Amway/quixtar

[Inspector]

Hidden behind Quixtar are motivational groups that are both illegal pyramids and brainwashing cults.

...For the past 3 months, in this business, I've been staring at the gaping mouth of a demon, and I didn't know it until I almost fell in.

That matches my experience with BWW as well. I can also understand why this only comes out from you now. They try so hard to cover it.

So it's a "fraud" and "investment scam" because not everyone who tries it succeeds?

Whatever that article may say, it really is an oily, all-pressure-no-facts bit of brainwashing-as-marketing. Trust me, steer clear.

[Capitalism Forever]

Please define the following terms:

• cult
  
• mind control techniques
  
• brainwashing
  

[distressed_IBO]

I haven't been able to come up with good definitions for any of those terms. I looked in a few dictionaries for "cult" but many of the definitions were so bad that they would include this forum. The best approximation I can come up with is: A cult is an organization that systematically and intentionally brainwashes its members. I don't have a good definition for brainwashing either, but I can give examples of BWW brainwashing/mind control techniques from first hand experience. The freedomofmind website also lists many of these things. It also describes common characteristics of cults, but it's not clear if these are essential characteristics needed for a proper definition.

1) Sleep deprivation. Many seminars and all the weekend functions go late into the morning hours. You simply can't think straight.

2) Block all exits. You are let to believe that the business is the only path to financial success. The stock market, your job, real estate investing, are all put down as guaranteed failures. Stories of people getting laid off, losing their pension, stock market crashes right at retirement age, etc.

3) Information control. You are told that you need to get financial advice from financial successful people. The Diamonds in this business are the ideal mentors. Don't listen to stock brokers because they tell you to buy stocks that they personally don't buy. Don't listen to financial planners because their own finances are a mess. Listen to only your upline because they are where you want to be.

There are many others, as well as the BWW rules I listed in a previous post. These may seem silly, but they are used very subtlely and repeatedly, all the while you think you are learning about successful business principles. People sign up for Quixtar for good reasons: learn people skills, learn how to sell, network with good people, develop character, develop a second source of income, etc. but they end up getting sucked into cults like BWW. Worst of all, your sponsor is being indoctrinated while he simultaneously indoctrinates you. Hence the blind leading the blind that bothered me.

I think I would need expertise in cult psychology for a proper definition.

Edited May 10, 2006 by distressed_IBO

[Capitalism Forever]

1) Sleep deprivation. Many seminars and all the weekend functions go late into the morning hours. You simply can't think straight.

2) Block all exits. You are let to believe that the business is the only path to financial success. The stock market, your job, real estate investing, are all put down as guaranteed failures. Stories of people getting laid off, losing their pension, stock market crashes right at retirement age, etc.

3) Information control. You are told that you need to get financial advice from financial successful people. The Diamonds in this business are the ideal mentors. Don't listen to stock brokers because they tell you to buy stocks that they personally don't buy. Don't listen to financial planners because their own finances are a mess. Listen to only your upline because they are where you want to be.

THESE are supposed to be examples of "brainwashing" and "mind control" ?? Then all I can say is that your brain soaks way too easily. If you get hypnotized by being told at 1am that your stocks may lose value, then Amway is indeed not the thing for you. The venture you are likely to profit the most from would be a visit to a psychiatrist!

Listen, I don't know much about Amway's internal workings; I can well imagine that some of the things they do may be open to criticism (as is the case with most companies in today's culture). But the things you say here and the sites you link to do not even resemble what I call rational, objective criticism. They are emotionalist, volitionally-challenged claptrap that could have been generated from a Democratic propaganda rant by replacing "Haliburton" with "illegal pyramid," "peak oil" with "block all exits," and "tax cuts for the rich" with "mind control techniques."

Perhaps it is not a coincidence that one of the "freedomofmind" links goes to politicalaffairs.net, "Marxist Thought Online," which criticizes Amway co-owner Dick DeVos as follows:

[...]

He has used his personal wealth to support publicity campaigns and lobbying efforts to convince the public and members of Congress that "free trade" agreements are good for workers.

[...]

DeVos dishonestly fought Michigan’s minimum wage increase. At a campaign event last October, DeVos parroted a slew of tired anti-minimum wage myths. "Most minimum wage jobs are part time," he proclaimed. He also said, "[if] you raise it, you end up losing jobs," and added that "a lot [minimum wage workers] are kids coming out of schools."

[...]

DeVos despises Michigan's public schools. [...] He is a staunch advocate for privatization

[...]

DeVos supports the failed Republican ideology of tax cuts for the rich and deregulation.

[...]

DeVos thinks large corporations shouldn't have to pay their fair share of Michigan's tax burden.

[...]

DeVos paid over $4 million for a $300 million corporate tax break.

[...]

DeVos secretly backs a dishonest campaign to repeal the estate tax.

I don't know how much of what these Commies write about him is true, but if half of it is, we need more people like him in both business and politics!

[Inspector]

Capitalism Forever, don't let red herrings like that fool you; I've been subjected to the mindless, evasive, "just do it, trust me" way of doing business that these people engage in. It is a ponzi-scheme business based around the evasion of the fact that it's a ponzi scheme. Doesn't that tell you anything?

[Capitalism Forever]

It is a ponzi-scheme business based around the evasion of the fact that it's a ponzi scheme.

As far as I know, a Ponzi scheme is a type of fraud where early investors are paid off entirely out of money contributed by newer investors. It is like a stock market bubble, only in debt instead of equity. How Amway is supposed to fit this definition is beyond me.

[Inspector]

As far as I know, a Ponzi scheme is a type of fraud where early investors are paid off entirely out of money contributed by newer investors. It is like a stock market bubble, only in debt instead of equity. How Amway is supposed to fit this definition is beyond me.

The only reason to buy the products is if you want to convince others to buy the products. The only reason they would want to buy the products is to get others to sell those products. Ad infinitum. The promise of the business is that you make money by signing others up. The only way to get them to sign up is to convince them they will make money if they sign others up.

That's a pyramid scheme.

[Dismuke]

2) Block all exits. You are let to believe that the business is the only path to financial success. The stock market, your job, real estate investing, are all put down as guaranteed failures. Stories of people getting laid off, losing their pension, stock market crashes right at retirement age, etc.

3) Information control. You are told that you need to get financial advice from financial successful people. The Diamonds in this business are the ideal mentors. Don't listen to stock brokers because they tell you to buy stocks that they personally don't buy. Don't listen to financial planners because their own finances are a mess. Listen to only your upline because they are where you want to be.

I have never participated in any such organizations. I have a pretty hardened sales resistance - the moment anyone tries to "hard sell" something to me, regardless of what it is, I immediately go into defense mode and do whatever it takes, even if it requires me to be extremely rude, in order to shut down that conversation then and there. Let's just say that the last time I purchased a vehicle, I stormed out of two dealerships - and the third where I did end up making a purchase got a piece of my mind when they initially tried to insult my intelligence with sleazy tactics. Attempts to recruit me into multi-level marketing schemes and the various awareness cults do not last very long.

That having been said, I have known a number of people who have been involved and, in my view, taken advantage of by the exact same sort of stuff Distressed_IBO is talking about. I congratulate him for coming to his senses and recognizing the nature of what he has just experienced.

While I am not familiar with the specific organization under discussion, based on what I have observed from people who have been involved with similar outfits, these organizations specialize in what I call "tear down and build back up" tactics. In a nutshell, they are experts at breaking down a person's contentment with the current values in his life and proving to him that his life, as it now is, is meaningless and hopeless. For a person to get to the point where he feels that way about his life - well, that is, of course, very traumatic and frightening. People in such a situation are very vulnerable to outside manipulation - and there are plenty of people in this world who are more than willing to step in and fill the void that, in many cases, they helped either create or widen. What the manipulators do once such a void has either been identified or created is provide their victims with a hope and a vision for a better life that they currently do not have - and, of course, the ONLY way that such a vision can become fulfilled is if they do what the manipulator tells them to do.

There is an example of such a person in the Objectivist literature - Ellsworth Toohey. Remember all of the people that Toohey gave career advice to? Remember how Peter Keating, on some level, came to the realization that he really hated Toohey - but he kept being drawn back to Toohey in the same way an addict goes back to his pills or bottle? Why were all those people drawn to Toohey despite the fact that he was poison to everyone who came in contact with him? Because there was a void in their lives - and Toohey was more than happy to fill it for them.

How many people in this world do you suppose are fully satisfied with their lives? How many people are passionate about their careers verses how many simply hold jobs in order to pay their bills? Maybe they don't hate their jobs - but if they won the lottery, most people certainly would not continue working at their present job. How many people in this world feel trapped because they are in a job that they are not passionate about - but they cannot quit because they perhaps have kids to support or a lifestyle such as an expensive house, cars, boats, etc. to maintain? How many people start out in life with big dreams and a vision of the future - only to find that, after a great deal of effort and struggle, they are in a rut from which there seems no escape?

I would guess that the vast majority of the population has felt, at least to some degree, that way about their lives at one time or another. It is such people that the get rich quick manipulators seek out and attempt to prey upon.

The sort of schemes under discussion here manipulate people with what I call "The Lottery Ticket Effect." When I was in high school, I was very impressed by a short story we were required to read "The Lottery Ticket" by Anton Chekhov (which you can read for yourself at: http://www.classicshorts.com/stories/lottery.html) The opening sentence of the story starts out:

"Ivan Dmitritch, a middle-class man who lived with his family on an income of twelve hundred a year and was very well satisfied with his lot...."

Ivan and his wife temporarily believe that they have won a lottery which would make them very wealthy - and they begin fantasizing about the new life that they will have. At the end of the story, then discover that they, in fact, did not win the lottery. Here are the last two paragraphs:

Hatred and hope both disappeared at once, and it began immediately to seem to Ivan Dmitritch and his wife that their rooms were dark and small and low-pitched, that the supper they had been eating was not doing them good, but Lying heavy on their stomachs, that the evenings were long and wearisome. . . .

"What the devil's the meaning of it?" said Ivan Dmitritch, beginning to be ill-humored. 'Wherever one steps there are bits of paper under one's feet, crumbs, husks. The rooms are never swept! One is simply forced to go out. Damnation take my soul entirely! I shall go and hang myself on the first aspen-tree!"

What these manipulators frequently do is make one's current life seem shabby - and that is not necessarily a difficult thing to do. If you only make $25,000 per year, your lifestyle probably does look pretty cheap and shabby compared to the things that $80,000 per year will buy - and $80,000 will look pretty cheap and shabby compared to what one could buy with $500,000. It is not especially difficult to convince many people who are frustrated and discontent with their lives that they are failures. Many people do not have a rational philosphy to provide them with the context necessary to put their frustrations in perspective so they can realize that things are not necessarily as bad as they fear that they may be. And, even if they do have a rational philosophy - well, maybe there are psychological issues and insecurities involved. And the most rational philosophy in the world is not going to give situation specific career or financial advice - it's not the job of philosophy to do so.

The manipulators prey on people's fears and discontentments. They soften their victims by convincing them that their very worst fears are, indeed, true - and they pounce by offering a vision that the victims are desperate to see, a vision that only the manipulators are in a postion to tell them how they can make it real. They don't dare break from their manipulators - because to do so means to walk away from that vision and be forced to deal with the void that sucked out whatever contentment they previously had in their lives.

While such tactics are very common with multi-level marketing and various other get rich quick schemes - they certainly are not the only ones using such techniques. The various group awareness cults out there are the absolute worst, going to the point of actual public humiliation in order to "break" their victims and turn them into zombies who then relentlessly and often deceptively try to browbeat everyone they know into going to an introductory meeting. Those who know someone who has been through Lifespring or est know exactly what I am talking about - I have personally seen it happen twice with very decent people.

Some of the motivational messages that the get rich quick crowd puts out, can, on the surface, seem benign or even positive. They talk a lot about self-responsibility, ambition, not feeling guilty about making money, having a positive attitude and sometimes even add a folksy pro-free market twist to it - all of which are good things. But all of that is often little more than feel-good window dressing designed to give the organization a certain "real world" credibility. The essence of their message to their followers ultimately boils down to an appeal to faith. As distressed_IPO pointed out, the appeal to faith usually takes the form of denouncing "negativity." Not only must the person be inoculated by the nagging doubts that occasinally seep through from whatever amount of his rational faculty which is still functioning, more importantly, he must be inoculated against any friends or family members who may become alarmed and concerned. I remember someone I used to work with who tried to rope me into one of those schemes dismissing me as a "dream killer" when I pointed out to him why I thought the organization was a scam.

The faith is also maintained through guilt. For example, the fact that a person might feel very uncomfortable using deception in order to trick a good friend into attending what turns out to be a high pressure sales pitch is held up as an example of his moral cowardice and proof positive that he needs to spend more time and money on motivational tapes and attending meetings. And, of course, the faith is also maintained by the victim's own capacity for evasion. Negative thoughts and the rational arguments of others are blanked out because the scheme has to work, it just has to.....everything is riding on it. If it doesn't work out, if it turns out that the wonderful vision is nothing more than a cheap mirage.....well, that means one is right back where he started, but only worse.

There are people who have gone through such programs time and time again spending thousands of dollars with nothing to show for it other than supplies of unsold products and various motivational books, tapes and other materials - and the next time someone comes along with something else, they eagerly sign up.

Nobody has ever convinced me that such organizations are, in fact, criminal and should be outlawed. If someone, for whatever reason, buys into a scheme that is openly advertised as being nothing more than an opportunity to sell an opportunity to sell an opportunity to sell an opportunity ad infinitum - well, I don't think anyone has been defrauded. I do, however, consider such organizations to be profoundly evil - they are leeches who seek nothing more than to exploit the self doubts, insecurities and tragedies of countless thousands of otherwise innocent people every year. There are honorable ways to make a buck - and there are ways to make a buck which do not violate anyone's rights but which are profoundly dishonorable and immoral. This is one of them. In a free society, such people and such schemes should not be outlawed, but they should be exposed for what they are as widely as possible.

[Capitalism Forever]

The only reason to buy the products is if you want to convince others to buy the products. The only reason they would want to buy the products is to get others to sell those products. Ad infinitum.

a scheme that is openly advertised as being nothing more than an opportunity to sell an opportunity to sell an opportunity to sell an opportunity ad infinitum

I am beginning to wonder if we are talking about the same organization. In my (admittely limited) experience, Amway is a manufacturer of cosmetics and related products that relies on individuals called IBOs for marketing. I have seen Amway products used in at least five households, only one of which is run by an IBO. Believe or not, there exist people who have purchased Amway products not because they want a buck, but because they want to floss their teeth, clean their windows, and freshen the air in their homes. This will undoubtedly come as a shock to Marxists and mercantilists (and the newest gang, debitists), but if it surprises you as an Objectivist, you need to study the philosophy a little more! (May I recommend the books and DVDs at www.aynrandbookstore.com ... if I may ... I hope I didn't make you angry ... )

Buying things from Amway is pretty much like buying them at a drugstore, except that instead of some dumb commercial on TV, you'll have your friends telling you about why you may value the product. And instead of the TV station and the advertising agency, your friend will be paid for marketing. One might argue that this is bad for those who enjoy viewing TV for free, but that argument doesn't carry much weight with me. (Although it is at least an objective and selfish one, unlike all the other arguments I have seen on this thread so far!) If your friend sponsors further IBOs, he'll get a cut of their sales too--which is only just, because he has helped Amway make those sales. In either case, we are talking about a commission paid after actual sales--an exchange of value for value--not about a wealth transfer whose only reason for being is the hope of future wealth transfers (which is the defining characteristic of pyramid and Ponzi schemes).

Sure, there are some aspects that are common between MLM and pyramid schemes. But anyone who sees the two as equivalent has committed the error of definition by non-essentials. It's like saying that a person is as evil as Hitler just because he has a moustache.

[Capitalism Forever]

I have a pretty hardened sales resistance - the moment anyone tries to "hard sell" something to me, regardless of what it is, I immediately go into defense mode and do whatever it takes, even if it requires me to be extremely rude, in order to shut down that conversation then and there.

That's a good strategy, which I like to follow myself. What I'm asking of you is to apply the same principle to those who try to sell you ideas in suspicious ways. If a person talks about "mind control techniques" and it turns out it simply means he had to stay up late, that should raise a red flag. If two mouse clicks on links (in approving contexts) will take you from a post of his to an openly Marxist website ... well, then we have a sea of red flags, with hammers and sickles on them! Anything such a person asserts should be taken with a large amount of salt, and if you happen to agree with a specific idea he espouses, you should make sure to distinguish his probably wrong reasons for believing it from your right ones.

[distressed_IBO]

Thanks, Dismuke, for providing a larger context for these motivational groups. I've had first-hand experience supporting every single one of your points.

There is an example of such a person in the Objectivist literature - Ellsworth Toohey.

I can certainly see the ringleaders in BWW having Toohey characteristics, but I've had very little personal experience with them, because they spend so little time on stage, which helps create the image that they are legends. I'm sure there are a number of Dr. Floyd Ferris types running around behind the scenes, but it is the large number of Robert Stadler types that recently stuck me, and they are the Amway/Quixtar Diamonds.

From when you first start the business, the Diamonds are upheld as heroes to be worshipped. They are supposed to have a 6-figure, willable, inflation-adjusted, on-going residual income. "Here's the CD featuring our upline Diamond, listen to it to learn the secrets of building a big, world wide business." Huge anticipation is built up for going Diamond. "You drove 4 hours for a no-show? With that dedication, you're sure to go Diamond soon!"

By the time someone goes Diamond, he has a huge team under him, and they are all hanging on every word he says. Since his critical thinking ability is severly hampered by now, he ignores the suspicious activity at this level in the business. He has no clue what to do with his huge team, so he relies on his upline more than ever.

During the seasonal functions, 10 to 20,000 people gather in coliseums to listen to Diamond after Diamond go on stage, tell their life story, describe the struggles they went through to build this business, and how the business has made all their dreams come true. Most of these 20,000 people are sitting on the fence, trying to figure out if the business is worth it. The Diamonds know, deep down inside, that something is wrong (aisde from a large portion of their income coming from the motivation business, not the Quixtar product business) but they go ahead and emphatically praise the business. They do it because the system has bullied them into doing it. I think Diamonds get the most abuse from upline, and dish out the most damage to their downline.

This strikes me as eerily similar to Robert Stadler, a well known authority of science, addressing the anxious and confused crowd, assuring them that Project X has beneficial humanitarian motives, right before the demonstration with farm animals and buildings. (If I remember correctly.)

Edited May 12, 2006 by distressed_IBO

[distressed_IBO]

If two mouse clicks on links (in approving contexts) will take you from a post of his to an openly Marxist website ... you should make sure to distinguish his probably wrong reasons for believing it from your right ones.

I've not made any claims regarding the political positions of the owners of the websites I linked to. I only claimed that their observations regarding the motivational organizations match my personal experience, and those websites provide both background and more detailed information on this topic.

Even if I were a Marxist with a hidden agenda, how would my politics affect my claims regarding cults hidden behind Quixtar? Regarding the network marketing business as whole, I've stressed the distinction between the Quixtar pyramid-like structure and the pyramid-structured cult hidden behind it. I've already said that there are probably Quixtar groups without abusive cult characteristics, and that there are other network marketing businesses, and there is no reason for me to believe that they are cults, and I've already implicitly supported the beneficial aspects of network marketing. I don't see any other way in which my politics would affect the topic.

If I've broken any forum rules, point them out and I'll stop. I know I "stormed" on to this forum, but I was confused and distressed, and did not want to go through the normal proceedure of going to the Introductions and Personal Notes thread. And there's little chance I'll post in any other thread. I'm a long time lurker and plan on going back. Many of these posts here are extremely informative.

Edited May 12, 2006 by distressed_IBO

[Inspector]

I am beginning to wonder if we are talking about the same organization.

We are not. I am talking about Quixtar and BWW. I know nothing of Amway.

[distressed_IBO]

Amway and Quixtar are sister companies. Quixtar was launched in 1999, I believe. Most active Amway distributers have become Quixtar IBO's, in North America. The official reason for launching Quixtar was to provide online shopping. The more likely reason is because of the bad reputation Amway developed.

Most current BWW Diamonds started as Amway distributors, and their organizations switched to Quixtar. The two companies have similar product lines. I don't think Amway's product lines are growing.

The Amway/Quixtar business model pays comissions based on sales, or referral of sales (and referrals of referrals of sales). Getting people signed up does not make you money, so it's not really a Ponzi, but still has a pyramid-like structure.

BWW makes money from CD's, seminars, functions. My understanding is that it is an illegal pyramid, because the CD's never make it to an end consumer, whereas a percentage of the Quixtar products are supposed to go to a client that is not an IBO.

Edited May 13, 2006 by distressed_IBO

[The Owl]

I looked into Amway/Quixtar in a small way, and couldn't figure how anyone like me at the lower levels makes even a minimum wage, as long as all you're doing is selling and not signing up others. And I was not satisfied with the answers I was getting, to put it mildly. So I walked. The conclusion I kind of came to is that if someone had a gift for selling, they could probably do okay with Amway...but could probably make more money elsewhere. And as I have no talent for this sort of thing, I doubted I could go anywhere.

I also kept banging into all this Jesus nonsense that really irritated me. I'm not sure to what extent this sort of thing is encouraged or permitted within the organization, but it seemed like the couple of people I talked to were at least as interested in saving my soul as they were in selling me detergent or signing me up. This is very strange, because I live in a part of the US that has very few Evangelical Christians. I almost never run across this sort of thing. It wasn't ultimately what put me off them, but it definitely contributed to my jaundiced view. I guess no else saw anything like this?