Like any good Skeptic a large part of applying skepticism comes down to understanding to some extent human psychology. Understanding how people think or why they think the way they do can go along way to understanding someone else’s beliefs.
Any good Skeptic should also be fully prepared to turn their critical eye on themselves. Knowing common logical fallacies people make can be used to improve the quality of your own arguments but also highlight weaknesses in other’s arguments.
When evaluating medical claims of herbal supplements I usually apply a “back of the envelope” litmus test to such claims. Failing this litmus test doesn’t inherently disqualify something 1) because its not a fool-proof system 2) I’m not a medical doctor but it does raise some red flags. Some of those tests are:
“Kitchen Sink” claims
Does this [insert alt med herb/treatment] claim to cure all known diseases, like cancer, memory loss, toxicity and diarrhea simultaneously?
Argument from Naturalness
Does it seem like the biggest thing this [insert herb/claim] has going for it is that its “All Natural”. It shouldn’t need to be said but the claim “natural” is a meaningless term. I’m sure you love your All Natural Wheatgrass/Guava/Arsenic fruit smoothie but I’ll pass.
Does it have Side Effects?
If it doesn’t have any side effects it probably doesn’t have any *main* effects either.
I’ve never really compiled a list of these little litmus tests before and this is certainly not complete. I’d be interested in hearing anyone else’s tests or if someone has already put together a list of these before.
Just like “alt-med” claims there are other little litmus tests that could be applied in specific areas such as investments. Certainly all claims should be thoroughly understood but sometimes you need a cheat sheet.
Here’s a list from U.S. News & World Report on investment scams, The Psychology of Investing Scams. Below is a brief outline to a rather brief article.
While the old adage “if its too good to be true” should always be followed, here are some specific variations on a theme.
The “Phantom Riches” Tactic
If you are guaranteed decent (or extraordinary) and steady returns on an investment, you could end up in a Madoff-style investment/Ponzi Scheme.
The “Source Credibility” Tactic
Anybody can claim to be a financial planner but his she really? Is she registered with an accredited/recognized trade group, like the National Association of Personal Financial Advisers. Are the products sold/marketed registered with the SEC?
The lack of credentials or the registered status of an investment doesn’t disqualify it from being a sound investment but you’ve just removed some level of independent verification and you really, really need to understand how the investment vehicle can generate capital including the risks. You’ve certainly increased your homework.
The “Social Consensus” Tactic
This is fundamentally peer pressure. Everyone else is investing in mortgage-backed securities. Why aren’t you? This is a tough one because in many instances because, “I invested in something because [insert person whose judgment you trust] invested as well.”
The “Reciprocity” Tactic
I call this the “there’s no free dinner” rule. If you are given a free dinner at a nice restaurant and all you have to do is sit through an investment seminar, be prepared for the hard sell. You’ll see this with Buyer’s Clubs where you’ll get a key to a “new car” and all you have to is sit through the sales pitch. The Nigerian Email scam is a grandiose version of this, although this one plays very much to someone’s greed.
The “Scarcity” Tactic
Just as you might assume, “this opportunity will only last for the next 10 minutes so CALL NOW!!!” I think QVC or HSN have perfected this tactic, there’s a reason they show a running clock and slowly dwindling numbers of “items left in stock”. Any long-term investment (and most short-term ones as well) worth being involved in will not disappear overnight. The rhinestone-encrusted unicorn cigarrete lighter/tape recorder on the other hand is only available While Supplies Last.
Cross-posted at FreeThought Fort Wayne
Filed under: Health, Internet, Skeptic, investments, madoff, reciprocity, scams, Skepticism
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