George Akerlof and Robert Shiller’s last book is close to my heart.[1] It is high time to shed some light on the shadier side of human interaction, this time in the markets. The word phish was coined in the Nineties as the World Wide Web was getting established, and it has to do with online fraud by deceptively angling for personal information.[2] In this book, phishing is used as a metaphor for getting people to do things that are not in their own interest, but only in the interest of the phisherman, and a phool is someone who is successfully phished.[3] The main idea behind the book is that there is something fundamentally wrong with the alleged optimality of a free-market equilibrium, which goes back to Adam Smith and The Wealth of Nations (1776).[4] To wit, when there are completely free markets, there is the freedom to phish, as well.[5] This is the book’s main contribution. In short, Akerlof and Shiller’s last book is fun to read, but it is far from fun enough. Nobel laureates both, they strike me as weary of their fellow economists. Manipulation and deception run through all human interactions, including economic ones, but that is difficult to demonstrate, let alone prove. And especially in so-called scientific circles. The world of science suffers from internecine strife, and social sciences are not very different from natural sciences in this regard. Alas, this is where manipulation and deception are also rife, but nobody dares even mention it. It is a pity this book skips it, too.

Footnotes

1. Phishing for Phools: The Economics of Manipulation and Deception, Princeton and Oxford: Princeton University Press, 2015.

2. Op. cit., p. xi.

3. Loc. cit.

4. Op. cit., p. 5.

5. Op. cit., p. 6.