We have written this book to offset what we consider to be a wrong focus. There is a story regarding free markets that is widely believed in the United States, and is also influential abroad. This story is derived from an unsophisticated interpretation of standard economics. It says that free-market economies, subject to the caveats of income distribution and externalities, yield the best of all possible worlds. Just let everyone be “free to choose,” says the mantra, and we will have an earthly paradise, as close to the Garden of Eden as our existing technology, our human capabilities, and the distribution of income will allow.

We, the authors, see the cornucopia that free markets have delivered. But just as every coin has two sides, so do free markets. The same human ingenuity that produces the cornucopia also goes into the art of the salesman. Free markets produce good-for-me/good-for-you’s; but they also produce good-for-me/bad-for-you’s. They do both, so long as profit can be made. The free market may be humans’ most powerful tool. But, like all other powerful tools, it is also a two-edged sword.

That means that we need protection against the problems. Everyone with a computer knows this. The computer opens us up to the world in many different ways. We all know that we must take precautions against the phish and against the virus. We all know that others send us emails asking us to do things that are not good for us, but are good for them. We all know that, reciprocally, we do the same. We all know that we can become addicted to the computer, with its enticements of games, Facebook, and who knows what other attractions. We have opened ourselves up to these downsides, which are a form of free market, because of the advantages; but only a real fool would pretend that there are no disadvantages, or take no precautions against them.

From George Akerlof and Robert Shiller’s Phishing for Phools: The Economics of Manipulation and Deception, Princeton and Oxford: Princeton University Press, 2015, p. 150.