
Pyramid schemes causing social harm in China – crackdowns may not be working - subsubsub
https://www.economist.com/news/china/21736182-crackdowns-may-not-be-working-pyramid-schemes-cause-huge-social-harm-china
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ciguy
MLM scams are massive in the Philippines right now as well. The baffling thing
to me is, when I've laid out how this works to friends talking about joining
up, they agree with the math but join anyway! It's like they need something to
believe in subconsciously even if their logical mind knows it's bullshit.

Maybe these schemes really sell hope to those that need something to believe
in, replacing religion on some level. Except in this case it's economic hope,
the belief that if they work hard enough they will be rewarded.

I've noticed a trend amongst participants. The people at the top are straight
up psychopaths looking to exploit human greed for their own gain. But the
lower level minions are usually simply poor. They have very little to lose, so
why not try it? Ultimately they usually end up poorer, but there's always the
story of Bob and Betty who made a million dollars last year and came from
nothing to be top sellers.

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jannes
Even in the US there are large MLM scams. Just look at Herbalife. They say
they stopped some of the bad practices after the FCA investigation, but how
likely is it that they changed a pyramid scheme into a non-pyramid scheme
overnight?

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ghostcluster
Amway is another example. It has established close ties to the US government
to help ensure its survival, even though it is another parasitic multilevel
marketing pyramid scam.

Like biological parasites, the long lasting ones seem to have optimized the
level of damage and chaos they cause, along with maintaining protection
mechanisms (lobbying, political donations, corruption) that enable them to
continue to survive and be incredibly lucrative to their founders.

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westiseast
Amway is huge in China. Anytime I got approached in coffee shops it was 50/50
someone wanting to practice English, or an Amway rep.

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sidzpah
This is very rampant in India as well, local facebook groups get at least 5-10
posts a day regarding pyramid schemes and offers. The response is equally high
to these post averaging 50-100 comments whereas other posts barely receive
any. Showing the promise land of instant riches without hard work via flashy
ads and illogical math creates such greed amongst the low-income community
here (which is the majority of the population, btw) that it is almost
heartbreaking to see them lose their everything eventually. MLM/Pyramid scams
cannot be stopped via government bans or awareness programmes as such, it
needs an equal rival which not only makes the same promises but magically also
fulfills them somehow. As much as I have observed, the amount of hard work
they do for recruiting new members can well be exchanged for a handsome salary
with a steady future income promise leading to a better financial gain over
time.

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bluecalm
I don't agree. Make MLM's illegal, punish people who recruit. They will dry up
in no time. The problem now is that they are perfectly legal (or can be made
legal by introducing sham product to make it less like a pure pyramid) so
recruiters can scam others out of their life savings with impunity.

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viraptor
Is there any country with a working anti-mlm law? I think the line is so
fuzzy, it would be really hard to define what's a scam and what isn't. What's
the difference between a franchise/dealership and an MLM where some product
really exists and you're expected to pay for the stock up-front? If there was
a law against one of them, how close would they get?

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AJ007
It can work the other way too. How many people have had their savings wiped
out starting s restaurant when they had no idea what they are doing, compared
to people who started a McDonald’s or Subway and made out ok?

The only thing you can do is force publication of accurate numbers, and audit
them. I have a pretty low view of people who with IQs over 95 that join
pyramid schemes. They are throwing their friends and family under the bus in
hopes they personally get rich. That is extremely immoral even if you are
poor.

In the US, if you do this, at best your friends will think you are an idiot,
at worst you are going to get cut off. I’ve seen both happen more than once.

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walshemj
The experience of Albania in 96/97 caused massive disruption and the deaths of
around 2k people when the schemes collapsed.

[http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm](http://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm)

Id imagine this is worrying the Chinese government

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ddorian43
That was like crack epidemic. Aka gov help. But still people enjoy the MLM
dream there, though mostly young/poor/stupid combination.

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mmrezaie
The same thing is happening in Iran. I didn't know it still exists but then I
just learned that it is so rampant that Iranian shopping companies may very
much start their pyramid section of their business officially very soon. More
than anything I think we should have a proper education for the public about
this. Funny thing is employees some of these companies hire have to pay the
company if they wanna work in there, and the company that I am talking about
had something close to 20 people working in there as far as I could see!

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bane
They're also massive in South Korea and a pretty entertaining movie about them
came out in South Korea in 2016 called "Master" [1]. It's highly dramatized,
but has a few scenes in it of the big sales gatherings of some of these scams.
They have much of the appearance and feel of a mega-church gathering (also
common in the country) and seem to use many of the same "make people feel good
and then exploit them along the way" techniques.

It's my understanding that the movie was made simply to help raise awareness
of these predatory groups as the population they tend to target don't have the
resources to do it themselves.

1 -
[http://www.imdb.com/title/tt5735464/](http://www.imdb.com/title/tt5735464/)

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hux_
Religion gets spread the same way. Some people benefit.

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simonh
That’s a very specific, very broad claim. Can you explain how (apparently all)
religions structure and market their pyramidal incentive schemes? I’m not
currently active in any organised religion, but I have been for long periods
of time and didn’t really notice any pyramidal incentives. In fact there
didn’t seem to be much in the way of proselytising at all and I was certainly
not involved in doing so. What was I missing?

~~~
fpig
You're right, relatively few adults these days convert because someone "sold"
them on the religion and in my majority-catholic country the church doesn't
even make any serious attempt to do this or tell their followers to do this.

But christianity and islam are still the biggest MLM schemes in the world,
however they work slightly differently.

Instead of being incentivized to recruit people around you, you are
incentivized to create your own recruits by having as many children as
possible and it's absolutely expected that you will "recruit" them. Also they
love proselytizing (religious education etc) in schools, even though they
don't care about doing it to adults. They know children are softer targets,
and if they don't convert them before they reach adulthood, they're _way_ less
likely to succeed.

Basically it's all about proselytizing to children instead of adults. Get them
while they're young!

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gamechangr
Lumping "Christianity and Islam" reminds me of the craziness that passes as
intellectualism on hacker news. "Mother Theresa and Hitler" believe in
concentrations camps...come on? Maybe one more than the other?

At the very minimum, you should take a world religion class if you want to be
taken seriously???

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fpig
I don't need to take a "world religion class" to know how incredibly retarded
the religion I grew up in is.

And your post is for sure a shining example of "intellectualism".

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gamechangr
You grew up in both?

Or just like grouping two beliefs with about half the worlds population
together?

Google says there are 2.2 Billion practicing Christians and 1.8 Billion
practicing Islam.

How many Billion people are you referring to when you use the word "retarded"?

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fpig
I group them together as the biggest MLM schemes in the world which sounds
pretty much correct according to your own numbers

They are grouped together by size and by the fact they both prey on children
as their main recruitment targets

Do you think "christanity and islam" should never be together in a sentence
just because they differ in some aspects that are irrelevant to this
conversation?

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gamechangr
"to know how incredibly retarded"

Who were you referencing that's incredibly retarded?

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sexydefinesher
Maybe they will face the same fate as their eternal ally Albania

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DiNovi
I mean I've seen this here in the US everywhere... specifically skin care shit

