This post is about “Critical Perspectives on Multilevel Marketing: An Introduction to the Field of Critical MLM Studies,” a book that has just been published by Edward Elgar, a large, international academic publisher. Full disclosure: I am very excited and honored to be one of the contributors to this volume. The subtitle is important: the editors of the book, Deanna Grant-Smith and Claudia Groß, have perceived the emergence of a new, interdisciplinary field, Critical MLM Studies, drawing on sociology, critical management studies, economics, consumer research, and regulatory scholarship.
When I started bringing cases against multilevel marketing companies in the early 1990’s I looked for experts who had experience in analyzing these schemes and explaining them to judges and juries. I could not find any. There were a smattering of papers in marketing publications that touched on MLM, and a few older law review articles had addressed the phenomenon, but there was nobody who could really be considered an “expert” in the field.
This changed in 1997, when two books on MLM were published; “False Profits” by Robert L. Fitzpatrick and “The Network Marketing Game” by Jon M. Taylor, Ph.D. Both Fitzpatrick and Taylor provided valuable insights into the crucial aspects of MLM, including their financial structure and compensation plans as well as the harmful behaviors engaged in by MLM recruiters, who are often the victims of the schemes they are promoting. And incidentally, both became personal friends of mine. But while both of them have been qualified to testify as experts in a number of cases, neither Fitzpatrick nor Taylor had traditional academic positions.
It was not until 2002, with the publication of Peter VanderNat and William Keep’s “Marketing Fraud: An Approach for Differentiating Multilevel Marketing from Pyramid Schemes” in the Journal of Public Policy and Marketing, that MLM began to be the subject of serious, sustained and critical attention by the academy. Since then MLM has attracted the attention of an increasing number of scholars from a variety of fields, including economics, law, marketing, business ethics, sociology, psychology, anthropology and even cultic studies (see the listing of academic books and articles in the resources section of this website). There have also been a number of books in the popular press, including Bridget Read’s “Little Bosses Everywhere,” Jane Marie’s “Selling the Dream” and Emily Lynn Paulson’s “Hey, Hun.” Since 2021, William Keep has led a group that has organized a series of annual conferences on “Multilevel Marketing: The Consumer Protection Challenge,” that bring together academics, regulators, social media content creators and consumer advocates. Since 2022, Deanna Grant-Smith and Claudia Groß (the editors of Critical Perspectives) have organized a series of academic roundtables, involving an international group of scholars who study MLM.
The publication of Critical Perspectives is undoubtedly timely, coming as it does amidst a number of enforcement actions and rulemaking efforts by the Federal Trade Commission, and a growing “anti-MLM” movement on social media, where victims of deceptive MLM scams have been increasingly willing to share their stories and expose the fraud and deception that are endemic in the MLM industry.
The editors succinctly describe the fundamental problem with studying MLM:
… MLM is not merely a quirky retail format or an entrepreneurial niche. It is a system whose economic logics, cultural practices, and regulatory ambiguities create harms that disproportionately affect those with the least capacity to absorb them. Yet despite MLM’s global reach and well-documented risks, scholarly engagement remains fragmented, sporadic, and heavily overshadowed by industry-produced narratives. What is missing is a coherent, critical framework capable of analysing MLM as a complex organisational and socio-economic formation.
In the first chapter of the book Grant-Smith and Groß boldly propose to establish a new field, Critical MLM Studies, and outline the guiding principles of this discipline. For instance, they state that scholars should not blindly accept the MLM industry’s narrative that success or failure is a matter of individual effort rather than the intrinsic design of the MLM system. They note that the MLM industry tightly controls key data and warns that industry-sponsored studies need to be critically analyzed and verified. Finally, they argue for a dual commitment to both rigorous academic analysis as well as engagement with consumer advocacy. I believe they will be successful, and am looking forward to further academic attention to this under-studied field.
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Critical Perspectives is a multi-author work, which analyzes MLM and the harm it causes from a variety of perspectives. To give an idea of the scope and depth of the book, here is a list of the chapters:
Bonnie Patten, Executive Director of truthinadvertising.org
1 Critical MLM Studies: an introduction to the field and its fault lines
Deanna Grant-Smith and Claudia Groß
2 Lawful but awful: how the MLM industry has gained and maintained legitimacy
Claudia Groß and Dirk Vriens
3 Chasing fading rainbows: a brief history of US government efforts to regulate MLM
Douglas M. Brooks
4 Information asymmetry in multilevel marketing: can disclosures and disclaimers help?
Stacie A. Bosley
5 Designed for irresponsibility: how multilevel marketing companies use their organisational design to exploit gaps in the legal system
Claudia Groß, Dirk Vriens and Bettine Wils
6 Cultivating connections: how MLMs recruit and socialise their participants
Claudia Groß and Douglas M. Brooks
7 Belong, believe, and consume: from the prosperity gospel to new age spirituality in one MLM
Melissa Carr
8 Motivation or manipulation? How multilevel marketing uses personal development to attract and retain distributors
Lucas Dixon
9 Femvertising, femwashing, and feminity in multilevel marketing
Máire O Sullivan
10 Hunzoning: how multilevel marketing messaging strategies on Facebook make targeted women feel
Naomi Yanike and Máire O Sullivan
11 From the field to the field: bearing witness and creating change through critical MLM research
Claudia Groß, Deanna Grant-Smith, Douglas M. Brooks, Melissa Carr, Lucas Dixon and Máire O Sullivan
Epilogue: What to do about multilevel marketing? An activist perspective
Robert L. FitzPatrick