The Gospel According to Dixon #18: Pyramid of Betrayal
by Dixon Wragg
WaccoBB.net
Column #18: Pyramid of Betrayal
"I was on the women's gifting circle and lost about $6000.00 and now stay away from them..."
"I personally know several women who were involved in the "Gifting Circle"...One of these women I know actually made a nice little bundle of tax free cash. Because she got in on the ground floor. Everyone else lost their "investment"."
"I made a commitment to myself some years ago never again to get involved in anything that smells even a little bit like a pyramid (I was young the first couple of times and I forgive myself for being young and ignorant). Many of my womyn friends were involved in the "Gifting Circles" that were popular here a while back and tried so very hard to get me involved. I just stood my ground, spoke my truth (I don't get involved in pyramids) even as they tried to explain it away. There came a time when they all stopped talking about it, and I assumed that the bottom fell out and that those involved didn't want to speak of it."
--private email communications to me from local women
It's baaack! The latest version is cynically called the "Women's Wisdom Circle". It's a slightly mutated version of the "Women's Gifting Circle" that blew through here in 2005, leaving in its wake emptied purses and ruined friendships.
Every few years they return in slightly different forms. In years past, the Bay area was infected by scams with names like “Airplane Game”, “Abundance Workshop”, “Holiday Magic”, “Dare to Be Great”, “Koscot Interplanetary”, “Circle of Gold”, etc. More recently, we had the “Circle of Friends”, the “Women’s Gifting Circle”, and another one that didn’t even have a name, and was usually just called “the activity”. I am especially familiar with these last three, having studied their promotional materials, and they are all, despite their denials, plain old pyramid schemes.
Briefly, the typical Ponzi, or pyramid, scheme involves buying into the game (usually costing at least a couple thousand dollars nowadays), and then recruiting some number of people (usually two recruits per participant) to join on the level below you. Because each level is larger than the previous one (typically twice the size, as each participant recruits two), the “base” grows exponentially larger than the “tip” (the person who began the scam), hence the pyramid image. For you to profit, the game has to grow enough for three layers to be built up beneath you, as any money you receive will be the buy-in bucks from new recruits three layers below you. In other words, you’ll receive the money from the eight people who were recruited by the four who were recruited by the two who were recruited by you, so your initial investment of, say, $5000 will get you $40,000 (eight people’s buy-in fees) if the pyramid doesn’t collapse before it’s your turn to get paid.
So it’s a deferred debt, earlier players receiving money from later ones, who hope to profit from those who join even later. Of course, eventually the whole house of cards collapses as new recruits can no longer be found, at which point the last three layers of payers, (the ones who haven’t ascended high enough in the pyramid to get paid) lose every penny they invested, with no payoff. Their money went to someone three levels above them, while there isn’t anybody three levels below them to pay them off. And since each level is double the size of the previous one, those last three levels comprise the vast majority of all who joined! Around 9 out of 10 participants lose every penny invested, which is very different from the rosy picture that was painted for them when they were recruited! And the outcome is not substantially different in slight variations such as when participants re-invest their ill-gotten gains back into the pyramid.
Furthermore, I have racked my brain trying to figure out some ethical way I could participate in such a thing (I certainly need the money) and have determined that there is really no way to profit from one of these schemes without ripping someone off. Telling the truth to potential recruits about their real prospects for success would simply not result in enough recruits for the thing to work at all. Clearly, anyone who joins has been misled or, at the very least, allowed to believe a rosy fantasy. That's just not ethical.
One thing that makes all of this confusing is that many, maybe most, of the participants don’t realize that it’s inherently a swindle. I don’t want to judge too harshly those who have made an honest mistake, though I have noticed with disgust how many close their minds in order to evade being shown that they are engaged in a con.
For instance, years ago my friend Hari tried to recruit me into a pyramid scheme. My attempts to focus on the specifics so as to explicate the swindle were met with vague metaphysical slogans such as “You’ve got to get out of that poverty consciousness and into prosperity consciousness”, “The universe is abundant”, and “You have to get past that linear thinking, Dixon; this isn’t linear” (although Hari clearly had no objection to a linear increase in his bank account). To my surprise and disappointment, when I asked him if he thought that money would be produced from thin air so that everyone in the pyramid could profit with no one losing, he endorsed that as a possibility.
(This bizarre notion raises some questions, such as: Would the materialized money have been magically transported from someone’s coffers, in which case it would be grand larceny, or would it literally manifest from thin air, in which case it would be counterfeiting? What would the serial numbers be? Would they all be the same? And would the bills feature the traditional portraits of dead presidents, or would they perhaps depict someone more appropriate, such as Shirley MacLaine, Uri Geller or some other icon of New Age hucksterism?)
When I pressed on with my effort to explain the simple facts, Hari terminated the conversation. This anecdote gives us several examples of common defense mechanisms: 1) the attempt to disguise plain, old-fashioned money-grubbing with a veneer of New Age rhetoric, like a reeking harridan slathered with cheap perfume; 2) the assiduous avoidance of looking at any unpleasant facts (manifest here as his repeated retreat from specifics into vague slogans); 3) Herculean feats of irrationality and credulousness; 4) fallacious attempts to invalidate the person challenging the belief; and, when all else fails, 5) termination of the dialogue.
Please note that I’m not faulting Hari for being wrong about pyramid schemes. We all make honest mistakes. What disappointed me was the considerable effort he put into avoiding being corrected. The payoff in a situation like this is clear: by avoiding the conscious acknowledgment that what you’re doing is fraudulent, you can have your cake and eat it, too--that is, you can get the money without suffering the conscience pangs that should accompany the knowledge that you'd profited from a swindle. (1)
Much of the terminology used in such scams helps maintain the denial. One example is the insistence that it's not a pyramid; it's a circle or whatever. The recruiting material from one pyramid scheme I studied even depicted the organizational structure upside down, with the triangle pointing downwards, so it wouldn't look like a pyramid! Another example of misleading jargon: calling it “gifting”. Since when do we need a pyramid structure to give a gift? If you want to give someone some money, just give it to them! In a pyramid scheme, you’re sending your dough to someone three levels above you, possibly a total stranger, in hopes of getting eight times as much money from those who are three levels below you. What kind of gifting is that? Anyone calling a pyramid scheme buy-in a gift is just not being honest.
What’s really pathetic about many of these scams is the “spiritual” trappings. Phrases like “The universe is abundant”, "Law of Attraction", and “prosperity consciousness” fool gullible seekers into taking a cynical scam for some kind of personal growth workshop. How many of you want to get some “spiritual enlightenment” by paying some New Age rip-off artiste a few thousand bucks for a lesson in your own greed and gullibility?
The women-only scams add another layer of sleaze: representing a con game as empowering women and building their community while doing just the opposite. Women who question the latest popular scam, such as the Women's Gifting Circle or its daughter, the Women's Wisdom Circle, are sometimes ostracized or even attacked by their local women's community. Even those who realize that it's a rip-off are loath to publicly criticize the group. Much of the appeal seems to lie in the "women are more spiritually enlightened than men" smugness that characterizes some women's groups. For instance, a friend of mine recounts his interview with a local woman, a well-known New Age huckster, in which she evades the issues by saying something like "It is too bad men cannot seem to grasp the concept, as they tend toward linear thinking and this is circular--not the same thing at all."(2) This is an example of the sort of fallacious evasion of logical critique muttered by New Age mountebanks as they head for the exit, bags of loot in hand.
Another feature that appeals to many participants is a sort of "inner circle" arrangement with mentors (womentors?) offering what may feel like special relationships, and the overall "secret society" specialness cultivated by these groups. This is explicated far better than I could do by women's group insider Lindsey Vona in her article "Addressing the Women's Wisdom Circle Pyramid".
Part of the reason I went to the trouble to research and write about this is to assuage my guilt for not calling the police when people attempted to recruit me into such scams. I tried to talk them out of participating, but, with the smell of easy money caressing their nostrils, they were too rigidly defended to budge. I took the coward’s way out, avoiding the storm of social disapprobation that would ensue if I did the right thing and called the police. Next time, I will try to do better, and so should you. If some “friend” tries to recruit you into a scam, give them the benefit of the doubt; assume they honestly don’t know it’s a rip-off. Try to talk them out of it. If you can’t, give them my phone number (707-527-6163) so I can try to educate them. If they still insist on participating in the scam, do the right thing: call the police and let them handle it. If that seems harsh, understand that those who persevere in these rotten cons are victimizing people.
NOTES:
1. Some time later, Hari confided in me that he felt his joining the pyramid scheme was a mistake. I almost asked him if he felt it was a mistake because he realized it was a swindle, or just because he lost his money, but I didn't ask because I was afraid I'd be disappointed with his answer.
2. Thanks to James Canter for this anecdote. The paraphrase is from him.
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
Damn! The article looks so nice on the Wacco site, but it showed up in my Wacco Daily Digest stripped of all its carefully selected illustrations and most (though not all!) of its apostrophes and quotation marks. Waaaaaah! :tear:
Is that how it looked in other people's Daily Digests, or is it something to do with my browser or...? Were any of you able to see my article's illustrations in your Daily Digest?
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
Dixon,
In college one of my majors was Philosophy and I read many of Plato's Dialogues. One of my favorites was also one the shortest--- which is significant. In it, Socrates attempts to engage a military man in a dialogue about patriotism. At some point, he presents him with a choice that is an impossibility (like asking your friend Hari if money will appear out of thin air) and the military man asserts that the impossibility must be true. At that point Socrates just says the ancient Greek equivalent of "Have a nice day" and moves on. The point being, obviously, that it is a waste of your time and breathe to attempt to have a dialogue with someone who is completely irrational. And that such behavior is not new.
I have pretty much stopped trying to engage these people who believe in completely irrational ideas and are utterly resistant to any sort of logic or critical thinking. Their desire to engage in magical thinking is too strong to overcome. While I admire those such as yourself and others who attempt to expose magical thinking to the light of common sense and reason, I find that I get far too frustrated so I just don't even try.
The problem is, the vast majority of people I run into these days seem to be mired in such thinking so my conversational options are limited.
Another interesting point you raise is that people don't seem to get that the term "con" man is based on the word "confidence" and that conmen or women don't, as the movies would portray, appear as fast-talking obvious frauds dressed in plaid jackets with clashing ties. Rather they appear as someone who inspires "confidence" in you--- a sincere-seeming member of your church, someone preaching new age, feminist values, someone of your ethnic group who talks about mutual support, your next door neighbor whose kids play with your kids, etc. Con games wouldn't work if these people did not inspire "confidence".
Anyway, good luck in your Quixotic quest to bring clear thinking and common sense to the woo-woo West County.
Quote:
Posted in reply to the post by Dixon:
by Dixon Wragg
WaccoBB.net
Column #18: Pyramid of Betrayal
...
It's baaack! The latest version is cynically called the "Women's Wisdom Circle". It's a slightly mutated version of the "Women's Gifting Circle" that blew through here in 2005, leaving in its wake emptied purses and ruined friendships.
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
Quote:
Posted in reply to the post by Philip Tymon:
I have pretty much stopped trying to engage these people who believe in completely irrational ideas and are utterly resistant to any sort of logic or critical thinking. Their desire to engage in magical thinking is too strong to overcome. While I admire those such as yourself and others who attempt to expose magical thinking to the light of common sense and reason, I find that I get far too frustrated so I just don't even try.
The problem is, the vast majority of people I run into these days seem to be mired in such thinking so my conversational options are limited.
There are a couple of people whom I have pretty much written off as lost causes, but for the most part, I err on the side of trying to communicate. Here I'll just quote what I said about this issue in the comment thread of my last column:
"...sometimes I wonder if I'm wasting my time trying to reason with people who are clearly committed to irrationality.
"I have been known to give up on people when they're clearly trolling (which is different from just disagreeing with me, and even different from being consistently irrational), or when, after banging my head against their armor for awhile, I decide it's useless.
"But I do like to give people the benefit of the doubt (that's a Golden Rule issue), and give them the opportunity to be reasonable rather than assuming they can't be. Anyway, people rarely make major changes in their worldview on the basis of one conversation. I may plant a seed in someone that slowly germinates and flowers beautifully years later, without my even knowing it. And even if I make no headway in convincing someone--and even if I get abuse from them for trying--at least I can model rational behavior. And my arguments as well as my behavior modeling could be influencing bystanders and lurkers without my ever knowing it. So call me naive, but I'm not about to give up on trying to communicate with people I disagree with. Besides, some of those people have important truths to impart to me."
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Anyway, good luck in your Quixotic quest...
I'm charitably assuming you mean this humorously rather than cuttingly.
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
I liked your quote. I am one of those people who says inconvenient things. I get a lot of flack for it and have been told many times I just shouldn't tell the truth. But what you said is true. More often than not the reaction will be immediate and negative but it sticks in there and begins to grow and bloom. I have had people come back to me years later and say yanno I didn't like what you said to me but I thought a lot about it and it ended up changing my life. We never know what we will say or do that will change the life of another. IT may not even be the person we are talking directly to. I think its best to tell the truth and not worry about whether its kosher to do so. If it is said from a place of love and reason and integrity, from truth and not to intentionally hurt, then its the right thing.
Jessica
www.jessicawolfe.net
www.mandalaconcierge.com
“Live with intention. Walk to the edge. Listen hard. Practice wellness. Play with abandon. Laugh. Choose with no regret. Appreciate your friends. Continue to learn. Do what you love. Live as if this is all there is.” ~ Mary Anne Radmacher
Quote:
Posted in reply to the post by Dixon:
I may plant a seed in someone that slowly germinates and flowers beautifully years later, without my even knowing it. And even if I make no headway in convincing someone--and even if I get abuse from them for trying--at least I can model rational behavior. And my arguments as well as my behavior modeling could be influencing bystanders and lurkers without my ever knowing it. So call me naive, but I'm not about to give up on trying to communicate with people I disagree with. Besides, some of those people have important truths to impart to me."
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
I meant it neither humorously nor cuttingly, but quite seriously. There are a number of people, both on here and elsewhere, who have the patience to undertake the Sisyphean (or is it Herculean, or both) task of explaining things rationally to those who are consistently muddled, whether willfully or otherwise. And I laud and support their efforts. I just don't have the temperament or patience to try to batter my way through the denial mechanisms of those apparently committed at a deep emotional level, to magical or nonrational thinking. If someone sincerely wants to understand a topic I am more than happy to explain it. But if it is clear that they are enmeshed in a denial mechanism that is impervious to reason, then I just give up.
Quote:
Posted in reply to the post by Dixon:
I'm charitably assuming you mean this humorously rather than cuttingly.
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
I will jump into just a bit of this dialogue. Yes, it's frustrating to try to communicate with people who are irrational and yes, irrationality and denial have been around forever, but I think there are more people caught in denial/magical thinking than there were even twenty years ago. I think the reason is that our nation has become so screwed up that people have a difficult time seeing a way to feel empowered to create change, and so they are very vulnerable anything presented as a solution. People panic at the lack of what seems like a a viable solution and they scramble to find one anywhere even if it doesn't make sense.
Personally I try to give to people concrete actions they can perform that are at least in the direction of what might make a concrete difference. It's what I do for myself when I feel overwhelmed by the destructive path of humanity . I plant a tree or an heirloom vegetable- something positive and real. What is that saying… it is better to light one candle than to curse the darkness…… something like that. Sneering at people with imaginary candles won't help much, but you could give them a real candle.
Slainte
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
It's beautiful "words and graphics".
Quote:
Posted in reply to the post by Dixon:
Damn! The article looks so nice on the Wacco site, but it showed up in my Wacco Daily Digest stripped of all its carefully selected illustrations and most (though not all!) of its apostrophes and quotation marks. Waaaaaah! :tear:
Is that how it looked in other people's Daily Digests, or is it something to do with my browser or...? Were any of you able to see my article's illustrations in your Daily Digest?
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
Sisters and Brothers:
I am taking some positive steps to try and inoculate our community against pyramid schemes. This requires that I hear from some of you who have been victimized by this sort of scam. It's especially useful to hear from those who were ripped off within the last 5 years, but I do want to hear from any and all of you. YOUR CONFIDENTIALITY IS ABSOLUTELY GUARANTEED. Please email me at dixonwragg at gmail dot com (or just hit the Reply Privately button at the bottom of this post) or call me at (707) 527-6163. (It may even be possible to recover your stolen money, though I'm not sure about that.) Anyway, do your community a service; give me a call. Thanks!
Re: The Gospel According to Dixon #18: Pyramid of Betrayal
Dixon - Thanks again for speaking out about this, and so eloquently.
Philip - I appreciated your riff on con men. I think it's so important that folks see that during the sale they are persuasive - charming, seeming to meet your needs, addressing your concerns, caring about you, etc. That's key to their plan -- and a key part of their harm -- that when the dark truth underneath is revealed, people feel so betrayed -- and stupid for believing them. Part of the antidote is to not rely just on how someone's offer feels, or (as you say) assuming that the con will be obvious at the time. I've found it helps to also to also know the patterns con men use -- including the charm component. Then the underlying structures become more easily visible.
And, sheesh, I wish con men (people) would use their ingenuity in true service instead of scams -- what a huge difference that would make. There's certainly plenty of work that needs doing, instead of us having to waste our time understanding and dealing with unconsciousness like pyramid schemes...
EXCERPT PHILIP
Another interesting point you raise is that people don't seem to get that the term "con" man is based on the word "confidence" and that conmen or women don't, as the movies would portray, appear as fast-talking obvious frauds dressed in plaid jackets with clashing ties. Rather they appear as someone who inspires "confidence" in you--- a sincere-seeming member of your church, someone preaching new age, feminist values, someone of your ethnic group who talks about mutual support, your next door neighbor whose kids play with your kids, etc. Con games wouldn't work if these people did not inspire "confidence".
