In the past year there has been an amazing rash of articles on the increase of aristocratic attitudes in American society and culture.
For example, school admissions are struggling with the sense of entitlement many families and other groups now feel, and major theme parks like Disney and Universal Studios have responded to affluent ticket purchasers who want to pay more in order to avoid long lines and get better food.
The gap between first class and coach airline tickets is increasing, both in terms of price and the benefits. There are many other examples.
As Orrin Woodward and I wrote in our book LeaderShift, the gap between the top 1 percent of wealthy people and the rest of us is increasing drastically, and the gap between the 1 percent and the .1 percent is widening even more rapidly.
The super-rich are getting richer, and the poor are getting poorer.
The middle class is getting poorer as well. In fact, the standard of living in the United States stayed almost the same between 1955 and 2005, but only because most households sent two adults to work instead of just one breadwinner.
In other words, we maintained the standard of living by doing more than twice the work. And this standard of living has decreased for almost everyone since 2008.
With such a divide, perhaps it isn’t surprising that many youth now see success as achieving celebrity status. One of the most significant current trends is that many young people consider winning on a reality TV show or the lottery a legitimate career choice.
A popular song expresses the widespread sentiment, “I wanna be a billionaire, so stinkin’ bad…” The tune says nothing about hard work, entrepreneurial risk, or finding innovative means to serve society in a way that will bring great wealth–in the tradition of Andrew Carnegie or Steve Jobs. Instead, a lot of modern youth want fast celebrity, and see it as the highest goal.
Years ago I was in a group of speakers after a large political event, and when our hosts took us to a restaurant and tried to use the celebrity of a visiting political official to move our group to the front of the long line, a lot of people grumbled and the politician finally begged to go to the back of line and wait our turn–he didn’t want to anger the crowd.
I recently saw the scenario repeated with a totally different group of people, and the twenty- and thirty-somethings in the line didn’t say a negative word. “Who’s the celeb?” one woman asked. Everyone else in the long line shrugged and went back to texting on their phones.
Not a single person seemed concerned that the entourage just walked past them to the front of the line. Today’s young adults are accustomed to “celebrities” getting special treatment. It’s just part of the landscape for them, apparently not even worth a dirty look in the direction of those cutting in line.
The Problem: Class Inequality
Welcome to the rising aristocracy. Young people today send an email directly to their CEO or company President, and in many cases get an almost immediate personal response, but they’re fine with those who have more power, money, or status being treated differently.
While today’s teens and twenty-somethings are nearly all delightfully democratic on issues of race and gender, the one exception is class.
Those with more celebrity are expected to receive special benefits. “All men and women are created equal,” says the new mantra, “except, of course, celebrities and others who are rich, powerful, or famous.”
This is a glimpse of American culture in decades to come. In my book, The Coming Aristocracy, I predicted this rising reality in the United States, and I warned that an aristocratic society is actually significantly less free than socialism.
Indeed, we may have won the Cold War against socialism only to see a return to European-style class dominance in North America.
If we are going to be ruled by elites, then freedom, prosperity and opportunity will drastically decrease for most people. And through history, aristocratic nations have been even more oppressive than socialistic societies.
This is hard for many moderns to believe, because we have recent experience with the dangers of socialism and not so much with aristocracy.
But history is clear: socialism is bad, and communism is terrible, but through history the worst system has been aristocracy — and note that aristocracies always eventually turn into dictatorships. Today the shift toward aristocracy is very real.
Like the proverbial frogs in a kettle, we are headed in this direction, whether we notice it or not. The fundamental problem is that, in contrast to racism or gender dominance in society, there is no obvious group that feels the need to stand up against the rise of aristocratic values.
In fact, the people most likely to stop aristocracy, members of the middle class, usually get sucked into the vortex of just trying to move up into the upper classes.
This bears close scrutiny by anyone who cares about freedom. An aristocracy is coming, and its supporters are making huge progress with each passing year. And it bears repeating: Aristocracy is even worse than socialism.
This is perhaps the most dangerous current threat to modern freedom, but few people are doing anything about it.
The Solution: Entrepreneurship
Actually, the most effective way to slow (or better still reverse) this trend is for a lot more people to become successful entrepreneurs.
A nation of independent business owners and leaders is the best protection against the abuses of aristocratic rule by elites.
As far as the future of freedom is concerned, one of the most important things we can teach the rising generations of youth is the desirability of building their lives around entrepreneurship.
Sadly, most people over thirty aren’t sure how to promote entrepreneurship. After all, we grew up in the age of employeeship, where our parents and teachers assured us that getting a good job and moving up the career ladder was the path of success for most people.
Times have changed now, and many of today’s youth will need to be successful entrepreneurs.
Hardly anyone who isn’t entrepreneurial in the decades ahead will maintain or improve upon the current American standard of living — much less have meaningful and independent influence in their communities and society at large.
The first problem arises when our young people realize that times are different, that entrepreneurship is the new reality, but are thwarted by parents and older siblings who still believe that getting a job is the way to succeed.
Even when parents understand that we live in a new economic reality, the second problem occurs when parents and mentors have no idea how to counsel young people about entrepreneurship.
That’s our current roadblock.
To help, here’s a quick guide to promoting entrepreneurship:
1. Start a Business
The downside to this is that the costs to begin can be high and the learning curve of success can be steep. Still, there are huge benefits to building a business.
Two excellent books to read are The E-Myth Revisited by Michael Gerber and Cashflow Quadrant by Robert Kiyosaki.
Today’s youth do best with building a business when they focus on their areas of interest and passion–their life mission–and find ways to make it profitable and truly serve people at the same time. Steve Jobs recommended focusing your daily work on something you really love.
2. Buy a Business.
Buying a business or a franchise can really help young people because many of the details, branding, legalities, etc. are already worked out. Franchises can be expensive, and often struggle without the right kind of leadership, but they can also bring a significant financial return.
It is important to study the details and get wise professional and experienced counsel before buying a business.
3. Join a Business.
Network marketing is usually easy to join, and it can teach young people a lot about leadership, management, sales and people skills.
Some people really dislike network marketing, but I have promoted if for many years as a great way to get involved in entrepreneurship and learn leadership skills.
Young people often do best when they join a business because they love the product, like Young Living or doTERRA essential oils, or health products from companies like Isogenix or MonaVie. There are a number of other network companies.
One business I really love is the LIFE Leadership company, because its products are leadership and freedom books, materials and training. I know many of the leaders of this company and I have co-authored a book with the founder (Orrin Woodward) and gotten to know their company culture up close.
I think this is one of the most exciting companies of our time because it is directly teaching people about freedom, and I have recommended it to a number of people who want to become successful entrepreneurs.
While I am a customer of several of them, I am not a member of any of these businesses (though I really like the ones I’ve listed here), and for years I have recommended network marketing entrepreneurship to a lot of people.
And in the current economy, network marketing is becoming an even more desirable opportunity for minimal-capital good-return entrepreneurship.
4. Help a Business.
One way to learn how to entrepreneur is to volunteer to work with a start-up or small company and learn as you work. Often this can turn into a paid position if your work is good, but even if you remain a volunteer you can learn a great deal from just showing up and helping out.
This is sometimes called an internship, but in the current environment real entrepreneurs are often less formal and more concerned with your work than your title.
Encouraging young people to get out and work, even as volunteers, is often a great way to get them out of their parent’s basement and doing something important. It can teach them a lot, in many cases more than spending the same time in class or at home.
Nearly every community has entrepreneurial businesses that are willing to put a motivated volunteer to work, and this kind of service can be a great way to get started.
5. Study Business.
Another great way to promote entrepreneurship is to go to a bookstore and skim all the books in the Business section, pick out a few books that intrigue you, and buy them. Then take them home and read them. Plan to spend at least two hours or more at the bookstore, and really look through their Business books.
Ideally, take the young person you are helping learn about entrepreneurship with you to do the same. Your investment in buying him or her a few books could go a long way–especially if you get books he is really interested in reading. Or buy the books he likes and read them yourself.
If possible, discuss what you are learning with your young protégé. This will teach both of you a great deal about entrepreneurship. Even if you are already an experienced entrepreneur, you’ll be amazed at how much you can learn from this little project.
Once you are reading the books, you’ll naturally have a lot of ideas about becoming an entrepreneur–and helping youth do the same. Oh, by the way, if you choose any of the options above (Start, Buy, Join, or Help a Business) you’ll still want to do this reading project. It will make all the difference in your success–for you or the young people you are helping.
As part of your study, I also encourage you to take advantage of the various classes we offer through the Center for Social Leadership on freedom, entrepreneurship, and leadership.
How to Save America
In short, there are many ways to get involved in entrepreneurship and promote it with today’s young people. As I said above, the future of freedom literally depends on whether or not entrepreneurship spreads in the years ahead.
If it doesn’t, an aristocracy is coming to America. It has already moved in and set up shop, and right now it is rapidly expanding its influence.
The history of aristocracy in the world shows that this is one of the worst things that could happen to this nation.
Only a rebirth of American entrepreneurial innovation will create another century of American freedom.
Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.
Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.
Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.
I am a big believer in entrepreneurship and in liberal education. I am also very concerned about the future if our nation and society. I really enjoyed this article, but throughout, I kept asking the question, “Why?” Why is entrepreneurship the solution to stopping the coming aristocracy? How does self-employment avoid this condition? Also, what proportion of the population must become entrepreneurs in order to retain/restore our republic. Thank you for these frequent articles.
@ Jason:
I always enjoy the way your mind challenges assumptions and questions things. I know you’re wanting a response from someone you respect a little more than me, but I hope you don’t mind if I share my thoughts on the answer to your question, “Why?”:
The aristocracy that is mentioned is based solely on the inequality of wealth possession. In my religious text there is a phrase that is often used to justify socialism and communism by some that I believe are misled, “… it is not given than one man should possess that which is above another, wherefore the world lieth in sin.”
This phrase is often used to imply that it is “sin” to seek to be wealthy or rich. There is, however, one thing I have noticed about this passage: It doesn’t say that the wealthy or rich “lieth” in sin, only that the world “lieth” in sin. The inequality is merely an indicator of the indicator of sin, not the sinner.
Since I believe that I should apply scriptural concepts that condemn or define sin to myself first, I also believe that if I choose to do nothing to fix the inequality, whether I am wealthy, or poor, I “lieth in sin.”
Because of the things learned through the process of starting something and becoming a leader (which is just another way of describing entrepreneurship), entrepreneurship is the best way for me to either affect the changes in myself, or assist others in making those changes. Either way, entrepreneurship is the most effective way to solve the problem, either by helping others become entrepreneurs, or by becoming one myself … or both.
Also, this may be a bit semantical, but I think the clarification is valuable. There is a difference between self-employment and entrepreneurship. Being self-employmed could include being an entrepreneur, but not necessarily vice versa. The difference is explained extremely well in The Cashflow Quadrant, by Robert Kiyosaki, as well as The E-Myth Revisited, by Michael Gerber.
Thank you Oliver for sharing your great wisdom. My teen son was just asking the other day if he could do a class on owning a business. And of course the two books you suggested will definitely be included in our self-directed education.
We also can’t wait to start your Constitution class in a couple of weeks!!!
Again, thank you so much!
some of the questions that I ask while reading this article are…
If entrepreneurs are regulated and taxed to death, can this really be a solution? I think the tax (theft/plunder) and the regulation must cease.
If our beliefs are that “government is necessary” and that win-lose exchange is acceptable, will entrepreneurship really stop what is happening? I think our beliefs must shift to win-win relationships in all areas of our lives, respect for private property, and government (by this I mean the coercive, bureaucratic, take-care-of-us system we have accepted as necessary) is NOT necessary! Ideas have consequences.
@ Ammon, you make some interesting points. Your explanation of that scripture is the best I have read. I think, though that assuming entrepreneurship will result in wealth is a faulty conclusion. This is not a given. Besides, it leaves out many of the provided ways to express that entrepreneurship, such as volunteering. So, while the accumulation of personal wealth sounds like a good answer, I doubt it is the answer, or at least the whole answer. Plus, you know that your answer will just elicit another why question from me: Why would a person’s accumulation of wealth through entrepreneurship help ward off the coming aristocracy? And why not wealth accumulated through a high-paid E-quadrant job?
“Why” is a good question. The answer is simple: to be a successful entrepreneur, one must learn and develop the skills of innovation, initiative, ingenuity, tenacity, frugality, resiliency and leadership. It turns out that these are exactly the same skills needed by free citizens.
These can be developed by pioneering, frontier exploring (assuming there is a true frontier like there was in colonial America), and independent business ownership. There are few employee jobs that require this specific skill set–there are a few, like military. Entrepreneurship always requires these skills to succeed.
So, yes, entrepreneurship naturally trains people to be the kind of citizens who create and maintain free society. Without such people (who have these skills highly developed), freedom wanes.
Note that mere self-employment doesn’t bring these skills. The self-employed person has to earn real success, which requires these skills in abundance.
As for percentage, it’s been different in history, but always at least 10%.
thanks for you note,
oliver
@Jason:
I apologize if I gave the impression that I believed that entrepreneurialism is for creating wealth and that is the solution for aristocracy. While that is more of a possibility under the freedom and responsibility of an entrepreneur, material wealth is by no means guaranteed by being an entrepreneur.
The benefits of entrepreneurialism are exactly what Dr DeMille explained, and I tried to explainun successfully, the character traits gained. It is these qualities developed best through process of becoming an entrepreneur that will be the best defense against aristocracy.
@ Oliver, thank you for that clarification. @ Ammon, trying to follow you earlier today regarding the scripture, I missed the thesis statement of the following paragraph where you wrote, “Because of the things learned through the process of starting something and becoming a leader…” After rereading your original response, I see that you meant more than wealth.
Great writeup. Unfortunately the original story that makes the point of the “inequality of income” makes no attempt to provide any real solution. Thank you Oliver for giving what he should have provided. Then again, most folks think the solution is something other than their own work and efforts.
Oliver,
I just got around to reading your article here and I have a few thoughts I’d like to share and I’m interested in your feedback. I’m a big fan of sales, network marketing, and self-employment. Sales can be a very high paying line of work to be in, even at entry level if you’re good at it. And I agree with the trivium that rhetoric, sales, and persuasion is an important thing to learn. One of the things that bothers me about many network marketing companies is the multi-level form of paying overrides to salesmen at the many levels and tiers above the salesman who made the sale. It seems to me that the more a man can own his own labor the better, and therefore the smaller the overrides his overlords receive on his commissions (with those overrides going instead to he who made the sale) the better. For a man who wants to own more of his own labor it seems it would be better for him to hire and pay teachers, trainers, and sales-gurus, or read books on the subject to teach and train him in sales and recruiting than to enter into a situation where managers, trainers, and teachers will be placed above him in a manager type position where they will ever after receive a portion of the commissions every time he makes a sale. Such a structure that has overlords receiving overrides on sales made by those laboring beneath them strikes me as a form more in congruence with aristocracy than with freedom and independence.
Exploiting, or rather making use of other men’s labor is a very effective way to riches. But isn’t this type of structure, as is found in many multi-level payscale structures, a type of aristocracy in and of itself and contrary to the idea of self-employment where a man owns his own labor? Is this what Thomas Jefferson envisioned for America: A nation of network marketing companies where a smaller group of individuals profit greatly because they know how to position and set things up in a manner so that when other men labor they get a portion of the fruits of those men’s labors?
And along these lines it seems the more levels a company pays overrides to on sales made, the higher priced the product/services they sell must then become. This hurts the consumer who only wants to buy the product/services but doesn’t want to do the business.
Another thing about many network marketing structures I find myself thinking about and that is that the type of system where in order for one to succeed he must not only be able to sell and recruit but must also be able to effectively manage how he positions recruits in his different downlines is a structure that very often denies the laborer of the fruits of his labor (this of course is actually the point, the reason why it is structured the way it is). Commissions should be based on sales, production rendered, and not on how one manages downline structures of recruits and customers. This gimmick is structured into the pay-scale form for the simple reason that it allows the company to deny profits to sales producers who haven’t quite figured out how to play the game just right. This makes the company very wealthy and allows them to be able to greatly reward those who have figured out how to play the game correctly. Having a few people who make it really big helps the company pitch the dream, and the company is built and made very wealthy on the backs of the masses who make sales here and there but never really figure out how to play the game just right or never achieve the critical mass of sales to where they get paid out much of anything in the way of commissions. The company makes a killing in profits off of these laborers because they never have to pay them very much for their labors.
Apex-Alarm/Vivint (whom for 7 of the last 9 years I have contracted my business out to do sales work for) is an alarm company that has used a type of multi-level sales structure, albeit with a whole lot fewer levels where overrrides are being paid out than most network marketing companies customarily use. Started from the ground up, after only 13 years this company is now worth more than two-billion dollars today. This company was built off of the retroactive pay-scale gimmick. The retroactive pay-scale is a pay-scale where the more you sell the bigger the commissions become on all past, present, and future sales — but keep in mind that 1 sale from the 70 account sales rep is worth the same to the company as 1 sale from the 200 account sales rep, only that the company pays a whole lot less to acquire the account from the 70 account rep than it does in acquiring the one from the 200 account rep. Sales recruiters for Apex/Vivint show the retroactive pay-scale to potential recruits and sell them on a vision that most of them will never be able to reach, a vision of achieving massive sales production and being rewarded with the higher retroactive rate commissions that go with the higher levels of sales production. Then they reward the big producers handsomely, often beyond what they’re worth (but then again *hahaha* they actually are worth it because these few individuals–and I was among these top sales producers–can then be used as poster boy examples of success to sell new batches of poor suckers on the vision that they can and will be able to do it too *hahaha*[although it’s really not funny].) In other words they pay out the big producers with big rewards while denying the lower producers (lower mostly only because the bar is set so high) of much of the fruit of their labors. It is simply a maneuver to deny the laborer of much of the fruit of his labor. And you see, it is on the backs of this much larger group (the lower producers) that they built the company into what it is today and how they still continue to make lucrative profits. But it’s all fair because that was the name of the game and those self-employed contractors knew how it worked when they signed up to perform sales for the company, right?
(Note: A friend of mine ditched this retroactive pay-scale model when he started up his own alarm company a few years ago and decided to pay his laborers a fair and set-priced commission for every sale they make. His little alarm company seems to be doing very well, but I don’t expect his company to swell to the size of a Vivint in such a short amount of time as Vivint did because he is trying to not deny his laborers the fruit of their labor. But then again, maybe success shouldn’t be measured off of the size of one’s organization but rather on how well it promotes freedom, independence, and fairness?)
I understand that there are some tremendous advantages to multi-level sales commission pay structures–one being that they help recruit those persons most ambitious to make a lot of money–but they seem to me, as I said earlier, to be more in agreement with aristocratic forms than they do with the forms of independence. To put it bluntly, multi-level-sales-commission-structures, and other business forms that leverage other men’s labors and then deny them much of the fruit of their labors (as in the examples I have given of the retroactive pay-scale horseshit and 2-3 leg downlines) strikes me as an effective Babylonian business model, but not one worthy or fit for Zion.
Thank you Robby. That was one of the best arguments against multi-level marketing structures I have ever read. That said, I think the LIFE multi-level company has one of the better pay structures.
I wonder if the pay structure can be set up to foster the synergistic teamwork required to multiply efforts and support in such a way that the production is worth it to the middleman and the lowest echelon. This ought to be objectively broken down for the LIFE company. It would go a long way if they could stand up to the strong scrutiny of Robby.
I’m not yet sold on the model for the very reason Robby outlined above. We live in a world where hierarchical structures are everywhere and aristocracy is everywhere. The gospel of Jesus Christ is the truly selfless model that I can stand by as the measuring stick for pure entrepreneurship and freedom. We have to each make our own choices as to whom we will support and what we receive in return. I’m confident that it is not the same for everyone.
Still, it does seem like a pretty airtight case that an aristocratic structure is at the core of multilevel organizations. Does the multilevel structure foster natural and good aristocracy? Possibly, but at this juncture of my life and understanding, I think not, at least not on the whole.
@Robby, I realize you are looking for a response from Oliver, and I’m confident that his response will be more along the lines of what you’re looking for, but for my own benefit I would like a stab at an answer, if you’ll give me that indulgence.
I think this mostly hinges on a difference in understanding of the terms exploitation and aristocracy.
The definition of exploitation that you are using above (using other people’s efforts) would apply to any employee/employer relationship, but also has been used to describe free enterprise, and would be accurate of any relationship where there is a heirarchy of authority- including almost all church organizations I can think of. I’m sure this is not your intent so I suggest a slightly different definition: Exploitation is the coerced or deceptive consumption of other people’s resources.
The problem with aristocracy is not that some have more than others. In any society where some perform better or more effectively / efficiently than others there will be a situation where some have that which is more than others. The problem of an aristocracy is that some are limited in their ability to achieve by artificial, or socially imposed limitations. In my faith’s core books (with your reference to Zion, I presume we share the same core books), there is a reference that says, “And the Lord called his people Zion, because they were of one heart and one mind, and dwelt in righteousness; and there was no poor among them.” I like to point out that it doesn’t say, “… and there was no rich among them.”
These two concepts (exploitation and aristocracy) are not unique to MLM/Network marketing. They are also not a matter of business structure, but a matter of personal character of those in leadership positions. With morality and virtue, they are irrelevant. Without morality and virtue they are unavoidable.
Take a look at any other business structure. They are every bit as structured to promote aristocracy and exploitation, if not more so than any MLM/Network marketing business – definitely more so than the structure of the TEAM approach that is promoted in the culture and supported by the compensation plan of The LIFE Leadership business.
If an artificial and exploitative aristocracy is going to happen within a community or society because of the character of those involved, the structure becomes irrelevant. But in something like an MLM/Network marketing structure where participation and activity is completely voluntary, these negatives will quickly tend toward disintegration of that society/community. While a natural and good aristocracy will flourish on the compensation based on performance and production which is inherent in the Networking structure – especially with the LIFE Leadership company.
@Allen, If you are looking for a reason to refrain from joining a network marketing company, you will have no difficulty finding one. Likewise if you are looking for a reason to believe in one and be successful, you will find it just as easy – in fact in order to succeed it is essential that you have a reason to do so. Mere experimentation or “testing the waters” will not lead you to success. Network marketing is not for everyone. To be long-term successful, it requires that you have a clear vision of what you want, are humble enough to change yourself, stretch your comfort zone, learn to relate and love people, become a true leader that people voluntarily follow, and that you have the character to avoid exploiting those who choose to follow you. This is not dependent on the business model or structure.
I suggest you must also clarify the difference between a natural aristocracy and a political aristocracy! Political aristocracy uses coercion and is always a violation of the Golden Rule.
Leonard Read discusses this in his book, The Coming Aristocracy. A natural aristocracy is focused on the pursuit of excellence.
Ammon, I actually was using the word exploitation in the broader sense as you said, “using other people’s efforts,” and not only in the narrower defined sense of “coerced or deceptive consumption of other people’s resources.” If Thomas Jefferson envisioned a nation made up of mostly independents then doesn’t that mean one mostly made up of self-employed entrepreneurs and few employees as opposed to a nation of entrepreneurs building vast organizations hiring many employees? Wouldn’t it be better for men if they could enjoy the full fruits of their labor rather than having to share them with an employer, or even somebody in an upline? That being said I’m not opposed to hiring labor, or employing out one’s own labor if the wages or commissions are fair and such that they do not take an unfair or extreme advantage over the laborer. It seems to me though usually better if this situation can be avoided as much as possible and an encouragement made more towards self-employment and proprietorship. I guess I just imagine that in Thomas Jefferson’s vision he saw not so much in the way of entrepreneurs with businesses hiring people spread out across the land, but rather proprietorships, self-employed business minded people who own and enjoy the full fruits of their own labor and are not maneuvered and manipulated at the whims of an employer, manager, or master. (Though I must admit that it sometimes strikes me as a little weird talking about Jefferson’s vision when you look at his own plantation and all his own slaves and hired workers. I hope I have the courage to ask him about this if I ever get the chance to meet him in the next world.)
Another thing Ammon, you made a comment that if there is aristocracy in a society because of the lack of character of those involved that the structure becomes irrelevant. I disagree with this. It seems to me that structure almost always play a huge role in casting nuance and important differences, even in a society lacking morals. And just because you can set up an aristocratic structure within a free society and because it flourishes that you call it a natural aristocracy and say, “Well people are free to choose and don’t have to join it,” (and by the way, you are right—people are free and don’t have to join it) it still doesn’t mean though that the person who designed the structure isn’t still a jack-ass.
Allen, I really like what you said about “wonder[ing] if the pay structure can be set up to foster the synergistic teamwork required to multiply efforts and support in such a way that the production is worth it to the middleman and the lowest echelon.” I really feel like you understand what I was saying and I appreciate that. I want to understand more and I’m hoping someone can stand up to the challenge of showing me a model that can be very fruitful at the same time without violating principles as taught in the scriptures and by the Spirit of Freedom.
Robby,
Thank you so much for engaging in this topic. I think it is an important one and I value your point of view. It is apparent that you have spent a lot of time thinking about this and I appreciate the way that you are stretching my thinking and challenging my assumptions.
I probably misspoke when I said that structure (or form) becomes irrelevant with lack of morals. Form is not irrelevant, it is just less important than individual character. Forms are important artificial checks on corruption and exploitation. However, as with any contract, they are only as good as the character and integrity of people involved – either to enforce or respect the form.
Likewise forms can be an excellent enabler of someone determined to succeed with integrity and character, but a bad form is never an insurmountable obstacle to a determined mind.
I hope you don’t mind and are not offended, but am going to challenge you on just a couple of things.
First – please define “jack-ass” in objective terms. Then describe how your use applies to the discussion we’re having. 🙂 j/k
On a serious note, another couple of terms that I would like defined:
1. fair wages or commissions
2. taking unfair or extreme advantage
Who gets to decide what is fair or unfair, and what defines “extreme” advantage. Is taking advantage of somebody to any level acceptable as long as it’s not “extreme?” At what point does the taking advantage of someone else become extreme?
The reason I was giving a different definition of exploitation is because, using your definition (using other people’s efforts), parents exploit their children when they have them do chores, I exploit my neighbor if I ask them to borrow a cup of milk, and children are exploiting their parents until they are independent. I could be mistaken, but I don’t think that is what you were saying you have a problem with. I feel that these things are part of a healthy society, and I believe you would agree with me. Or did you mean that I should give fair wages and commissions to my children for doing the dishes, based on what they consider to be fair? 🙂
Yes, there is a dictionary definition for exploitation which would be accurate in each of these situations, but because exploitation is generally a pejorative in our society, I thought a different definition would be more appropriate and avoid confusion.
Ammon,
Trying to define what is fair, just, reasonable, or extreme can sometimes be difficult, because what may seem fair or reasonable to one person may seem unfair to another. Often the difficulty in this lack of agreement is because at least one of the two parties doesn’t exactly know how the business they are involved in works, or the difficulty could lie in that at least one of the two parties is not truly being honest.
It seems to me in a situation where both people are being honest, both have a good understanding of the ins and outs of how things work in the business they are involved in, and neither party is dependent upon the other for it’s livelihood, then it seems that the chances would become higher for a fair arrangement to be arrived at.
I think you’re gonna have to let the Spirit of the Lord be your guide on this one. But just because I may not be able to define a clear cut definition of “fair wages” or “extreme advantage” doesn’t mean that such things don’t exist.
Where is Oliver on this topic? How come he doesn’t respond to a direct challenge made against a part of the conclusion he made in his article?
Oliver! I want you to defend your position or change your mind about it! And after you respond you can go ahead and delete this comment. 🙂
What if “fair” is defined as anything that is agreed upon and non-coercive?
You’ve gotta know that ain’t true Kris.
Robby,
OK, so to bring it back to the topic, are you saying that in network marketing one of these two scenarios is always taking place:1. at least one of either the person enrolling or the person being enrolled is lacking in understanding of the essentials of the agreement or … 2. at least one of the person enrolling or the person being enrolled is not being truly honest?
As far as where Oliver is: I believe he is actively engaged in many worthwhile things. My experience has been that if he feels he has something valuable to add to the discussion, that will edify all those involved, he will reply; but he is generally not in the business of answering every individual direct challenge to his conclusions. I’m sure you know that there are many people who challenge his conclusions and if he tried to answer them all individually, he would not be able to spend as much time as he should on writing and expanding his circle of influence. My guess would be that his best response will come in the form of another article that addresses the most frequent challenges he sees. But that’s just my guess. 🙂
Kris, that is almost my definition. I would just add, anything that does not involve deception or coercion, and is agreed upon.
Ammon,
I said neither of the two things about network marketing that you just asked me about. I simply called most network marketing, or sales structures, aristocratic models designed for the cheap acquisition of labor from many. I also said they are systems designed for some to benefit greatly off of the labor of others, along with the request to consider that a nation made up mostly of independents is one where most of the people are self-employed and enjoying the full fruits of their own labor without somebody above them getting a small cut of an override every time they make a sale, thereby allowing for some to get rich off of the backs of other men’s labors. I called this type of form as one bad for freedom and more aligned with aristocracy than it does with freedom.
There are some good things which one must develop in order to succeed in sales, such as ambition, the ability to take initiative, tenacity, hard work, good communication skills, the ability to overcome others’ objections, and the ability to lead people to make decisions (of course many of these same things are required in order to succeed at most anything in life). And a move to step more towards self-employment seems to me a step in the right direction. But the aristocratic forms of most network marketing companies make them difficult to endorse.
Ammon, For me, coercion is anything involving force or fraud (which is the deception piece)
Robby, why don’t you think that is true?
Robby,
I started a reply, but then it occurred to me that I get the feeling that I am coming across as attacking your point of view. This is absolutely my responsibility and I apologize for my failure to communicate effectively.
It is apparent to me that I have not been very effective at communicating my sincere desire to understand your point of view, and have an honest, open dialog about truth. I value the relationship more than making any specific point, which if you feel I am attacking you is likely to be lost anyway, so I will refrain from further comment and just follow the discussion.
One last comment, I promise it’s my last.
Robby and Allen,
Orrin Woodward gives an excellent explanation here of how to fix the problems with network marketing that you speak of:
http://orrinwoodwardblog.com/whistleblower-to-reformer/
Ammon,
If you were attacking, I didn’t know. Attack away. I’ve wanted somebody to make a direct head-on attack against my argument or show me wherein I am wrong in it. That’s the big part of the reason why I argue: to make it so that my argument may be attacked, thereby allowing me new ways of seeing things. I constantly am seeking to see things in new lights, with fresh views, from different vantage points. How else do I do that unless someone attacks my views or helps me to see in a new way? I constantly challenge my own beliefs and views, pushing myself to look at things from different angles, in different lights, in different ways. But sometimes it seems you can only go so far doing this on your own and need contact with an outside influence in order to help one see with a fresh view. Again, the big part of the reason behind why I argue is so that my arguments may be attacked. If you were thinking that I might be one of those who gets my feelings hurt by your attacking, destroying, and demolishing my argument then think again. If you can crush my argument then I will give you much thanks for helping me see more clearly with a new view. So I encourage you and others to challenge my views and to let me likewise challenge your own. And I hope you likewise won’t be offended if I attack anything you say that appears to be wrong to me.
I feel that my original argument (that multi-level marketing structures are usually an aristocratic type of form) hasn’t even really been attacked head-on here though, and this has become somewhat demoralizing to me because it means little for me to gain from this conversation, and for this reason I am growing weary now it.
weary now of it.
Robby, I am glad you have not been offended. Relationships is my primary concern. I respect you and wild never want to give the impression otherwise. Since I now have your permission to tear your argument apart, I feel no compunctions.
I have been trying to address your concern, except you are not cooperating by helping me understand your point of view. If you would kindly address the questions I asked, then I could continue to address your concerns about the network marketing model.
So you don’t have to search through my previous comments, here are the questions I would like you to answer:
What specifically is wrong with an aristocratic model, in your point of view?
How do you determine what is fair for everybody all the time?
How is the networking model less aristocratic than the corporate business model or the paternal family structure?
We’re slammed with family needs right now (our disabled son had a major surgery, and we’ve been traveling back and forth to SLC half the month), so I haven’t even apprised Oliver of the dialog going on here. I’ll comment on my own account, though.
I cannot think of a business or business genre that does not compensate the major, founding risk-takers more than those who follow after them in the model they create. Big corporations, small franchises, mom-and-pop shops, either create no profit to speak of at all, or when they do, compensate on a reverse pyramid model. Do you actually have a problem with that in principle? I’m thinking, if I understand you correctly, that you do not. More on this later.
But name me a business model that is more democratic, with more opportunity for anyone who engages with it to build wealth to the level of their commitment and engagement than network marketing. Unless it’s a totally wicked scheme or a plain awful business model, or the product just plain stinks (as in, you’re only selling the business opportunity of overrides on recruitment, and there’s no actual value being transmitted with the product), network marketing as a type offers more opportunity with less risk and less capital outlay than pretty much anything out there.
Now back to the real problem, which you hinted at: freedom needs backing, and by and large, those who care are in the rat race chasing the dollar without much prerogative to do differently. Where is the opportunity for them to leave the rat race? For many, MLM is virtually the only reasonable solution. Not for all, and thank heaven there are many who have other personal dreams and causes, and other means to fund them. But these individuals are too few, and their wealth not nearly significant enough to make all the difference. Plus, many (if not most) entrepreneurial ventures do not leave the proprietor with more discretionary time and money – but rather, less.
The reason I (and again, I speak for me, although I don’t think Oliver would contradict me)…the reason I like the LIFE model (which I am not a member of) is manifold. 1) their operating budget is the lowest of any MLM I know of — 10%, as opposed to 30% or 50% or even (heaven help us) 70%. 90% of revenue is distributed in the downline. Simply unheard of. 2) The people at the top make their money in exactly the same way as the people at the bottom. In fact, if I do not misstate, there are founders who make less than others in their downlines because the downline individuals have more actual productivity in working on the business, while the founders are also working in the business (administratively) 3) The business structure of LIFE is such that successful members are specifically incentivized to leverage the success of others, in a “team” approach, and the culture of the company is highly focused on mentoring and building the individual members. 4) The product is the most relevant and powerful that I know of for moving the cause of liberty. In fact, it has 2 products: the subscription materials, and the individuals who are growing and learning and becoming independents.
Sorry for your frustration at Oliver’s silence. My bad. We have to juggle our priorities, and right now there’s a lot on our plates.
Thank you, Rachel for your response. I know from all to recent experience how stressful having a child in the hospital can be. I hope there are no major complications.
I new that either you or Oliver would have given a much more eloquent response than I have done, and you didn’t disappoint.