The Libertarian Answer to Fraud

Most of us Libertarians speak out against fraud when we see it. However, many of my fellow Libertarians have a hard time coming to terms with how to prosecute fraud. This is an understandable problem, because it's a touchy issue. We want to preserve freedom of choice without allowing fraud and quackery to rule the country. What a problem!

I admit, this is a problem I've struggled with personally over the course of the last couple years. My political philosophy seemed to be at odds with my personal opinions, and I didn't see how to make the two work together in this aspect.

Then it came to me. I was trying to think the issue over and come to some solution and it just hit me. I was startled at the simplicity of the idea, and couldn't understand why I hadn't thought of it before. After all, the answer is similar to one I've given in response to other issues.

Recently, I read a critique of Libertarianism that spoke heavily on our perceived softness on fraud and quackery. It's not difficult to imagine how the author came to those conclusions, when you consider something that recently happened to me.

I was on an online public forum during a discussion of healthcare policy. I showed my support to someone who offered a very Libertarian solution to the problem, but also made a point to suggest that in a Libertarian system, someone could choose alternative or holistic medicine. I showed support for most of what he said, but offered a critique of his thoughts on holistic medicine, because most of it is pure health fraud no matter how you look at it.

Unfortunately, I wasn't allowed sufficient space to thoroughly discuss the issue and make my point, so I was probably misunderstood. Whatever the reason, several people immediately came back, blasting me for my opinion. One of them pointed out that holistic medicine (if I dare call it medicine) and acupuncture have been around for thousands of years, and have helped to promote health. I'd like to point out that acupunture hasn't really changed (except in the terminology used to discuss it) during those thousands of years, and that doesn't suggest real science is behind it.

Another person took it even further: "Who are you to define for *ME* what is medical "fraud" FOR MY HEALTH CARE and what isn't? If you want to SAY what you think fraud is, great. If you want to FORCE everyone to agree with that definition, you're part of the problem..."

Minor verbal abuse aside (don't worry--I give it out and I can take my share of it), he does raise an interesting point. You see, the Libertarian philosophy is one of free choice. In that aspect of the discussion, he's certainly correct. I have no business telling him how to handle his own healthcare.

On the other hand, the Libertarian philosophy is also that government has only two just purposes: 1) to protect the people from force; 2) to protect the people from fraud.

Certainly there must be some way for government to carry out its second duty, while at the same time preserving the freedom of choice.

And there is! I present to you, my answer to the threat of fraud from a Libertarian perspective.

The first realization I came to during my thought process related to this issue was that there can be no simple one size fits all answer to the problem. Different people, from all different sectors and backgrounds need to do their part to prevent and punish fraud. So my answer comes in several different parts.

Education

Education is key in the fight against fraud. No matter how strong the legal or judicial fight against fraud may become, there will always be a clever con-man to find a way around it. The only sure-fire method for dealing with fraud is to educate the general public.

A reform of the school system is certainly in order, but this isn't the only type of education I'm talking about. Indeed, it may be the least important in this fight. The type of education I'm talking about is that provided by people like Penn & Teller, James Randi, and myself, here on this website.

Frauds and quacks are very good salesmen. They don't have any truth or science to back up their claims, but they have charisma, and they know how to make pseudoscience sound, to the layman, like real science. That's their greatest skill: making a lie sound like truth.

If you don't know what magnet therapy (quackery) actually is, you might be vulnerable to an attack by the quacks that promote this as real medical science. Fortunately, Penn & Teller did a BULLSHIT episode in which they discussed magnet therapy and exposed it for what it really was. All their viewers that may have fallen victim to these scumbags came away from that show armed with the knowledge they needed to protect themselves.

I cannot stress this highly enough. Education is the single most important factor in our war against humbuggery. If the public is not educated, there will always be a strong supply of suckers for the con-men to exploit.

De-Regulation

Government may mean well when it passes laws to regulate industries. In particular, the health industry. And it makes a lot of sense. If we want to fight against fraud, wouldn't it be practical for the first step to be making these types of fraud illegal?

It sounds practical, but this philosophy has some serious problems.

The first is a philosophical problem. We do want to maintain the freedom of choice as much as we possibly can. Government regulations severely limit this freedom of choice. Sometimes, this may bear beneficial fruits. Frequently, it only limits the ability of the people to pursue happiness as they see fit.

The second is a problem arising out of popular perception. If one type of health fraud is outlawed (say, therapeutic touch--which is not real therapy and doesn't involve touching) but another (say, acupuncture) is not, it creates the perception that the one which is not outlawed is valid. There's no way the legislature can possibly keep up with all the bogus claims in the world, so there will always be some fraud which is not specifically listed in the lawbooks. The public perception will be that if some are outlawed, those must be the only bad ones.

The third is a real legal problem, and it takes several forms. The first is related to our popular perception problem, but taken from a legal point of view. If some are specifically outlawed while others are not, it would appear to grant legal consent to those that are not outlawed.

There's another legal problem that occurs to me with the this government regulation: lack of judicial recourse. A government that regulates the health industry will issue licenses to practitioners so they may be allowed to offer their services.

Let's go back to our example of acupuncture. According to the National Council Against Health Fraud (NCAHF): "All states permit acupuncture to be performed - some by physicians only, some by lay acupuncturists under medical supervision, and some by unsupervised lay persons. Seventeen states permit lay acupuncturists to practice without medical supervision. In 1990 the National Accreditation Commission for Schools and Colleges of Acupuncture and Oriental Medicine was recognized by the U.S. Secretary of Education as an accrediting agency."

There are several types of degrees which are deemed sufficient for an acupuncturist to perform his witchcraft on a vulnerable patient.

When the government specifically allows acupuncture to be performed as if it were a real medical procedure, the victim (patient) loses much of his ability to seek judicial recourse. He could try to sue the acupuncturist, but unless that "doctor" has performed some act outside of the accepted standards of acupuncture, there's almost no way to win that case.

Therefore, my solution calls for a de-regulation of the health industry and other industries. Passing laws against specific types of fraud is suicide for our anti-fraud cause.

We must preserve the freedom of choice in all matters possible, and provide another means to combat fraud (see below).

Judicial Reform

Let me begin this section with a fairly simple example to illustrate. If you offer someone thirty dollars for twenty dollars, that's a fairly stupid move on your part, but you're free to do so. Obviously, this is not illegal. However, if a con-man uses a technique known as "change raising" to scam you into making that deal against your will, this is obviously fraud and is obviously illegal.

That's a necessary distinction to make, because it illustrates the possibility of preserving the freedom of choice, while also not allowing fraud.

Going back to our example of acupuncture, I would never suggest that acupuncture should be made illegal or that every practitioner is necessarily a fraud. The patient should be free to try it as long as there is full consent that it is an experimental procedure and has not been demonstrated to perform any better than a placebo, and that there may be the risk of some complications. That would be just fine, and would be comparable to our first example (offering thirty dollars for twenty).

However, many acupuncturists go far beyond that, and make misleading claims about the benefits of this procedure. That crosses over into the territory of fraud. So, beyond just educating the public about the dangers associated with acupuncture, how do we deal with this situation?

The answer is judicial reform. Our judicial system is broken, and it needs to be fixed. It needs to be much easier to sue these frauds--and to win--than it currently is. Part of the way to do this is through deregulation (see above for the reasons).

Then, all we need is a strong judicial system. Anyone who feels victimized by these frauds may seek recourse through the courts, and file either civil or criminal charges or both, depending on the particular situation. The accused, of course, maintains the right to a trial by jury.

Jury trial should be able to weed out the frivolous lawsuits, while punishing the real frauds.

We maintain the freedom of choice, in that you can seek whatever type of medical care you desire, but we also punish the frauds by creating a system in which the victims may take legal action against them.

Of course, some frauds will slip through the cracks. That's an unfortunate truth of the world we live in. But let's be honest: no system is so perfect that all frauds will end up behind bars. And really, isn't that the goal? Keep freedom alive, but put the scumbags behind bars.