A prominent advocate of multi-level marketing and the Direct Selling Association, Dr. Lasdwun N. Luzes, has spoken out against a recent consumer conference that critically examined multi-level marketing. Dr. Luzes called the conference “outdated, anti-business and un-American.”
The virtual conference, April 30-May 1, attracted more than a thousand registrants from 40 countries. It was organized by consumer protection advocates, expert witnesses, economists and attorneys. It included journalists, academics and state and federal regulators from the USA, Canada, Ireland and Italy as presenters. The keynote speaker was Noah Joshua Phillips, a U. S. Federal Trade Commissioner.
Dr. Luzes, is the author of the controversial booklet, In Defense of the Pyramid Scheme. The work was extensively referenced by MLM attorneys in an MLM-related court deposition. A description of the booklet on Amazon.com reads, “This extraordinary booklet is the most comprehensive defense of the multi-level marketing (MLM) industry ever published.” Dr. Luzes’ CV lists him as a “DSEF Fellow”, a group of academics who receive grants and speaking and consulting fees for promoting MLM. A popular speaker at MLM meetings and a lobbyist for the direct selling industry, Dr. Luzes is known for publicly stating views and opinions that industry insiders only discuss behind closed doors.
Dr. Luzes attacked some conference presenters for negatively characterizing MLM as a “pyramid scheme,” calling the criticism “outdated.” Quoting from his booklet, Dr. Luzes noted, “Pyramid schemes are all around us, operating in plain sight, as businesses.” He pointed to the spectacular rise in Bitcoins and other crypto currencies, now valued at over $2 trillion. Dr. Luzes challenges the illegality of “robbing Peter to pay Paul”, saying it is a “a basic principle of a free market that one person’s robbery is another person’s sale.”
Some analysts believe Dr. Luzes’ most significant contribution is the “endless chain” economic theory. It holds that opportunity is immeasurable. Since MLM’s actual product is opportunity, MLM distributorships can be continuously resold ad infinitum and the MLM recruiting chain can be “endless.”
Indicating his prominent role as a thought-leader in the MLM industry, Dr. Luzes is the first MLM spokesman to publicly respond to the conference’s critiques. The only previous response had been from the editor of Social Selling News, who characterized the conference as “caustic”, signaling to Dr. Luzes to speak out on behalf of MLM.
He ridiculed as “anti-business” the speakers who cited data showing near total consumer losses among MLM recruits. Dr. Luzes countered that the loss rates among MLM participants and the extreme money transfer to owners and a few top recruiters align with general economic trends. He cited a recent study showing that the 400 richest people in America own more than the 150 million adults in the bottom 60 percent.
He characterized the conference discussion of deceptive income and product claims also as “anti-business bias.” In his booklet, Dr. Luzes argued that deception in MLM is no different from what is common in marketing and advertising. “Deception is our greatest economic stimulus,” he declared.
Regarding “undue influence”, cult persuasion and brainwashing in MLM, which were also discussed at the conference, Dr. Luzes called them “marketing techniques” and praised their effectiveness for capturing new demographics for MLMs. Among those he cited: college kids with enormous education debt but little chance for good jobs, financially strapped young women and mothers, undocumented immigrants who cannot legally get jobs, millions who cannot afford to buy a home or pay current high rents, millions more working full time but still qualifying for food stamps, public sector workers whose pensions and job tenure are disappearing, and elderly facing medical, pharmaceutical and long term care costs.
Dr. Luzes stated that multi-level marketing is the last area of the economy that fosters faith in the American Dream. The conference critique of MLM, therefore, is “un-American,” he charged.