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Post 20

Friday, February 29, 2008 - 8:51pmSanction this postReply
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Hi Ed,
Do you think that the snake oil problem was worse then, or now?
I don't know how to quantify it. 

Bill,
 If he thinks that what he is claiming is true, then even if the claim happens to be false, the sale is not fraudulent.

This creates a perverse incentive for him to stick his head in the sand and not investigate the merits of the claims for fear of them being false. He might not succumb to this incentive, but doesn't it kind of suck if he does?

Jordan


Post 21

Friday, February 29, 2008 - 9:15pmSanction this postReply
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Jordan,

Let's cut to the chase and find a real-world, concrete case here.

Search the web (or watch TV) to find an ad for a product with a claim which you think or feel is fraud -- and I will examine the interface between the claim in the ad, and the totality of publically-available scientific evidence on the matter.

If you like.

Ed

Post 22

Friday, February 29, 2008 - 9:56pmSanction this postReply
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Hi Ed,

For this thread, I was just interested in securing the principle as Objectivists see it. I deliberately used a less-than-real-world example -- snake oil -- so as not to get bogged down in concretes.  I'll leave it to other folks here to apply the principle to concretes. And there are plenty, no doubt. Some discussers here have already mentioned a few. If anyone wants to take this thread that way, I'm okay with it.

 Jordan


Post 23

Friday, February 29, 2008 - 10:55pmSanction this postReply
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Alright, Jordan, suit yourself (pun intended).

;-)

Ed

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Post 24

Saturday, March 1, 2008 - 9:33amSanction this postReply
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I am going to have to weigh in here with a warning against "govern-mentality."  If scientifically validated testing showed no curative value to chicken soup, I would still continue to make it every time I felt a cold coming on, which I do now anyway and have done for decades.  (I start with a fryer or broiler, depending on which birds looks best in the case.  More on my recipes later.)  There was one time, I was training offsite in North Carolina and I knew I was getting sick, but I was in a strange city.  First day, all I could find was Chinese, so I went for the Hot & Sour.  Close, but not good enough.  Next night, on my way back to the motel, there flashed the sign: NATES NEW YORK DELI.  I went in.  "Homemade" chicken soup was on the menu.  I asked about it and the waitress assured me at that no two bowls were the same: it was made by hand in small batches.  I had three bowls.  She offered me a fourt, but I declined.  She took a closer look at me and said, "I''ve heard it called Jewish penicillin, but I never believed it til now."  I was fine for the rest of the week.    "Scientific" studies (so-called) deny individuality.  Chicken soup is my elixir.  I assert a perfect right to sell it on that basis to anyone who wants to buy "Mike's Jewish Penicillin."

Now, to be sure, the FDA has its casus belli.

“Sulfanilamide, a drug used to treat streptococcal infections, had been shown to have dramatic curative effects and had been used safely for some time in tablet and powder form. In June 1937, however, a salesman for the S.E. Massengill Co., in Bristol, Tenn., reported a demand in the southern states for the drug in liquid form. The company's chief chemist and pharmacist, Harold Cole Watkins, experimented and found that sulfanilamide would dissolve in diethylene glycol. The company control lab tested the mixture for flavor, appearance, and fragrance and found it satisfactory. Immediately, the company compounded a quantity of the elixir and sent shipments--633 of them--all over the country.
 “The new formulation had not been tested for toxicity. At the time the food and drugs law did not require that safety studies be done on new drugs. Selling toxic drugs was, undoubtedly, bad for business and could damage a firm's reputation, but it was not illegal.
 “Because no pharmacological studies had been done on the new sulfanilamide preparation, Watkins failed to note one characteristic of the solution. Diethylene glycol, a chemical normally used as an antifreeze, is a deadly poison.

Ballentine, Carol, "Taste of Raspberries, Taste of Death: The 1937 Elixir Sulfanilamide Incident." FDA Consumer Magazine, June 1981, http://www.fda.gov/oc/history/elixir.html


I point out that in the absence of the FDA, there would be businesses such as Underwriter's Laboratories and Consumer Reports and the American Society for Testing and Materials who validate and verfiy the claims made by sellers of a wide range of products. 

On the other hand, I never buy food from Mexico, not even "organic" food from Mexico sold by Whole Foods.  I do not trust them.  I do trust the Canadians, however.  Furthermore, I point out that Massengill is still in business.  If they had been Bubba's Nascar White Lightening Emporium, they would not have been so resilient, i.e., not so cozy with the FDA, as to weather the storm of poisoning

Ultimately, each of us is responsible for our own outcomes.  It might seem odd that Massengill could get away with murder.  Such failures of the legal system derive from personal failures.  That is why our efforts for a better world start with philosophy, not with politics.  For an example of someone  with integrity working for the FDA, consider this:
The FDA also takes credit for the preventing the worst effects of the thalidomide disaster.  Although 1200 babies were born deformed in Germany, the UK and elsewhere, only 17 tragedies occurred in the USA.  Francis Kelsey was newly hired as a reviewer for the FDA when an American firm applied for a license to market thalidomide.  Kelsey’s own experiences with quinine and pregnant women  in the 1940s led her to press for more information.  What she got was more akin to sales literature than a medical review.  She declined six applications.  Finally, news of the tragedy spread.  At first, reports were sketchy.  However, when The Lancet carried a warning letter, the facts became known to all.  

Unsuspected at the time, quinine was shown to cross the placental barrier.  The fetus could not process the chemical at all, though, of course, the mother could.
Bren, Linda. 2001. “Frances Oldham Kelsey: FDA Medical Reviewer Leaves Her Mark on History,” FDA Consumer March-April 2001. Washington D.C.: U.S. Food and Drug Administration. http://www.fda.gov/fdac/features/2001/201_kelsey.html

Again, of course, it was the reputation of The Lancet -- which has no legal authority -- that halted the thalidomide disaster.  But in the USA, it was one woman committed to the facts as she knew them that was the fail-safe.

So, I cite these cases to show that I am not ignorant of the important role played by the FDA.  That said, the successes must be put into an appropriate context.  I have a right to chicken soup and Vitamin C because I say so.  I also have a right to sell them to anyone who wants them.  Any independent lab in business for a profit has a right to buy my products and test them as they want, and then report their findings to anyone who wants to pay for that service.  I believe that in such a world, the horrors of the past would be unlikely to impossible.


Post 25

Saturday, March 1, 2008 - 5:26pmSanction this postReply
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I wrote, "If he thinks that what he is claiming is true, then even if the claim happens to be false, the sale is not fraudulent."

Jordan replied,
This creates a perverse incentive for him to stick his head in the sand and not investigate the merits of the claims for fear of them being false. He might not succumb to this incentive, but doesn't it kind of suck if he does?
Yes, but the seller isn't omniscient. Since he can't always know if a product has a defect, it can't be considered fraud if he sells a product with a defect that he wasn't aware of. Whatever the problem is with such a sale, it's not fraud. Fraud requires deliberate misrepresentation. As long as the seller isn't lying to the buyer, there's no fraud. If the seller makes a claim about the product, then the buyer can always ask him to justify it; and if the seller isn't able to, then the buyer can undertake to justify it himself.

When I buy products for which health claims are being made, such as that vitamin C fights the common cold, I don't buy them based on the claim unless I've researched it and am satisfied that the claim is substantiated. Now, it may not, in the final analysis, be substantiated. Both the seller and I may be wrong, but that doesn't mean that I've been defrauded, if the seller sold me the product in good faith. The buyer as well as the seller bears responsibility for evaluating the product.

Of course, in deciding whether or not the seller was aware of a product's defects and intentionally concealed them, the fact that he could easily have known about them, given his familiarity with the product, must be taken into account. If it is obvious that he could have and probably did know about them, then he might be considered guilty of fraud. But here, the decision is based on his presumed knowledge at the time that he sold the product, not on whether or not the product had defects that existed independently of the seller's knowledge.

If I'm selling you a used car, and I tell you that it runs just fine, when in fact there's a problem with the carburetor that I'm not aware of, because I haven't bothered to have it checked by a mechanic, then you can always ask me if I've had it checked. If I say that I have, then I'm lying to you, and it's fraud. If say that I haven't, then you're always free to have it checked yourself, and you should do so before you buy it.

- Bill

Post 26

Sunday, March 2, 2008 - 9:53amSanction this postReply
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It's fraud if the seller knows or should know his product claim is false. That is a seller can't claim ignorance if he is surrounded by evidence that demonstrably shows his product claims are false. This doesn't require omniscience but a minimal effort to investigate his own claims with readily available information or to pay attention if someone demonstrates to him the claim is false. If however he doesn't know nor should he know (for example evidence was not available) then it's not fraud but could be considered a breach of contract (depending on how the contract is worded) in which case the buyer is entitled to compensation.

Post 27

Sunday, March 2, 2008 - 4:51pmSanction this postReply
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John,

Interesting point. I thought you might be correct initially, but I got this definition of "fraud" off an insurance site:

"In the simplest terms, fraud occurs when someone knowingly lies to obtain benefit or advantage or to cause some benefit that is due to be denied. If there is no lie, there may be abuse but it is not fraud."

However, even if we adhere to the view that it's fraud if the seller should have known that his representation is false, it's reasonable to infer that he did know it, if the evidence is all around him.

By the way, what is your view of someone like Elmer Gantry, who doesn't believe in religion, but pretends to in order to get contributions from those who do believe? Is this fraud? Should someone be arrested for selling an idea that he believes is false, even if those to whom he is selling it believe that it's true quite independently of his own advocacy?

- Bill
(Edited by William Dwyer on 3/02, 4:55pm)

(Edited by William Dwyer on 3/02, 5:16pm)


Post 28

Sunday, March 2, 2008 - 5:20pmSanction this postReply
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One is sorely tempted to give back Field's answer - "Never give a sucker an even break, nor smarten up a chump..."


[there was a time when almost did that, be an Elmer Gantry, but just wasn't cynical enough....]

(Edited by robert malcom on 3/02, 5:22pm)


Post 29

Sunday, March 2, 2008 - 6:51pmSanction this postReply
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Bill

By the way, what is your view of someone like Elmer Gantry, who doesn't believe in religion, but pretends to in order to get contributions from those who do believe? Is this fraud? Should someone be arrested for selling an idea that he believes is false, even if those to whom he is selling it believe that it's true quite independently of his own advocacy?


Good question Bill, without some more specifics I can't say for sure, at the very least he sounds like a scum-bag. I'll confess I actually don't know who Elmer Gantry is. Is he one of those faith healers?

However, even if we adhere to the view that it's fraud if the seller should have known that his representation is false, it's reasonable to infer that he did know it, if the evidence is all around him.


Good point, I would think it's a matter of a burden of proof. That being if it was a claim that was so obvious it was false with readily available evidence, it would be reasonable to infer the seller knows it is even if he continues to profess ignorance. In this specific context the burden should fall on the seller.
(Edited by John Armaos on 3/02, 6:54pm)


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Post 30

Sunday, March 2, 2008 - 8:44pmSanction this postReply
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What constitutes proof?

Proof? By what standard?

According to the FDA, you only need about 60 milligrams of vitamin C per day.
According to the FDA, you only need about 5000 IUs of vitamin A per day.
According to the FDA, you only need about 30 IUs of vitamin E per day.

I do not take large doses of carotene, but prefer beta-carotin, and seldom get more than 100,000 IUs.  I usually take 1 to 3 grams of C.  I never limit the Es and I mix the Alpha with the Delta tocopherols.  None of that is "proved" according to the FDA, but all it is "proved" by other (scientific) literature.  I won't even get into the quack stuff.  My wife sprained her wrist snowtubing and immediately took this homeopathic stuff -- not for me, thanks -- and when she got to the ER, the MD told her that the arnica was good choice to minimize the swelling.  Proof?  By what standard? 

The case of Elmer Gantry is interesting.  Logic would look at four cases:
1. The seller believes it, The buyer believes it.
2. The seller believe it.  The buyer does not.
3. The seller does not believe it.  The buyer does.
4. The seller does not believe it.  The buyer does not believe it.

In The Fountainhead, the case of Monandock Valley illustrates the Elmer Gantry Gambit of option 3.

By the standards of academic philosophy, Objectivism is snake oil.  By the standards of Objectivism, academic philosophy is snake oil.  Proof?  By what standard?

We accept computering prima facie.  Have you ever read a software licensing agreement?  We old people used to fuss about this back in the early 80s.  No one does anymore.  In fact, your computer and its operating system both came with agreements that you signed when you bought the package and by those agreements you admit that you understand that the seller makes no warranty as to fitness of use for any purpose.  You get the thing home and cannot connect to the internet?  Tough.  You cannot write a file or print it?  Tough.  You cannot calculate by the four basic functions of arithmetic?  Tough.  You agreed to buy something with no promise of fitness for any use.

So, why do computers work at all?

You cannot define this in 25 words or less.  Wanting a thumbnail definition of "fraud" is an Orwellian chimera.  It is a consequence of government education that we think that we can "define" complex problems in a shoutable format. 


Post 31

Sunday, March 2, 2008 - 10:39pmSanction this postReply
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John,

===============
... if it was a claim that was so obvious it was false with readily available evidence, it would be reasonable to infer the seller knows it is even if he continues to profess ignorance.
===============

MEM answered this one well (though I thought that I detected anger in his typed voice). Anyway, choice of standard is paramount. Look at Christians who equate "morality" with "Christianity" (or muslims or Islams or Islamomusliphiles or whatever). Rules of evidence for common crimes are easier to lay down, than the nature of evidence to which you allude.

Scientists -- when brought into round-table discussions or panels -- can't even agree on what the evidence shows (we, and by "we" I mean the public, typically get an Executive Summary of recommendations which at least 70% of the polled scientists agreed to). The FDA panels themselves have had issues of conflict of interest -- most scientists on the approval panel for Prozac were getting good sums of money from its maker, Eli Lilly (now Lilly Pharmaceuticals, I believe).

Thorough evaluation of the interface between science and advertisement requires more than common knowledge, skill, and ability. It requires the kinds of special knowledge, etc. of which I am currently in possession. In fact, I have found that even the professionals in the relevant fields of knowledge, etc. (the scientists, the government, and the private sector "marketeers") are woefully inadequate in performing their respective functions.

Ed

Post 32

Sunday, March 2, 2008 - 11:24pmSanction this postReply
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Ed I'm a little surprised here

Anyway, choice of standard is paramount. Look at Christians who equate "morality" with "Christianity"


What about them? They are obviously wrong to do so.

Rules of evidence for common crimes are easier to lay down, than the nature of evidence to which you allude.


Nature of what evidence Ed? Fraud? Are you saying no such evidence can be provided to meet a burden of proof to say someone is guilty of fraud?

Scientists -- when brought into round-table discussions or panels -- can't even agree on what the evidence shows


Yes but usually in regards to controversial scientific issues. BUT most scientists agree on most things. For example there are no legitimate scientists that believe in creationism as sound science. Your comments seem to smack of relativism, as if to say because sometimes scientists got it wrong or that sometimes they disagree, must mean they will always be wrong or that the truth is simply relative to the person speaking it, and thus there is no way someone can meet an objective standard for a burden of proof that someone made fraudulent claims? Hmmph.

The FDA panels themselves have had issues of conflict of interest -- most scientists on the approval panel for Prozac were getting good sums of money from its maker, Eli Lilly (now Lilly Pharmaceuticals, I believe).


I don't understand where you are going with this. I don't think the FDA has the final say on what is the truth. The courts have ruled in the past against federal agencies like the FDA, I know one example where the courts ruled against the EPA for saying the science they used to ban DDT was not sound. A claim is not valid because of some authority claims they are "experts" and know it to be so, it requires evidence.

Thorough evaluation of the interface between science and advertisement requires more than common knowledge, skill, and ability. It requires the kinds of special knowledge, etc. of which I am currently in possession. In fact, I have found that even the professionals in the relevant fields of knowledge, etc. (the scientists, the government, and the private sector "marketeers") are woefully inadequate in performing their respective functions.


Um....ok so next time I'm in a suit against the FDA I'll call upon you as an expert witness :)

Ok but seriously, are you saying you are privy to information that others don't have? Forgive me for being a tad skeptical here.


(Edited by John Armaos on 3/02, 11:27pm)

(Edited by John Armaos on 3/02, 11:38pm)


Post 33

Sunday, March 2, 2008 - 11:36pmSanction this postReply
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Marotta:

I do not take large doses of carotene, but prefer beta-carotin, and seldom get more than 100,000 IUs. I usually take 1 to 3 grams of C. I never limit the Es and I mix the Alpha with the Delta tocopherols. None of that is "proved" according to the FDA, but all it is "proved" by other (scientific) literature.


Who said the FDA is the final arbiter for the truth? Did I say that?

You know what Ed this is what I think of Marotta's post:



What constitutes proof?

Proof? By what standard?


By the scientific standard.

Are we done with the relativism crap now?



Post 34

Monday, March 3, 2008 - 1:02amSanction this postReply
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Thinking about this further Ed I think you misunderstand me:

Rules of evidence for common crimes are easier to lay down, than the nature of evidence to which you allude.


Now what was it that you think I'm alluding to?

If a car salesman says "This car will get top speeds of 400 mph" and lo and behold you come to find out after purchasing the car it doesn't go any faster than 200 mph, I guess the nature of such evidence is harder to lay down?

I can see your point if a car salesman said "This is the best car"

Now that is a vague statement without anymore specific information on what the product is or advertised will do. But this isn't at all what I'm referring to. The courts always ignore these kinds of claims and don't consider them fraud. It must be demonstrated the claim is objectively false, you can't demonstrate something isn't the "best" because what is the "best" will differ from person to person. But you can't escape a claim that a car will perform a certain function (like travel at speeds of 400 mph) when a seller will very well know it can't do it. And if the seller professes "Well I thought it would go 400 mph" isn't a believable claim since most people are quite familiar with the kinds of speeds cars can achieve, hence if the seller professes ignorance on his part, it isn't believable.

Note I'm just using examples here for specifics, I think "fraud" is a legitimate concept.
(Edited by John Armaos on 3/03, 1:08am)


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Post 35

Monday, March 3, 2008 - 8:48amSanction this postReply
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[editorial note: Our posts crossed. I posted this before viewing the fish and the fast cars -- that fish was funny, too]


John, I can clarify:

1
====================
What about them [Christians who judge whether an act is moral by whether it is "Christian"]? They are obviously wrong to do so.
====================

See point 4 below.


2
====================
Nature of what evidence Ed? Fraud? Are you saying no such evidence can be provided to meet a burden of proof to say someone is guilty of fraud?
====================

The nature of the evidence to which you were alluding here deals with the interpretation and generalization of scientific findings. If you err (accidentally or willfully) in your interpretation and generalizations -- and I've shown that profession folks do -- then your judgments can be unsound. This is what I was getting at by contrasting simple crime -- assault; breaking & entering; etc. -- which any jury could judge, with crime based on input from the special sciences.


3
====================
Your comments seem to smack of relativism, as if to say because sometimes scientists got it wrong or that sometimes they disagree, must mean they will always be wrong or that the truth is simply relative to the person speaking it, and thus there is no way someone can meet an objective standard for a burden of proof that someone made fraudulent claims?
====================

I, in no way, meant to imply the lack of existence of objective standards (even in specialized fields). Instead, I meant to imply the lack of utilization of objective standards (even by all the relevant parties with any kind of power here to influence the outcome).

To be sure, objective standards exist, John. I can tell you with a straight-face that they're not commonly employed, however. I can tell you, for instance, that the FDA was wrong to KEEP and use folks sickened by EMS (curably sickened) in front of juries with the ulterior motive to get tryptophan removed from the market.

I can tell you that the FDA was wrong to hold an orchestrated "public debate" on ephedra by parading popular figures in front of the audience in order to play on their emotions, rather than on their rational judgment.

I'll stop there, but I hope you are beginning to get the picture.


4
====================
I don't think the FDA has the final say on what is the truth.
====================

The FDA thinks it does. As a deal-breaking exercise, John, try to use the Freedom of Information Act in order to get copies of the FDA's documentation regarding their 12-year ban on tryptophan -- and see where that gets you. Or, more quickly, point your browser window at ...

http://www.yale.edu/yfp/archives/98_5_kessler.html

... and read the first 2 paragraphs.


5
====================
A claim is not valid because of some authority claims they are "experts" and know it to be so, it requires evidence.
====================

Good point, and I -- of course -- agree, but it doesn't refute the rest of my replies here.


6
====================
Um....ok so next time I'm in a suit against the FDA I'll call upon you as an expert witness :)

Ok but seriously, are you saying you are privy to information that others don't have? Forgive me for being a tad skeptical here.
====================

I'm not privy to "information" that others can't get to -- I'm privy to the non-contradictory integration of said information (an integration that the key players are unwilling or unable to perform). Most -- if not, all -- perpetuated injustices exist by that dynamic.

And even though I'm in possession of the active integration of damning information here, I would be laughed off of the stand for not being the "right" kind of an expert.

:-(

Ed
(Edited by Ed Thompson on 3/03, 8:55am)


Post 36

Monday, March 3, 2008 - 12:51pmSanction this postReply
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Ed I think I agree with you. We both seem to agree the FDA is a corrupt agency, that appeals to the wrong standards of what should be a burden of proof, namely emotionalism and questionable science. I wouldn't disagree here in the slightest. I guess I'm arguing more as a philosophical principle, that objective standards do exist, and they should be used to detect fraud, but that you're right in that our government often does not use the correct standard.

Post 37

Tuesday, March 4, 2008 - 12:10amSanction this postReply
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Sounds fair, John.

:-)

Ed

Post 38

Thursday, March 6, 2008 - 1:58pmSanction this postReply
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Here is a very good example of fraudlent stuff being pawned off on people - I saw this crap and knew it was fake instantly, but too many people are easily duped:

http://www.lilsugar.com/1096611


Post 39

Thursday, March 6, 2008 - 8:18pmSanction this postReply
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Kurt, thank you for the concrete example.

As an expert on the interface between marketing and science, I will look critically into the matter and publish my "official" report for peer-review by astute RoR members such as yourself.

;-)

Expect results from this process within the next 72 hours.

Ed

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