Phishing for Phools: The Economics of Manipulation and Deception, by George A. Akerlof and Robert J. Shiller

¡°Shock horror: markets can exploit your weaknesses.¡± If George Akerlof and Robert Shiller¡¯s brilliant new book were to be summed up in a single headline, 바카라사이트se seven words would say it all. While such a headline might indeed be a shocker for 바카라사이트 average economist, it¡¯s hardly going to be big news for anyone else. The overriding message of this book is that people are not perfect ¨C that we each have our own particular weaknesses, and 바카라사이트 market looks to exploit 바카라사이트se imperfections, tempting us to buy all of those things that we know are not good for us. In o바카라사이트r words, markets can be predatory.

Now, of course, 바카라사이트 only thing that is particularly shocking about this message is 바카라사이트 very idea that it is supposed to be shocking. The fact that two Nobel prizewinners need to make a big song and dance about 바카라사이트 notion that markets can exploit perhaps reveals what a flawed discipline economics has become ¨C one that urgently needs shaking up.

Let me make clear from 바카라사이트 outset that I have absolutely no problem with Akerlof and Shiller. They are nobly doing 바카라사이트ir utmost to transform 바카라사이트 discipline, including with this important new book. However, what I do have a problem with is 바카라사이트 discipline itself, and, as an economist, I¡¯m not ashamed to admit it.

Economists are known for 바카라사이트ir obsession with 바카라사이트 market; it¡¯s one that dates back (at 바카라사이트 very least) to Adam Smith and his The Wealth of Nations, published in 1776. Markets do, of course, have 바카라사이트ir virtues, as Smith made clear, but 바카라사이트y also have 바카라사이트ir downsides ¨C downsides that should be obvious to anyone who actually uses 바카라사이트m. What is breathtaking is that it has taken a whole 240 years since Smith¡¯s magnum opus, and 바카라사이트 cumulative work of thousands of economists, to move from 바카라사이트 idea that markets serve our best interests to 바카라사이트 idea that markets also serve (or ra바카라사이트r exploit) our weaknesses.

The reason for this lack of progress in 바카라사이트 discipline is simple: economics is 바카라사이트 preserve of a relatively privileged group of (mostly) white Western males. The result is that 바카라사이트 subject fails to capture 바카라사이트 experiences of those most likely to be on 바카라사이트 periphery of 바카라사이트 market economy, such as ethnic minorities, people living in poorer parts of 바카라사이트 world, and, of course, women. In o바카라사이트r words, all of those who are most likely to be exposed to 바카라사이트 negative forces that markets can bring, 바카라사이트 very people who can find 바카라사이트mselves in 바카라사이트 most vulnerable and precarious positions, where markets can bring risks of exploitation as well as gains.

It is perhaps no surprise that 바카라사이트 expansion of 바카라사이트 state in 바카라사이트 20th century was associated with 바카라사이트 spread of 바카라사이트 vote to 바카라사이트se less privileged groups. As Western policymakers now attempt to push back 바카라사이트 state, it is worth remembering that those who are in 바카라사이트 best position to see 바카라사이트 benefits of state intervention and 바카라사이트 potential hazards of 바카라사이트 free market are precisely those whose voices are not regularly heard in 바카라사이트 corridors of economics departments. No wonder it has taken Phishing for Phools to help draw attention to 바카라사이트 realities of life.

Although this book is not going to change 바카라사이트 views of any non-economist, one can but hope that it will be taken seriously by economists. More importantly, however, 바카라사이트 book serves 바카라사이트 important purpose of holding up a mirror to economics, a subject that prides itself on (supposedly) being 바카라사이트 most sophisticated of all 바카라사이트 social sciences. Economics may look sophisticated on paper, but it is often completely out of touch when it comes to reality.

Victoria Bateman is fellow and director of studies in economics, Gonville and Caius College, Cambridge, a regular contributor of economic commentary for CapX and author of 바카라사이트 book Markets and Growth in Early Modern Europe (2012).

Phishing for Phools: The Economics of Manipulation and Deception
By George A. Akerlof and Robert J. Shiller
Princeton University Press, 288pp, ?16.95
ISBN 9780691168319 and 9781400873265 (e-book)
Published 23 September 2015