public lying in service of a purported deeper truth produces conservative in-group identity and loyalty—though with an important modification. In Perlstein’s account, the lying is largely cynical: elites deceive their base to build solidarity. MLMs complicate this picture. The loyalty they produce is not built solely on cynical deception but on something more potent: shared commercial participation that makes the ideology feel true because it is lived. Sellers are not merely told a story about how the world works; they are enlisted in a daily practice—selling, recruiting, “manifesting” success—that makes the story feel like their own. Participants are also shaped by the intellectual currents that support MLMs: Positive Thinking, pro-capitalist skepticism about working life, anti-feminist versions of female empowerment. The result is something more powerful than sales patter: it is a self-reproducing social world.
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But we should not overestimate the power of this cultural reproduction. After all, most people who join MLMs eventually quit. Part of what makes MLMs such a useful area of study is that they show how much effort it takes to create the sort of epistemic and social bubbles that have made MAGA possible.
Much of that effort involves structuring legal relationships to prevent downlines from having any recourse when things go wrong and holding the regulators at bay when they try to intervene. As such, there is reason to believe that stricter regulation of sales tactics and employment practices could do real work in making the creation of these fundamentally predatory social worlds more difficult and perhaps to disrupt some of the dynamics that reproduce the base for authoritarian political movements.
One approach to cracking down on MLMs would focus on the business model they have in common: chain recruitment of a sales force of independent contractors, with compensation depending heavily on bringing in more salespeople. Several states have anti-pyramid scheme laws that prohibit something like selling a right to sell a given product and to receive a reward for recruiting others. Under the Koscot test that the FTC adopted in 1975, such a scheme has been seen as inherently deceptive for the purpose of various federal anti-fraud laws. As Read recounts, when these laws were first adopted in the early 1970s, many thought the MLM industry was not long for this world. By 1975, the FTC and the SEC had shut down three of the biggest players: Holiday Magic, Dare to Be Great, and Koscot.
All of that changed when the FTC went after the biggest player: Amway. Although the Commission ruled that Amway’s representations about earnings were deceptive, it concluded that the company’s policies to limit “inventory loading” (by pledging to buy back unsold inventory of sellers who quit and by making recruitment bonuses contingent on sales) were sufficient to make it unclear whether Amway was a pyramid scheme. Amway sellers were making at least some money by selling products, even if they were also making money by recruiting (and even if most of those product sales were to other Amway sellers).
As Read points out, there is reason to doubt whether this conclusion was factually correct: a case brought by the Wisconsin Attorney General only a few years later demonstrated that these anti-inventory-loading policies did not prevent most sellers from failing nor most revenue from being recruitment-derived. The FTC was, further, under enormous political pressure at the time. Read provides ample circumstantial evidence to indicate that DeVos and Van Andel, who were close with President Ford and his adviser Bill Nicholson from their overlapping elite social circles in Michigan, were lobbying the administration as the investigation heated up. The FTC (as I have explored) was also in the middle of an unprecedented lobbyist-coordinated backlash that had a once-supportive Congress threatening to pull funding.
The Amway strategy—implementing nominal anti-inventory-loading policies while bringing heavy lobbying pressure—has become the industry’s bulwark against elimination. It held strong even when confronted with Bill Ackman’s short of Herbalife in the 2010s. While the FTC eventually extracted a $200 million settlement and an agreement to compensate distributors based only on verified retail sales, it conspicuously declined to label Herbalife a “pyramid scheme.” (The company’s stock price soared 15% on the news. Ackman lost his bet—perhaps his own first step toward MAGA world?)
As a legal matter, it would not be difficult to develop a rule that would close the door that Amway opened, whether via regulation or statute. Some courts have led the way by insisting on more evidence to establish that policies that purport to prevent inventory loading in fact do so. But a regulation or a statute could go further, by creating bright-line rules and prohibiting recruitment revenue altogether.
Another avenue—which could be pursued simultaneously—would be to focus on the deceptive claims that MLMs and their sellers make about their products. This approach would have the added benefit of damming up one channel through which disinformation flows more generally. Many laws prohibit deceptive advertising, and, as Alexandra Roberts has recently shown, many of these laws do and could (with some important interpretive modifications that Roberts suggests) apply to MLMs. Moreover, many of these laws are more demanding of advertisements that make claims about health benefits—requiring the advertiser to be able to point to adequate scientific support for any such claims. If more resources were poured into the enforcement of anti-deception laws, many MLMs would be in trouble. And not just MLMs. Many of the supplement peddlers in MAHA land, nootropic advertisers on right-wing podcasts, and AI slop sales pitches for miracle cures would be in serious trouble. It would be a way to go after a significant chunk of disinformation with much less of a First Amendment barrier to overcome.
The main obstacles to all of these reforms have been the political power of the MLM industry and the continued hold that the power of positive thinking has over those it exploits.
Perhaps paradoxically, I see this moment in which grifters run our government as a moment of unprecedented opportunity. It might have felt good to be part of the coalition of impunity during the 2024 election, but it hits a bit different when you’re losing your shirt and nobody is being held accountable. Trump’s popularity has been cratering, MAGA is dividing internally, and the obvious corruption is becoming harder to ignore even for those who have plunged their fingers most deeply into their ears. As measles and mumps kill more children and economic conditions continue to decline, Democratic politicians will face growing pressure to support a platform of accountability for the fraudsters in charge.
As with financial regulation in the wake of the global financial crisis, what were once seen as narrow technical areas of commercial regulation could well be—should be—infused with populist political relevance, creating an opportunity to disrupt lobbyist business as usual. If anything like this is in the offing—i.e., if the current leadership of the Democratic Party can have some sense knocked into them—then it would change the character of a crackdown on MLMs. More than an enforcement sweep, it would be part of a crusade against lying profiteers and a commitment to a more hopeful and inclusive future. We could even imagine the MLM crackdown outlawing the loophole at the heart of the industry (and of every other “fissured workplace,” from Uber drivers to Dunkin’ Donuts employees to chicken farmers): the misclassification of employees as independent contractors. That is the sort of generational struggle that has some chance of “cooling out the marks” of not just MLMs but other parts of the MAGA coalition.
What Read’s book shows is that in the United States grifting and demagoguery have long gone hand in hand. And the Republican Party has increasingly become a vehicle for both. (The Democratic Party, of course, should not be given a pass—but the relationship to movement building is different in kind) A reconstruction that is truly oriented toward renewing our democracy will require a serious and sustained effort to hold grifters accountable and to make grifting much more difficult moving forward. A society that tolerates too many conmen undermines its democratic foundations. I don’t think it’s just the consumer lawyer in me who thinks that by going after commercial fraud we can make for a much healthier political ecosystem as well.
