Business Books

You are being fooled every day of your life, says Nobel Prize-winning economists

The Money Show’s Bruce Whitfiield interviewed Ian Mann, MD at Gateways Business Consultants, for his weekly business book review.

Mann reviewed “Phishing for Phools: The Economics of Manipulation and Deception’’ by Nobel Prize-winning economists George Akerlof and Robert Shiller.

Description on Amazon:

Ever since Adam Smith, the central teaching of economics has been that free markets provide us with material well-being, as if by an invisible hand.

In Phishing for Phools, Nobel Prize-winning economists George Akerlof and Robert Shiller deliver a fundamental challenge to this insight, arguing that markets harm as well as help us.

As long as there is profit to be made, sellers will systematically exploit our psychological weaknesses and our ignorance through manipulation and deception.

Rather than being essentially benign, and always creating the greater good, markets are inherently filled with tricks and traps and will "phish" us as "phools."

Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away.

Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life.

  • We spend our money up to the limit, and then worry about how to pay the next month's bills.

  • The financial system soars, then crashes.

  • We are attracted, more than we know, by advertising.

  • Our political system is distorted by money.

  • We pay too much for gym memberships, cars, houses and credit cards.

  • Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous.

Phishing for Phools explores the central role of manipulation and deception in fascinating detail in each of these areas and many more.

It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation.

At the same time, the book tells stories of individuals who have stood against economic trickery - and how it can be reduced through greater knowledge, reform and regulation.

Listen to the audio for the review.

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This article first appeared on 702 : You are being fooled every day of your life, says Nobel Prize-winning economists


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