Bill Ackman has made something of my visit to a Herbalife club in his presentation. I have visited several. And I have a radically different interpretation.
But for the moment I just want to tell Bill Ackman a story.
In my lifetime in Australia it was commonplace to take children of mostly of mixed aboriginal racial heritage from their mothers and adopt them into white society or even to leave them in welfare homes.
This was done for the children's welfare, usually but not always close to birth. But there are stories of children aged four being hidden from the welfare because the kids would be stolen.
Stealing children had widespread social acceptance in Australia. The condition in which the aboriginal people lived was very poor - often rural, often quite lowly educated. And you hear stories of children aged 12 in middle class rural towns saying they have never met an aborigine and being told to look in the mirror (because they were aboriginal).
This wasn't a genocidal society. Indeed at the same time Australia had a massive multiethnic immigration program running. It just became the view of the liberal intelligentsia in the city (people who were utterly disconnected I might add) that this was welfare improving.
Like you Mr Ackman I am instinctively more than a touch paternalistic liberal. This was done by and supported by people like me. And dare I say it people like you.
The liberal intelligentsia came to this view however without ever talking to an aboriginal mother, without listening to their stories, without actually seeing what their policy looked like on the ground.
The literature of the time clearly made this out to be an interventionist welfare program. It was done for the victims own good. And the victims own good was widely believed by people who did no research. Strangely the welfare agencies - who should have had an idea that what they were doing was evil - were strong supporters. But their salaries were paid for by an evil program and their view of morality lined up with their pocket book. [Even then it would have been hard to describe them as evil people when they were doing it. They were concerned left-of-center but interventionist liberals. Like me. Like you.]
With our modern eye on this the church groups, rotary clubs, welfare agencies and the government were all deeply racist. They separated children from their mothers against their mothers wishes and did not listen to value their stories because they were different from them, had different colour skin and sometimes spoke in a different language or broken English.
I have - when all the historic inquiries into this practice - took place read the literature and wondered whether - reading it then - whether I would have seen the program for what it was. Pure evil. I have come to the conclusion I wouldn't have. There is an underlying misunderstanding of what is different in all of us.
I too would have been an evil person by my implicit support for evil.
But I resolved then to always listen to the stories that people told me even when it offended my sense of decency.
Let me tell you about a Herbalife club in the Bronx. This had real customers - about fifty per day which is fairly standard - who came along and purchased their shakes and sat around and chatted. It was like many other Herbalife clubs that I have visited. There was a grid on the wall with the names of the regular attendees, and gold stars against their names for when they lost the requisite amount of weight.
You could do the calculation and work out that husband and wife who ran this club were earning marginally less than minimum wage for the time that they were there. They didn't have much of a downline. A few of their customers purchased shakes at home for personal use - and they got some income from them. But for people who were modestly entrepreneurial it was almost sad - it certainly offended my sense of what is the right distribution of income to see them working so hard for so little. At first for me it was a little like poverty-tourism - the sort of poverty tourism you see when you visit small towns east of Battambang (Cambodia) or for that matter Arakun (a somewhat dysfunctional aboriginal town in Northern Australia.
But just as I would have been deceived by a welfare program in that aboriginal town I made a point of listening to the woman who ran the shop. And what I heard surprised me.
A husband and wife had been running this club for about fourteen months - and yes - they worked out that per-hour they made slightly less than minimum wage. They opened the club as a couple in the morning and he took the children to school and went to his minimum wage job. She ran the club, her friends came by. Most importantly after school her friends dropped her children off along with their own and went to their minimum wage jobs.
There were a pile of toys in the back and the place looked a little like a creche. The kids played well - and yes - one of her customers - in full knowledge of the financial circumstances was going to start a similar business a few miles away.
When I asked her about whether this was a pyramid and should be closed by the government she was hostile. She knew about you Mr Ackman but her attitude was that you wanted to take her children away from her.
I could not help but be struck by the parallels.
This is not a pyramid. There are plenty of real sales to real people. That is visible. Its a lousy business but it is a business in which people have integrated their lives and their families.
If it were Australia I would not hesitate to call the unwillingness to listen to the stories of the poor people of different race what I called it then: racism. In the US it is probably not that. US attitudes to Hispanics are far less racist than Australian attitudes to our aboriginal population.
In the US it is just money/class and the separation of the 1 percent from the masses. It is entirely possible to be from Manhattan and the Hamptons and completely lacking in empathy for people whose income is near minimum wage.
When I listened to people at Herbalife clubs I heard a story completely different from the story you tell in your presentations. It is a story about people who have integrated this business into their life. About people who have found community. And about people who have controlled their diabetes.
Its a story you don't present.
And not hearing it or presenting it reflects badly on you.
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