Phishing for Phools: the economics of manipulation and deception.

Abstract

It’s “the economy, stupid!” said James Carville, campaign advisor to presidential candidate Bill Clinton in 1992. He wanted to stick it to President George H. W. Bush for an array of economic problems that were tied to the economic recession that started during the Bush presidency. Well, we have a different, broader interpretation of Carville’s statement: that many of our problems come from the nature of the economic system itself. If business people behave in the purely selfish and self-serving way that economic theory assumes, our free-market system tends to spawn manipulation and deception. The problem is not that there are a lot of evil people. Most people play by the rules and are just trying to make a good living. But, inevitably, the competitive pressures for businessmen to practice deception and manipulation in free markets lead us to buy, and to pay too much for, products that we do not need; to work at jobs that give us little sense of purpose; and to wonder why our lives have gone amiss. We wrote this book as admirers of the free-market system, but hoping to help people better find their way in it. The economic system is filled with trickery, and everyone needs to know that. We all have to navigate this system in order to maintain our dignity and integrity, and we all have to find inspiration to go on despite craziness all around us. We wrote this book for consumers, who need to be vigilant against a multitude of tricks played on them. We wrote it for businesspeople, who feel depressed at the cynicism of some of their colleagues and trapped into following suit out of economic necessity. We wrote it for government officials, who undertake the usually thankless task of regulating business. We wrote it for the volunteers, the philanthropists, the opinion leaders, who work on the side of integrity. And we wrote it for young people, looking ahead to a lifetime of work and wondering how they can find personal meaning in it. All these people will benefit from a study of phishing equilibrium—of economic forces that build manipulation and deception into the system unless we take courageous steps to fight it. We also need stories of heroes, people who out of personal integrity (rather than for economic gain) have managed to keep deception in our economy down to livable levels. We will tell plenty of stories of these heroes.