Network Marketing as Cult


A text on Luke Setzer's Attitude Adjustment Website warned its readers that some MLMs reveal disturbing similarities to religious cults. I would find it indeed disturbing, if a specific marketing system would have the potential to turn a rational philosophy into a cult. Therefore, before deciding to consider a specific marketing system, we would have to ensure that there are no practices involved that would contradict Objectivist thought.


Since the topic is somewhat complex, I'd like to avoid misunderstandings by singling out the four separate questions that must not be confused.


1. Does the analysis provided has relevance for the proposed network marketing approach?


2. What makes a group a cult? (Distinguishing the essentials from the non-essentials)


3. Could an Objectivist business network display cult-like elements? (Checklist)


4. What are the normative implications of „cult-like“ and similar concepts?


Okay, now let's go through each of the four questions and answer them as objectively as possible:






Luke Setzer made a valuable attempt to protect us from the damage MLMs are known to be able to inflict on naïve and unsuspecting individuals. These problems are real and they should not be underestimated. However, by assuming that the question at stake was whether Objectivism should be sold by a conventional MLM, is doing us a disservice in our attempt to win the war of cultures that is now beginning to rage around the globe. I think that I wrote already to this list, that a network marketing approach is in no way limited to the structured direct sales organizations, which are usually responsible for the somewhat murky image of MLMs:


Franchising, for example, is a kind of network marketing system too. We are now familiar with franchising systems for decades and the majority of the players are solid and profitable companies with respectable products and services. So when going through the provided „cult checklist,“ one should have rather companies like McDonalds and other well known names in mind instead of pyramid schemes who are peddling essentially worthless products. Conventional MLMs are stretching the commissions for a sold product or service over more then six or seven distributor levels, which is IMO a tremendous cost factor that can and should be avoided. On the other hand, they are known to grow very fast unlike conventional businesses. I am convinced that rewarding distributors of Objectivist educational materials for the acquisition of other distributors in a reasonable way, for example with a maximum of two or three levels, will do more good then any possible harm that may come with it. Remember that the product is Objectivism and that Objectivist services (seminars, coachings, etc.) are by their very nature pro-rationality and anti-emotionalism.


As you see, it would be easy to dismiss the provided MLM specific answers as irrelevant for the evaluation of a network marketing approach as such. But there are interesting points regarding cults that I'd like to go into nonetheless.






Some anti-cult websites and books provide valuable checklists to identify cult-like elements, and I suggest reading them. They offer helpful hints for determining whether a group might be a cult. Alas, we must rely on the epistemology of the authors of such lists, who often have a Christian background. Therefore, we should ask first, What is the ESSENCE of a group that justly deserves to be called a „cult“?


The only essential characteristic that I could determine, is that a genuine cult is held together by the ~faith~ in the statements of a (real) person or a personified power! Instead of comprehending for oneself the logic and factual correspondence with reality, in a cult the group's doctrines are uncritically accepted as „true“ by an act of will. Empirical fact-checking and logical reasoning are frequently discouraged by such groups. This is why a philosophy that affirms reality -- i.e. objective and non-contradictory facts -- as the one and only authoritative source of knowledge, does not deserve to be called a „cult.“


This, and only this, is the essence of a „cult.“ We are implicitly warned by the authors of the check-list in question, that the single items are of a non-essential nature: They write on „If you check many of these items, and particularly if you check most of them, you might consider examining the group more closely. Keep in mind that this checklist is meant to stimulate thought, not 'diagnose' groups.“ To be taken seriously, not just one or two of these items must be affirmed, but the vast majority of them, and even in this case, so they say, they would not substitute a rational diagnosis that we must undertake ourselves.






Because the comments given for each „cult characteristic“ on the Attitude Adjustment page is regarding conventional MLMs only, we must go through it anew -- this time with the proposed Objectivist franchising system for educational materials in mind.


1. „The group is focused on a living leader to whom members seem to display excessively zealous, unquestioning commitment.“


=> Genuine Objectivists are focused on reality only. In a business setting, it comes with the job that oftentimes a superior must be consulted and worked with according to the contract of employment. In a free society, I see neither the possibility nor the necessity for abolishing this principle, because the division of labor is essential to making efficiency and financial prosperity possible. While Objectivists have the potential to be committed and highly motivated professionals in their field, they will never be unthinking and obedient robots. An Objectivist company will fire those who are.


2. „The group is preoccupied with bringing in new members.“


=> Every business is preoccupied with bringing in new customers, and justly so. Eliminate a company's sales department, and it will go bankrupt within a week.


3. „The group is preoccupied with making money.“


=> Every business is preoccupied with making profits, and justly so. Good businessmen are no altruists.


4. „Questioning, doubt, and dissent are discouraged or even punished.“


=> By the very nature of the educational materials that we will sell, rationality will be encouraged in all fields. Questioning, doubt and dissent will only be evaluated on the basis whether its results will generate additional values for the bottom-line of the company. A questioning and doubting employee might be the source of increased rationality within the company, and must therefore be rewarded. On the other hand, an employee who's frequent dissents produce nothing but costs, is a burden and must be fired. That's common business practice.


5. „Mind-numbing techniques (such as meditation, chanting, speaking in tongues, denunciation sessions, debilitating work routines) are used to suppress doubts about the group and its leader(s).“


=> In an Objectivist company, there will be only focus-increasing techniques and rationality-enhancing coaching sessions. Intelligence and awareness are too high values for a modern company to be suppressed. We are not a religion.


6. „The leadership dictates sometimes in great detail how members should think, act, and feel (for example: members must get permission from leaders to date, change jobs, get married; leaders may prescribe what types of clothes to wear, where to live, how to discipline children, and so forth).“


=> Businesses usually have developed certain practices that are proven to be economically efficient, and of course, employees should implement them. If they want to invent new business practices, they are free to do so as long as they are responsible for the financial detriments that may result from their implementation. A strong corporate identity (CI) is known to produce valuable effects for the employees and their company alike. On the other hand, there is no need for prescribing or forbidding practices that have no effect on the bottom-line.


7. „The group is elitist, claiming a special, exalted status for itself, its leader(s), and members (for example: the leader is considered the Messiah or an avatar; the group and/or the leader has a special mission to save humanity).“


=> If Objectivism is the only philosophy which takes a principled stand against stupidity (faith and irrationality) and the initiation of force, then Objectivism is mankind's great and only chance to eliminate insanity and crime on a grand scale. In my opinion, that makes each Objectivist into something special. We are indeed the vanguard of a second renaissance, and I see nothing wrong with that.


8. „The group has a polarized us- versus-them mentality, which causes conflict with the wider society.“


=> To judge is to think. Whoever wants us to give that up, is indeed one of the bad guys. Facts are values, and an Objectivist will keep that always in mind when it comes to the evaluation of other people or groups. Either they are good for us, or they are bad for us. Neither justice nor life are possible without the guidance of our mind.


9. „The group's leader is not accountable to any authorities (as are, for example, military commanders and ministers, priests, monks, and rabbis of mainstream denominations).“


=> An autonomous individual (i.e. an Objectivist) ultimately is only accountable to himself. In a social context, this may include keeping promises and fulfilling contracts, but the ultimate point of reference is always one's own mind. Regardless of ones position in the hierarchical structure, this applies with no exception to everybody inside (and outside) the company.


10. „The group teaches or implies that its supposedly exalted ends justify means that members would have considered unethical before joining the group (for example: collecting money for bogus charities).“


=> Generally speaking, the ends always must justify their means. There is either an economical relation of virtues (means) and resulting values (ends), or there is none. The author seems to imply, that one could never change ones views of what means are ethical by thinking rationally. Learning is, like erring, a part of life -- this involves rethinking one's ethics when the situation indicates that this is necessary.


11. „The leadership induces guilt feelings in members in order to control them.“


=> Like all emotions, guilt can be either rational or irrational, but in an Objectivist company, everybody produces his own emotions by using his own rational faculty. If the management is forced to think for an employee, the result will be diminished productivity. In this case, it may be considered to replace the individual in question.


12. „Members' subservience to the group causes them to cut ties with family and friends, and to give up personal goals and activities that were of interest before joining the group.“


=> An Objectivist company will encourage its employees to ~strengthen~ the ties with ones family, because it is necessary for the flourishing of a biological entity. However, this doesn't mean abolishing justice just because one is a relative. Regarding the goals and activities one had in his past, the same answer applies as that which is given in point #10 (learning in the area of ethics). It is a logical fallacy to think that everything is automatically good just because it is old -- or new, for that case. Everything must be evaluated objectively regardless of its age, but we must take the fact in account, that a rational person has the ~tendency~ to learn and to improve with time.


13. „Members are expected to devote inordinate amounts of time to the group.“


=> This is like saying „investors are expected to devote inordinate amounts of money.“ Without considering how large the return is, it is absolutely impossible to say whether the investment is good or not. Like many other in this list, this item is clearly acontextual.


14. „Members are encouraged or required to live and/or socialize only with other group members.“


=> Socializing or living with certain people can be hell, while doing so with others is a pleasure. It is only natural to form communities with like-minded people while avoiding people we have nothing in common besides being members of the human race. Our rational faculty must help us in the evaluation of other people and groups, and, as in any other field, we should act here according to our value judgments too. Either somebody is good for me and my goals, or he isn't, and only this should determine how close I want to be to him or her.


Based on the list that the authors created, it seems that ~every~ rational business system or way of life could be called „cult-like.“ And -- considering what the identified essence of a cult is -- this doesn't concern me the least. Why? Because being „cult-like“ according to the author's listing of non-essentials, means in no way that the group in question is a ~genuine~ cult. I already explained what constitutes a genuine cult in topic #2 (The Essence of A Cult). It is important to reject a label when the descriptive elements of the concept are not corresponding with reality -- for example, I would never accept the label „cult“ for Objectivism, and I would urge everybody to fight such a false characterization. But even if the descriptive elements of a „negative“ concept are applicable to a group one belongs to, there are reasons for not being so easily intimidated by such labels. If you're wondering why, read on.






We must keep in mind, that all descriptive concepts also are culturally set to have normative implications. Obviously, the normative implication of „cult“ or „cult-like“ in our culture is: „this is something bad for you“ and „you have to stay away from it.“


I am always cautious not to let other peoples good/bad-judgments let invade my mind carried piggyback on the purely descriptive elements of a concept, because all values or disvalues can only be AGENT-RELATIVE. So much we have learned from Ayn Rand.


It is said that Sigmund Freud identified the fact, that civilization started when someone began cursing his enemy instead of using physical force to stop him -- and I'd like to add, that the all-embracing linguistic sublimation of curses is what determines the fabric of a society. Considering the normative signals that unavoidable come with psychological labeling, it is no wonder that it was Freud, the inventor of psychonanlysis, who made this important discovery. You may have noticed these mechanisms at work whenever somebody says to you „you are X“ („a capitalist,“ „a communist,“ „selfish,“ etc.). Statements like these are never only descriptive, they always want to enhance or change certain characteristics of your behavior. If you simply shrug them off without considering to act on the subtle but implicit praise or rebuke, you will se many people become irritated. Experiment in your own mind with substituting for X any kind of characterization, especially moral or psychological characterizations, and imagine how an intellectually independent person would react. Oftentimes it will be something according the lines of „so what?“


The „negative“ but factual characterization of your person may be an expression that this is something which the other person considers to be an undesirable fact, but it says itself nothing about how good or bad this fact is FOR YOU. What may be bad for them, may be good for us, and vice versa. For example, somebody could say that you are „unfair“ -- with the obvious goal of changing this behavior -- but it relies on the assumption, that you have accepted „fairness“ as something that you will practice, because you already evaluated rationally that doing so is „good for you.“ The collectivist mindset is usually programmed by socialization to feel guilt when directly or indirectly cursed, regardless whether this emotion is rationally justified or not. The verbal induction of shame and guilt is a powerful substitute for physical force that informs almost all of our communications in very subtle ways. As an Objectivist you know, that these emotions -- like others -- are not unjustified per se, because they can be equally based on rational evaluations as they can be on irrational ones.


Everyone who has the ambition to live according to his own rationally determined code of morality, must be aware, not to cement unfavorable relations of power by accepting unthinkingly the normative implications of received communication, because the communicator may have (class) interests opposing to your own.


Returning to our main subject, if one says „your philosophy is cult-like,“ he has planed a behavior change for you, which can be positive for you or negative. Depending on your rational evaluations, your answer might be „yes, sure“ and going away, or it may be „no, it's not, and I will logically explain to you why.“ As distinct personalities, we all have different psychological and social needs. So it won't be too surprisingly to discover, that some of us prefer instead of frequent but mindless socializing, senseless, unorganized work, and other conventional ways to await ones death, a life with a fascinating intellectual mission, military discipline and adventures that are always in near sight. I would love it! Some of us are born to be soldiers, and most soldiers are lucky that there is somewhere an army for them where they can fight with like-minded comrades shoulder to shoulder: may it be in business, in philosophy, or in an actual army. Remember the character of Robert Billings in The Wave? He was born to be a soldier. I vividly remember at the end of the movie saying to myself, „What a shame! They destroyed everything that gave him a reason to continue living. From now he is without a home.“


I just reread the list of „cult-like“ elements and the answers that are written below them. And I must honestly admit, that if an total commitment to logic, objective facts and rationality is what constitutes a cult, then I'd be proud to be a „cultist.“ When I compare our society at large and Objectivism one with each other, while keeping in mind what the essence of a cult is, then I must say that, by any means, society is an evil cult compared to Objectivism. Remember the characteristics: faith, emotionalism and uncritical acceptance of authority instead of empirical fact-checking and logical reasoning; the group's doctrines are uncritically accepted as „true“ by an act of will. Go now through the list and substitute „group“ with „conventional society,“ „leadership“ with „social institutions“ and „members“ with „the people.“ For me there is no doubt, that society with all its institutions (incl. some families) is the biggest of all cults, and I'd like to see an sociological analysis someday that checks all the characteristics that are now said to constitute a cult. I bet that the result wouldn't be flattering -- for society.






(1) The analysis on the Attitude Adjustment Website is relevant only for conventional MLMs. It is in no way relevant for more sophisticated network marketing approaches, for example franchising. It would have been easy to shrug it off as something totally irrelevant for our cause. (2) The authors of cult-checklists like the one which can be found on the AFF website, usually have a religious background and epistemology, therefore their lists oftentimes contain non-essentials. The only essential characteristic of a cult is its FAITH in the statements of a person or a personified power. A philosophy that encourages its adherents to think over its doctrines for themselves while using logic and empirical fact-checking, can never be a cult if one won't declare objective reality to be a „cult.“ (3) A business network made of Objectivists may display what anti-cult authors consider to be cult-like elements -- like every other rational business or philosophy. (4) Labels like „cult“ carry besides their descriptive elements always the normative agenda of the communicator with them. Knowing this, the responsibility to evaluate the communicated facts rests from now on your shoulders.


FAZIT: Franchising and other reasonable, low-profile systems of network marketing are probably suitable for promoting Objectivism.


Alexander Fürstenberg,