< >

Living on the Precipice banner

Chapter 7:

Gresham's Law:
Its Treacherous

Like all the chapters in this section, we start with an immensely simple idea. In this case, the simple observation (and fundamental principle in economics) that "bad money drives out good." Expanded to assume a more interdisciplinary utility, we might say that when you dilute "the good" in any system by allowing the introduction of "the bad," you succeed in getting rid of the good altogether, in varying degrees and in proportion to the bad you allow to flourish.
A good example of this might be the internet. Email has become a vital tool of business and industry -- not to mention what it has done for personal communications. In the early days of the internet, I found it to be an enormous benefit. Then, over time, we saw the introduction of more and more "spam," to the point where many users feel overloaded in attempting to "extract the good messages." I myself got to the point where even with advanced filtering methods, I was overwhelmed and urging my associates to CALL ME on the phone if their message was IMPORTANT. I could not take the chance that an important message might be missed awash all the unsolicited garbage.
No one likes spam. And the laws to try to reduce or eliminate its overgrowth in cyberspace do not appear to be working. There are, however, far more sinister applications of Gresham's Law, involving far more deliberate attempts to drive out the good. And despite arguments that the converse of Gresham's Law holds historical accuracy, there is no evidence that the role of organized medicine -- at any of its levels of operation -- has served to use the good to drive out the bad. 1.

Because I am an herbalist, people are sometimes shocked to hear me say that at least 90% of the herbal products on the market are, at best, marginal. Most products are, to use the vernacular, just garbage.
Herbology, well practiced with an eye towards maximizing the desired effect on the customer, is an exacting science. Depending on the herb and its use, and in varying degrees, the efficacy of a given herbal product will be based on when it is picked, how it is processed, the proven efficacy of the mixed ingredient formula itself (where applicable), and the validity of the protocol provided, etc.
Good manufacturing practices should be enforced to ensure the very best herbal products are sold on the market. But such standards are not used OR enforced, and the reason is simple: the FDA doesn't recognize herbal supplements as anything more than that: a dietary supplement. Herbal manufacturers get to hide behind the DSHEA disclaimer -- after all, if you tell your customer up front, "This product is not designed to diagnose, prevent, treat or cure any disease," then if you market a medicinally worthless product how can you be held accountable?
You can't.
Officials at the FDA know this. They know that the marketplace is awash with worthless herbal products that do not benefit the customer. They like it that way. The pharmaceutical companies like it that way. And most physicians like it that way. By taking a blind eye to having near non-existent standards for medicinal herb products you have in place a phenomenon where bad products drive out the good. In other words, consumers stay confused and distrustful of good herbalism in general.
For every customer who has tried a product like Cansema and had a spectacular result, there are 20 who honestly believe that herbs don't work. And why shouldn't they believe this? They bought some cheap $4.00 bottle of product from WalMart, took it home, tried it, got no result, so what conclusion should they draw?
Another good example of this phenomenon is the regulatory posture towards homeopathic preparations. Although the FDA takes a conciliatory position towards homeopathy on its web site. 2, its lack of enforcement of good manufacturing practices has lead to an unusual chasm in how homeopathy is perceived in the U.S. versus other countries that are more open to alternative health care practices.
A close associate of mine in New York is a native of India who came to the U.S. 20 years ago to get his MBA. He has indicated to me that he knows physicians in Mumbai (Bombay) who use homeopathic preparations regularly, along with ayurvedic, herbal, and more conventional drug therapies. He has told me, "I didn't realize why Americans didn't think more highly of homeopathic remedies until I came to understand that because of unenforced standards your homeopathics don't work as well -- if at all."
Now, I have to regard this commentary as hearsay at this point. In all our work at Alpha Omega Labs, despite the fact that we manufactured, in part, most of the 350 different products we carried, we never manufactured any homeopathics. So this is not my area of specialty.
Nonetheless, given my experience in other areas where Gresham's Law runs amok, I regard this as another example of a phenomenon where the FDA, in allegiance to the pharmaceutical industry, turns a blind eye to encouraging the best alternatives to flourish in the market -- simply because by allowing the bad to dilute the public's confidence in the good, consumers are left only with the choice of going with more expensive pharmacological therapeutic options.

  1. http://www.columbia.edu/~ram15/grash.html The twelve and final section ("Conclusions") of this Columbia University essay attempts to make just such an assertion. To-wit: "The catchy phrase, 'bad money drives out good,' is not a correct statement of Gresham's Law nor is it a correct empirical assertion. Throughout history, the opposite has been the case. The laws of competition and efficiency ensure that 'good money drives out bad.' The great international currencies--shekels, darics, drachmas, staters, solidi, dinars, ducats, deniers, livres, pounds, dollars--have always been "good" not "bad" money."
  2. http://www.fda.gov/fdac/features/096_home.html
    This piece was abstracted from the December, 1996, issue of FDA Consumer magazine.

Fake Cansema - Center Panel
How FDA Officials
Assisted in the
Production of
Counterfeit Versions
Of My Product
After the FDA closed down our Louisiana operation in September, 2003, one of our former distributors, Toby McAdam, began selling his own version of our product, stealing the name, the web page information --- virtually everything about our product off our site.
All this began while I was in prison, and with the FDA having confiscated virtually all our assets, it was impossible for us to respond to this counterfeiting activity.
At the same time, Mr. McAdam, began telling our customers that he was working WITH FDA officials to continue selling his "legitimate version" of Cansema for sale to the public.
It is now one year since the FDA raided our facility, and we have had the chance to analyze Mr. McAdams product. Is it anything like what the label claims it to be? Not at all. Although the label clearly indicates that Toby's Cansema contains zinc chloride, chapparal, bloodroot, galangal root, ginger root, graviola leaf, bitter melon seed, and glycerine, we found that it contains N-O-N-E of the active ingredients of Cansema.
No zinc chloride.
No chapparal.
No bloodroot.
No galangal.
What it does appear to contain is corn oil and a couple of herbal components that are NOT listed on the label.
It is both an adulterated and mislabelled products.
But it has the blessings of the FDA.
Skeptics might ask, "Why would the FDA do such a thing?" Our answer is simple: with thousands of this worthless counterfeit product being shipped all over the U.S. -- product that does not work AT ALL -- can you think of any better way for the FDA to prove to the public that Cansema doesn't work as we have promised? After all, didn't the FDA insist in testimony in my own criminal case that Cansema was a worthless, "unapproved drug." It absolutely did. I know. I was there.
This is a treacherous application of Gresham's Law at its very worse. I have produced a special page on the Alpha Omega Labs site to provide more detail on this case.

Fake Cansema - Center Panel