Re: Pyramid Schemes

[dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM)]

Benjamin Grosman <bgrosman@healey.com.au> writes:

> this is all well and good, but what I'd like to know is: do these schemes
> actually work? In theory they same to...

In depends on what you mean by "work". If you're asking whether MMFs result in
substantial amounts of money being sent to the originators, the answer is, I
don't know for sure, but I doubt it very much. (I've never tried it myself but
I interviewed a couple of people who did, for the research I did a few years
ago.) Similar MLM schemes (such as Amway or Herbalife) seem to result in
substantial profits for the owners/folks at the top of the pyramid, and losses
to most people who join later, as the theory would predict. So why do so many
people stay in programs like Amway despite their financial losses?

In my opinion, _all memetic communications work very well not as a scheme for
making money, but in the sense that people in the professions that involve
person-to-person networking (such as public relations, recruiting, real estate
and other sales) use them as a pretext to remind their business contacts of
their existence. E.g. a headhunter might pass on copies of the Craig Shergold
appeal to hundreds of potential recruits, with a note on his letterhead saying
"I'm passing this on on behalf of the dying boy". Moreover he'd probably pass
along photocopies of half a dozen letterheads from the chain of people who
passed the memetic letter along to him. Most recipients reaction can be
summarised as "What a nice person, what a good deed he's doing, do I need a
headhunter now"?

And by the way the reaction of the vast majority of Americans to a MMF snail
letter is "I'm so grateful to the sender for passing along this business /
networking opportunity." :-) which is why they're spread so eagerly by high
school kids in search of popularity.

I'm convinced that the good-luck chain letters (which just ask for the letter
to be passed along, with no money changing hands) and the various MMF variants
and MLM schemes are more about making/maintaining contacts than about money.

Likewise most Amway/Herbalife peddlers lose money but gain the satisfaction of
personal contact with the purchasers (which could be used for something else)
and also the sales experience that they can later use to sell something else.

How would Internet memetics be affected by wider availability of anonymity?
We observe that snail mail anonymity is available now, but is apparently
seldom used for memetics distribution. In the running example the p.r. person
already has the ability to make hundreds of photocopies of the Craig Shergold
letter and to snail-mail them to everyone s/he knows with no return address on
the envelope and the cover letter. I've never come across such behavior, which
is consistent with my belief that the sender is really interested in
distributing his/her letterhead more than in distributing the memetic letter.

When John Doe multi-posts the Craig Shergold's letter to thousands of Usenet
newsgroups (as was done again a few weeks ago), s/he's more interested in
splattering his own name around than in getting postcards/business cards to
the dying boy. (Of course the poster's intent is to be widely seen as someone
doing a good deed on behalf of Craig Shergold; instead he loses his Internet
account and is widely viewed as a clueless spammer. Such is life. :-)

At present someone could (ab)use the remailers to post anonymous Craig Shergold
appeals on Usenet and on various mailing lists. I believe that one of the
reasons why this has never been done (as far as I know) is because this would
deprive the poster of the satisfaction of having his own name splattered all
over the network.

MMFs are a slightly different story because the poster can't get money from the
"downline" without revealing some contact address to send the money to. Out of
curisority, I looked at several different MMF spams that came this way; in many
cases the sender's e-mail address is crudely forged; the money is requested to
be sent to a postal address that's often a P.O.Box; and the name associated
with the postal address is often missing, obviously phoney, or just has the
initials. There's clearly interested in anonymity on the part of MMF posters.