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When does it become a pyramid?

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This is fascinating.

https://www.huffpost.com/entry/why-did-kamala-harris-let-herbalife-off-the-hook_n_5c8fab16e4b03e83bdc39a37

I will be curious to see how far Kamala Harris gets within the Democratic Primary campaign and, as her campaign proceeds, how much of an impediment her involvement with Herbalife (specifically with a husband-wife lobbying team both of whom did work for Herbalife) will be.

There is an ethnic issue here: Herbalife draws its sales force, aka its sucker supply, largely from the Hispanic community, and it has come under fire from activists in that space.

But underneath that, there is the notion of what if anything is the difference between a "pyramid scheme" and a legitimate multi-level marketing firm, other than the pull of the lobbyists the latter can hire.

In either case we are talking about operations where some sales people make money by recruiting other sales people, who can do the same, though for appearances sake it is good that they make at least SOME money by selling a real product.

The reason pyramid schemes are illegal is that they are destined to fail, because the supply of potential recruits is finite, and that MOST participants will lose money, for the benefit of the few at the top of the pyramid. They are inherently fraudulent.

The reason some MLM operations are considered legitimate is that they seem to last a long time (like Amway, or Herbalife itself). Their longevity is taken as proof of their sustainability, like the way Zeno's critics proved that motion is possible despite his arguments. They prove their sustainability by sustaining themselves.

An important counter-consideration though: one can certainly devise a management operation that sustains itself over a long period of time by creating a succession of pyramid schemes. Each pyramid would come into existence, grow, collapse, take its victims, only to be followed by another and another. This model explains the continued existence of Amway and Herbalife pretty well.

The simple point with Harris, though, is: when she was California's AG, some of her prosecutors urged her to open an investigation of Herbalife. She ignored their urging, and (not long thereafter) began a campaign for the US Senate with the help of generous donations from the aforementioned lobbyist couple.

At best, that "smells" mmmm ... bad.

Comments

  1. Your link led me to this one, which is also fascinating: https://www.huffpost.com/entry/identical-twins-child-support-brazil_n_5ca66de1e4b0a00f6d3cf303

    From a legal standpoint, the decision seems wrong, because the mother did not prove by a preponderance of the evidence (51%) that either twin was the father. She proved it by only 50% for each. But I nevertheless applaud the decision, because I find it preferable to treat one twin unjustly than to deny the mother and child the money. The twin who is not the father could sue the father, but, unless the father confessed, the twin who is not the father would have to find evidence of the father's "casual fling," such as a phone call between the father and the mother, or an alibi for himself at the time of the fling.

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    Replies
    1. The judge ordered both twins to pay the full amount of child support, not to split it 50-50. That means that the twin who is the father would not lose anything if he confesses now; he would have to continue to pay, but he'd get his brother off the hook. Or perhaps the judge would say that it's too late, and not revise his order, because it would disappoint the mother's expectations. The judge could also consider that, if the father confessed, he'd open himself up to a lawsuit by his brother, and he'd end up paying double child support. That would be fair, as it would be his own fault, because he'd denied his paternity initially.

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