There’s a reason the History Channel has produced hundreds of documentaries about Hitler but only a few about Dwight D. Eisenhower. Bad guys (and gals) are eternally fascinating. Behind the Bastards dives in past the Cliffs Notes of the worst humans in history and exposes the bizarre realities of their lives. Listeners will learn about the young adult novels that helped Hitler form his monstrous ideology, the founder of Blackwater’s insane quest to build his own Air Force, the bizarre lives of the sons and daughters of dictators and Saddam Hussein’s side career as a trashy romance novelist.
Tue, 05 Oct 2021 10:00
Robert is joined by Jack O'Brien to discuss Amway.
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It's Rachel Zo, and I'm here to tell you about my new podcast, Climbing in Heels. You might know me from the Rachel Zo project, the Zo report, or as the founder of Curator. On my new podcast, I interview other super women who have worked their way to the very top. My guest share the spark to began their journeys as industry leading ladies and how they balance it all while staying so glamorous. Follow us so you don't miss a single episode. Listen to Climbing in Heels starting October 6th on the iHeartRadio app Apple Podcasts or wherever you get your podcast. Hey, I'm Deweleeper and I'm thrilled to be back for the second season of my podcast Deweleeper at Your Service. Alongside me and my guests lists and recommendations, the show features conversations with some of my biggest inspirations, working across entertainment, politics, activism, and much, much more. I've been hard at work getting season two ready for you all summer long, so please tune in and join me on this very special adventure. Listen to Deweleeper at Your Service on the iHeartRadio app Apple Podcasts or wherever you get your podcasts. Hey, it's Roy Wood Jr. host of the Daily Show Podcasts Beyond the Scenes and we are back for season two. Beyond the Scenes is the podcast where we take the topics and segments that were on the Daily Show and give them a little more love. This season we're bringing back more Daily Show writers, producers, and correspondents. More experts giving us some extra knowledge. You can't get anywhere else. Don't miss it. Listen to Beyond the Scenes on the iHeartRadio app Apple Podcasts or wherever you get your podcasts. What's syphilitic my 1870s sailors? I'm Robert Evans host behind the bastards that introduction had really nothing to do with the topic today, but I mean sailors in the 1870s had a hell of a lot of syphilis. You can't argue that. That's just fact. That's just science. Here with me to talk about syphilis a little bit more is my once and current and probably future boss, Jack O'Brien. Actually, I'd end after this after that one more time. This is your swan song. Yeah. Yeah. No pleasure to be here. Pleasure to just be on a Zoom with both of you. Robert and Sophie. It's good. It's good. What is more the American way than syphilis? You know, it is the most American disease and I think when we ought to bring back, let's bring back everybody slowly losing their minds as worms eat their brains. It's good for you. It brought us, there's a bunch of art we got because of syphilis. You know? What are we losing? Now that we've cured it, a lot is my contention. We're losing a lot. Yeah. And possibly a hitler or two. Yeah, we might be losing exactly. We're losing a hitler or two and maybe, uh, uh, uh, well, okay. Probably. This has nothing to do with what we're talking about. It really doesn't. It really doesn't. Um, Jack, a tech, O'Brien, a tech, a tech, a tech, a tech, a tech, a tech, a tech, a tech, this is every time I do this, I'm, I'm continuing a series of jokes that our, our colleague, Dan O'Brien did when I was like 17. Yeah. It's funny. The things that stick with you. Um, Jack, how do you get it? It's funny. The things that stick with you, like that, playing a thing that everybody says to me. Also, uh, people thinking that I'm a fictional character created by Daniel O'Brien. Aren't you? I did think that right up until you called me about the internship when I was, yeah. I just, yeah, I'm just somebody who saw a branding opportunity and reached out to Daniel and said, Hey, I want to occupy the, this character of Jack O'Brien that you invented. We should really be nicer to Jack. He employed both of them. He's employed me virtually my entire adult life. Jack saved me from the tech world. He saved me from a very lucky teacher. Well, you're still, still teaching people stuff. I, I would feel more bad about that, but I feel like you do a good job teaching people stuff. So I appreciate that. Well, Jack, how do you feel about Amway? I mean, I don't know a ton about it. And that's good. I know it as a like door to door sales thing. And I know it as sort of the grand mother of multi-level marketing that which has turned into a massive thing now. Yeah. Yeah. That's, that's the basics. And the most important thing to know about Amway, Jack, is that it is not legally a pyramid scheme. As in never, we have, what legally not a pyramid scheme. And the fact that we have to say it's legally not a pyramid scheme does say all that you should know about the kind of business Amway is as in it's the kind of business where you have to specifically note that legally, it's not a pyramid scheme. A lot of lawyers. They have a lot of lawyers and a lot of money. I wonder if there's like a mathematical equation you can do based on like the, the amount of money you have and then how much of that money you spend on lawyers that just like attack people on your on your behalf. Yeah. Yeah. And so it is, it is not legally a pyramid scheme. But the Consumer Awareness Institute has calculated that Amway's loss rates for distributors exceed 99.9 percent, which means virtually all of the people who are kind of sort of employees of Amway, of course, legally they're not employees. They're independent distributors make zero money or lose money. And nearly all of the profits that Amway makes come from its distributors and are funneled up to a tiny group of people at the top while the vast majority of people at the bottom make nothing. You can visualize the shape of that arrangement in your head. But it's legally not a pyramid scheme. Yeah. Yeah. Now the 99.9 is not not great. It would be a really different podcasting industry. Well, I guess that is like if you look at podcasting as a whole, but that's not you know, a company. I'm just saying most podcasts are are like my favorite, David, tell you about my favorite podcast, Jack. What's that? Oh my god. I came across this before I ever got into podcasting. But when people started talking about it as a thing, I think around 2014, 2015. And I fell in love with it because it was the most tasteless, tackless thing I have ever encountered in my life. It was a vaping podcast by like four kind of chubby dudes in South Carolina. And the name they picked for their podcast was the serial vapists. Yeah, they sure did. The sure did. And the content was exactly what you'd expect. It was it was horrible, but it was very funny. I don't think they I'm fairly certain they never made Joe Rogan bucks off of that show, but it was very funny to me. I was really hoping you were going to name drop one of your own podcasts as your favorite. Yeah. I was hoping you were you were that guy. No, no, no. I don't listen to podcasts. So if I just make them, I've actually never had a podcast in my life. Exactly. To be making the podcast. You're making them. It's like Dan Acroids and ever seen one of his own movies. No, that can't be possible. Is Dan Acroids the only man who hasn't watched Ghostbusters? It's probably watched that one. You'd have to think, but he claims he doesn't watch his own movies. Yeah. I mean, that would be. Did you? Did you just wait? When you were discovering the serial vapists, did you just put, is there like some function on? For serial. It was like when serial it was whenever whatever years the first serial came out. So I was looking for serial and I saw underneath it like and I had to listen. And it was amazing. Like one of the episodes, the first like 20 minutes was just a guy talking about taking a shit at a vapestore and the fact that they were cool with the fact that he took a giant shit in their bathroom. Like it was an incredible moment in content history. If someone can find their old episodes, by all means do, it was amazing. So Jack, the first important thing to know about Amway is that it's legally not a pyramid scheme. The second most important thing to know about Amway is the history of pyramid schemes. Because once you learn the history of pyramid schemes, why Amway isn't legally one makes somewhat more sense. Now, okay, if you go into this line of research, if you Google for first ever pyramid scheme, you will generally be directed towards the tale of Charles Ponzi, who we've discussed a couple of times on the show in brief. He was an immigrant from that perfidious peninsula, Italy, who in 1919 hatched a scheme involving what were called international postal reply coupons. These were essentially stamps that had been created for small international transactions and they were redeemable at post offices in the United States for real stamps, which obviously have a cash value. Ponzi got one of these international postal reply coupons from a friend in Italy while he was in Boston. He realized that the coupon he'd gotten had been purchased in Spain because they were cheapest there. Because of basically to make a long story short, because of how much stamps were worth in the US and how cheap these things were to get in Spain, you could make a profit just buying these in Spain and redeeming them for stamps. It was kind of a loophole in the system. So Ponzi hatches this. That sounds like basically the most honest way that somebody could make a living today at like a hedge fund or something. Like that just sounds like every financial job in existence. Well, this is not what he actually does. This is how he just like so his initial plan was to do this at a huge scale, like getting a bunch of basically giving getting people to give him money to use to buy these international coupons that he would then redeem for stamps, which he would sell for cash and then just redistribute the profits. That was the idea on pay the cover store. Yes. So he found the security and exchange company, which was not he wasn't trying to do a thing with the SEC. The SEC did not exist at this point. So he just came up with the same name they did, which think of that what you will. So he comes up with the SEC to facilitate this scheme and he promises a 40% return to investors in 90 days, which is obviously bullshit. And even what time someone tells you, unless it's drugs, if someone's telling you that they're going to, if they're going to do that with your drug money, that might be real, but you know, it's drugs. So it did well for a few months, but Ponzi never really went through like he got a bunch of investments, but he never did the international coupons thing. Instead, he just lived the high life for months and would repay early investors with money from new investors, which is obviously an unstable situation that can't last forever. And eventually the Boston Post found out what he was up to. They wrote a bunch of exposés on it. And the district attorney of Boston got all aggro about the whole thing. In the end, Ponzi was arrested and his name went on to adore and countless other similar schemes. So that's where we get the Ponzi scheme from. You can look like Bernie made off did that. And kind of over time, the term pyramid scheme became the catch all term to refer to a wide variety of cons that were all descended from Ponzi scheme. So Ponzi generally seen as like the first pyramid scheme. But it's also worth noting that he wasn't the first pyramid scheme. As a matter of fact, if you want to look at the real originator and maybe the person Ponzi was copying, as best we can tell it was a woman named Sarah Howe in Boston in 1879. So the first pyramid scheme properly may have been the invention of a of a lady in Boston in the 1870. She just very rarely gets the credit for this. But but we're all about, you know, giving credit to the women grifter. So I'm going to talk about Sarah Howe for a little bit. She created a con called the Ladies Deposit Company. And the Ladies Deposit Company was was ostensibly a bank run by woman women and exclusively for women. Now in the 1870s, women weren't allowed to have bank account, open bank accounts on their own. Like if you had a bank account as a woman, it was because like your husband or your dad had opened one for you and like they were would have like a co, you know, whatever on it. So it was a fairly huge deal that Sarah was creating a bank that was like four women. And specifically Sarah's bank only accepted deposits from women who were what she called unprotected. IE, they did not have a male guardian in charge of their finances. So this was like a big deal. But of course it was it was a giant scam, right? So Sarah promised that in exchange for investments from these unprotected women, she would give them an 8% interest on their like 8% return on any money they invested. So if you deposit at $100, at the end of the year, you'd have $196 bucks in your account. And she was also giving out the first three months of interest in advance to women who started accounts with her. So even the day that would sound like a scheme, right? And it was definitely a scheme back then. So people at the time asked how this could work, how the bank could possibly profit doing this. And Sarah assured them it's because it was not a for-profit endeavor. She claimed that her bank was funded by Quaker philanthropists, which was a lie. But it was a very successful con. And you can see why she picked this population to con. The fact that these women are unprotected means like who are they going to go to, right? They don't have like presumably these are like kind of these poor women, right? If you're an independent woman, you don't have like a man, either a father or a husband, you're kind of in the least protected segment of society. So she's going after these people in part because she figures they're not going to be able to like do anything, right? And the con is very successful because there was a huge need for a bank that would actually serve these women. And in short order, Sarah gathered between $250,000 and $500,000 in 1870s money from close to a thousand people. A local paper. Yeah, she made a lot of money off of that. That was millions in modern dollars. Ponzi was just the first one to get caught basically. No, she gets caught before him, but she's a woman. So they're not going to name it a Sarah scheme, you know? Right. That literally does seem to be like why? Right. So a local, I mean, Ponzi scheme was larger. But Sarah's scheme was not small. This is not a low level con. You know, you're making a quarter of a million dollars or more in the 1870s. You have pulled off a good scheme. As with Ponzi, a local paper exposed this as a scam. Sarah had been a fortune teller in the past. So that was a big part of like the reporting on her that like this is not a banker. This is like a person who, you know, it told fortunes and stuff. That's how I pick all my financial advisors is making sure that they have a background in fortune telling. You could argue that that's what any stockbrookers. I mean, yeah, there's just don't want to admit it. But yeah, there is that fun article about how there's that hamster that has outperformed the vast majority of humans in the crypto industry, which I do love. They even made a cute little desk. So yeah, and the articles also exposed that in addition to having a background that maybe was not the most credible basis for a someone who founded a bank, she had, you know, essentially created, I mean, she didn't create a Ponzi screen. She created a house scheme and Ponzi created a house scheme. But I'm going to quote from a write up on long reads here, when a new depositor arrived, how would use their money to pay out older clients? So the whole scheme required a constant influx of new depositors to pay out the old ones like every other Ponzi fraudster house bank would have eventually run out of new money. The run of stories in the Boston Daily advertiser instilled enough fear in the banks investors that they began to withdraw their money and eventually there was a run on house bank. It took two weeks and five days from the first story published in the advertiser uncovering House fraud before she was arrested. The press extended her victims' amodicum of sympathy, describing their plights will also remind the reader that they deserved their pain for trusting a woman with their money. I put every dollar I had into the bank, and if I lose it, I am a beggar. One depositors told the Boston Globe at the time, I wanted the interest so badly that I placed a mortgage on my furniture to secure the principal to deposit. Oh, I wish I hadn't now. For I shall have my goods sold from under my head, said another. I feel like those characters were made up by writing that story. They're just lying. Yeah. Yeah. Also, like... Talk to a woman, I'm a journalist. Also, is it true that women couldn't... women couldn't have credit cards until like the 1970s? Like a very deep, entrenched sort of myth about women. Yeah. There's a lot of fucked up stuff about what women weren't allowed to do financially. In the 1870, it was basically nothing. So she was going after the most desperate people, and it says a lot about society that they were just like, well, they trusted a woman with that money. Even though they weren't allowed to trust a man with their money. Like they legally couldn't. What were they supposed to do? Right. I mean, that's also probably why it got picked up. And we still know the story is because it like goes to prove a thing that everybody, all the white men in existence wanted to believe. So... Yeah, it's funny. And by which I mean, it's fucked up. So... And I guess, I mean, it should be a house scheme. We should call them house schemes and fairness, but also a Ponzi scheme is just a great name. Ponzi did have a better name objectively for calling a scheme. It's funny. It's Italian. We all know the Italian's can't be trusted. It's just good. So Sarah Howe and Charles Ponzi were the first of all would become an American institution. Confidence games of one sort or another have existed probably as long as economies have existed. One could argue that most states and corporations are just confidence games on a very grand scale. But I'm not going to get into that right now. What made the schemes that Howe and Ponzi started different was the fact that they were built to masquerade within the facade of reputable institutions, banks and other like financial investment companies. By the late 1800s, capitalism was a very rock solid concept for most Americans and inequality was soaring. People were enticed by a scam that seemed to offer them away out of wage slavery by doing what looked on the surface to be the same thing that all of the rich people around them were doing. There were promising anything like new and fantastic. They were saying, hey, you know all those bankers are rich because of interest. Here's a way you can get interested. You can get out and move up into the middle class and whatnot. This is a fanciful scheme. This is an investment. It's an investment that unlike the other investments that you know, the rich people are in. I'm letting you win on this. We talked about this a little bit with a nesterous scheme. It's a big part of just saying, hey, if you frame your scheme as we're giving regular people a chance to do the stuff rich people do all the time, that's the best kind of financial scheme. Because you're building it on a basis. People know there's some way to make money with interest. People know some people get rich off of investments. Why couldn't it be me this one time? Haven't I worked hard enough? Then in the case of Bernie Madoff, he did it to the people who were the financial institutions. Wait a second, nobody knows how any of this shit worked. And that's why you're never going to hear about Madoff on behind the bastards. Because I don't have problem with what he did. Of course. Yeah. Fucking avenging Angel. I mean, I'm sure he did a lot of fuck that shit, but I don't give a shit. His victims were people like whatever. So in Sarah's day for impoverished single women, the thing that she was promising, this downtrend group of people was like, you know that rich people have number one half bank accounts and make interest. I'm going to give you that opportunity. So it didn't seem these people weren't making a dumb decision. They thought they were getting a chance to do the thing that the people who have money have been doing forever. In Ponzi's day, investments like the stock market was starting to get to be a huge deal. And he made people feel like, well, now you can get in, get in on that thing. Both schemes work because most of the targeted people simultaneously misunderstood the real thing the scams were pretending to be, but also new enough about that real thing to know that something like what the scammer was promising was how all of the rich people they knew had gotten that way. That's why these things work. Now the exact origins of the term pyramid scheme are unclear, but the term certainly seems to have come into widespread use during the early 1970s. Thanks to a scam cosmetics company named Holiday Magic, which if you listen to the podcast, the dream, which is a very good podcast, they go into a lot of detail about this. I'm just going to give you the cliffs notes. So holiday magic had started in the mid 1960s. The project of a man named William Penn Patrick. And he, oh, Billy was a real character. He had had a bunch of failed businesses. He apparently came upon. He was like walking past and smelled like or like, saw like cosmetics stacked up in some guy's garage and bought the business off of him. It was very like sketchy story. William Penn Patrick is a fascinating guy. He unsuccessfully ran against Ronald Reagan from the right as governor of California. He was a one time vice presidential nominee of a party called the California Theocratic Party, which just seems like it's straight up fascism. And of course, he was a member of the John Birch Society. So, oh yeah, he's the guy. You know this guy, right? Everybody's got a picture of William Penn Patrick in their hair in their head now. I mean, Holiday Magic sounds like a name you would give to actual snake oil. Like that you would sell to people. Holiday Magic, it'll get some holiday magic. Yeah, whereas like where I feel like we're learning the importance of names because like with Ponzi and Amway sounds like, you know, that they build fucking trucks or something, you know, like it's like such a drag on. Yeah, exactly. Or at the very least like a place to buy sturdy groceries or something like that, you know. So Holiday Magic was a multi level marketing company. It was not the first. In fact, by the time William Penn Patrick started it, there was Avaan, Amway, Mary Kay, a bunch of other MLMs existed. We'll talk about what maybe the first was in a little bit. But Holiday Magic was probably was within the first generation of such companies. And it was by far the scammyest. The basic idea behind Holiday Magic was that women would become distributors and buy makeup kits that they could then throw parties where they did the makeup for their friends and they would sell the makeup via this. The makeup was terrible. And it was so heavily marked up that, you know, it was number one, it was very much impossible for distributors to make money off of it. And number two, William Penn Patrick made a shitload of money off it. He was in very short order making like $6 million a month. He had quite a few models for his distributors. One was tell recruits they're going to be happier, healthier, wealthier and receive what they want out of life with the Holiday Magic program. Any person who fails in the Holiday Magic program must fall into one of the following categories. Lazy, stupid, greedy or dead. That's fucking it. He's the best. Also, is he a time traveler from the 1920s who made the words of the 1970s? Oh, Jack, you got that. Okay. Okay. This is happening in the 70s though, right? The voice. Yeah, this is happening in the 70s. I mean, that's the voice that I pitched behind the bastards to you on. We're going to talk about it. Jack, we're going to talk about Saddam Hussein. It was going to be all the day because you were doing it all with while doing a soft shoe and like taking your hat top hat on and off, juggling a little. Yeah. Doing some magic. Jack and I went, that's the guy we want. So his personal motto was those who condemn wealth are those who have none and see no chance of getting it. So again, you see the guy that he is. Now, as I said, there were other MLMs out there at the time. What made William Penn Patrick special and you really have to say all three names is that he has very astutely married the kind of American dream style grift of a pyramid scheme with Coltick influence techniques. So he was kind of the first to like, I'm not just going to have a money grift to get money at a people. I'm going to keep them there by kind of making my grift into a cult, right? Because if you're just taking people's money in a scam, eventually, they'll figure it out and leave. If you get them to like believe that they're getting them getting scammed is like makes them morally superior, like keys them in spiritually to something is part of some sort of sacred thing, then you can keep them forever, right? That's the church of Scientology. That's the way to really make a grift last. And William Penn Patrick is kind of the first MLM dude to get it right. Well, sort of. He went a little far. I was going to say that Holiday Magic is too stupid a name for a cult and then you immediately disproved that by saying Scientology. Yeah. Well, and you know, the cult, he had another organization that was the cult. And this was called it was a series of courses called leadership dynamics, which we're build as like a training conference for Holiday Magic and other MLM distributors. So like, on paper, leadership dynamics is a course that you take in order to learn how to run your own business selling MLM products. The reality of the program is that people would pay like a thousand dollars. And again, 70s money to hang out in a horrible hotel, getting locked in coffins and mentally abused. Like it was all these like weird power games and shit, like quasi-torture of people. It involved a lot of, we've talked about synonym and Chuck Deiderick. It involved a lot of the game where like you'll sit around in a circle and everyone in the group will harass one person for a period of time and insult them. Like it was a lot of like fucked up cult shit, you know? Yeah. Yeah. Stim vibes. Yeah. Yeah. Next he survives. Everything that came after Nexium is very much descended from this cult, from this cult pyramid scheme too. Now again, if you want to learn a lot more detail about this because I'm really breezing over a lot, the podcast, the dream has done an excellent series of episodes on this. For our purposes, what you need to know is that Chuck's dream fell apart as a result of the fact that he was just promising way too much. And it wasn't really a product he was selling. He was just getting money straight from distributors to sell the product and like that's that that was too much of a scam. Holiday Magic generated enough complaints that it kept coming up in the House of Representatives and eventually the FTC took him to task for being a pyramid scheme. And I'm going to quote from the excellent book, Coltish, by Amanda Montel here. Patrick's behavior was unhinged from all angles, but when the FTC brought him to court, their most compelling argument against him and would eventually allow them to shut down holiday magic was their points about his speech. Ultimately, the court ruled that Patrick's deceptive hyperbole loaded buzzwords and gas lighting disguised as inspiration were what to find him as a pyramid schema. This makes sense because in every corner of life, business and otherwise, when you can tell deep down that something is ethically wrong, but are having trouble pinpointing why language is a good place to look for evidence. This is where the FTC turned to squash holiday magic. And over the next few years, its attorneys cited the same kind of outlandish fraudulent messaging as they prosecuted a litany of MLMs, including the biggest one they went after. Amway. Now, Amway, as we started the podcast by stating, is legally not a pyramid scheme. And to explain why the FTC blasted William Penn Patrick's scam to hell, but did not do that to Amway, we have to talk a little bit about the men who founded Amway. We're going to be veering back and forward in time here. So, if we can we cut in some of Cody's time machine noises here? No. Okay, well, do you say no? No. No. Torment. Let me try. Oh, right. We're okay. I know. We're talking like a cockroach. I think he'd be proud. I feel like we're smiling upon smiling upon me from heaven. So, by the way, so you know, I host this show The Daily Zeke. I still not just putting that in. There's a plug, but we have been covering cohost with Miles Gray, former guest on the show. We've been covering a lot of Amazon lately. And they also have coffins and like scream at each other until they start weeping at work. Like, did you know about the, you know, the Amazon, we're doing this the holiday magic scheme. Yeah. Amazon, Amazon booths, which are just these like booths at the office where you go. And like, they are like, you're good. You are worth it. I hate that. It's basically like a place you can, a coffin you can cry in for like 15 minutes. That's not as hell, Jack. Yes. I love it. I love to see a company respecting tradition, you know? That's really what it's all about to me. Embrace tradition, reject modernity, put your employees in coffins and scream at them. Yes. Speaking of that, Jack, do you know who else puts their employees in coffins and screams at them? It's going to be like an accidental Amazon ad like a decent chance. That's a non zero. It could happen. Might be Chevron, you know? I really hope not. I don't know. Look, I think one of the great things about this country is that we all have a sacred right to force our employees into coffins and scream at them. Yeah. It's the American way. It's the American way. It's the AM way. Yeah. That's what the American way came comes from right? Yeah. Yes. Yeah. Well, yes, the dead actually does. We'll be talking about that briefly. But first, products. Hi, I'm Molly John Fast and this is Fast Politics. You may know me for my old podcast, the new abnormal, my many, many, many tweets or my articles in Vogue, The New York Times, The Washington Post or my newsletter at The Atlantic. Wait, what? I do my best to poke holes in political arguments with no fear of critiquing any side of the political spectrum. When I interview someone, you get to see who they really are and what they really think. On this podcast, you'll hear me talk to people like senators Chuck Schumer, Cory Booker and Amy Klobuchar, smart people like Dr. Peter Hotez or James Carville, up incoming political stars like Richie Torres and John Federman or even smart celebrities like Ben Stiller and Julia Louis Dreyfus. Listen to Fast Politics with Molly John Fast every Monday, Wednesday and Friday on the I Heart Radio app, Apple Podcast or wherever you get your podcasts. The 1980s had a lot of great stuff. Big hair, arcade games. But not everything was RoboCop and Rubik's Cubes. In the 1980s, we also came dangerously close to nuclear war and none of us had any idea. I'm Ed Helms and I'm hosting a new podcast called Snathoo, a show about history's greatest screw ups. On season one, Able Archer 83, a story of political miscalculation, espionage, mind games and a NATO military exercise that almost triggered a very real nuclear war entirely by accident. America is preparing a Southern nuclear attack on our country. It is a miracle we did not all die. It's just goofy. So how close were we to all dying in 1983? And why don't we know about this? Subscribe now to Snathoo, premiering on October 5th on the I Heart Radio app, Apple Podcasts or wherever you get your podcasts. Okay, you can find all five episodes on both theってる hypothesis in the Master's Feeds. And you can listen to behind the masters inorld относitance on the I Heart RadioWap Apple Podcasts or wherever you get your podcasts. wynn We are bad. Oh, fuck. I don't know, Jack. I don't know. Is my connection slow or is it? We do a lot of podcast. Did you just glitch out? We've been casting too many pods lately. I've got it. I'm overwhelmed by the amount of content. The share of well of it. No, I get it, man. I'm right there with you. We just recorded our thousandth episode of Daily's I Guys. Jesus Christ. I'm always done a cracker. And we realized that because somebody wrote it into an AKA otherwise. Yeah. Yeah. You never I have no idea how many podcasts I've done other than far too many. Yeah. But you know, the nice thing about this Jack is when we're both dead, teenagers, a hundred years from now, we'll be able to make us say literally anything. There's plenty of our voices. Yeah. We can finally immortality, Jack. Yes, the in that my kids will finally be able to hear me speak to them because yeah. Yeah, you're famously have never never speak around your children. I only speak Klingon to my children. Yeah. You're doing like a star track version of the experiment that one poked it. There's actually a psychologist who did a Klingon thing to his children. They'll only spoke Klingon around them. That's this heart, this beautiful mix of like kind of abusive and also kind of red. Like it's a really unique area. Yeah. Okay. So, AMway got it start thanks to a company called Nutra Light, which was a dietary supplement business founded in 1934. And I think from the name Nutra Light, you know it's a scam. Yeah. Yeah. So the founder was an American businessman named Carl F. Rainburg, who as far as I can tell. Yeah. I don't know the degree to which this guy was a total con artist. Nutra Light definitely sounds like a scam. By some accounts, it may be the first MLM company. But also I think it was MLMs were not quite as much of a of a bulb face scheme at that point because it was really just like a modification of door to door salesman, right? That was a big thing at the time. The fact that the idea that like someone would buy products and then go to door to door selling them was like not weird, like it is now. So I don't know. Rainburg had been working for the steel industry as well as Colgate in China when the Chinese Civil War forced him to flee. And he claimed that seeing so much poverty and starvation convinced him of the value of vitamins. And so he got into the dietary supplement business next. Again, Nutra Light may be the first MLM company. It's unclear to me how scammy it was. He sold his products wholesale to distributors who eventually formed their own companies to sell it. And two of the people who became independent distributors of Nutra Light were Jay Van Andal and Richard DeVos. They got involved in 1949. Yeah, we all know that last name. Yeah. Yeah. I was waiting for the first DeVos. I mentioned. Oh yeah, there's a big old DeVos episode. I feel like we need like a horrifying sound effect. Yeah, let's hear. No, not that one. That's the good thing. I can't say that. That's the DeVos sound. It feels appropriate. So they become independent distributors in 1949. And there is not a tremendous amount that I found of reputable information about these men's early lives. They both did kind of write memoiry books, but they're again, mainly existed to sell you on AMway. So not the best sources. Jay was born on June 3rd, 1934, which is the same year that Nutra Light was founded. He was the grandchild of Dutch immigrants. His parents were extremely religious and members of the Christian reformed church. He attended a Christian high school. And when World War II broke out, he joined the Air Force and trained bomber crews. After the war, he became a door-to-door salesman where he met his wife. Jay had met Richard DeVos back in high school. They both went to the same Christian academy. Now, Richard DeVos, who we'll call Old Dickey D, was born on March 4th, 1926 in Grand Rapids, Michigan. He was a true child of the 20s, by which I mean his mother was named Ethel and his father was Simon Cornelius. Wow. I know. It's a name you just have to punch. So his family, I think, were fairly, he would later say that they had hard times during the depressions that was difficult for them. I'm sure it was tighter than other times where they also paid to go to a private school. I don't think it was like my grandpa had to leave the family when he was 17 because they didn't have enough food. I don't think they were that kind of poor. But he makes a lot out of how poor they were during the depression. I don't know. I wasn't there. His family and Jay seem to have been more comfortable than most in this period of time. Again, they're able to send their kids to a private school. There is fairly little about the early lives of either men and sources that are particularly trustworthy. When he was 88, Rich wrote a memoir where he described his grandfather as a huckster, but he meant that in a positive sense. And I'm going to put it from a write-up in Politico here. Grandpa Decker had been an immigrant from the Netherlands, Dutch in origin, like the word Huckster itself. During the Great Depression, he sold freshly-formed vegetables door-to-door in Grand Rapids, Michigan. Rich Devas used to tag a lawn, noting the way the old man's neighborly demeanor and good humor gave him an instant rapport with customers. At the end of the usual routes, young Rich had the chance to pedal the leftover vegetables. The first thing Devas ever sold was the bag of onions. His father let him pocket the profit. That's apparently how Rich Devas claims he got. That may very well be a lie because it's a very folksy story. But Rich is very, very bullish about the craft of being a salesman. He kind of builds his whole life around that. The official AMWay account of both men's life from the website, amwaglobal.com runs just a few paragraphs long. They stayed up front. The founders of AMWay, Rich Devas and J. Van Andell, first became friends in high school in Grand Rapids, Michigan. They had no way of knowing that their individual lives would become forever entwined, or that their combined work would change the landscape of business for good. But they don't give a lot of detail about these guys again. It's kind of hard to nail down on a whole lot about their early lives. So as I stated, Richard and J. started as independent neutral life distributors in 1949, right after World War II. Direct sales were a big deal at the time. And the concept of people going door to door to sell things was still fairly common and not really weird, right? Part of what's weird about MLMs now is that like, business doesn't work that way anymore. Where like a salesman just buys a bunch of products wholesale and goes around selling them. That did used to be kind of normal. When J. and Rich got involved in neutral life, it was fighting off an attack by the FDA, who accused the company of false advertising. So again, I think that their vitamin things were kind of a scam. J. and Rich were very good salesmen, but the Bruhaha with the FDA concerned them. So after 10 years as neutral life distributors, they quit and they spun off their own company to sell different household products. They called it the American Way or AMWay for short. Now a few short years later, Von Andaline DeVos would buy neutral life from Carl Reinberg, and it today remains one of the staples of their product line. But the first AMWay product was a type of highly concentrated organic detergent, which they bought as a patent from a destroyed area scientist who'd fallen on hard times. The organic home cleaner was called Frisk, and the men liked it because it was the kind of product that they claimed anybody could sell. AMWay was successful early on, offering Americans during an unprecedented economic boom the chance to quote, own a business of their own. This is from the beginning, a huge part of the pitch, right? A lot of people are getting rich. This is the biggest economic expansion in history, and they're like, AMWay is a chance to own your own business. So you're not our employees. You're starting your own business to sell these great products, and like that's how you're going to get your piece of the American dream. That was the AMWay pitch from the beginning, and AMWay wrapped itself in the cult of the American dream. Rich and Jay's most quoted line on modern AMWay company websites is quote, we were just two guys from Adam Michigan, USA, who wanted to have a business of our own. The AMWay slogan is, you can do it too, right? And you see the, I mean, this is a little bit of the evolution of the GRIFF, right? These Ponzi and Hal, these first schemes, it's, you know how rich people are making their money. You can do that too. And this is more of like an intimate sort of thing. We're just two regular guys who started a business and it got us rich, and you can do that too. They're selling entrepreneurship as a brand, right? Like you too could be your own entrepreneur. You could start your own business, be your own business owner, because that is a good idea. But it is what all the rich people that you've read about have always done. Like they really are like basically selling the American dream, like the American way, like they tell you in the title exactly what they're going to do to you. Yep, that's exactly right. Now Rich DeVos, I think was more the driver of the duo, and he was first and foremost a salesman. He wrote in a 1965 book quote, my own particular thing has always been salesmanship. I am always amazed to see how many people look down their noses at salesmanship as a worthy occupation. Now to sell Amway, Rich had to sell his own lifestyle. The fact that he was rich, big house, nice cars, and he'd all earned it through Amway. And if Rich could do it, you could do it too. He would warn his new distributors that Amway wasn't about making a quick buck. It was about making your own slice of the American dream a reality through hard work. From Politico quote, he helped his distributors along the way with guidelines and best practices, but he mostly saw himself as a cheerleader for people to realize their own capabilities and to expand their ideas of what is possible all while undergirded by specific political and spiritual ideas he saw as fundamental to the American way. And this is again what separates this from these early pyramid schemes are promising 90 days, 40% return. You'll get Rich. You know, you do nothing but hand in your money, you get Rich. The much more durable version of the Gryfft is it's going to be hard work. It's going to you'll get Rich, sure, but you have to do, you know, you have to put in this work. You know, you can, this is your own business. This is not like a quick return thing. You'll get, you'll be a millionaire if you follow these steps, but you have to follow these steps and it's going to be hard and that's a lot more durable. And it also means if all you're doing is handing in money, being promised a return, when the return doesn't come, it's pretty easy to figure out who to blame. If you have to do put in the hard work quote unquote, then if it doesn't work out because maybe it's close to impossible for it to work out, the blame is on you. Rich is a much smarter Gryfft, you know? Right. And like your family, as you're, you know, taking out a second mortgage on your house to buy like wheelbarrow's full of fucking cleaning solution that doesn't really work in your family's like, don't do this. You're like, don't you trust me? Like I'm going to, I am going to make this happen because just through sheer tyranny of will because like that's what America treats teaches us as possible. And then, you know, when it doesn't happen, you're kind of fucked because you already, like kind of put it on your own shoulders. Yeah. Yeah. That's exactly right. And that's brilliant. It's much smarter than what Ponzi and how we're doing. I mean, it's evil as fuck. It's very evil, but it's also legally not a scam. Yeah. Yeah. So for divorce, the American way meant a country that embraced the free enterprise system, faulted God and held true to the conservative Christian principles. This country was built on a religious heritage, he wrote in his book Believe, and we'd better get back to it. In Minta Country where the only limit to what one could achieve was how hard one worked. I think being poor is something many people do. He said in a 1966 speech, it sort of has to do with being poor by choice. And in Minta Country where personal responsibility and belief in yourself were two sides of the same coin. In the 1960s and 70s, divorce believed that those values were under threat from the rise of the welfare state and the decline of religion to the Soviet threat and the spread of communism in Southeast Asia. At the time, conservative Christians hadn't become yet a potent political force, but the makings of the movement were there, the sexual revolution, the Supreme Court's Roe v. Wade ruling, the pornography wars, the white backlash to desegregation, the backlash to the women's lib movement, the rise of the silent majority. Inquit. That's all from Politico's obituary of the man. And it makes a good point about where this guy is situating himself very consciously. So he's from the beginning, not just a businessman and from the beginning, doing the kind of thing that William Penn Patrick did, this isn't just a money making scene. This is wrapped up in this coat of Americana and it is wrapped up in Christianity and this religious belief in the free market. And again, that makes it all much more durable because it's not just a matter of, well, this doesn't work, maybe it was a scam, it's a matter of like, well, this must work. And so if it's not working, it's on me because this is what God wants, you know? Right. Now, the religious right in the 1970s, which is when AMway really starts to make serious money, was not yet an organized factor in U.S. politics. That didn't come around until 1979, but Richard knew the future was in marrying conservative electoral politics with Christian fundamentalism and free market ideology. By the early 1970s, he was wealthy enough to start spreading some of his money around to deserving causes. He founded the Christian Freedom Foundation, which he chaired. Now, today there's an organization by this name that comes to be an apostolic law ministry, but that is not the, the, the CFF that existed at his time. According to a mother Jones report from 1981, the purpose of the CFF was, quote, was as stated by a member during one meeting to elect conservative Christians to Congress. Shortly after giving it $25,000, Richard DeVos took, DeVos took control of the board of the CFF and ran it. He used funds from the organization to funnel money into yet another right-wing theocratic organization. Third century publishers. These fund folks published a guidebook for conservative Christians who wanted to win local elections. They framed this as returning to America, quote, as it was when first founded a Christian republic. Now, during the same period, J. Van Andel, the co-founder of AMway, organized the Chamber Citizens Choice Lobby, which agitated against government regulations that he claimed reduced choice and that other people said reduced the ability of corporations to like crush workers with factory equipment. So, both of these guys are, are, are seeing both like the fight for deregulation and whatnot and the fight for, you know, corporate rights as the same as like fighting for a Christian republic because obviously a Christian republic would have no limitations on what capital can do. Now, the AMway co-founders established the Center for Free Enterprise and Ada Michigan as though, and this is like kind of like a museum. It sounds like the lobby of this building featured life-size bronze statues of both men. Mother Jones described it as quote, one of many displays in the saucer-shaped building that illustrate the rewards of a capitalism stewarded not by the federal government, but by God-fearing tycoons themselves. It's like a propaganda outlet, right? This like this, this, this museum dedicated to the, the wonderful history of free enterprise and all that goes great when the government stays out of the way of Richmond. And it's first full year of business, 1960, AMway had made just half a million dollars. By 1977, the company was selling more than 300 million dollars in products per year, mostly to its own distributors. While AMway had started off as a multi-level marketing company, the focus was initially on selling products to actual customers. It quickly became clear that this was not the best way to make a fortune. If you relied on selling products the normal way, you had to worry about whether or not they worked or were marketed well to customers. Instead, DeVos and Van Andell created a modified cult dedicated to convincing people to buy more AMway products and the guys of independent businesses that they would ostensibly sell, but in most cases would just kind of accrue in their house because they were unable to move them. Mother Jones lays it all out. AMway measures a distributor's success by how many products the person sells and by the size of the distributor's down line. Each time the distributors get a new recruit, they add to their personal sales force and elevate their own position. Increasing the amount of money they get from people below them while acquiring ever-loftier titles. First direct, then ruby, immoral, diamond, and so on. So you can technically make money by selling the products, but the real way to make money is by selling AMway to new people, right? Because then you get to cut it. And in order to stay in it, you're pressured to buy a certain amount of the products a month. Most of what's bought is distributors buying it just so that they can say that they're continuing to quote unquote sell products. And if those people are in your down line, you get a chunk every time they buy more AMway stuff so they pressure them to buy more AMway stuff. And if you have a lot of people in your down line, you make a shit load of money, you know? On your down line means like, so you get somebody to join an AMway who like answers to you and then they get 300 people to join them. Yeah. All those people are in your down line. Their money is rolling up flowing up to you as they buy the products to then sell. Yeah, exactly. And again, you can think about the shape that that would be if you were to draw out the way that arrangement works. But yeah, that's all we can say on the map, right? So we're like a triangular. It's definitely like a triangular shape to the way the money would be flowing. Interesting. Okay. Now, William Campbell, a distributor for the company, explained the traditional AMway sales pitch this way for when he was interviewed for a 1977 article. AMway is just a good old American dream. Everybody has the idea to open their own business and see it go. AMway lets you. And of course, most AMway distributors either made nothing or lost money. This discrepancy between the wealth made by AMway and the poverty of many AMway distributors led DeVos and Van Andell to earn the nickname, the gold dust twins. I don't know who gave them that nickname, but that's what people call it. Pretty sure they gave themselves that. Yeah, it does sound like a nickname to yourself. Despite all of their growing propaganda operations, DeVos continued to prefer to deliver his sermons on capitalism and Christianity in person to wrapped audiences of AMway distributors. His speeches at regular AMway events were said to drive the audience into a quote, near frenzy and always ended in a chorus of weepy God bless America's from the mostly husband and wife teams who attended. AMway purchased its own radio broadcasting system. In one interview, DeVos explained that purchasing the media directly was important to AMway, so that quote, we can expose to a broader audience the things we feel are important in the future of this country. Keep that in mind, because that's going to come up again soon. AMway also increasingly published its own cartoons, films, booklets and audio cassettes. Many of these were geared at training people to sell, but more were pure ideology aimed towards in their words, objectively fighting the unfair scapegoating of the profit motive by the left. Now, DeVos and Van Andell also took the fight directly to politicians in Washington, generally by buying them outright. When Gerald Ford took office in 1973, after some unpleasantness with his old boss, the AMway founders had been shotgunning money his direction and towards the Republican Party for years, and so they quickly became regular guests at the White House. This came in really handy for them, because in 1975, AMway fell under a federal trade commission investigation to determine whether or not they were a pyramid scheme. But beyond speaking terms with the president, when the FTC starts looking into whether or not you're a grifter. But Jack, you know who the FTC never looks into? As far as we know. As far as we know. Yeah. Yeah. Is it the products? It's the products. It's the products. I'm a chunk. I'm a chunk. The FTC isn't even aware of them. We fly right under the FTC's radar, baby. That's the promise behind the bastards. They don't even know what we're doing. We use a VPN. It's fine. Here's ads. Hi, I'm Molly John Fast, and this is Fast Politics. You may know me for my old podcast, The New Abnormal, my many, many, many tweets, or my articles in Vogue, The New York Times, The Washington Post, or my newsletter at The Atlantic. Wait, what? I do my best to poke holes in political arguments with no fear of critiquing any side of the political spectrum when I interview someone you get to see who they really are and what they really think. On this podcast, you'll hear me talk to people like senators, Chuck Schumer, Cory Booker, and Amy Klobuchar, smart people like Dr. Peter Hotez or James Carville, up incoming political stars like Richie Torres and John Fetterman, or even smart celebrities like Ben Stiller and Julia Louis-Dreyfus. Listen to Fast Politics with Molly John Fast every Monday, Wednesday and Friday on the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. The 1980s had a lot of great stuff. Big hair, arcade games, but not everything was RoboCop and Rubik's Cubes. In the 1980s, we also came dangerously close to nuclear war, and none of us had any idea. I'm Ed Helms and I'm hosting a new podcast called Snathoon, a show about history's greatest screw ups. On season 1, Able Archer 83, a story of political miscalculation, espionage, blind games, and a NATO military exercise that almost triggered a very real nuclear war entirely by accident. America is preparing a Southern nuclear attack on our country. It is a miracle we did not all die. It's just goofy. So how close were we to all dying in 1983? And why don't we know about this? Subscribe now to Snathoon, premiering on October 5th on the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. This will be the first crossover ever between political politics with prop, which is me, and the behind the bastards, five episodes of pure, fury, uncut and raw. Slightly cut. Okay. You can find all five episodes on both the hood politics and the behind the bastards feeds, and you can listen to behind the bastards and hood politics on the I Heart Radio app, Apple Podcasts, or wherever you get your podcasts. Okay. These are returns from ad breaks, or is incredibly, we've never won anything. Yeah, we've never won an award and never will. Never. Not a one. We're, you know, awards. Jack, we're back. Robert, you just reached my Ruby level of podcast hosts. So you get that reward. You're certified Ruby. Thank you. Thank you. Does that come with a car? Do I get the Cadillac? Yeah, yeah, of course. The Red Cadillac. The Bright Red Cadillac. I'm going to go cruising in the main drag. So just a question on kind of what we've covered so far, because they're, you know, they have these people who are like the foot soldiers. Like are they rewarding those people based on how enthusiastically they like sing the praises of Amway? Because that does seem to be like part of it, right? Is like, I'm assuming they think by kissing ass and saying his speeches like throw them into like, you know, orgasms of fucking capitalist joy that they are then like kind of finding favor in the Amway world. Yeah, I mean, obviously you have to praise the boss, but also the people, the only people who are really great. Yeah. Thank you, Sophie. I was what I was getting at and I appreciate it. The only people who like get to give talk for Amway are going to be other successful distributors. So you do have, you have the people who are actually trying to run a business and like sell Amway products who don't make money and wind up broke and dying on the street. And then you have the people who are really good at getting people to be that person. And those people do make money. There's not a lot of them, but those are the people who get to like, who, who, when you go out for quotes and whatnot are representing Amway, right? These big distributors who are not Amway employees often, we'll talk a little bit about that, like that's like it and a big part of it is like building this, this cult of personality around the founders and around the successful distributors. And it's this huge part of what works about Amway is the worship of success. So when somebody does make money, you put that person in front of crowds. You have them deliver these and the kind of people who are capable of making money at Amway are going to be good public speakers because they're kind of people who are charismatic, right? They're good at getting people to buy in. They're good at things. Yeah. I think, I don't think that audience is faking it. That audience is cheering and losing their minds because they desperately want to believe in what Amway promises because it's the only hope they have of living a life that isn't wage slavery. And so they, they, they, they, they want the promise that Amway is making them. And so when they, they hear someone tell them, it's possible. You can do this, you know, you can succeed. You can have the big house and the boats and everything. They don't question it. And instead they find it like inspiring. And I'm sure when they get home that night to their house full of unsolved Amway products, there's, there's a crushing feeling of inadequacy and failure. But it's, it's maybe even made worse than it otherwise would have been because they've convinced themselves, well, this guy was able to do it. So as the Amway motto goes, I can do it too. You know, and so if I haven't done it, there must be something wrong with me. It's, I mean, it's, it's how America talks about homeless people and poor people, right? It's just like a company that's bottled that, that discussion of like, if you're not succeeding under this system, it's because there's something wrong with you. Makes sense. Yeah. Now, in 1975, as I stated, Amway, the FTC is like, this might be a pyramid scheme. Holiday magic had just been busted. And the FTC was at this point kind of going bullishly after other MLMs. Their argument against Amway seemed pretty strong. Despite Richard DeVos's strident claims that Amway was a good way to build an independent business and get rich, the average gross monthly income of distributors was $67 a month. Now, and you, you have to consider that's average when you consider guys like Von Andeel and DeVos who are making millions of dollars a month, right? That's the average when you include the people who are getting rich off of this stuff, which means the vast majority of the 750,000 Amway distributors were making nothing or losing money, right? I mean, didn't you say at the top, the independent distributors lose 99.9% of their money? Yes. Yes. Yeah, that's a more recent number. But yeah, like this was the number back then, right? With $67 a month was the average in 1975. We now know based on, again, what I started the episode with, yeah, 99.9% of people lose money. You know, the data on Amway, obviously, it's different throughout the years. And, you know, we know more now than we did at that point. So that same year, 1975, Van Andeel and Richard DeVos met with President Gerald Ford in the Oval Office for 43 minutes, the same year that like this, this investigation gets underway. Next, from the Washington Post, a month later, Van Andeel was quoted in a Michigan newspaper as saying that Ford was aware of Amway's travels with the FTC. Later, Warren Rustent, director of Ford's scheduling office, and William Nicholson, his assistant, were listed as stockholders in an Nebraska insurance company being formed by Van Andeel and DeVos. Rustlin Nicholson dropped out of the venture, despite White House approval of their participation. Nicholson was later hired in Amway's government affairs office. You know, there's ways of greasing things. Wow. In 1979, the FTC ruled that Amway was not a pyramid scheme, but that they're recruiting straight. Yeah, amazing. A true underdog story. Yeah. If you have a 43 minute meeting with the President of the Oval Office, you too can make court stuff maybe not, not continue. Yeah. DeVos's picture on Wikipedia is him standing next to Ford at the White House holding up what appears to be the Constitution. Like, I don't know what it, well, I don't know exactly what they're holding. It's like a single page document list of how much money he makes. Yeah, exactly. Yeah. Interesting. Very funny and not at all corrupt. In 1979, again, the FTC rules Amway's not a pyramid scheme, but the FTC, the judge, did note that their recruiting strategy had the capacity to deceive prospective marks because it heavily implied they'd get rich. They were fine and Amway had to agree to change their ads to more accurately reflect what people could actually make. The reality is that they just got slightly more cunning at promising the same things to people while skirting right up to the legal line. I found a book, Merchants of Deception, published by a former Amway distributor named Eric Schleibler. He came into Amway well after the FTC case and he explains how it was sold to him. So this is kind of how they've modified things since the case to not make fraudulent claims, so to speak. Hmm. Quote, one of the many analogies used by Amway distributor leaders to illustrate this was a reference to the McDonald's franchising scheme. Would you rather own one McDonald's or be Ray Croc and have the right to franchise or duplicate your efforts? Isn't it far better to have 10% of 100 businesses than 100% of one? By helping many people succeed in owning their own franchise, so to speak, you could literally work yourself out of a job and live comfortably on the residual income generated by the businesses you started. This residual income stream could even be passed on to your children as part of your estate. There was no way to lose money, that's end quote, as it was the perfect business opportunity with no employees or overhead. Because again, the people under you are your sales. No sales. Yeah, no sales. When we questioned them about the apparent pyramid nature of the business, we were advised no one makes more money off your business than you. Carey later informed us this is a legal requirement that keeps this business from being an illegal pyramid. Amway claimed that the worst deception found in their marketing strategy was the fault of rogue distributors, individuals who had made their own money signing folks at Framway and who had started pushing motivational tapes and pamphlets at conferences to teach people how to become super salesman. This is not entirely untrue. All these things are hallmarks of Amway today, but they actually started as independent from the main Amway business. All of again, everybody in Amway, these are all independent little companies and some of them are independent large companies, the people who are really successful, the guys who are good at getting people to buy an Amway. Those guys start selling books and pamphlets where they're talking about how rich you can get. Amway claims that's what the FTC had an issue with. It wasn't what we were doing. We just weren't keeping enough of an eye on these distributors. You know? Power reminds me of like gig workers, almost like all these massive tech companies built on gig workers who are not actually employees. It does seem a lot like what Uber is doing. Uber the company that a lot of people got rich for starting and has never made a profit, which is fun. Yeah. It's neat. So as I noted, the way this worked in the beginning is that Amway sold products to distributors who often started their own companies to sell said products, much in the same ways DeVos and VanAndle got into the business. The money was in selling the products to distributors and the smartest Amway distributors made money by promising the good life to smaller fish and getting them to buy a bunch of Amway products. Thanks to a 1980s court case, we have a memo-richered DeVos wrote in the late 1970s as FTC scrutiny of his company reached a height. In it he very bluntly laid out what the FTC would later say was true. Amway distributors were being lied to. Quote, and this is Richard DeVos. Wide spread legalities inherent in Amway distributor designed systems of tapes, books, and rallies. While most of these systems were conceived of in the late 1960s and early 1970s as genuine support programs to help Amway distributors develop their Amway business, entrepreneurial higher pins discovered and developed programs for substantial, separate and additional income under the Amway umbrella. Again, he was very aware of what was going on. Richard outlined these support systems as a threat to the future security of the Amway Corporation. He acknowledged to his subordinates that the disproportionate to Amway sales, intensity and solicitation of these tool systems are illegal, per se, under several US federal and state laws. So he's aware in the early 70s that a lot of his distributors are breaking the law. But he can't really, he's not going to do anything about this because those people are how Amway makes money, right? Those big fish distributors who are all breaking the law and the promises they're making are also where his money comes from because they all have a bunch of people in their down line. But they're not Amway employees and they're not, yeah, none of them. Yeah. And he's not the one doing the lying. So it's like, it feels like he's good. Yeah. I mean, legally he was good. So after the FTC decides that Amway's not a pyramid scheme, a bunch of different state attorneys general start investigating Amway to like try to figure out if there's anything else they're doing illegal because, you know, they're getting a lot of complaints. People who like come out of the Amway culture like, well, I lost a bunch of money. Something seems like there'd be wrong here. In Wisconsin, the state attorney general sent people into Amway meetings and he found these shady distributors running conferences and Hawking tapes that made promises about wealth that Amway absolutely could not back up. The state filed civil complaints against Amway, which sent journalists undercover to poke around, which is when Richard DeVos finally started to care. He proposed a number of possible solutions, perhaps the funniest of which was to create what he called a truth squad to fair it out big distributors who were lying in their supplemental materials. But the Vos quickly realized there was nothing Amway could actually do without harming, like, his ability to make money. As Dr. Carol Juth, a sociologist who studies direct marketing wrote, the entrepreneurs of the Amway Corporation, perhaps unwittingly, created an organizational structure which evolved into two powerful symbiotic organizations. The survival of the corporation and the distributor organizations are now dependent on and constrained by the other. The Amway Corporation is constrained in its ability to garner desired profits because of the amount of money it must allow for distributor incentives and the fact that distributors are more inclined to sponsor rather than to sell retail. After the FTC fined Amway for false advertising, the company was forced to make changes. Since Amway couldn't actually do without these big distributor organizations, they brought them and their propaganda into the whole deal. So they actually kind of merged these two. They bring a lot of these distributors into like, and particularly the propaganda they're making, they just start selling that as part of Amway. These big distributors with ranks like Double Diamond became a key part of the internal Amway business and their motivational speeches and books were rolled into the product line. The Griff got straight slightly smarter. Instead of saying, this book or conference will teach you to be a millionaire, it became, if you want to grow your business, this mentoring can help. I found one story in a Mother Jones article from 1996 that relates the tale of two Amway distributors, Karen and Craig Jones. I think this illustrates the where Amway moves after 1979 in terms of how these promises are made to people. After paying about $100 for a starter kit, the Jones is started by motivational audio tapes recorded by such Amway leaders as DeVos, Yeager and Bill Britt, another well-known distributor. Before long, Amway pressured them to place a standing order for new tapes, which cost $6 a piece. They'd tell you that the people who are serious about their future in the business do this, Craig says. Soon the Joneses were receiving two tapes a week by mail. One might also expect them to buy at least $200 in Amway products each month. You start believing them, says Karen. You want to do what they did to get to where they are. Karen quit her cleaning business. The couple sold their three-bedroom home in Charlotte and moved their three young children an hour north to concord to be closer to their upline. They contacted every acquaintance they could think of trying to recruit new distributors. It didn't work. Karen said they lost friends and, within a year, were broke. We would eat beans all week long. We sold our living room furniture and our TV. As Craig lost interest in Amway, Karen says she received a less-than-Christian response from her sponsors, who implied she should file for divorce. They tell him, they tell me, flush him. Flush my husband, says Karen. If he's not doing this part, then flush him. After Karen stopped going to meetings in April 1995, Craig returned to work full-time as an architectural engineer. Amway squeezed the Joneses out. I know, right? Their business had made... He was an architectural engineer. Yeah. He had a job, but it's again, a real job is hard. You have to do it for years. Maybe you don't even get to retire on a day. Amway, you get rich. You have three kids eating beans for every meal because they wanted to live closer to the person that they bought their giant boxes of soap from. They would just end up storing their basement because they couldn't sell them to anyone because nobody wants this shit. Yeah, their business peaked at revenues of $300 a month and the couple claims that Amway cost them $50,000 in 1990's money in four and a half years of their lives. And having people who are struggling financially, who just keep spitting their wheels, blaming themselves and then a group of people in power, also blaming them is the most American thing that I can possibly imagine. Like this is just, I mean, couldn't be a better metaphor for everything about our country. Yeah. It's perfect, Jack. It's perfect. Yeah. Well, that's going to be the end of part one. Hey. Hey. Hey. What the, hey? I don't know. I was being Italian. Jack. I thought so. Wildly offensive. You're the co-host of the Daily'site, guys. That's one of the co-hosts. I'm the co-host of the Daily'site. You guys, you can also find me on Twitter at Jack underscore old Brian. And yeah, those are kind of the two main places. Awesome. I want to end this with a little plug for something cool that a fan is making. Those of you who listened to our episode, our Christmas episode on Nester Machno, who is an anarchist warlord in Ukraine. This is about a different anarchist revolutionary guy who actually knew Machno and fought during the Spanish Civil War, a guy named Winnevin Shura Derudy. There's the wringo award-nominated comic creator, Brinton Lengel, is creating a new comic series called Derudy's Shadow of the People and he's looking for people to back it on Kickstarter. If you go to Kickstarter and you search for D-U-R-R-U-T-I Derudy, you'll be able to find it if you back at the book level or higher and comment bastards. He'll send you a unique sign to print free. It's a cool product, Derudy at Kickstarter and you'll find Brinton's project. So I think it's neat. Check it out. Anything else, Jack? Nothing for me, Robert. Nothing for you? Well, that's all for me also. All right. I can't wait until next episode. I can. I can't. Okay. I can't. I can't wait like a day. Let's wait like a day. Okay. Sounds good. All right. It's Rachel Zo and I'm here to tell you about my new podcast, Climbing in Heels. You might know me from the Rachel Zo project, The Zo Report, or as the founder of Curator. On my new podcast, I interview other super women who have worked their way to the very top. My guest share the spark to began their journeys as industry leading ladies and how they balance it all while staying so glamorous. Follow us so you don't miss a single episode. Listen to Climbing in Heels starting October 6th on the I Heart Radio app, Apple Podcasts or wherever you get your podcast. Hey, I'm Deweleeper and I'm thrilled to be back for the second season of my podcast Deweleeper at your service. Alongside me and my guests lists and recommendations, the show features conversations with some of my biggest inspirations, working across entertainment, politics, activism and much, much more. I've been hard at work getting season two ready for you all some along, so please tune in and join me on this very special adventure. Listen to Deweleeper at your service on the I Heart Radio app, Apple Podcasts or wherever you get your podcasts. Hey, it's Roy Wood Jr. host of The Daily Show Podcasts Beyond the Scenes and we are back for season two. Beyond the Scenes is the podcast where we take the topics and segments that were on the Daily Show and give them a little more love. This season we're bringing back more Daily Show writers, producers and correspondence. More experts giving us some extra knowledge you can't get anywhere else. Don't miss it. Listen to Beyond the Scenes on the I Heart Radio app, Apple Podcasts or wherever you get your podcasts.