Essay

It is never appropriate for people to use informal fallacies in society. This is because these fallacies have no justification behind them, they are just simply wrong. Many people throughout history have used these fallacies despite the damage they cause and they and others have paid severely for it. The corporate company Enron is one example and they are not the only ones. Many people have fallen victim to using informal fallacies.

It easy to understand why informal fallacies can sometimes be plausible and convincing despite the fact that they are by definition false. A fallacy is a deceptive, misleading, or false notion or belief and people often make the mistake of believing them because of the affect they have on those people. Informal fallacies are commonly seen in human societies and it is fair to say that they have become an inevitable part of everyday life. This is why people often fall for them, because they are so common and they have therefore become almost popular in society. No one wants to be the outlier by calling someone out on a fallacy. They would rather make themselves believe it was true than risk being called insolent for questioning someone else’s belief. For example if someone said “I saw him right after the crime therefore he must be the criminal” (an example of the fallacy post hoc ergo propter hoc, or one event does not necessarily cause another even if they happen one right after the other), not many people would likely suggest that that person was mistaken and that just because they saw him does not necessarily mean he committed the crime. Or if someone said, “comets are like cats because they both have tails and they go wherever they please” (an example of the fallacy of false analogies), no one would point out that that is not necessarily accurate because it would make them seem conceited to other people. Most people allow themselves to believe these fallacies because they are popular and common in society and because they would not want to be considered an outcast for calling someone out on a false remark.

In the case of Enron, many informal fallacies can be found within the various comments and claims of the people involved in the scandal. The scandal was that the major corporate company Enron was lying to their clients and their employees about how much profit they were earning by using mark-to-market accounting to make it seem as though they were extremely successful, when in fact they had virtually no income and were severely in debt, while the owners of Enron pocketed the little money they did have. In the article entitled “Open Secrets”, by Malcolm Gladwell, the author points out many examples of fallacies that related to Enron’s cover-up. One example was the use of mark-to-market accounting by Enron that Gladwell explains in his article, saying that “when a company using mark-to-market accounting says it has made a profit of ten million dollars on revenues of a hundred million, then, it could mean one of two things. The company may actually have a hundred million dollars in its bank accounts, of which ten million will remain after it has paid its bills. Or it may be guessing that it will make ten million dollars on a deal where money may not actually change hands for years.” This type of fallacy is known as a false dilemma or when it is communicated that there are only two possible conclusions to a situation, because Enron was communicating that they either had their money or they were going to get their money by using mark-to-market accounting, when in fact they actually did not have the money and they were actually not going to get it. Another example from the Enron article was Enron’s involvement S.P.E.s when Gladwell explained how “Enron's use of mark-to-market accounting and S.P.E.s was an accounting game that made the company look as though it were earning far more money than it was. But the I.R.S. doesn't accept mark-to-market accounting; you pay tax on income when you actually receive that income. And, from the I.R.S.'s perspective, all of Enron's fantastically complex maneuvering around its S.P.E.s was, as Fleischer puts it, "a non-event": until the partnership actually sells the asset—and makes either a profit or a loss—an S.P.E. is just an accounting fiction. Enron wasn't paying any taxes because, in the eyes of the I.R.S., Enron wasn't making any money.” This fallacy is called equivocation or the use of ambiguous words to hide the truth of what is being conveyed, because Enron was using this method to maneuver around S.P.E.s and blind the I.R.S. form seeing what their income actually was. One more example that was given in the article on Enron was the maneuvering they preformed with their tax code or as Gladwell said, “If you looked at Enron from the perspective of the tax code, that is, you would have seen a very different picture of the company than if you had looked through the more traditional lens of the accounting profession. But in order to do that you would have to be trained in the tax code and be familiar with its particular conventions and intricacies, and know what questions to ask. ‘The fact of the gap between [Enron's] accounting income and taxable income was easily observed,’ Fleischer notes, but not the source of the gap. ‘The tax code requires special training.’” This is again the fallacy of equivocation because Enron was using the complication of the fallacy to make it extremely difficult for anyone to understand what the deal really was with their income so that they could put it in plain sight and not seem suspicious.

Some more examples of these fallacies were presented in the movie “Enron”, which was a documentary about the events of the Enron scandal. One such example from the movie a clip that was shown in the movie of Skilling addressing his employees in a meeting, some time after 911 when Enron was beginning to be questioned about its income, and stating that “just as the United States was under attack from terrorists, so was Enron under attack from the media”. This type of fallacy is a false analogy because Skilling was comparing Enron to the United States when the two had nothing really to do with each other to provoke pity for the company as though it were under attack by terrorists. Another fallacy that the movie presented was when it explained how Enron was claiming that no one could show that they were making profits, again when Enron was first being questioned about its income, and therefore the company must be making them. This fallacy is known as argument ad ignorantum or claiming that something is proven just because it has not been disproven, because the company was claiming that that it was proven that they were making the income because no one could prove that they were not, but the only reason no one could prove that was because no one had the skills to interpret the maneuvering they went through in their tax code. One other example the movie provided was the audio recording of Skilling the first time someone questioned his company about their income and it reveals how when Skilling was backed into a corner by his interrogator he lashed out to detract the attention from himself by calling the man an “asshole”. This fallacy is called an ad hominem attack, or rejecting an argument or question on the basis of some irrelevant fact about the person presenting the argument or question, because Skilling was rejecting his interrogators questions about the company’s income by saying that he was being insolent, despite how irrelevant it was, so that he could avoid answering the questions.

There are no circumstances under which these formal fallacies can be justified. Enron truly showed this with their malicious intent in using them. It is true that these fallacies can sometimes be used as a sort of survival technique by people with good intensions, for example campaigns aimed to make people donate money for a good cause sometimes communicate information that is a bit of a stretch from the truth in order to gain more sympathy. But this still does not justify these fallacies because it is still a form of lying and cheating. In his article Gladwell questions who is responsible when the use of these fallicies take a turn for the worst. He claims in the piece that “it is your fault as well”, meaning it is the fault of the person who did not see these fallacies happening and did not stop them and that is why they turned for the worst. A counterargument for this claim would be that it is impossible or at least very difficult to recognize these fallacies when they occur because as a part of their definition they are well concealed. But there us logic on both sides of these arguments because it is true that people should be aware of these fallacies when they occur and should try to prevent them from becoming worse but at the same time people should not be forced to take on this responsibility because there are no situations which justify thee fallacies and therefore people should have the common sense not to use them.

Despite the fact that fallacies cannot be justified it is still difficult for people not use them in their life for personal gain. I myself have used an indirect fallacy or two in my time to improve my own circumstances. The one I most commonly use is equivocation, because it helps me get out of trouble. For example one day when my mother asked me to do the dishes and I forgot I was able to avoid punishment by telling her that it wasn’t so much that I had forgotten to do them but that I was simply distracted by the quantity of homework which was necessary for me to complete. I was able to avoid trouble by using this fallacy. I suppose it is a part of the human error which drives people to do these things like using these fallacies, but that still does not justify them. Even though I myself have used them that does not mean that they are acceptable. All people, including myself, should always be working to prevent these fallacies from occurring because they are not justified.