Episode 59: Zooming In on MLMs with Robert FitzPatrick
Make sure to check out the guest blog by Robert FitzPatrick accompanying this podcast episode.
The transcript for Episode 59 is below all the links.
Ways to Reach Robert:
Media Mentioned in this episode:
LuLaRich on Amazon Prime Video
This Week Tonight with John Oliver (EXPLICIT - also posted on Ep. 58 page.)
On Becoming a God in Central Florida on Showtime
Essential Oils MLM: Bob’s Burgers Season 9/ Episode 11: “Lorenzo’s Oil? No Linda’s”
Watch on Hulu or YouTube Tv.
Mary Kay MLM: Young Sheldon Season 5 / Episode 12: “A Pink Cadillac and a Glorious Tribal Dance”)
Watch on Hulu or YouTube TV.
Make-Up MLM: Schitt’s Creek Season Season 1/ Episode 8: “Allez Vous and You”
This episode is the perfect example of an MLM that is saturated. I highly recommend it…and the entire series.
Watch on Netflix, IMDB TV, or POPTV.com. Available to buy on Amazon as well.
Transcript
Melissa Milner 0:09
Welcome to The Teacher As... Podcast. I'm your host, Melissa Milner, a teacher who is painfully curious and very easily inspired. In this third season, I explore my interests as the main focus of the episodes. New episodes come out every other week. If you enjoy the podcast, please share it with anyone you think would benefit from listening. It really helps the podcast grow. Thank you for supporting The Teacher As.
Robert FitzPatrick 0:35
So I'm Robert Fitzpatrick. I'm the author of a book that came out just less than a year ago, called Ponzinomics: The Untold Story of Multi-Level marketing. And that book is the culmination of 20 years actually of involvement in work that I have done around the subject of pyramid schemes and multi level marketing. So, going back to the late 90s. But it even goes before that, because I encountered a pyramid scheme myself in the late 80s, which sparked a powerful fascination on my part, almost a compulsion to understand the power of a pyramid scheme, because I witnessed, first of all, the mania that they create among well educated people, the way they... the pyramid scheme was able to go apparently, unnoticed as a fraud, pass itself off is somehow something real and legitimate. And, and most important, I witnessed the feelings that the pyramid scheme evokes. The pyramid scheme promises in most cases, unlimited income, potentially, but just the thought of unlimited income unleashes in us feelings that many of us don't even realize we are harboring. And we are we are harboring a lot of insecurity, fear, concern about finance. We worry, we, we worry so, so constantly, we don't even realize it. And if those feelings that we carry, were suddenly lifted off our shoulders completely, as a result of the promises of the pyramid scheme, it creates an ecstasy and a euphoria. That is almost like being in love. And
Melissa Milner 2:47
Yeah.
Robert FitzPatrick 2:48
I experienced that. So I never questioned why people, you know, behave as they do. I understand that, and I have empathy for that. So, but what is that?
Melissa Milner 2:59
Yeah, Roberta Blevins talks about it being like a dopamine hit? Yes.
Robert FitzPatrick 3:02
Yeah. And that's a good a good description. And yet, there is no drug here. In many cases, that feeling can be evoked even without people actually having any money. So it's all a psychological hope instilled fantasy, actually, and a delusion. So, I'd say that's pretty powerful. And the fact that it can be carried out on a vast scale, involving hundreds of thousands, or millions of people, to me makes it a subject of great concern, and seriousness, that ought to be better understood. When I, after I experienced this and decided I wanted to research and write about it, I discovered to my dismay, that there's very little written about it. I couldn't find anything really serious in the field of economics, finance psychology, about pyramid schemes. I had just seen in that one experience I had, that lasted only a few weeks, actually, in South Florida, where I lived at the time, I calculated that perhaps as many as 20,000 people got involved. Each one putting in $1,500 or more. So, millions of dollars were transferred in that period of time. And that was just one small one. After that, what swept into South Florida was multi level marketing companies of all types. So the numbers escalated, and yet and I could see the same effect coming over, you know, people, all kinds of people. So this eventually led to my writing a book. And, and after the book came out...I sort of was pulled in really into this world that involves questions of legality, distinctions between is there distinctions between pyramid selling schemes like that we call multi level marketing companies, Amway, Nuskin, Herbalife companies, Mary Kay companies of that sort and a pyramid scheme? If there is what is it? And then, of course, there were lawsuits. I eventually became an expert witness, and I've been in 37 cases now,
Melissa Milner 5:35
Wow.
Robert FitzPatrick 5:36
I've helped to help the media a lot I've been involved with, you know, because reporters get assigned, go, go take a look at this thing and write about it. And, and they run into exactly what I ran into. There's there's very little written, there's not much, you know, reliable information. There's tons of hype, disinformation and solicitations everywhere you turn. They also discover that many people in these schemes don't talk.
Robert FitzPatrick 6:06
Yes.
Robert FitzPatrick 6:07
You know, people that are in it, are often deluded, and are not reliable. People who have been in it in the past and last don't want to talk about.
Melissa Milner 6:17
Right. They feel it's embarrassing. I mean, I've been there. I was in Amway in the 90s and I understand that it's embarrassing, but how about learning from it and trying to educate others? You know, which is where I'm coming from is the education piece.
Robert FitzPatrick 6:33
Exactly. Well, on the education piece, that's something else I eventually encountered. I thought, just like anybody would, I think who delves into this. Oh, my God, I didn't know about it. I didn't, I wrote, I had heard the word pyramid scheme, but I wouldn't say I knew what one was, I really didn't. They're not complicated. Once you take a look, it's not that difficult to grasp. So my first thought was, why didn't I know about this?
Melissa Milner 7:05
Right.
Robert FitzPatrick 7:06
What... why...I mean, I was college educated. I never, I never discussed this. I think maybe I encountered it in history, something about a Tulip Mania and Holland. You know, I read about Charles Ponzi, maybe. I didn't know much about that. The stock market crash of 29, panics, bubbles, but I didn't connect any of that to something that would affect me, or that would present itself as a business, and so on. So the truth is, as I have come to see in much detail now, it isn't taught.
Melissa Milner 7:45
You know, how you said you did a Google search and you didn't find anything about MLMs? I did a Google search, you know, curriculum about pyramid schemes. There was nothing. Edutopia I don't even think has done anything about this. This is a huge gap that, you know, I'm sort of trying to figure out how to even tackle it, to try to get educators middle school, high school, and even college to be teaching this. I don't even know where to start. Do I start with George Lucas and Edutopia? You know, try to start big like that? Or do I start just in my own district and see if I can get them to be starting to teach it?
Robert FitzPatrick 8:28
Well, I think the first fact that goes into that question of how to get it taught is an acknowledgment. And, and this hasn't really been done officially either. It's all over the schools. It's all over college campuses, high school kids are in these schemes. I've seen them recruited right on high school property. I know of high school students who bragged to me that they're going to be rich now, you know that they found a business. I've had parents write me who putting their kids through college is scraping and struggling to pay the tuition, to have their student come home and tell them they are thinking of quitting school because they have found this business and they don't need education now. In fact, education is for losers. And then when the parents object and say that's not true, they say, "Well, you don't really understand business." You don't understand business. And so this is the kind of crazy talk and indoctrination that people are subjected to who get into this delusional world of pyramid schemes, multi level marketing schemes. They are told that they have found something remarkable, extraordinary, a secret to success. The people on the stage claim to have the secrets. They present themselves as gurus. Of course, they flaunt that they are wealthy already, that they used to be ordinary people, middle class or struggling or poor, and they've overcome all of that through this program, which is now available to you.
Melissa Milner 10:29
Opportunity, this opportunity.
Robert FitzPatrick 10:33
Yeah, it's an opportunity. So it's, this is why then a, an 18 year old would come home to their parents and say to them, who are paying their tuition, you don't understand business, because they've been told that they have now gained this special or about to receive this special knowledge. Because multi level marketing is presented as a business, but a business with a special advantage, a special system, and the system makes it possible for anyone to become fabulously rich. And it just begins by getting people involved other people involved. The trick, of course of it is the endless chain. And, and and I, I would say if there were a curriculum to teach how a business can be presented to people in a... in a disguise. In other words, presented as a business, that is not a business, it would start there. What is an endless chain? And what is the trickery of it? What is the problem with it? And the endless chain is the basis of the pyramid scheme, the Ponzi scheme, it's also the basis of what is often called on Wall Street, the greater fool theory.
Melissa Milner 12:06
Is that basically, who wins and who loses and where what direction the money's going in kind of thing?
Robert FitzPatrick 12:12
Well, it's it's based on... yes, it is partly that. It's based on a speculative investment, that depends for the value, the investments value depends totally, or virtually totally, on other people buying it and paying more than you did. So it, that's what it relies on. So the underlying value, so you buy, not to get into the stock market issue. But just for analogy purposes, if you were to buy a stock, what is the basis of the value that the price that you pay for this stock? Well, if if it is hyped up, and there's really nothing there, but there's a great story. And we've seen this recently, of course, and with this company that promised, you know, some kind of breakthrough in blood testing. And people would pile in and bought buy into this thing. But it turned out there was really nothing there. But it didn't matter because people believed there was something there. Only only later it was revealed to be completely fraudulent. But as long as people believed it, they would buy it. As long as people buy it and pay more, then it's called a good investment. You bought low, you sold high. So, the greater fool theory was, is that whatever you paid for it, even though there's nothing, as long as there's somebody out there that will pay even more than you, if there's even nothing there really, but they will pay because they are they're hoping or they believe, then they're a greater fool than you are. So you know that you can make money. That's in contrast to a stock that is based on a business that is producing value with a product or service. It has stability, it has customers, it has, you know, a durability to it, it is sustainable, it could go up, it could go down. But underneath it is a a delivery, something real delivery of a service or product and is meeting a need. So the endless chain, I mean, if there were a curriculum for high school or college students, it would be to explore this idea of an endless chain and it once you grasp that, then now you have the distinction we just discussed the distinction between a business that actually has value, how would you determine value and one that just has story or hype? Now we do know that companies can sell hype. And and with virtually nothing below it for a while at least. So it's not that we're we're creating a some kind of a hypothetical or an unreal that this goes on all the time. Even companies that have value can be overhyped to where the value is exaggerated to a point of absurdity. So you say, well, it's a real company, they have real customers. Yes, but, but you paid five times, or ten times more than that company is really worth. That's okay. As long as there's, everybody else believes that the stock would never go down. But if anybody actually looks at the company, realistically, it may plummet. So, so I think this put this takes people into a world... students into another world of even a deeper world, what's real and not real? And, and as, as far as business goes, or investment goes, or money goes, at least I mean, I'm not talking about a deep philosophical discussion here. I'm talking about distinguishing reality from marketing.
Melissa Milner 16:16
If it's a good business, should you have to buy in? Should... you know, should you have to pay and get a starter kit in order to be involved in the business?
Robert FitzPatrick 16:30
Yeah, now? I would. Yes. So now, I would classify that as is kind of the second level, the first one would be the endless chain distinction. And that also is this, it takes you into some questions about what's real, not real marketing versus reality. Advertising. You know, the truth is students are not even really taught to intelligently understand advertising. So I mean, just that itself would be such a valuable going way beyond pyramid schemes just to understand.
Melissa Milner 17:03
Especially with social media, my gosh.
Robert FitzPatrick 17:06
Yes
Melissa Milner 17:06
Yeah. Crazy. Yeah.
Robert FitzPatrick 17:08
So beyond that, would be characteristics of scams that may likely be using the endless chain.
Melissa Milner 17:19
When you say characteristics. Do you mean, what we would say like red flags?
Robert FitzPatrick 17:23
Yes. Red flags, red flags, and you just named one of the key ones?
Melissa Milner 17:28
Yeah.
Robert FitzPatrick 17:29
Which is? Pay. What? Wait a minute, why would I be paying for the opportunity? What am I buying? What? After I've given you my money? What am I getting back? Well, an opportunity. Okay, an opportunity to do what exactly? Well, to enroll other people in the opportunity. Yeah. Okay. But what is the opportunity? Yeah, you can see that, that? I think it would be... I think most students would be quite fascinated with this, because it's, it's, you know, this isn't science fiction. This isn't a fantastical superhero story, but it is about reality versus non reality right in our own lives here, all around us. And, and if you gained some skills in this, it gives you power, a lot of power to know what's really going on around you. So paying is definitely having to pay for it. Just to connect the endless chain with the paying, usually in the schemes, the the money that is to be earned or transferred, is coming directly from the participants themselves, not from what the company is actually producing out in the open market. So, in the case of multilevel marketing, you you pay a fee that goes into the company's pot. And then for you to realize the opportunity, they tell you, you have to buy the product. Well, you say, "I have to buy it?" Well, no, you don't have to buy it. However, for you to be qualified to receive these bounteous rewards that are going to come as others join in after you, you have to maintain a quota. A volume quota. So okay, so alright, so now I'm buying, I paid to join now and buying and buying every month, and that becomes the revenue of the business. There's no real customers out there of any consequence. There's no real demand for this product. Nobody's really heard of this brand. So it's becomes a closed internal market, but it starts with you paying. So that yeah, that's a, that's a red flag characteristic, another red flag characteristic, there's only a few. Yeah, we just named the endless chain, we named it, they start you off, you have to pay and then they usually have a way for you to keep paying. The third is you have to go out and enroll other people. Now that's different from selling, you know, selling you look for a customer, you sell them the product, end of story, they pay more than you paid for it, that's your profit. Go find another customer. That's different in multilevel marketing, what you do is you go and look to what they call duplicate yourself. So the only way I'm going to make money is I have to recruit other people in the same way that I am. In my status. In other words, if I'm called a salesperson or a distributor, I have to go recruit two or three or four or five more people like me. Now that's not what a sales person does, a salesperson delivers product, looks for customer sells product goes and looks for other customers sells product. They're not going out recruiting other salespeople of which of course, would be their own competitor, if they were actually selling. So recruiting, what we often call recruiting mandate, the truth is you're not going to make any money unless you recruit. And so they've told you about this endless chain, two get four get 16 Look how these numbers pile up. Oh, my God. Wonderful.
Melissa Milner 21:37
I saw that page in Ponzinomics. I mean, we used to do the whole thing, you know, do you want a penny, what was it a penny...
Robert FitzPatrick 21:46
A penny that doubles every day for 30 days?
Melissa Milner 21:48
Or a million dollars? And Right, right? Yeah.
Robert FitzPatrick 21:53
So, you know, the whole idea of an endless chain, you you do learn about that. And a lot of people don't learn about that, they, you know that they say, just get five, and they get 25. And you're on your way, but they don't keep well, if it works for me, these 25 are gonna need 125, the 125 are gonna need 625. Well keep going, you can only go eight or nine more levels, and you would exceed the population of the earth.
Melissa Milner 22:25
Right.
Robert FitzPatrick 22:26
So that's another part of the endless chain is the exponential, how math works is not complicated. I mean, it's not like algebra, you don't need trigonometry. It's arithmetic.
Melissa Milner 22:38
Yep.
Robert FitzPatrick 22:39
And, you know, so. So the fourth thing, I would call a red flag, we, we saw the endless chain, which is a key thing, key structural thing. And we talked about, you know, another red flag is that they want you to pay and keep paying, you're supposed to be making money, but you turn out you're paying money. And the third thing is you got to keep recruiting people like yourself, duplicating yourself. And the fourth thing is the one that a lot of people don't know about until they get into it, and are already losing money. And they don't know why. But the way a pyramid scheme works is the money coming in from the last ones in, which is let's say you when you join, you're the end, you're at the bottom, the money you pay, most of that money, doesn't actually even go to the person who recruits you. It goes way up the chain, to the top of the chain, which means that really, nobody can make money, unless they're at the top. To be at the top means there has to be a vast number of people below you. So it it has a formula right on the surface. If if you could look at it that says, Well, maybe only one and 100 could make money because that's about how many you're going to need not making money below you for you to make money. Each of them would need the same. So well, then we know one in 100 will make money maybe. But no more than that. So when they tell you everybody can make money. No, only one in 100 can make money in that plan, which means I gotta find 99 losers. Who do I talk to? Well go to your family and friends. Imagine that. So there's there's four characteristics that I would say we'd go right into a curriculum, the nature of an endless chain, and then coupled with the endless chain payments, that you're necessarily going to incur that's part of the plan. And then then the mandate for you to go out and recruit and recruit and for the people you recruit, they have to recruit. And then finally, a transfer model, where the money that comes in the door doesn't go to the person who brought in or made the transaction, but moves up the line, way back to the top. I think if just that simple thing it would equip and arm young people with the tools to evaluate these solicitations that are everywhere.
Melissa Milner 25:33
And then, you know, that other piece that you've mentioned before, is not just the red flags. But why this appeals to us. You mentioned the frenzy, I don't know... mass hysteria, like the the excitement, the dopamine hit whatever you want to call it, could that be tackled in a curriculum? Or is that more something parents could talk to students about? Or is it more just K through 12? Building self esteem? And, and having students just understand the value of hard work? And understanding the difference between you know, when something looks too good to be true? Like all those kinds of things?
Robert FitzPatrick 26:15
Yeah, it's it's a good it's a, it's a crucial question, Melissa. And since since we have no basis, we have no education courses, we don't have anything to go and say, well, this works and this doesn't work. Yeah. So we're having we're talking about a creative discussion here, you know.
Melissa Milner 26:34
Yeah.
Robert FitzPatrick 26:35
Just to think it out loud. I would say for myself, this subject is absolutely necessary. Because if it isn't, it's sort of like the soul of the pyramid scheme phenomenon is being left out and just the shell of it is being discussed, which I'm not sure would, would make a real impact and would not really equip people unless it's rooted in how it actually plays out. And maybe an approach to that would be rather than lecture, it might be almost treating it as a question based on history. You know, we do know people when do we do know that these schemes can explode and grow and draw in hundreds of 1000s or millions of people? This is history there's nobody will dispute this. They have occurred in America we had the chain letter mania of the in the 30s. We have had stock market manias, bubbles, we had a huge one with the housing bubble in 2008. Yeah. So and we've we've seen the Bernie Madoff, supposedly the biggest Ponzi in stock market history that was prosecuted or collapsed. So as part of a discussion of pyramid schemes, I think, has to be raised the question what what is it that appeals? We know they exist? We know people go kind of crazy in large numbers. What's going on there? That would be the question, I think, for students to look and by looking at that, they necessarily would have to, in a way, bring themselves into the story, because they would know, nobody would have to introduce this. These similar propositions are on campus. They're in the school, they know friends, everybody, so it wouldn't be hard for them to say, "Well, yeah. Okay. So what what is it?" And they might dismiss it, as, "Well, so what it's about making money, a lot of money. I mean, why would you get excited about that?"
Melissa Milner 28:51
Right?
Robert FitzPatrick 28:52
Well, really, but first of all, we just determined it's not real. I mean, it's not real. It's mathematically impossible, as we've seen with the exponential math, historically, easily documented
Melissa Milner 29:08
Right.
Robert FitzPatrick 29:09
99% never do make money. So this isn't, if you knew those two facts, would you get excited? No. So why do you get excited then? Well, somehow, you decide that it's not true. You somehow become convinced that that everybody can make money that you will make money. Now, why would you come to that conclusion in the face of the facts? In the face of logic? And that might lead to you want to believe?
Melissa Milner 29:46
Yeah.
Robert FitzPatrick 29:47
Now why do you so want to believe that you will suspend your critical judgment?
Melissa Milner 29:53
Yeah,.
Robert FitzPatrick 29:54
You will put, you'll put math on a shelf. You'll say, okay, it happens everybody else it won't happen to me. So that's kind of crazy. Why would you do that?
Melissa Milner 30:07
What a great discussion to have. I mean, I could see having a discussion like that with high school students, even middle school, even middle school. I mean, just in the, just in the past week, I've heard about a young Sheldon episode about Mary Kay and a Bob's Burger's episode about essential oils. I mean, you could just bring that episode in, you know, just stream that episode, have them watch it, and just have a discussion. You know, it's in. It's in pop culture now.
Robert FitzPatrick 30:37
It is.
Melissa Milner 30:38
So I mean, that's a good sign. That's a really good sign that like, maybe something's happening here.
Robert FitzPatrick 30:43
Yeah. There are...occasionally these show up on the internet then they get pulled down, I guess, for copyright reasons. But but there was a little segment in The Office.
Melissa Milner 30:53
Oh, I love that one. Yeah. And Jim, Jim draws the pyramid around. Yeah. Yeah,
Robert FitzPatrick 30:59
Yeah. There was a very funny scene, segment of King of Queens.
Melissa Milner 31:06
Oh!
Robert FitzPatrick 31:07
With Kevin James. And he, of course, gets lured into a water filter scheme. And his his wife, I forget her name, who's the realist?
Melissa Milner 31:19
Leah Remini, yeah.
Robert FitzPatrick 31:20
Leah Remini. Yeah. And he's explaining to her that the money is really not in the water filters. It's in selling the distributor ships. That's where the real money is. And she says, "No, Doug, the real money is the check you gave to our friend. That's... he's got the real money. We lost it." And so... let's see what else Schitt's Creek had a segment.
Melissa Milner 31:48
Yes! Oh my gosh, that was so funny. They... it was so saturated. They all had already done it.
Robert FitzPatrick 31:54
Yes. And these are the local people that she thought they could just take advantage of so easily and they just patiently explained it, "Well, we've done this before." Literally everybody has been in it.
Melissa Milner 32:06
And that that is so realistic, because that's what happened with Amway when I went to do Amway, it was like everybody's like, is this Amway? Is the same way? I'm like, okay.
Robert FitzPatrick 32:18
Yeah, so it is in pop culture and and, and there there's been a whole series on Showtime called On Becoming a God in Central Florida.
Melissa Milner 32:30
That was for sure. Amway. Absolutely. Yeah.
Robert FitzPatrick 32:34
And then we have the the documentary LuLaRich.
Melissa Milner 32:38
Yup.
Melissa Milner 32:39
About the scheme LuLaRoe. That's a good one.
Melissa Milner 32:42
You were in that everybody listeners. Robert was in that.
Robert FitzPatrick 32:49
So there are... there is resource material drawn from pop culture that is entertaining funny. And and valuable. I mean, useful, accurate. That's there too. So Penn and Teller back in...when I was some years back before this, there were a few others, Penn and Teller did a piece. Yes, it's a it's that I was on to they, they came. I never met them. And of course, the John Oliver show did a piece.
Melissa Milner 33:21
I just grabbed that. I'm going to put it in the in the episode page. It's... it's hysterical. It I wrote. I wrote explicit.
Robert FitzPatrick 33:31
Yes.
Melissa Milner 33:32
It's kind of explicit, but it's fantastic. And you're in there for like two seconds.
Robert FitzPatrick 33:37
Yeah. But I spent a long, long, long time working with producer.
Melissa Milner 33:42
Oh, good.
Robert FitzPatrick 33:43
That show didn't just come out of nowhere. The the woman that actually was responsible for that show was Liz Day. Liz Day works for the New York Times now. And she approached me about this show that they wanted to do the show. Did I know what the John Oliver show was? Yes, absolutely.
Melissa Milner 34:02
Yeah.
Robert FitzPatrick 34:03
I wattch the John Oliver show. So he said but I will say to you, I don't want to be a part of it. If you are going to treat it as if some of these MLM companies are pyramid schemes, but multi level marketing is legitimate. If you're going to phrase it that way. I'm out. She goes no, no, we're not good. We've already figured that one out. They're all the same.
Melissa Milner 34:27
Yeah.
Robert FitzPatrick 34:27
They're all the same.
Melissa Milner 34:28
Yeah. And I noticed there was a heavy heavy info about Herbalife which was really interesting.
Robert FitzPatrick 34:34
Yeah. And that was partly because there had been a documentary on Herbalife just prior to this. And and so there was the footage available to use, which, you know, was great stuff and I worked with with that director, Ted Braun, also very closely,
Melissa Milner 34:57
What was that one called? The Herbalife one.
Robert FitzPatrick 34:59
It's called Betting on Zero. Betting on Zero. Now that show... that movie, it was on Netflix for quite a while. It did very well. LulaRich is on Amazon Prime, On Becoming a God in Central Florida's on Hulu...no Showtime.
Melissa Milner 35:15
And I mean, that gets very bizarre and, you know, outlandish. But the actual Amway part of it when she gets the very sweet man, the neighbor involved and it just makes their life fall apart. I mean, that's so...
Robert FitzPatrick 35:32
Oh, yeah.
Melissa Milner 35:32
So realistic. And also the tapes, listening to the tapes.
Robert FitzPatrick 35:37
Yeah.
Melissa Milner 35:37
Driving for hours to show the plan and listening to the tapes and, and, and j.o.b., just over broke. And all that stuff was Amway in the 90s. Crazy.
Robert FitzPatrick 35:47
Well, it's Amway today.
Melissa Milner 35:49
Yeah.
Robert FitzPatrick 35:50
It hasn't really changed. And it's duplicated over and over again. They've they've modernized it a bit today. But the way I described I had nothing to do with that film, I was not involved at all. But I thought they did a beautiful job of depicting, showing, dramatizing the pathos, the tragedy, without diminishing or ridiculing anybody. You know, nobody is mocked for falling into that scheme. But they didn't flinch in showing what happens when they do. And that I thought was was very good. And of course, they did still kind of keep some humor in it, too.
Melissa Milner 35:50
Yeah.
Robert FitzPatrick 35:52
It was it's a dark humor, but but it is so. So yeah, it it is out there. Now, going back to the question about the mania, the hysteria, the non rational part of this, the capacity... we're now talking about something that should be classified as mind control, sometimes called undue influence, or sometimes called brainwashing.
Melissa Milner 36:59
Cult... I said it, I said it.
Robert FitzPatrick 37:05
Yeah, these are the indoctrination, the brainwashing is the bread and butter of cultism. Gaining complete control over people, getting them to not use their critical thinking, losing their freedom as a result, and disconnecting from objective reality. And, and in the process, usually isolating them from, you know, sustainable relationships, historical relationships, everything that really constitutes your current identity.
Melissa Milner 37:40
Yeah, it's very us vs. them that you know, the whole, you know, Steven Hassan's BITE Model, as I'm sure you know
Robert FitzPatrick 37:46
Sure.
Melissa Milner 37:46
...of authoritarian control, I find, you know, when I go through that and think about my Amway days, which I'm going to be doing in an episode coming up, it's like, Oh, yep. Yep. I mean, some of the stuff is not Amway, but a lot of it was and, you know, the toxic positivity, you know, if it's not working, it's your fault, because you didn't work it hard enough. I don't know how that could be taught without possibly, you know, when you're teaching about cults, then, and you're looking at the BITE Model, some of those things apply to regular religions. It's very dicey.
Robert FitzPatrick 38:24
It is, and that's probably why it's not taught. Cults is another area. Now generally cults, as we're speaking about multi level marketing, pyramid schemes and so on. I think it's, it's worth noting, too, you know, we're talking about students, by the way, Melissa, I should, we should say, acknowledge teachers, in large numbers have fallen into these schemes too.
Melissa Milner 38:52
Absolutely.
Robert FitzPatrick 38:53
So, I mean, this isn't like teachers sitting from on high and talking down to students about this, this this is a pervasive force. And and I think any teacher who has ever tasted it ever been subjected to it experienced it, can grasp why it would appeal to students. You know, every person I've ever talked to who fell into multilevel marketing eventually tells me, "Yeah, joined it at a kind of vulnerable point in my life."
Melissa Milner 39:26
Absolutely.
Robert FitzPatrick 39:26
Okay. Well, what could be more vulnerable than youth? Teenagers are walking vulnerabilities, they are influenceable. They are insecure. And they're searching. I mean, that's we all do and did. The the appeal is not so much where you're going to go to heaven or something. It's a heaven on earth. And the heaven on earth is of course money, but it's also depicted as, not just money. But money is presented as the key to happiness, that you couldn't be happy without it and whatever amount you have now, it's not enough. It's not enough.
Melissa Milner 40:12
Yeah. You know, it's it's so funny because it reminds me, I was thinking, you know, in an ideal world, you know that everybody would agree this is important to teach everybody all the way up to, you know, Department of Ed, everybody. And it would be something like, the not very successful DARE program, but you know, about the DARE program to keep kids off drugs.
Robert FitzPatrick 40:36
Yes.
Melissa Milner 40:37
Yeah, there was a government thing. You know, it was from the top down DARE programs in all the schools. You know, could there be something similar to that? A program where speakers come in. You know, I was in a cult level, you know, those types of things. And included in that could be the economics of MLMs. That are all the things we've been talking about, as like a program that can come into schools, maybe I don't know.
Robert FitzPatrick 41:06
Well, yes. I mean, clearly, there's a need for it, if only based on the students themselves falling into these things, and teachers themselves and the what we know, of the tragedy and the you know, the disastrous consequences of it, there's a demonstrable need. It does take you into sensitive areas. That's for sure. And I said this to you earlier, it definitely takes you into areas. Now you mentioned the cult, close association with religions,
Melissa Milner 41:43
Some of the things I read on there. I'm like, Oh, that's interesting, because you could apply some of this to some religions...
Robert FitzPatrick 41:50
Some. Yeah. Yeah. But there are some enormous distinctions.
Melissa Milner 41:54
Oh, of course. Of course.
Robert FitzPatrick 41:56
Enormous distinctions that I think most people could could could recognize. The other area, though, in terms of discussing pyramid schemes, and we've already alluded to it, is that for many students, I think they have lost the distinction. And I know this sounds like an old person talking about young people. And it might be so we'll see but...
Melissa Milner 42:22
Damn, rock and roll music.
Robert FitzPatrick 42:26
But I do think that and I've experienced it in my own life, I've seen this too, that this idea of making money through speculative means has driven out the reality of sustainable work. And at the end of the day, sustainable work is really what constitutes livelihood, enables us to buy homes, raise children, and have a retirement, if we're lucky. And it's also what it's the glue that makes the world work, you know, is work. People looking for need satisfying those needs, earning a living, as opposed to getting rich quick.
Melissa Milner 43:12
Yeah.
Robert FitzPatrick 43:12
And, and just in my lifetime, for example, lotteries did not exist. It's certainly not state sponsored lotteries. So now, and they used to be illegal, actually.
Melissa Milner 43:26
Oh, that's interesting. That would be an interesting thing to look at with with kids. Yeah.
Robert FitzPatrick 43:30
So lotteries. There's one when I was younger, very few people own stock.
Melissa Milner 43:38
Right?
Robert FitzPatrick 43:38
Very few people own stock. Nobody speculated on their homes, you didn't buy and flip your home. It's a ridiculous notion.
Melissa Milner 43:50
Yeah.
Robert FitzPatrick 43:51
A home was a home and that was a place for you to live and a neighborhood was where your children would make friends and you didn't think of the houses as some kind of an investment vehicle,.
Melissa Milner 44:02
Right.
Robert FitzPatrick 44:03
The realm of speculative investing, high flying, hitting it big timing has really grown... whereas jobs and as you saw in the Amway spiel, the very word job.
Melissa Milner 44:20
J.O.B
Robert FitzPatrick 44:21
Yeah, it's diminished... it's demeaned. Yeah. And...
Melissa Milner 44:25
and that's the and that's also pays it like plays into the us vs. them too. Big time. Right. Big time.
Robert FitzPatrick 44:32
Right. So your your independent business owner, and people at work are slaves, wage slaves.
Melissa Milner 44:39
Losers... losers.
Robert FitzPatrick 44:41
The losers. Yeah. So the but and the truth is, you know, most people will never own their own business. It's it's a risky thing to do. Most people will have jobs. And that's what really life is mostly about and if you don't have a job and you rely on these speculative schemes, you will probably come to a bad end. They're financially at least.
Melissa Milner 45:11
Right.
Robert FitzPatrick 45:11
So I think when I say this, that's the students, I think, to grasp this, about what is going on here with pyramid schemes, that discussion would have to be a part of it. Because I may have said this to you when we chatted by phone that I used to say to people when they would ask me about the nature of a pyramid scheme, what's so bad about them? Apart from that you might lose money. I said, "Well, it's not just that you would lose money. It's a viral thing. Because for you to make money, you have to enroll losers."
Melissa Milner 45:51
Yup.
Robert FitzPatrick 45:51
Because it's their last, that's going to be your gain. There's nothing exchanged. There's no fair exchange of value going on here. And so for you to look for losers, which is what you're going to do, you would probably have, you're not going to say, hey, I need some losers. You're going to deceive them, you're gonna lie to them.
Melissa Milner 46:13
Yeah.
Robert FitzPatrick 46:14
So there's deception. And there's harm built in on worse than that, they advise you to go to your very own friends and family. So when I used to say that, spell that out about enrolling losers, and didn't even get to the point that the losers would be your friends and family. I had many people would stop right there and say, "Right, I get it, that I wouldn't want to do that. I don't want to do that. I know. They dressed it up to make it sound good. But in the end, I see that I'm not doing that." Now, I see. I say the same thing. And I've had people say I don't get your point. Isn't that business?
Melissa Milner 46:54
Oh my gosh. Right.
Robert FitzPatrick 46:55
Yeah. Especially younger people. Isn't that isn't that business? Isn't that the way the real estate market stock market?
Melissa Milner 47:01
Some wins some lose?
Melissa Milner 47:03
So what? Yeah, some lose some win some lose? So what? Yeah, so I think that's a distinction about work. What is work as sustainable work, real work, as opposed to speculative schemes would come into this curriculum somewhere, it would come up, and no matter what you did, because...
Melissa Milner 47:26
Yeah.
Robert FitzPatrick 47:27
Somebody would say, Isn't this business? Isn't this the way work operates? Isn't? Isn't this just you're just describing a market or capitalism? No, we're not the pyramid scheme is not capitalism. A pyramid scheme is not work. A pyramid scheme is a deceptive money transfer scheme. And, and, and it's not sustainable. And you could never build an economy around it. And, and it comes to bad ends. Yeah. So these would be elements that that would go into it. And unfortunately, I should add one final element, since we're talking about risks and obstacles, maybe to teaching this. For all that we've said about multilevel marketing and describing it and and in the book that I've written that documents how it works. And, and we know from data from court cases from government investigations and prosecutions, how many and we can look at the pay plan itself and mathematically chart it out how many win and lose despite all that, it's not illegal in the United States right now. More more than not illegal. It's sold on the stock market... stocks for the for some of these companies sold on the stock market. It has celebrities that endorse it, major, major sports stars, that endorse it. It has politicians that protect it, this is largely a function of spreading money around. But it results in a kind of false story, replacing the truth. And to teach about this, you've got to you've got to work with the truth of course. There would be no purpose in teaching the false story. I mean, unless you want to put it in a an a myth story. But it is taught it is promoted, like unicorns are promoted. Everybody knows what a unicorn is. Anybody can draw a picture of one. Everybody seen artistic versions of them. Some people love them. Children are especially attracted to them. They have a role in romance, magic. They don't exist, but there's a whole lore around them. So multilevel marketing operates very much like that... as a lore. Oh, it's about entrepreneurship. It's about business ownership. About being a business owner. It's about initiative. It's about freedom, prosperity. But none of its true. Just as all the things that we say about the unicorn, they have a horn. No, because they don't exist. There's nothing really true about the lore... in the lore of multilevel marketing, they don't even sell products they induce people to buy by promising them falsely, they will gain money through recruiting, that's not sales. So they do have products, but products by themselves don't make a business. It's a lore. So I think teaching the truth will meet inevitably having to dispel the lore and the lore is defended, because it has money behind it by people who have influence. One thing I think I discovered, if you just take a little while to investigate multilevel marketing, as you have done, and I have done, and I have been, you know, dealt with and encountered people all over the world, it doesn't take very long to grasp that this is all just lore, falsehood, scheme, hope, myth, con. Now, it doesn't take long to get that. When you do, it's sort of Oh, my God. I mean, it's, but it's so huge. It's been going on for so long. And it has so many people, respectable people either defending it or ignoring it. And that's, that starts you on a path to, you know, critically look at many other things, but but the fact of the scheme itself grasping, that it's unsustainable, it's not real business, that it results in loss to almost everybody. Isn't that difficult. I mean, it and it's, it's grasped. But then, you know, confronting that truth is, is another story. So, it is it is maintained, it is protected, and it has its protection has been purchased. Now we are seeing I think we are definitely seeing a shift in the news coverage of multi level marketing. I just, I just saw an article and I helped the the author a little bit reporter, and a pop magazine, online magazine Bustle about multi level marketing infiltrating dating apps.
Melissa Milner 52:46
Oh, yes, I saw you sent a thing out about that.
Robert FitzPatrick 52:49
And it's a beautiful article, because it lets a lot of people tell their story. You know, first of all, why they go to the dating app, you know, for the usual reasons, looking looking for something and maybe having not had success out in the workplace or their work is kind of isolated. They're not meeting people...they want to meet people. Well, that's what the dating app is for. So now you go to the dating app, looking for what you're not finding in the in your work life or your social life, hoping to make some new connections, good connections, friends, dates, maybe intimacy, who knows maybe a marriage partner, you know, you never know. What do you find? Oh, my God. There are predators all over them promising and saying I want to go on a day we'll meet we'll hook up we'll have coffee, and you get there. And they're recruiting for Amway, or some other scheme. And they've just used the dating app as a platform. Because, well, why else are you on the dating app, you're in a vulnerable moment. You're searching. You're looking. It's entrenched.
Melissa Milner 53:56
Yeah. It's so interesting. I just heard a story Roberta Blevins had a live Facebook group chat and the woman that was on there with her was talking about trying to get a dog from a dog breeder. And the breeder was like, yep, well, you will have to buy this certain food and these vitamins for the rest of the dog's life or we can take the dog back or something like that.
Robert FitzPatrick 54:20
God.
Melissa Milner 54:21
It's like it yeah. So like dog breeders now are trying to sell you know, I think I don't remember it was something paw something. There's companies now that sell dog food and the breeders are...
Robert FitzPatrick 54:34
We've seen it. Why wouldn't they? I've seen chiropractors. I've seen massage therapist. I've seen dentists do the same thing. And in the 90s, there was quite a battle in at the American Medical Association because medical doctors were using their authority and their trust to enroll people into you know, buying vitamins and supplements.
Melissa Milner 54:58
Yeah.
Robert FitzPatrick 54:59
That were actually just multilevel marketing schemes so, and they tried to stop it but, and these doctors all had their stories, oh insurance has driven down my income and Medicare and this and that I have to do this, I have to do this now. And I'm sure the dog dog breeder or dog trainers are, you know, might have a similar claim that they've got to supplement. So it's it's all over the place. And and I think I'm sure the students would have a good time seeing this and talking about it. I think, yeah, we somebody brought something like this the school when I was in school... and...
Melissa Milner 55:38
Yeah, just keeping it you know, if you don't want to get into the heavy stuff, just keeping it with like the, the economics and the, you know, just that piece of it. I was thinking it would be really interesting to just I know, they're not all factual but to take some income disclosure statements Don't you know, cover the top where it says what the company is? And just like, look at the income disclosure statements and Okay, so how many people are actually making money here? What percentage, you know, or like, looking at businesses having them all in pyramids.
Robert FitzPatrick 56:09
Yes.
Melissa Milner 56:10
You know, but one is one is Walmart.
Robert FitzPatrick 56:12
Right.
Melissa Milner 56:13
One is ...one is Amway? Like? What's the difference? Because everybody's like, Oh, it's just like Walmart. No, it's not just like Walmart. Just, you know, again, I hate to keep quoting Roberta Blevins, but she's like, you know, my, my MLM anti MLM guru?
Robert FitzPatrick 56:28
Yeah. Roberta's great. And she's got a wonderful body of experience. And she's reached out and...
Melissa Milner 56:35
and she's a good teacher, she's a really, she's, she's doing a great job teaching. So keep it up, Roberta. Honestly, we could talk for hours. But I don't want to keep you. And I still have a couple things. I want to go over really quickly. How can people either contact you or get Ponzinomics or see your work, and I will put everything in the episode page as well?
Robert FitzPatrick 56:57
Well, contacting me is easy. The easiest way, you know, since we're all online is to go to the website that I helped develop over so long. That's pyramidschemealert.org... all one word... pyramid scheme alert. Not schemes, but scheme. Singular.
Melissa Milner 57:17
And that's where you do all your activism, advocacy?
Robert FitzPatrick 57:21
Well, yeah, historically, that's, that's where I put information. And that's sort of, you know, where, and that's where I networked myself over the years. And, you know, that was sort of the main place.
Melissa Milner 57:35
Yeah.
Robert FitzPatrick 57:36
So that's the easiest place. The book is available online. It's available, essentially, through Amazon, that's really where you are. And you can get it as a paperback or you can get a Kindle version. Or you can get an Audible, which is you know, is owned by Amazon too. Audible, so you can listen to the book, too. I narrated it, and a lot of people have bought the, you know, the the narration method or, or the Audible.
Melissa Milner 58:05
Yeah.
Robert FitzPatrick 58:05
And prefer that so, so you know, your Kindle or paperback or or listen to us listen to it.
Melissa Milner 58:13
Yeah, I got, I got the book through Amazon. I'm about halfway. I got it like Friday, and I'm already halfway through it. It's just I'm like, what, what I keep turning the pages like what? It's, it's just fascinating. The history is just fascinating. So what are you zooming in on right now in your work?
Robert FitzPatrick 58:31
Well, I actually, I'm trying to get more into understanding and talking more about the cult element, the mind control element of multilevel marketing. And the other area that I'm trying to get some interested in is, when is this actually going to become taken? When is it going to be taken to decision makers who are involved in law enforcement, fraud investigations and so on too. And there is a there's, as you saw in the book, there is a long history of investigations of court cases of class action lawsuits. of you know, Herbalife was forced to pay $200 million back to 350,000 people, and that is a tiny, tiny fraction of the people who've lost money in it. So those are the two areas I think is the the our I wouldn't even call it political. It's not political. It's law enforcement side of this. And the other is the is the deep psychological, social, psychological impact... influence that multilevel marketing is having on people and I want to see that I do think if more people even if they didn't understand pyramid schemes, the the financial side of it a loss, history and all that. If they grasp this thing as intruding improperly into their life personally, in a cult like manner, they would run away from it.
Melissa Milner 1:00:15
Education is not, you know, I'm not even just really talking about high school, middle school, high school, college, but even the education for law enforcement, the education, like what are they learning about MLMs and cults and then education for people who are coming up and they're going to be psychiatrists and psychologists and, you know, like the work that Steven Hasson is doing, you know, do they know they, you know, person comes into their office and just got out of a cult? Do they even know what to do to help that person? You know?
Robert FitzPatrick 1:00:50
I've I've had an I have had a number of students who, who wants to specialize in that in a psychology practice. They they want to focus on people who've been damaged in cults. Yeah. And how to help them. It barely exists right now, as a field. And people who've been in multilevel marketing, I've talked to people, I've encountered cases of suicides, divorces.
Melissa Milner 1:01:16
Yep.
Robert FitzPatrick 1:01:16
Bankruptcies, unemployment, years of unemployment, because they were so damaged. So distorted. So misled.
Melissa Milner 1:01:24
Yeah. It's awful.
Robert FitzPatrick 1:01:26
It's a it's a field waiting to be, you know, really developed, explored, and, and with skills brought to bear on it.
Melissa Milner 1:01:37
Absolutely. On a lighter note, my last question, was there anything else you wanted to make sure to mention, before I ask the last question?
Robert FitzPatrick 1:01:44
I think we've covered the the areas that I I have, I used to be much more alone in delivering this message. And so today, I feel much more comfortable about it. Because as we said, it's it's in pop media, it's about pop culture now. It's it's being portrayed more accurately in the media. Yeah. So I don't feel that my story is particularly marginal anymore. And I'm not having to defend it so much. So I think...
Robert FitzPatrick 1:02:21
Good.
Robert FitzPatrick 1:02:22
We really, you know, touched on the main areas that that I hoped we would.
Melissa Milner 1:02:27
Yeah.
Robert FitzPatrick 1:02:28
I would your your basic question that you asked earlier, how do we get this going into my my thought would be to go higher. I think it would be very difficult for a local school board, local schools of any kind of an individual's school, I think it will be promoted at some higher level national international level as a legitimate area of study and teaching. And that's where I would go if I were you, and you have the qualifications to do it. And I would go to the foundations or to the areas that you described at the beginning.
Robert FitzPatrick 1:03:07
Yeah, I'm thinking Edutopia, you know, just just you're trying to get to George Lucas and say, Listen. Yeah.
Robert FitzPatrick 1:03:14
And a curriculum could easily be presented. And that doesn't require too much time. And and maybe that could be dispersed to teachers on their own to just when they are confronted, they don't have to initiate it. But when they are confronted with this, they'd have some material to work with.
Melissa Milner 1:03:34
Yeah, that's a good point, too. Okay. Last but not least, on a lighter note, what is your favorite movie and why? I asked this for everybody.
Melissa Milner 1:03:44
Oh, wow. So my favorite movie is barely findable now. It's... I think it's on YouTube. It's an English film from the 70s called, Oh, Lucky Man. The star is Malcolm McDowell. And the director is Lindsay Anderson. And it's satirical, but philosophical. And it's really about the dilemma we all face in trying to make a living while remaining human beings, and the lore of making money. The way money can corrupt governments and other institutions. It's a it's a big look at life life itself, and it has wonderful music, and it also by suddenly his name went out of my head. Alan Price. He is and was a very famous rock and roll singer who wrote the lyrics and the music and won awards for this movie. So it's called Oh, Lucky Man.
Melissa Milner 1:04:53
I've never even heard of it.
Robert FitzPatrick 1:04:54
Yeah.
Melissa Milner 1:04:56
Awesome. Yeah. I just want to thank you so much for taking the time out, and whether you believe it or not, you are a celebrity.
Robert FitzPatrick 1:05:05
Thank you.
Melissa Milner 1:05:07
I, I mean, I want to just thank you for all the work that you do. And maybe you and I can crank out a curriculum and start trying to get it to schools.
Robert FitzPatrick 1:05:17
So I'd be happy to collaborate on that.
Robert FitzPatrick 1:05:20
Absolutely. Well, thank you again.
Robert FitzPatrick 1:05:21
Thank you to Melissa. Bye bye now.
Melissa Milner 1:05:24
For my blog, transcripts of this episode, and links to any resources mentioned, visit my website at www.theteacheras.com. You can reach me on Twitter and Instagram at MelissaBMilner and I hope you check out The Teacher As... Facebook page for episode updates. Thanks for listening. And that's a wrap.