is fraud immoral?

[David Ottinger]

Fraud is immoral because it violates the principle of equal consideration as far as contracts are concerned.

 

In order for there to be a valid contract various elements need to be present, and off the top of my head, some of them are:

 

• Clear intent to contract
• Full disclosure
• Mental Capacity
• Offer & Acceptance 

 

Without these elements present in a transaction, there can be no consideration.  Thus, there can be no valid agreement as consideration is necessary for consent.  Any violation of this principle is fraud.  And because fraud is a form of economical conquest, it is also a violation of the NAP. 

[shirgall]

Fraud is immoral because it violates the principle of equal consideration as far as contracts are concerned.

 

In order for there to be a valid contract various elements need to be present, and off the top of my head, some of them are:

 

• Clear intent to contract
• Full disclosure
• Mental Capacity
• Offer & Acceptance 

 

Without these elements present in a transaction, there can be no consideration.  Thus, there can be no valid agreement as consideration is necessary for consent.  Any violation of this principle is fraud.  And because fraud is a form of economical conquest, it is also a violation of the NAP. 

 

Careful, you are using a legal definition to defend a philosophical one, something I've drawn criticism for myself in the lethal force discussions, although I do try to relate it back to philosophical principles like you have.

 

I didn't try to go this deep into contract law for this reason, I figure we can stop at the point of universalizing the thing we expect to be immoral, like I tried. I'm happy to learn what I did was not sufficient however.

[David Ottinger]

Careful, you are using a legal definition to defend a philosophical one, something I've drawn criticism for myself in the lethal force discussions, although I do try to relate it back to philosophical principles like you have.

 

I didn't try to go this deep into contract law for this reason, I figure we can stop at the point of universalizing the thing we expect to be immoral, like I tried. I'm happy to learn what I did was not sufficient however.

 

UPB is a methodology for evaluating moral theories.  And I think what I presented here is another moral principle.  One that deals with establishing contracts.  What does it matter where the concept comes from?  What matters is whether it's valid or not, right?

[yagami]

Let's try universalizing the opposite: It is immoral to misrepresent the value you are exchanging in a trade because if it was the maxim that ALL people MUST misrepresent what they are selling then it would be impossible to make trades.

 

All parties benefit from a fair exchange. Only one party benefits from an unfair exchange. It is unlikely that any party benefits if everyone cheats on an exchange.

 

As above, lying itself may not be immoral, but lying about the value of an exchange cannot be universalized.

 

Right there are two categories of morality. Immoral and not immoral. There is no such thing as positive morality.

[cynicist]

I think intentionally defrauding somebody is unsavory and I think most people would ostracize somebody who was known to be an agent of fraud. However, this inquiry is to whether or not fraud is immoral or not?

 

I would argue that it is not because fraud is co-operative; it only takes place with consent on both sides. If one were to claim that fraud was immoral, they would be saying that one party in an exchange is responsible for understanding the exchange, but the other party is not. I find this to be inconsistent and contradictory. I think if a person does not understand an exchange, they should not submit to it.

 

Can you really blame someone for 'not understanding' an exchange when the other party is purposefully deceiving them? Why is it worse to reneg on a deal once it is agreed upon than it is to lie about it beforehand? In either case you are trying to steal from the other person.

 

In fact I'm not sure how you can even say it takes place with consent, because if consent were present then how could you call it fraud? The way you phrase this is very important because fraud is not when someone misunderstands an exchange, it's when someone deliberately misrepresents what they are exchanging in order to deprive the other person of their property.

[dsayers]

Let's try universalizing the opposite: It is immoral to misrepresent the value you are exchanging in a trade because if it was the maxim that ALL people MUST misrepresent what they are selling then it would be impossible to make trades.

 

I don't see this as having acknowledged my challenges to your position. You stated a conclusion and I sought clarity as to how you arrived at that conclusion.

[shirgall]

I don't see this as having acknowledged my challenges to your position. You stated a conclusion and I sought clarity as to how you arrived at that conclusion.

 

Actually, I gave how you I got to the conclusion, by universalizing the opposite and seeing if it worked. If it doesn't work, it's immoral. Just like, "it doesn't make sense when everyone murders therefore it's immoral" it's also "it doesn't make sense when everyone lies about the value of what they are trading therefore its immoral."

[st434u]

Of course fraud is immoral, by any standard definition of morality. If fraud isn't immoral, then I fail to see how anything would be.

 

And it's not just about stealing.

 

If someone sells you lemonade with poison in it but doesn't tell you about the poison, then they just engaged in fraud with the intent to murder you.

 

If someone sells you a pair of Nike shoes that isn't really produced by Nike, then you may never figure this out, but the shoes they sold you weren't what you agreed to pay for, and that is fraud as well, and it is immoral also.

 

Obviously the first example is much worse than the second.

 

There are other examples of fraud that don't involve financial transactions.

 

For instance, a woman has sex with you and tells you that she've been taking contraceptive pills every day for over a year, but she lied, then she defrauded you also, and that is also immoral.

 

The key to fraud is to enter into an agreement with someone else using deceit, absent which the other party would likely refuse to enter into.

[dsayers]

Just like, "it doesn't make sense when everyone murders therefore it's immoral"

 

"Makes sense" is both undefined and not the criteria for immorality. The questions were:

 

1) How can you logically claim that one party is responsible for understanding the exchange but the other is not?

 

2) How can you logically claim that if a party enters into an exchange they do not understand, somebody else is more responsible for that than they are?

 

Of course fraud is immoral, by any standard definition of morality. If fraud isn't immoral, then I fail to see how anything would be.

 

To be clear, "fraud" is not what's being asked about. It was jettisoned on page 1 once the use of the word was found to be obfuscating. So the question is HOW do you arrive at the conclusion that deceiving somebody is immoral. Please observe the challenges I've posited to shirgall.

 

Poisoning somebody is assault, not deceit. If somebody buying shoes views being manufactured by a specific brand as a requisite, they can do business with the company directly, with authorized sellers, reputable vendors, etc. If a man has sex with a woman he knows so poorly that she could lie to him in that fashion, how is he not responsible? It keeps coming back to the same two challenges I put forth in the opening post and they remain unassailed. Surprisingly, multiple people are asserting as if the challenges have not been put forth.

[powder]

dsayers, I think Robert responded to your challenge above.  

[shirgall]

"Makes sense" is both undefined and not the criteria for immorality. The questions were:

 

1) How can you logically claim that one party is responsible for understanding the exchange but the other is not?

 

2) How can you logically claim that if a party enters into an exchange they do not understand, somebody else is more responsible for that than they are?

 

 

Neither one of these has anything to do with fraud. Fraud is the act of deliberately misrepresenting the value of one side of a transaction.

 

Sorry about the "makes sense". Misrepresenting value in transactions is not universally preferable. This is not a personal preference. This is also not a requirement that all parties have perfect knowledge of the transactions.

 

If I may quote Universally Preferable Behavior:

No moral theory should, if it is universally applied, directly eliminate behaviour it defines as moral while simultaneously creating behaviour it defines as immoral.

 

 

If everyone lies about the value of their side of the transaction no transactions will occur. (Or, if they do occur, they'll be like hostage exchanges in the movies.) People will spend all of their time checking and rechecking and setting up perfect exchange systems that no will will trust to get to some approximation of perfect knowledge at the same time obscuring and lying to overstate the value of what they offer. Even when everyone knows that everyone else is lying you won't get to a usable market.

 

Can you imagine someone trying to introduce bitcoin when it's universally preferable to defraud? Would anyone use it?

 

UPB doesn't go so far to say fraud is evil because the victim has some agency in the transaction, but I hold that it is evil because universalizing fraud leads to an unusable market. People need to transact with others to live and universalizing fraud leads to starvation and exposure.

[dsayers]

From the opening post:

 

I think intentionally defrauding somebody is unsavory and I think most people would ostracize somebody who was known to be an agent of fraud. However, this inquiry is to whether or not fraud is immoral or not?

 

Adjusting for the clarification of my use of the word "fraud" instead of "deceit before consent," at no point have I operated under the assumption that anybody would enjoy the deceit or that the deceit is good. The question is: is it IMMORAL? Is it the initiation of the use of force? Does it violate property rights? I took the position that it is not immoral because it is voluntary. I provided the null hypothesis that in order to be immoral despite being voluntary, one would have to logically prove that one party is responsible for understanding the exchange while the other is not AND that the person consenting to an exchange they didn't understand would be the responsibility of NOT the person doing the consenting.

 

I apologize for the 3rd time that my use of the word "fraud" has clouded the discussion. However, I feel I've engaged in due diligence in clearing up this mistake. I've also now thrice put those same questions to you specifically, shirgall, which you refuse to address. Which means that we are, at this point, talking about different things entirely. I reject that immorality can be found where consent is present as consent is the antithesis of immorality. I am sorry that I have wasted your time that you've spent talking about something other than the question of this thread.

 

@powder: No, the first sentence of his second paragraph is evidence that he is talking about his interpretation of the word "fraud" instead of what the topic is actually asking about. The topic is asking about where consent is present and he's talking about where consent is not present without the rigor of logically explaining how consent is not present where it is present.

[cynicist]

dsayers, I think Robert responded to your challenge above.  

 

It seems that I'm off topic so I'll just leave a few thoughts below and end my participation.

 

If consent were present the person wouldn't be complaining about fraud. If someone takes something from you, how would bystanders know whether it was theft or not? Since you've already decided that consent is always present when items are exchanged without force, there isn't much to argue about. If you are curious I would ask yourself about situations where people are stolen from without their knowledge for example.

[shirgall]

Let's throw in a lifeboat.

 

Party A has recently suffered the loss of a child.

 

Party B is a preacher.

 

Party B claims that the dead child will be sent to heaven if one only donated some money to the church and performed some ritual.

 

Party B has credentials from a 2000-year-old organization.

 

Party B, in his heart of hearts, only got the credentials so he could have a cushy job of inflated importance.

 

Party A consents to the transaction because she is desperately sad about the lost child.

 

Was what Party B did immoral?

 

Yes. Yes it was.

 

Was what Party A did immoral?

 

No. Credulous perhaps, but not immoral.

[David Ottinger]

Dsayers,  does my post not address your question/challenge?

[dsayers]

I don't know. You refer to "fraud" after it's been established that the word has very different meanings.

 

The topic is about the moral consideration of deceit prior to a contract. Near as I can tell, adapting your post to that topic, you are claiming that deceit prior to contract invalidates consent. In order for this to be true, one party would have to be responsible for understanding the trade while the other is not (which is internally inconsistent) AND somebody else would have to be more responsible for somebody consenting to a trade than the person consenting is (which is logically impossible).

[David Ottinger]

The moment one presents an offer, whether a buyer or seller, the two are engaged in a negotiation.  Both have a responsibility of full disclsoure.  To introduce deception to the transaction changes the nature of the interaction from trade to economical conquest.  The difference between conquest and peaceful relations is the NAP.

 

The defintion of an unconscionable bargain is:

 

UNCONSCIONABLE BARGAIN, contracts. A contract which no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept, on the other. 4 Bouv. Inst. n. 3848

 

For one party to decieve the other would be to perform an act that is deliberately intended to place the other party under delusion.  The nature of war is deception.  That is what the art of war is all about. 

 

Aren't you simply aksing: Can there be honor among thieves? 

 

And, is that not the sort of cognitive dissonance responsible for the duality we see in statism? 

[dsayers]

Both have a responsibility of full disclsoure.  To introduce deception to the transaction changes the nature of the interaction from trade to economical conquest.  The difference between conquest and peaceful relations is the NAP.

 

These are assertions and begging the question.

[David Ottinger]

These are assertions and begging the question.

 

I fail to see how.  You're mistakenly claiming something is both consensual and deceptive.  One cannot fundamentally consent to deception just like one cannot consent to theft.  Consideration is necessary for there to be conset, and there can be no consideration where there is deception.  And where there is no consideration there is no valid contract.    

[dsayers]

Again, begging the question. I accept that if you point a gun at somebody's head and they sign a contract, they did not give consent. I can logically explain how what looks like mechanical consent in that scenario is not moral consent (therefore I accept that mechanical consent might not be moral consent). However, you have not.

 

Deceit is not the initiation of the use of force. So for me to offer to buy your $20k bracelet for $20 to be immoral, I would have to be responsible for understanding the exchange while you are not responsible (which is internally inconsistent) AND I would have to be more responsible than you for YOUR agreeing to sell something you didn't know the value of (which is logically impossible).

 

One cannot fundamentally consent to deception just like one cannot consent to theft.

 

Do you accept human capacity for error? If so, then you understand that even your own eyes cannot provide you with a perception that is necessarily representative of the real world. It is absurd to say that another person must provide what a human being cannot absolutely provide.

[Bradford26]

This is a fantastic discussion. I feel like we've got the question surrounded and need to recognize a few nuances to get it solved.

 

Where we agree

I believe we all agree that it is fraud to misrepresent what you are selling. For example, if the contract states that you are selling a car that has 20k miles on it and it is later discovered that the car actually has 100k miles on it, that is fraud, a breach of contract and you owe restitution. 

 

Where we disagree

Whether it is immoral to take advantage of someone else's lack of knowledge, unawareness, or gullibility. Is it immoral to tell a lie in an effort to manipulate someone's purchasing decisions if it DOESN'T involve misrepresenting what you are selling? To manipulate someone's reality for profit is unethical, but is it immoral? Can we use force to neutralize these individuals?

 

Followup Questions

Are there any aspects of society that contribute to gullibility? Are parents responsible for their children's gullibility? Should the gullible be considered victims, not of the manipulative salesman, but of bad parenting and/or schooling? If we place blame on being ill-prepared, does the solution look different? Could warranties or insurance solve this problem?

 

Thanks for reading.

[David Ottinger]

 

Again, begging the question. I accept that if you point a gun at somebody's head and they sign a contract, they did not give consent. I can logically explain how what looks like mechanical consent in that scenario is not moral consent (therefore I accept that mechanical consent might not be moral consent). However, you have not.

 

I'm essentially pointing out the equivalence of how a door can't be both closed and open at the same time, and you're telling me that's circular reasoning.  So, again, I fail to see how that's the case.  And, you can continue asserting logical fallacies, but that's not really pointing it/them out for further discourse.

 

Also, what you pointed out here is duress. What I've been trying to establish with you is what consent is.  And I find that you're limiting consent to merely offer and acceptance, and that's erroneous.  I've already provided other elements that make up this abstraction called consent.  By your definition of consent so far you can get a child to "consent" despite that they do not have the mental capacity to actually *consider* the deal. 

 

And, you also failed to address the point:  One cannot logically consent to deception.  Now, I can subject myself to willful blindness by saying, "Hey, I don't really want to know those details."  And, at that point I've assumed the consequences.   So, for me to consent to deception would cease to be decption just as it would cease to be theft if I said, "Yeah, you can take that."    

 

 

Deceit is not the initiation of the use of force. So for me to offer to buy your $20k bracelet for $20 to be immoral, I would have to be responsible for understanding the exchange while you are not responsible (which is internally inconsistent) AND I would have to be more responsible than you for YOUR agreeing to sell something you didn't know the value of (which is logically impossible).

 

Well... it's not the initiation of force as it's typically used, but it is a form of economical conquest, and all acts of conquest violate the NAP.  The principle you're violating with deception is the principle of equal consideration. 

 

It is universally preferable to act in good faith, i.e. with respect to the interest of the other parties, when conducting negotiations.  Taking advantage of someone else's ignorance fails to do that.  You are purposely misrepresenting the value of said good for your own monetary gain.  You are clearly engaging in a transaction meant to defraud the person of his/her wealth.  You're being a thief, a very cunning theif, but nonetheless, a thief.  You are intending to hoodwink/dupe/cheat/swindle/mislead someone for your own personal gain. 

 

This is duplicitous behavior.  When you offer that $20, you're telling that individual, "I think that's worth $20."  No, you do not!  You have purposely misrepresented yourself for gain at the expense of another. 

 

 

Do you accept human capacity for error? If so, then you understand that even your own eyes cannot provide you with a perception that is necessarily representative of the real world. It is absurd to say that another person must provide what a human being cannot absolutely provide.

 

Of course I do.  But I do not call that deception.  It can be negligence.  And, in the case of gross negligence such action is tantamount to fraud in the event of loss of property. 

 

Gross negligence being something where a person is informed of an issue or risk arising and failing to address that issue in due course, thus leading to unintended consequences such as loss of property. 

 

If, for example, I agree to manage your property, and I fail to take care of it because I misjudged an issue, then I am the reason you have to suffer more damages.  There was no intent to decieve you.  I just failed to do my job.  Though, if I try to cover it up, then at that point it becomes intentional, and thus fraud. 

[dsayers]

 

When you offer that $20, you're telling that individual, "I think that's worth $20."  No, you do not!  You have purposely misrepresented yourself for gain at the expense of another. 

 

And unless I then force them to engage in the transaction, I have successfully argued that it is not immoral. Unless you can satisfy the two challenges I put forth as the null hypothesis.

 

Begging the question means providing an argument that assumes the conclusion of the question it's meant to answer. In a thread that's essentially asking, "is deceit the initiation of the use of force," you're saying that deceit is the initiation of the use of force. For the third time now. You won't explain how. You won't address the null hypotheses. You're repeatedly putting forth a conclusion without acknowledging the challenges or explaining how you arrived at that conclusion. You appear to be engaging in bias confirmation, not a discussion. If this continues, I will cease to operate under the assumption that it is in fact a co-operative discussion for the purpose of determining the truth.

 

Oh and pointing out that theft is immoral by definition is not evidence that NOT theft is also immoral by definition.

[David Ottinger]

Well, if it's any consolation, I share your frustration in articulating this because I find I've addressed your premise insofar as to point out its flaws.  So which one of us is labeling things inaccurately?  Also, "begging the question" is synonymous with circular reasoning.  And, we're definitely going in circles here, so I will try this one more time as well...

You have not successfully argued that it's a valid act of trade (i.e. not immoral) and here is why:

• You have not accurately defined consent, i.e. the elements of consent;
• You have not accurately defined deception;
• You have not explained how one can logically consent to deception; and,
• You have not explained why duress or the 'initiation of force' is the be-all-end-all metric by which one would categorize the morality of an exchange.

Now, I cannot go further in the discussion until these points are addressed.  And, the only reason I'm asking for '1' and '2' at this point is because I do not fathom how there can be consent in the presence of deception as they are contradictory to one another.

And just for clarity:  Something is not moral or immoral solely based on whether there was an initiation of force.  That only covers a portion, albeit a large portion, of the NAP.  The NAP is just one principle, and it is one that allows us to categorize human action as it relates to conquest.  And there are 3 forms of conquest: (1) physical conquest; (2) economical conquest; and, (3) epistemological conquest.  (I can explain further if you need me to.)

 

The initiation of force only deals with physical conquest. 

[labmath2]

Doesn't universalizing lying also universalize fraud?

[wdiaz03]

dsayers, on 16 Dec 2015 - 10:31 PM, said:

I liken it to the purchase of a used car. Say I walk onto a lot and I want a blue car. I find a blue car and I ask the salesman how it runs. He says great, so I buy the car. I get in to drive it home and find it has no engine. Is the salesman responsible for this LIE that led to me parting with thousands of dollars? NO. Because if having no engine is a deal-breaker for me, then it is my responsibility to verity that it has an engine (which functions) before trading for it. Otherwise, we'd be saying that the salesman is MORE responsible for my actions than I am, which cannot be universalized.

 

I wish OP would have included the example he posted on the thread that prompted him creating this thread. I think it would have saved some time and people could debate the example instead of trying to determine what he meant. I have included it here for further discussion. I already expressed my thoughts to him but will summarize it for others.

 

The fact that the salesman lied indicates to me that there was fraud. The buyer would only buy the car if it "ran great" the salesman agreed it did. There is a breach of contract when the car is delivered without an engine. 

This is the classic empty iPod box from ebay. I buy an iPod I get an empty box. 

 

Thoughts?

[SamuelS]

Doesn't consent imply that one has some knowledge of what they're consenting to? The term "informed consent" comes to mind. Frankly your example reads to me as theft, which is immoral. If you and I agree to exchange my apple for your dollar, and I don't get your dollar but you get my apple, you're a thief. There may be some obfuscation of that truth, but that doesn't change it any more than a shower door makes me blurry.

[wdiaz03]

 

Neither one of these has anything to do with fraud. Fraud is the act of deliberately misrepresenting the value of one side of a transaction.

 

Sorry about the "makes sense". Misrepresenting value in transactions is not universally preferable. This is not a personal preference. This is also not a requirement that all parties have perfect knowledge of the transactions.

 

If I may quote Universally Preferable Behavior:

 

If everyone lies about the value of their side of the transaction no transactions will occur. (Or, if they do occur, they'll be like hostage exchanges in the movies.) People will spend all of their time checking and rechecking and setting up perfect exchange systems that no will will trust to get to some approximation of perfect knowledge at the same time obscuring and lying to overstate the value of what they offer. Even when everyone knows that everyone else is lying you won't get to a usable market.

 

Can you imagine someone trying to introduce bitcoin when it's universally preferable to defraud? Would anyone use it?

 

UPB doesn't go so far to say fraud is evil because the victim has some agency in the transaction, but I hold that it is evil because universalizing fraud leads to an unusable market. People need to transact with others to live and universalizing fraud leads to starvation and exposure.

 

 

I'm curious about how UPB would handle lying. What are your thoughts on this? Can two people in a room lie to each other at all times? If not, does that proves honesty is a virtue?

 

Thanks.

[shirgall]

I'm curious about how UPB would handle lying. What are your thoughts on this? Can two people in a room lie to each other at all times? If not, does that proves honesty is a virtue?

 

Thanks.

 

I think lying in an of itself is a tough row to hoe, but I think that lying with specific contexts can be proven to be not UPB. Lying about a surprise party is one thing. Lying to your wife about hooking up with hemophiliac heroin-addicted hookers every weekend is another.

[wdiaz03]

I think lying in an of itself is a tough row to hoe, but I think that lying with specific contexts can be proven to be not UPB. Lying about a surprise party is one thing. Lying to your wife about hooking up with hemophiliac heroin-addicted hookers every weekend is another.

 

I can see how lying cannot be universalized because if one makes the claim "lying is UPB", is one lying then? SO one cannot make the claim without stepping outside of that behavior to do so. right?

[shirgall]

I can see how lying cannot be universalized because if one makes the claim "lying is UPB", is one lying then? SO one cannot make the claim without stepping outside of that behavior to do so. right?

 

Yes, but just because something isn't UPB doesn't make it immoral. There's a lot more work to do to get there. That's why it's easier to break it into contexts.

[dsayers]

Lying to your wife about hooking up with hemophiliac heroin-addicted hookers every weekend is another.

In that scenario, the lie isn't the violation of property rights. The breaking of the marital contract would be.

[shirgall]

In that scenario, the lie isn't the violation of property rights. The breaking of the marital contract would be.

 

I was providing a context in which lying was clearly wrong. I had hoped I had succeeded.

[dsayers]

I agree if by wrong you mean somebody I would choose to avoid for being willing to engage in that behavior and lie in such a high stakes manner. I would disagree if by wrong you meant a violation of property rights. Not trying to steer the conversation. Just that this is what I made the thread to explore.

[shirgall]

I agree if by wrong you mean somebody I would choose to avoid for being willing to engage in that behavior and lie in such a high stakes manner. I would disagree if by wrong you meant a violation of property rights. Not trying to steer the conversation. Just that this is what I made the thread to explore.

 

Well, taking great liberties with the wife's reproductive health by knowingly exposing her to probable STDs is arguably a property rights violation...