The AFS Pyramid Scheme: The Key to Their Incredible Growth

This episode of "The Poor Proles Almanac" continues the exploration of American Energy Farming Systems (AEFS) and its attempt to turn the Jerusalem artichoke into a miracle crop and fuel source in the 1980s. Hosts Andy and Elliot examine the flawed business model and questionable leadership that drove AEFS's meteoric rise.

From Alleyways to Empires: Fred Hendrickson’s Grand Vision

The episode picks up with Fred Hendrickson, the self-proclaimed "agribusiness concept developer" introduced in the previous episode, and his growing obsession with the Jerusalem artichoke. After seeing six artichoke plants thriving in an alley behind his home in Rapid City, South Dakota, Hendrickson becomes convinced of the plant’s potential. He devours articles on the subject and even cold-calls experts mentioned in the articles, solidifying his belief that the Jerusalem artichoke is "energy farming's answer to OPEC".

Hendrickson's enthusiasm for the Jerusalem artichoke knows no bounds. He declares its superiority to corn as a source of alcohol fuel, despite having no experience growing the plant himself. This lack of practical experience, coupled with his previous failed ventures like the "Igloo project," a self-sustaining farming community that never got off the ground, raises red flags about Hendrickson's judgment and ability to deliver on his grandiose promises.

A Partnership Forged in Hubris: Enter James Dwyer

The episode introduces James Dwyer, a businessman who becomes Hendrickson's partner in AEFS. Dwyer, drawn to the promise of cheaper fuel for his energy-intensive construction business, is eager to invest in the Jerusalem artichoke venture. However, Dwyer’s own business acumen is questionable. He is already struggling to pay his contractors and has made risky bets on farmland appreciating in value, despite a nationwide farm crisis that is driving many farmers into bankruptcy.

Despite these warning signs, Dwyer is immediately captivated by Hendrickson's vision. He decides to buy enough Jerusalem artichoke seed for 20 acres, a significant investment at $1,000 per acre in 1980. This impulsive decision, based more on faith in Hendrickson's prophetic pronouncements than on sound business logic, further underscores the shaky foundation upon which AEFS is built. The episode notes that both men seem to feed off each other's enthusiasm, validating their shared delusion that they have stumbled upon a revolutionary agricultural solution.

Dwyer, like Hendrickson, frames their partnership in religious terms. He sees Hendrickson as a prophet sent by God to save the "Christian farm" and the nation from the clutches of "Big Oil" and the "Trilateral Commission", a group of international business leaders often cited by conspiracy theorists as a source of global economic manipulation. This intertwining of religious conviction and economic opportunism becomes a hallmark of AEFS, attracting investors who share their belief in the divine providence of the Jerusalem artichoke.

The Ragtag Research Team and the Illusion of Legitimacy

AEFS's claims of scientific backing are quickly exposed as hollow. The company’s "research" is led by Wayne Dorband, an assistant professor with a PhD in Fisheries Resources, who has no prior knowledge of the Jerusalem artichoke or experience in crop development. Dorband's role seems to be more about providing a veneer of scientific legitimacy than conducting rigorous research. He compiles articles on the Jerusalem artichoke, conducts rudimentary field surveys, and writes much of the company's sales literature, which later becomes the subject of a legal investigation by the Minnesota attorney general.

The episode highlights the irony of Dorband, a scientist with limited expertise in the field, being responsible for AEFS's scientific claims, while Hendrickson, an attorney by trade, oversees the company's research. This mismatch of skills and experience further underscores the haphazard and ultimately deceptive nature of AEFS's operations.

Riding the Wave of Delusion: AEFS's Unsustainable Business Model

AEFS's initial success is fueled by its pyramid scheme-like structure. The company guarantees to buy back a portion of the Jerusalem artichoke seed produced by its first-year growers, creating a false sense of security and incentivizing farmers to invest heavily in the venture. This model allows AEFS to boast of impressive cash flow, even though much of that money is simply circulating within the system, ultimately promised back to the growers who initially invested in the seed.

The episode breaks down the economics of AEFS's model, revealing how the company inflates the perceived value of the Jerusalem artichoke. Seed costs are set at 100 times higher than corn, with the promise that growers can sell their harvest back to AEFS at 1,000 times higher premiums than corn on the commodity market. This artificial inflation, coupled with the guaranteed buyback scheme, creates a bubble that is destined to burst as soon as the market for Jerusalem artichokes inevitably saturates.

The Power of Belief: Evangelicalism, Charismatic Capitalism, and the Allure of Quick Riches

The episode explores the role of evangelical Christianity in AEFS's success. The company taps into the religious fervor of the 1980s, framing the Jerusalem artichoke as a divine gift and AEFS as a vehicle for both spiritual and material salvation. This messaging resonates with farmers struggling during the farm crisis, who are drawn to the promise of a solution that aligns with their faith and offers a way out of their economic hardship.

This intertwining of religion and commerce is further amplified by the emergence of Reverend L.O.L Kramer, a charismatic televangelist who joins AEFS as a motivational speaker. Kramer, with his flamboyant personality and penchant for wordplay, embodies the excesses of what the hosts call "charismatic capitalism". His speeches, filled with religious pronouncements and promises of financial abundance through the Jerusalem artichoke, further solidify AEFS's image as a movement driven by both divine purpose and the pursuit of wealth.

The episode ends on a cliffhanger, with AEFS riding high on a wave of investor enthusiasm and religious fervor, seemingly oblivious to the inherent flaws in its business model and the looming collapse of the Jerusalem artichoke bubble.

For sources, transcripts, and to read more about this subject, visit: www.agroecologies.org

To support this podcast, join our patreon for early, commercial-free episode access at https://www.patreon.com/poorprolesalmanac

For PPA Restoration Content, visit: www.restorationagroecology.com

For PPA Merch, visit: www.poorproles.com

For PPA Native Plants, visit: www.nativenurseries.org

To hear Tomorrow, Today, our sister podcast, visit: www.tomorrowtodaypodcast.org/