Monday, December 10, 2012

Bad Argument: the either/or fallacy (i.e. false dilemma)

Chasing Madoff
Chasing Madoff (Photo credit: Wikipedia)
One way defenders defend a suspect scheme is to claim that a business is "innocent until proven guilty", and use that to deflect every sort of analysis by critics.  To the defenders, there are only two choices: illegal, or legal, and anything that was not declared illegal by a government or court must therefore be legal. 

This is a fallacy on multiple levels. 

As a legal concept, this is fallacious because "innocent until proven guilty" is primarily used for CRIMINAL prosecution, not civil. And if a business is fraudulent, it's a civil matter. (there are exceptions, but US is not one of them)

As a logical fallacy, this is a form of either/or (i.e. false dilemma), as a business can be "undetermined", as well as legal, or illegal. In fact, this is a fundamental concept in critical thinking, that you have to start from a "null hypothesis", and prove it either way. 

There's also the question about operating illegally, vs. formally declared as scam and received a judgement by a real judge in a court of law. For example, we knew that Madoff's Ponzi had been operating for a decade or more before it ran out of money in 2008 and Madoff confessed. So it was operating ILLEGALLY for a decade, but there was no charges. So was Madoff's scheme illegal? Absolutely. However, according to some scheme defender's logic, Madoff's scheme is NOT illegal UNTIL it's formally declared by a judge to be illegal. That's just bogus.

Then there's the question of settlement. If the head of the company plead "no contest" and chose not to contest the charges by the government, is the business a fraud or not? Legally, it should be same as guilty, but as there was no "guilty verdict" some defenders continue to claim the business is legal. Then zealous defenders will claim "incompetent defense lawyer", "prosecution strong-armed the plea deal", and so on.

And even if it's pronounced guilty, some zealous defenders will continue to claim "malicious prosecution", "corrupt judges", "incompetent defense lawyer", "they just don't understand our business model", and so on and so forth. Such a thing has happened to many a scam, esp. international ones. Ad Surf Daily adherents continued to defend the scheme years after it was stopped by SEC, even filing frivolous lawsuits. TVI Express followers around the world refuse to acknowledge that their scheme is illegal just because it was declared illegal in some other country (or in this case, a dozen different countries). 

When the evidence becomes overwhelming that the company was indeed operating illegally, defenders will often abandon their argument that it's completely innocent or completely guilty, and claim that the company is MOSTLY LEGAL, by claiming that "most" of the company's revenue is derived legally, and whatever the critics analyzed is but a small portion (but then, they can't prove it either).

So many ways to BS, so little time. Don't fall for the false dilemma. There are usually alternate explanations. 

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