I have seen many people fall prey to the promise of multi-level marketing schemes (MLMs). I almost got taken into an MLM without even realizing it. I met a really friendly guy. As we talked, I found out he owned his own business. This was a time in my life when I was looking to do something different. He talked about mentoring others and teaching them how to start a business. He convinced me to download an app on my phone, and I almost went to a meeting before I figured out what was going on. The app had some surface-level functionality and more would "unlock" but first I needed to go to this meeting. The thing was, I was asking him for the information, it didn't even feel like I was getting a sales pitch. I was going to receive some secret knowledge… for free! What a nice guy!
Nobody Is Immune
The brain has a vulnerability that doesn't care how smart you are. It's the same part that funds lotteries, keeps scammers reliably employed, and puts televangelists in private jets. I've watched it pull in my parents, my in-laws, and people with graduate degrees. This isn't an intelligence failure. The pitch is specifically engineered to bypass reasoning before it can engage.
Why It Works: The Machinery
These tactics show up everywhere. MLMs just take them the furthest. These pitches are built to shrink the window between hearing something and agreeing to it. Urgency: the opportunity closes Friday. Scarcity: only a few spots left. Social proof: your neighbor made $3,000 last month. Authority: this guy owns four houses. In-group belonging: we are building something together.
I watched these tactics get deployed on my dad when I was twelve at a timeshare pitch. Free breakfast was the hook. We ate some not-very-good pancakes. They did a sales pitch. Dad said no, so then they worked him up a special offer. He said no, so then the guy in the back room came out and was like "well, we are not supposed to do this, but..." Every no was met with a new level of pressure, a new authority, a new special exception made just for him. I think he was close to buying one at that point, but we already had a timeshare, two actually. How many do you really need? Once you've said yes, your reasoning doesn't shut off. It just pivots. Now it's working to justify the decision you made. How to sell this stuff. Who else can you recruit? What are you going to do with all the extra time and money you will soon have?
The Inoculation
As I think about my daughters and the world they are growing up in, with AI's rapid improvement, they will need to spot fraud and manipulation far more often than I had to. Scams and misinformation will keep getting easier and cheaper to produce. I have not yet seen the LLM-powered MLM, but something that can generate personalized text, voice, and video on demand is an obvious weapon waiting to be picked up. Let's give ourselves a fighting chance. The best tool I know of: Immanuel Kant's categorical imperative. You don't need to know who Kant is. You only need two questions you can ask before the pressure hits.
First Formulation: The Math Test
If everyone acted this way, would it be ok?1 MLMs don't survive that question. The structure requires more losers than winners by definition. This isn't a moral objection, it's arithmetic. If I need 10 people under me to turn a profit… and they each need 10 under them to make a living… You run out of people real quick.
Second Formulation: The Mirror Test
Are you being treated as a person or as a pipeline?2 The recruitment pitch requires you to convert your relationships into revenue. Your mom. Your college friends. That's not a side effect of MLMs; it is the mechanism.
Why I'm Teaching This To My Children
Marketing works. Every day companies are spending incredible amounts of money to convince you their products are best. They are using your psychology against you to make these points. Our ancestors, as a group, survived in part because some members' brashness allowed them to fight a saber-toothed tiger without fear. That served the species. It's just that we haven't received a firmware update, and modern psychology has been weaponized against that exact feature. Every day you get hit with ads, promises, and news. Then you go make widgets for eight hours. By the time someone approaches you at the end of that day asking if you want a better life, more money, work that is actually fun, your defenses are already spent.
On a hike recently, my seven year old and I talked through both formulations. Not in the context of MLMs. We were talking about stealing. She got the first one immediately: "If everyone steals all the time, no one could keep anything. We would just keep stealing from each other forever." For the second, I asked her to come up with her own example. She thought about it and said that a friend who always expects help but never offers any is probably not a very good friend.
She figured that out herself.
Footnotes
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Immanuel Kant's original version, Formula of Universal Law: "Act only according to that maxim whereby you can at the same time will that it should become a universal law." ↩
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Immanuel Kant's original version, Formula of Humanity as an End in Itself: "Act so that you treat humanity, whether in your own person or in that of another, always as an end and never merely as a means." ↩