America—land of the free, home of the brave . . . and a great place to make a buck if you don’t mind fleecing desperate people. Making money from dubious claims has been an American tradition at least since the days when sleazy con men hawked patent medicine to gullible suckers at every whistlestop on the continent.
But those were the Good Old Days; things are different now, right? Nobody today could make a soft living off of horse balm and Chief Kickapoo’s Vitality Tonic now that we have genetics and the germ theory of disease, right? We have scientists now, with lab coats and everything, who know better. Right?
Since this is still going on, here are three of the most blatant pseudoscientific scams that are still enriching unapologetic frauds today. Maybe enough of you will forward and share this piece to ensure that the exact same article doesn’t have to be written 100 years from now and uploaded to the Space-Internet.
Legal Scams: Multi-Level Marketing
Multi-level marketing companies, also known as Ponzi rackets, tend to be really litigious, so we’re going to go ahead and just invent a make-believe pyramid scheme that does not in any way resemble any existing cosmetics companies, vitamin distributors, or investment groups.
Say you have a line of products, one that hypothetically could be used as cosmetics, and you want to make a lot of money selling it. The traditional route would be to approach retailers and see about getting shelf space. Of course, those retailers would want a cut and they’d pull your line if it didn’t sell well, so you’d better have a quality product and aggressive, expensive marketing.
An alternate approach would be to skip the middleman—established, respectable retailers with a reputation to protect—and sell directly to the end users. Of course, without the retailer you’ll have a hard time moving the product. Reaching hundreds of thousands of customers calls for a sales force made up of consumers themselves. And what better way to encourage this unpaid sales force than with the dream of financial independence via a pyramid-shaped sales force underneath them?
That’s where the “pyramid” part comes in. It really doesn’t matter what product is being sold, as long as money is flowing in from the bottom of the pyramid. The people joining up at the bottom levels aren’t buying the product for their own consumption—it’s way too expensive for that—but as inventory in their own mini pyramid. All the money in the pyramid comes from people near the bottom who are sold on the idea that some money will eventually land on them. As these financially strapped people near the bottom inevitably wake up to the realization that the only direction cash flows in the pyramid is up and away from them, company literature assures them that it’s all their fault for not working hard enough. Again—this is totally legal, mathematically impossible, and entirely hypothetical.