Since 1955, when HK Beecher published his classic "The Powerful Placebo," it generally has been accepted that 35% of patients with any of a wide variety of disorders can be treated with placebos alone. In recent years, average cure rates of 70%, and up to 100%, also have been quoted. Like pharmacological preparations, placebos are credited with possessing time-effect curves; cumulation and carry-over effects; differentiated actions depending on color, size, or packaging; even toxic effects. It has been postulated that placebos can prolong life, that their effects occur in surgery as well as in medicine, and that they are mediated by endorphins. In this article source material that forms the scientific basis for such claims is examined. Analysis shows that the studies on which such ideas are based, except perhaps in bronchial asthma, do not in any way justify the conclusions drawn from them. The truth is that the placebo effect is counterfeited by a variety of factors including the natural history of the disease, regression to the mean, concomitant treatments, obliging reports, experimental subordination, severe methodological defects in the studies, misquotations, etc; even, on occasion, by the fact that the supposed placebo is actually not a placebo, but has to be acknowledged as having a specific action on the condition for which it is being given. A further reason for misjudgment is the lack of clarity of the placebo concept itself. Experimental subordination and conditioning are other areas of insufficient conceptual differentiation. The authors conclude that the literature relating to the magnitude and frequency of the placebo effect is unfounded and grossly overrated, if not entirely false. They pose the question whether the existence of the so-called placebo effect is itself not largely-or indeed totally-illusory.