Wednesday, October 4, 2017

MLM and Affirming The Consequent Fallacy

Today's blog post is about a trickier fallacy to identify known as affirming the consequent. This fallacy is effective because it starts with a valid or true statement and then spins that into an erroneous one. Therefore, we have to identify the error in the bridge from the original statement to the conclusion, which is difficult because most people will focus on this part the least. It is also difficult because the abuser of the fallacy may skip the bridge entirely and simply start with a correct statement and then leap to the erred conclusion. If you are unprepared to identify why the conclusion is wrong, then you may be more easily convinced by other faulty logic.

Here is the definition of affirming the consequent fallacy: "It is categorical in nature and, essentially, means reversing an argument, or putting the cart before the horse, meaning reversing or confusing the general category with the specific/sub-category.  Note that in this fallacy the premises/reasons are actually correct or valid; the error is found between the premises and conclusion.  Usually, the error occurs because we incorrectly assume that the Premise was a sufficient condition, when in fact it was only a necessary condition (one of many conditions) necessary to prove the conclusion."

In case that was confusing, let's first understand the difference between a "sufficient condition" and a "necessary condition". A sufficient condition or conditions is made up of necessary conditions which are used to predict the outcome of an event. The necessary conditions, alone, cannot be utilized to predict the outcome of an event because there are other necessary conditions that can affect the outcome. In other words, a necessary condition is a piece of a pie, whereas a sufficient condition is the entire pie.

An example of a sufficient condition: If I score an average of 95% on all of my assessments, then I will receive an A in my class.

An example of a necessary condition: If I don't get a 95% on my final exam, then I won't receive an A in my class.

The main difference between the two examples is the way they are implicated. The first condition assumes every score will add up to 95%, whereas the second example ignores all previous necessary conditions which brought us to the need for a 95% on the final exam.

The difference between the two examples is significant because people will try to use a necessary condition to prove a conclusion, even though the conclusion is created by a much more complex set of conditions. To assume you didn't receive an A in a class because you didn't get a 95% on a final exam could be erroneous because there were other grades that also affected the outcome.

Here is another example of how a necessary condition can be used incorrectly:

My car requires gas to move, therefore any time my car isn't moving it is out of gas. Obviously this is flawed as there are many reasons for why a car stops moving.

MLMs utilize this fallacy as a means to transfer fault from the MLM to the user. An MLM will try to use a necessary condition, such as "hard-work" to indicate whether or not a MLMer is successful. Even though "hard-work" or "effort" may have some correlation to success in MLM, it is far from the only variable to determine the outcome. In fact, most people would argue it has very little do with success in MLM because the actual opportunity for success is extremely low (often less than 1%). The opportunity is also an important necessary condition, again arguably more important than "hard-work", and yet a MLMer may completely leave that out when casting judgment on people that have failed in MLM. To an untrained victim of this faulty logic it may be very persuasive.

A popular example of affirming the consequent used by MLMers is, "In 2-5 years, you can earn residual income", or "In 2-5 years, you can retire from your J-O-B". Unfortunately, much like the "hard-work" example, time is not a sufficient condition for determining success in MLM. Many people have been in MLM for decades and have not retired or earned residual income, and an overwhelming majority of MLMers do not succeed in 2-5 years. Yet, MLMers will continue to repeat this line as though it is an inevitability, an infallible truth, or even a commandment.

It is important to remember that MLMers have a financial bias when it comes to recruitment and will often utilize fallacies, such as affirming the consequent, to achieve their goals and earn an extra dollar. That should be a sufficient condition for understanding why a MLMer says things that you want to hear and can be designed to mislead you into making a poor decision for your financial future.




  1. MLM leaders are quick to take credit for the very small and limited amount of success but they are also quick to place blame on anyone but themselves for the massive amounts of failure.

    Upline will say to trust them as they want you to succeed but they never get held accountable for the results.

    I was told that a function was like a buffet. You take want you need and want and leave the rest. I asked my sponsor how in the world will people know what is needed or not? The response was to take in anything n everything and fill your cup and you can't fail. I thought what bullshit is this, when I was starting to doubt the system.

    1. Joe --

      That's an interesting story. Could you imagine if you went to school and were told to pick and choose what you thought was important and leave out the rest? Why would learning how to be successful in MLM be different? How could anyone that is not an expert in the subject disseminate what is important and what isn't? All of this, as you said is "bullshit".

  2. John - Perhaps a plainer description of what you are describing here, is 'fraud combined with ritualised abuse by closed-logic.'

    'Heads I win tails you lose.'

    Ritual closed-logic is present in all criminogenic cult controlling scenarios, because closed-logic is a universal identifying characteristic of criminogenic cults.

    Whatever (non-existent) future secure Utopian existence is being peddled by cult bosses is always offered as being dependent on the adherents' total obedience to a step-by-step plan to achieve Utopia and blind faith that they will achieve Utopia.

    Thus, when inevitably, the adherents fail to achieve Utopia (no matter how obedient/faithful they have been or how much they have committed - financially, physically, emotionally, etc.), any attempt at complaint can be immediately quashed simply by telling the dissenting adherent that he/she cannot have obeyed/believed totally, worked hard enough, etc., and, therefore, it is entirely his/her own fault.

    'MLM' cults are totalitarian states in microcosm in which victims have been tricked into believing that they are 'Business Owners.' In reality, 'MLM' victims have been made responsible for their controlled activities on behalf of the group, but have received no advantage. In other words the bosses of 'MLM' cultic rackets have acquired all the advantages without any responsibility.

    'MLM' cults operate just like fascist states. The dictators control everything, but they can never be held to account.

    'MLM' cults have survived to date, by tricking their victims into believing that they were entirely responsible for their own financial losses, when these financial losses were actually inevitable by design.

    1. David --

      That is a great way of putting it. They put together as many ways to give themselves the "win" as possible with the rhetoric which does devolve into the "heads I win tails you lose" scenario.

      By having at least one adherent "make it" and become fabulously rich that makes all statistics, all data, all research, and all information invalid in their minds. As long as one person has somehow churned through the "system" and had a positive result, then MLMers can say anything they want and defend their practices because they have an example they can use. This practice of using a ridiculously small sample size to further their agenda is the same reason science has been struggling with credibility for years.

      I still see MLM adherents claiming they are "their own bosses", and they "own their own businesses". This narrative helps feed into the MLMers programming and removes the MLMs responsibility. These people don't even realize they are helping to enforce this bad rhetoric by embracing the dream that they are falsely autonomous. It is a frustratingly sad loop.

    2. John - The quantifiable evidence proves that, whilst they remained under the influence of the pernicious 'MLM' fairy story, chronic 'MLM' adherents have been de facto slaves who actually paid for the privilege of serving their wealthy de facto (temporary) owners.

      Anyone who is really in business and who doesn't keep a detailed balance sheet of every last negative expenditure and all positive revenue, and thus, know exactly what his/her net-profits/losses are, will almost certainly go bankrupt.

      The first common-sense rule for keeping any real business running and in profit, is keep a tight control over your operational costs. Every dollar saved is a dollar earned.

      The 'MLM' fairy story (as peddled since the 1940s) does not include anything 'negative' (such as operational costs). No 'MLM' shill would ever freely-disclose his/her own balance sheet, and reveal the true source of 'MLM' revenue. On the contrary, 'MLM' racketeers constantly tell their de facto slaves that the only way to achieve success is to duplicate their own perfect example, ignore their mounting net-losses and keep paying through the nose for effectively-valueless: publications, recordings, tickets to meetings, etc.

      So-called 'MLM success plans' are, in fact, plans to commit financial suicide - to the exclusive benefit of the racketeers peddling them.

  3. Another true premise false conclusion technique is stating a true premise post the fact, and leaving the conclusion "Duh, what did you expect?". It is such a true premise, and made so obvious, that even complaining that it was not mentioned up front would make any questioning participant sound stupid.

    For example, you sell the idea that anyone can do it, thousands of ordinary folks have, and it's about following a certain proven recipe.

    Then when things don't pan out you say: "Owning a business is not for everyone".

    This is particularly sneaky because this is about stating and using a premise that the MLM defender does not believe in, or at least does not act upon. If MLMs truly believe and consistently preach that business ownership was not for everyone, they would not criticise employees and employers, they would encourage persistent non performers in their ranks to quit, and they would do proper vetting of who they show their plans to.

    Also note this defence is only offered in response to explaining attrition, and never in response to people that have not seen results, but are still in. Those guys get the hard work lecture, or "no get rich quick" instead.

    1. "Owning a business is not for everyone".

      I have always considered the irony of this ritual line to be exquisite, because the complete reverse of it has been a key-element of the fairy story that dozens of 'Amway' copy-cat 'MLM' racketeers have peddled

      Many years ago (before the 'MLM' fairy story was penned), the original 'Direct Selling Association' had rational rules which prevented its member companies from recruiting too many salaried, and non-salaried, sales agents in any particular geographic enclave. This was to give the sales agents a fair chance of finding, and maintaining, enough regular customers in their own territories, to make a good living.

      For obvious reasons, 'MLM' racketeers have never set any rational limits on the numbers of non-salaried 'sales agents' being recruited in any geographical enclave. Indeed, 'MLM' racketeers have pretended that there is absolutely no limit, numerically or geographically, to the pool of potential recruits available to all existing recruits.

      Tellingly, all rational direct selling rules concerning sales agent recruitment limits, were removed from the 'DSA' as this once-legitimate organisation gradually became taken-over by 'MLM' racketeers peddling their non-rational ritual belief system.

    2. Kwaaikat --

      Your are noting a very important point about blanket statements and how faulty they are without proper statistics. In general, when people make a claim involving a large populous, they need some sort of data or the the claim should be viewed as fraudulent. We critical thinkers understand that each person is different, and therefore, describing a mass of people is extremely difficult without rigorous parameters.

      What ends up happening with these blanket statements is, they end up being true only because every statement would technically be true. If I made a statement such as, "Owning a business isn't for everyone", then of course that would be accurate as there must be people working in particular roles to make sure each business functions correctly. It is very rare to have a business that is run by one person and has no staff of any kind, especially if they intend to grow.

      Now, the overlying question is, why do these lines continue to be effective in nullifying people and their doubts? The answer, sadly, is people are prone to accept these statements incorrectly as it has a different meaning than what is literally being stated. This statement, "Owning a business is not for everyone", comes with a ego-driven side message suggesting, "If you own this business, then you are better than the rest of the people that don't". This is the danger, as these people are preying on low self-esteem people and utilizing "love-bombing" and guilt-driving statements to fuel the drive to pour more monies into these scams.

      What can we do to stop this? Teach people to stop thinking with their emotions, and start analyzing these situations rationally. Stop taking what these prolific speakers are saying unquestioningly, and start asking, "Does that make sense?", "Is that relevant?", "Can that apply to everything?". When these simple questions are asked, people will find, they are duped a lot less often.

    3. David --

      That is an interesting note about the DSA, and it isn't surprising that they got away from those previous standards due to an infiltration of MLM leaders at their highest ranks. The fact that the DSA is run by a nearly full MLM staff, suggests why their message has changed drastically from its original premise.

      I was reading an article, I believe on Ethan Vanderbuilt's blog, about "LuLaRoe" and how there was no ability to geographically control an area without other distributors opening shop. It got so bad that, in one apartment building there were at least 3 different distributors all trying to sell their "LuLaRoe" wears. Naturally, with this outrageous amount of supply, and a low-quality product, the demand eventually became 0 and all 3 distributors lost their monies. The overlying question though, how could they allow this overpopulation of distributors to occur? The answer is two-fold, there is no overarching focus on sales to consumers over sales and recruitment to distributors, and they did not teach their distributors a basic understanding of competition in the market.

      This brings me back to the weird McDonald's example people love to make with MLM. They try to suggest that MLM, much like McDonald's, is a franchise opportunity. The biggest problem with this comparison, as it relates to the problem mentioned above is, people don't invest in a McDonald's without a lot of market research. It doesn't matter how popular McDonald's is, if there is one at every block, then obviously some will fail as demand will not be able to meet supply. Yet MLMers continue to peddle this idea that supply/demand isn't a relevant topic in business, and it is somehow all about "duplication". Well, if everyone attempts to "duplicate", then eventually someone will be the last "duplicator", and have nobody else to "duplicate" with involving significant losses.

    4. The original DSA comprised only authentic direct selling companies whose agents mainly sold cheap and cheerful goods directly to the public door to door based entirely on value and demand.

      Ironically, after WWI, these companies got together to protect their image against fly-by-night pedlars offering sub-standard goods and quackery.

      Until WWII, authentic direct selling remained very popualr in the USA. Customers were mainly oridnary housewives, and/or female domestic servants, so the products were aimed at them. The big change in the DSA began to come about during the 1950s, 1960s and 1970s - as car-ownership, and supermarkets expanded and traditional door-to-door selling shrank.

      Today, with the Internet, hypermarkets, etc., authentic door-to-door selling has effectively vanished in the USA, but according to the DSA propaganda, it's bigger than ever.

      BTW, In the past, I had contact with some European journalists who once made a programme about an 'MLM racket. Previously, they had made a programme about franchising, and this is what first gave them insight into the folly of 'MLM'. They had interviewed the owners of profitable McDonald's franchise which then began to lose money, because another McDonalds franchise was suddenly sold in a better position to their's in the close vicinity of it (literally on the other side of the road).

    5. David --

      Do you have a video link to that McDonald's program? I'd like to use it in the future to show the stupidity of "duplication" without market research, and how their wonderful example of McDonald's has had its own growing pains.

  4. McDonald's also sees to it that there aren't two of their franchises on the same block. They make sure that their outlets are evenly and sensibly spaced.

    That's not possible in Amway, where the only thing that matters is recruitment of new down-line. Nobody in Amway stops to think about market saturation, or competition between IBOs for customers. That's largely because the selling of products to non-IBOs is such a minor part of the Amway business. Amway actually prefers self-consumption of products by IBOs. In fact the company has a lot of chickenshit regulations that hinder retail sales.

    1. Anonymous --

      Those are some great points about Amway and its ridiculous policies which go against the 1979 landmark case, FTC vs. Amway, in which Amway was supposed to change their ways. How can they create regulation to hinder sales to retail customers, when they were ordered to sell at least 70% of their products to them? How can they limit the visibility of their products to retail customers when each distributor must have at least 10 retail customers before introducing new "recruits" to the "opportunity"? Clearly they are in violation of the very agreement that kept their scam alive.

      It is infuriating to see Amway defenders on blogs, such as Joecool's and Annabanana's, that Amway isn't about sales. They are brazenly admitting they are involved in pyramid selling, and that they are not adhering to the terms and conditions of the settlement, and yet they continue to go forward, ever day, as though nothing is wrong. The inability of the FTC and the judicial system to hold Amway accountable for their shenanigans further proves how bought and sold they are.

    2. There have been some legal disputes between franchise companies and their franchisees concerning the exact interpretation of territory limitations which are included in most franchise contracts.

      In all cases, these disputes have come about when just one new franchise has encroached on the profitability of an existing one.

      Thus, ay attempt at a comparison between franchisors like McDonalds and 'MLM' front companies is absurd.

      Imagine if McDonalds had signed contracts with around one million franchisees in the UK (population around 65 millions) between 1973 and 2006, but this is how many 'Amway distributor' contracts were signed in the UK during that period.

      A better comparison for 'MLM' rackets, would be the fraud portrayed in Mel Brook's, 'The Producers.'

      For decades, a growing number of 'MLM' racketeers have been peddling never-ending chains of victims infinite shares in the non-existent future profits from essentially the same sure-fire flop.