Hi, everyone. Luke here with an interview that's concerned with a subject I've been thinking about a lot lately, namely the subject of multi-level marketing.

I recently watched a documentary called Lula Rich, which is about the Lula Roe Company, a company which expanded very, very quickly by selling primarily women's leggings, customized leggings, but more precisely

by selling them to individuals who in turn were tasked with selling them and recruiting

their friends to do the same. Now, the second part, the second part of that, recruitment was

really the key to the company's whole shtick because by offering potentially,

and I stress potentially, potentially lucrative bonuses for signing others up, Lula Roe was able to grow very quickly.

It was able to attract huge numbers of people, the majority of them women and many of the mothers,

by way of the promise that they could make money from home

while spending time with their children and, you know, having fun, selling colorful garments on

social media. Now, I'm sure you can you can see where this is headed, even if you aren't

familiar with the story. Basically, most people involved in the scheme either lost money or failed

to turn a profit. The company and its founders were unbelievably pushy in terms of encouraging

people to go into debt in order to pay the fee that was required to sign up, et cetera,

and Lula Rowe ultimately destroyed lives and liquidated bank accounts on its way to what was in practice a pretty small financial settlement over its activities.

I think the company is still operating today.

So this case got me interested in pyramid schemes in so-called multi-level marketing, and I was astonished to discover that these schemes are

absolutely everywhere. And it's not just the big ones that you might have heard of like Herbalife,

which was notorious for targeting Hispanic Americans in particular. It's not just Herbalife.

It's not just Lula Rowe. These things are everywhere. They're growing. They're turning huge profits,

particularly during the pandemic, as you might imagine. And as my guest will explain,

they're also hideously under-regulated. There is currently no federal law on the books in the

United States, which, by the way, very much invented the whole multi-level marketing enterprise.

...