Multilevel Marketing Scams Expose Capitalism’s Foundational Lie

Pyramid schemes aren’t a corruption of capitalism — they’re a microcosm of how the class system arbitrarily creates winners and losers while falsely promising opportunity for all.

Mark and DeAnne Stidham, founders of multilevel marketing company LuLaRoe. (Amazon)


Back in high school, a friend of mine somehow got looped into attending a seminar concerned with spreading the good word about an exciting — though notably nonspecific — job opportunity. In retrospect, everything about the initial experience was less a series of red flags than it was a proverbial flotilla of giant crimson banners emblazoned with the words “obvious scam.” Adding to the aforementioned lack of specificity (just what the hell was this “opportunity”?), the event itself was to be held in a bleak-looking conference room at an airport motel — the kind of vaguely sinister and transitory location one associates with ugly carpets, mandatory office retreats, marital infidelity, and small-time hucksterism.

In retrospect, I don’t think the actual nature of the gig (such as even existed) was ever really made clear. From what I gathered at the time, attendees were shown a series of peppy, Tim and Eric–esque videos featuring would-be salt-of-the-earth types who had supposedly transformed their lives overnight using the One Weird Trick bequeathed to them by whatever shady LLC was hosting the affair. (My friend, to their credit, left after ten or fifteen minutes.) Were I a betting man, though, I’d put all my chips down on saying this was a multilevel marketing (MLM) scheme of one kind or another — perhaps a notch or two away from being downright illegal, but doubtless powered by a mix of sleaze, credulity, and human desperation.

I’ve had MLMs on the brain since I watched the recent documentary LuLaRich, which chronicles the rise and (at least partial) fall of LuLaRoe: a company that successfully ensnared tens of thousands of Americans by peddling a seductive tale of economic independence and personal empowerment. On a basic level, there’s nothing to particularly distinguish LuLaRoe from other schemes leveraging the same rhetoric and business model. In this case, the schtick was mainly directed at women, who were sold on the prospect of selling custom apparel from home and making big bucks while doing it.

This article is for subscribers only. Please login or subscribe to access our full archives and beautiful print and digital magazine starting at just $3 a month.