I'm glad you're talking about this. Man, I didn't even think about how this would be going on. I just can't stand capitalism. I have too many friends who participate in these things. Everybody's desperate to escape poverty, but we don't live in a world that will allow everybody to do so.
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I dunno if it's possible to blame this on capitalism. Legit business models do exist. MLMs just aren't one of them.
I have reasons I think capitalism is to blame, but I don't want to hijack your thread without permission. Let me know If I should make my case for why capitalism causes MLMs to exist and, dare I say, flourish.
Due to my own experiences with MLMs, I find myself in agreement with you.