This week The Atlantic posted a disturbing video from a small white-supremacist conference that took place in Washington, D.C. It's disturbing because, obviously, anyone discussing white supremacy and giving heil-Hitler salutes is disturbing, though it's not clear that the group (given the veiled title "National Policy Institute") has any particular influence anywhere.

Nonetheless, its leader, Richard Spencer, has gotten a lot of press, and the press he's gotten has gotten a lot of press. It seems that people are surprised that Spencer is from a well-off family, well-educated (prep school at the elite St. Mark's in Dallas, with degrees from the University of Virginia and the University of Chicago, and has studied Leo Strauss and Teodor Adorno), and well-dressed. "Sitting around conference tables, the formally dressed men more resembled Washington lobbyists than the robed Ku Klux Klansmen or skinhead toughs that often represent white supremacists," the Los Angeles Times wrote.

It shouldn't be much of a surprise. Even when the Klan was at its peak in the United States, its membership was not limited to, or even generally represented, by a bunch of Deliverance extras or meatheads with cauliflower ear. It was white collar and middle class.

One of the writers who revealed this is Kenneth T. Jackson; he's most famous for Crabgrass Frontier, a landmark work on suburbanization. But his first work was The Ku Klux Klan in the City, 1915-1930, which focused on the urban Klan in Indiana and Illinois (Jackson got his master's and Ph.D. at the University of Chicago).

"Few cities should have been more unreceptive to the Klan," Jackson writes of Chicago. "Long a mecca for newcomers from eastern and southern Europe, the midwestern colossus in 1920 was the home of well over 1,000,000 Catholics, 800,000 foreign-born immigrants, 125,000 Jews, and 110,000 Negroes." But the Chicago Klan claimed over 100,000 members; Jackson estimates it to be between 40,000 to 80,000, a nontrivial number compared to some of the city's largest minorities.

And it was respectable, or at least respectable enough for a considerable white-collar membership. Out of a sample of 110 members uncovered by the publication Tolerance—an anti-Klan publication from the American Unity League, a multicultural but largely Catholic organization—22 members were businessmen and 67 were white-collar workers, compared to 43 blue-collar workers (of whom the most common profession was the comparatively elevated position of foreman).

In 1922, Chicago had the largest Klan membership of any city. The advertisements in its magazine, Dawn: A Journal for True American Patriots, drew largely from Hyde Park, including—I am not making this up—an advertisement from the Quality Coffee Company "emphasizing 'Kuality, Koffee, and Kourtesy.'" When a big Klan meeting was held in Valparaiso, a jeweler from the Woodlawn Klan "arranged with the Pennsylvania Railroad for a twenty-two car 'Dawn Special' offering Chicago Klansmen round-trip transportation… for one dollar and twenty-five cents." In 1927, even as the organization was falling apart in Chicago, it hosted an Indianapolis Klan member (and judge) at the Red Lacquer Room at the Palmer House ("one of Chicago's 'architectural jewels'").

For a qualitative perspective, Jackson quotes the writer Robert L. Duffus, who reported on the Valparaiso gathering: "Belonging to the less successful strata of the white-collar class, they were not 'average American citizens' and neither did they represent organized labor. Rather, Duffus estimated Chicago Klansmen to be "small store-keepers, corporation employees, clerks, and clingers to the edges of professions, with perhaps a sprinkling of more influential personages."

This is echoed by findings from Harvard's Roland Fryer and the University of Chicago's Steven Levitt, working from a much larger sample of 60,000 Klan members across the country. "The results we obtain using our new dataset on members of the Klan are, in some cases, quite surprising," they write. "In some cities, individuals who joined the Klan were better educated and more likely to hold professional jobs than the typical American. In other cities, however, Klan members were significantly less likely to hold professional jobs despite being better educated."

They had to be: being a Klan member was expensive. The initiation fee was $10; an official robe (the Klan also sold optional dry-cleaning services for them) was $6.50, the membership fee was $5, and the "imperial tax" was $1.80, for a total of $23.30, or approximately $250 for the first year and $75 a year in 2011 dollars. "At its peak in 1924, the Klan conservatively generated annual revenues from all sources of at least $25 million – equivalent to $300 million in current dollars. Only a small portion of this revenue was required to fund basic operations," they write.

In short, the Klan was a multi-level marketing scheme, like Avon for racism. And it was designed this way. William J. Simmons, a Georgia doctor, was inspired by D.W. Griffith's The Birth of a Nation to resurrect the Klan in 1915; in 1920, he took over the Southern Publicity Association to market the organization.

"The contract stipulated that managers of the Propagation Department, Edward Clarke and Elizabeth Tyler, would get $8.00 of every $10.00 initiation fee," Fryer and Levitt write. "They sent over 1,000 Kleagles into southern and southwestern states with the charge to make salient whatever prejudices—anti-Catholicism, anti-Semitism, racism, and so on—were most acute in the particular areas they were selling Klan memberships. Only then did membership truly accelerate, and at a mind boggling rate."

Such a scheme can spread like wildfire, but it's fragile as well, as the Klan soaked up a lot of money but provided few tangible benefits to its members From 1924 to 1930, membership fell from one million to 30,000, in part because of a horrifying crime that took place just over the border in Indiana. D.C. Stephenson, a sharecropper's son who had gained wealth and political influence as the Grand Dragon of the Indiana Klan, assaulted his girlfriend, Madge Olberholtzer, on a train to Chicago; the next day, she took an overdose of mercury bichloride tablets, and died the next month (witnesses for the prosecution testified that infections from wounds inflicted by Stephenson contributed to her death). He was charged with rape, kidnapping, conspiracy, and second-degree murder and sentenced to life imprisonment, though he was paroled in 1950.

Stephenson was one of the most powerful men in an organization that promised law, order, moral rectitude, and the protection of "Protestant womanhood"; now he was in prison, having narrowly escaped the death penalty. From there, he hastened the Klan's demise by almost immediately rolling over on Indiana's political power structure. "The press and people of the state are pondering over the motive behind Stephenson's act in at last loosening his tongue," the Tribune reported in July 1927. "They concede he is still bargaining for his liberty. From many sources comes the theory that Stephenson is engaged in a desperate game with the men who hold him in durance…. One by one Stephenson plans to brand them with corruption and municipal sabotage and obesiance to the klan." His machinations ended with the mayor of Indianapolis and the head of the state's Republican Party in prison, and the political career of the governor in ruins.

The second iteration of the Klan drew immense membership and, in places, considerable political influence, but it was secondary to its purpose as a money-making scheme. Fryer and Levitt calculate that Stephenson "received nearly $2.5 million annually from the state's operations," in 2006 dollars. The politicians he courted, meanwhile, only passed one Klan-backed bill—"to have all students in Indiana study the U.S. Constitution." It was a con, but its marks weren't all rubes.