Multi-Level Marketing: A Neoliberal Institution

Abstract

Capitalism has a productivity fetish. The goal of squeezing more and more out of workers while also cutting costs to the quick underscores all historical incarnations of the capitalist cycle of accumulation. The fixation on productivity spills over and infects the adjacent cultural institutions, and individuals are socialized to believe that working hard—a virtue in its own rite—is also a means to achieving economic security and the respective cultural signifiers therein. Under neoliberalism, this productivity fetish spawned the “side-hustle” and the explosive growth of the multi-level marketing (MLM) industry.

The MLM is a logical outgrowth of the capitalist accumulation imperative as well as a neoliberal institution which relies on business and social practices distinct to this current historical period. MLMs are able to push typical retail overhead costs on to individual distributors, who are expected to act as buyers, inventory holders, retailers, self-managers, recruiters, job trainers, and exert disciplinary control over their distributor lines. All of the individual distributor’s relationships transform into potential transactional exchanges, thereby amplifying the alienation already endemic to capitalism. This research examines the MLM as an interactively reinforcing institution of neoliberalism, the ideological operant of this current phase of capitalism.

Keywords:

• direct selling
• network marketing
• multi-level marketing
• neoliberalism
• institutions

JEL Classification Codes:

• B52
• Z12
• N00

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1 The Body Shop and The Body Shop at Home have traditional retailing and MLM selling, however, so far it remains the exception.

2 Under U.S. tax code, individual distributors are considered 1099-contractors (Internal Revenue Service 2021).

International reply coupons are vouchers which allow for a person in Country A to send postal mail to a person in Country B and with that voucher, the person in Country B can purchase stamps from Country B in order to send a reply back to Country A. It acts as a sort of international version of including a self-addressed stamped envelope in a mailing within domestic borders. The United States stopped selling international reply coupons in January of 2013 (USPS n.d.).

4 Typically, traveling and door-to-door salespeople were men, although there are a few notable exceptions. The first African American millionaire, C. J. Walker, earned her money as a door-to-door direct seller for Annie Turnbo Malone who, around 1900, tapped into a market largely ignored by retail forces by selling hair treatments to African American women (Keep and Vander Nat 2014; Peiss 1998).

5 The data is from a self-published book which cites the author’s calculations as based on industry data from the Direct Selling Association (DSA). The 1990 and 1999 data specifically are sourced to remarks by Neil Offen, president of the DSA, according to a separate source (Sheffield Group 2014). The DSA responded to direct queries from the author but only pointed to data which is already available on the DSA website (www.dsa.org) and only goes back as far as 2017.

Although most MLMs will hold conferences and functions with motivational speakers, awards ceremonies, and celebrities from within the organization, these conferences function more like pep rallies than training workshops and most of the time, require the distributor to pay to attend. Distributors with downlines are also often encouraged to pay for their and at least some of their downlines to attend.

7 This happened to the author twice while living in Utah—the alleged MLM capital of the world.

8 This is a manifestation of Foucault’s entrepreneurial self within an organization.

Additional information

Notes on contributors

Mary V. Wrenn

Mary V. Wrenn remains a Senior Lecturer in Economics at the University of the West of England, Bristol, UK. The author would like to thank the anti-MLM community, especially Josie Naikoi, Savy Leiser, and Monica Hayworth, for their sharp insight and relentless agitation against the MLM machine.