Tuesday, February 10, 2009

GKC, Distributism, and Multi-Level Marketing

OK, I need your brain power here to help answer an inbox question. These are the kinds of things I get every day, and normally, I spend 25 hours working out the answers, but today, I'm giving you all a chance to be the experts. So, put some answers in the combox, ok? Thanks.
What do you think GKC would say about a multi-level marketing company? I can't figure out how Distributism applies to something like what my sister, my friend, and my brother-in-law are involved with--an MLM that provides telecommunications services. A grocery store can be distributist even if they don't grow all the food, right? Any insight will be helpful. My Gil-dar [Editors note: I believe this is a brand-newly coined phrase, which is new to me, and for those who don't know what it means, the writer is suggesting that he has a "Gil"bert-Ra"dar" system installed in his brain which rings whenever something either sounds or doesn't sound Chestertonian] is telling me that there's something not right about that kind of work.
Gil-dar. I don't know. I think we should also take a vote on that. Is that a working Chestertonianism like ChesterCon?

Oh, and don't forget to answer the distributism question.


  1. Could use some clarification/definition on MLM. My first thought was something like Amway (ugh... don't get me started).

  2. Hi Gil-dar,

    The norm under a Distributist society would be decentralist businesses, in other words, a society of businesses working under the principle of subsidiarity. The standard would take the form of manufacturer/retailer small businesses, with a sprinkling of retailers who do not produce. I mention a sprinkling for several reasons.

    1. Because any transition towards distributism requires step-by- step increments. Non-producing retailers will be the norm in any first phase towards a Distributist society. Currently, most citizens cannot perform both functions of manufacturer and retailer.
    2. There will be retailers who will sell what must be traded outside of the local community (e.g. where a particular product may be scarce).

    High tech or auto manufacturing, or any other business requiring greater labor, would be cooperative, i.e. worker-owned. We already have model businesses. We have Fr. Jose Maria Arizmendiarrieta's Mondragon Cooperative in Spain or the Italian Confcooperative in Bologna (both of these are neo-distributist, and were started under the influence of the Catholic social encyclicals Rerum Novarum and Quadragesimo Anno). These are perfect examples of medium to large-scale manufacturing.

    Currently the situation is ripe for cooperative businesses, as for years our large-scale manufacturers have outsourced all types of small fabrication, including small parts.

    So in effect, a carpenter could belong to a guild, while a construction worker or a librarian would belong to a worker cooperative. The norm is the small, and the exception is the large. Regardless of the fact that large-scale businesses may exist, the local community cannot and should not be dependent on them for the flow of goods and services.

    Now in regards to a marketing company, Chesterton was not very fond of marketing firms. Let’s understand why. Due to the removal of 19th century laws meant to protect domestic production from overseas competition (free trade), the repeal of these laws bolstered the marketing business, which local producers found themselves dependent upon in order to compete with outside business.

    This isn’t to say the distributists were against advertisements per se, as G.K.’s Weekly had much of it. Neither is it to say a service sector may not exist in a Distributist State that provides for some form of marketing (for example, nonprofits need marketing). However, marketers don’t produce any productive wealth in the community, and as a general rule the distributists were particularly concerned with property generating genuine wealth through production or stakeholder investments.

  3. Yes,Troubador, MLM is exactly what Amway does. It's not *just* marketing (what Richard was referring to (I think)).

    Though I am not an expert here, I think MLM is going in the wrong direction. A system which seeks to produce an entire non-producing middle management as a way to get "rich" off the work of others seems to not be a distributist way of doing things.

    Or so it seems to me.

  4. It seems a fine start.

    Basically, we get a large number of home-based retailers, offering personal service to customers. The very low "barrier to entry" encourages a great number of people to give this a try.

    Some folks -- those who are skilled at teaching and assisting people to succeed at their home-based businesses -- can build a suitably small empire.

    The mid-level guys are not a class of "idle non-producers." They work very hard... first, teaching people how to sell their own business. Later, they teach their people how to mentor others. It's all very interpersonal. The entry-level people adore their mentors -- unlike the servile state paradigm, in which the employees grow to loath their managers.

    And Amway, in particular, places value on supporting small, American supplier companies... who frequently cannot get big-box store chains to carry their products (cheaper from China, you see).

    MLM is not perfect... but at least it is *trying* to be distributist.

  5. Friends,

    I'm the guy who sent Nancy the question. The company that my friends are trying to recruit me into joining sells/resells telecommunications services using an MLM model. Their big product is a VOIP (Voice Over Internet Protocol) video phone that is supposed to be the next big thing in technology, but they also offer cell phone service through all the major carriers, digital satellite service through Dish and DirectTV, home phone/long distance service (through their video phone), and home alarm services.

    All of these things are things I already pay for through my regular service providers, but if I switch my services to this company, I'll get a discounted rate and a percentage of what I spend will come back to me. I would also get a percentage of the services of anyone I sell services to. All the billing, account management, etc. stays with the service provider (e.g. Verizon Wireless), but I get a piece of the pie.

    It seems to me that this is no different from setting up a kiosk in the mall and reselling services that way. And, I'm sure that if I were to set up a kiosk I'd have to pay someone for the privilege (I only mention that to ward off any comments about pyramid schemes). Anyway, my problem (what's setting off my "Gil-dar") is, how is this "work"? By doing this, do I really possess the means of wealth creation? It seems like I'd be selling air.

    My temperament is not one that gravitates towards this sort of thing--I only have evangelistic fervor for Our Lord and a certain portly saint. But, I have a lot of month left at the end of the money and I could use the help. Plus, this particular company is meeting a need that is almost universally acknowledged so I wouldn't feel I was hawking snake oil. Why shouldn't I get paid to save my friends money on something they're going to buy anyway?

    I appreciate everyone's comments. I haven't made up my mind and I'm very open to hearing more of what my fellow Chestertonians think.

  6. This question reminds me of a discussion in The Outline of Sanity. If I remember correctly, GKC's distate of marketing was linked to it's ability to sell people things they don't need or want.

    This MLM doesn't sound like that sort of "fake" demand creation - we all need phone service.

    However, it's completely possible that in the long run your discount dissolves and the only way you save money is through the backs of those you signed up (I assume you are paid a % of what those below you in the "pyramid" buy - as in Amway). Then you've bought into a scheme by the founders, and trapped your friends and family as well.

    My football coach in college was an early member of Amway. He got a check every year from them, but didn't buy anything from them anymore.

  7. You're getting money for your labor. You're saying your making money out of air, but that's patently false. You're making money off the investment you made in yourself. The investment of educating yourself in the technology and taking the time to tell people about it and such. A teacher for instance doesn't produce anything tangible, yet I don't think any distributist would be against teaching. They are making money from their labor and time. Not only the time and labor required in education pro se, but in learning the skills to become a teacher.


Join our FaceBook fan page today!