ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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A System That Fosters Deceit

Phishing for Phools: The Economics of Manipulation and Deception by George A Akerlof and Robert J Shiller, New Jersey: Princeton University Press, pp 272 +XVI, $16.95.

Conventional wisdom has it that the competitive market system driven by profit motive is a selfregulating arrangement that ensures optimum economic efficiency and welfare. This economistic ideology, so it is ass umed, works well, though state intervention may be necessary, through appropriate taxes and subsidies to solve the problems of “externalities” and “unfair” inco m e distribution.

At the heart of the system lies the interest of individuals to maximise profit from economic activities. While this has given us, over a long period, wealth and prosperity, economists in general tend to idealise economic freedom. There is a great irony in this system. The motive to make profit that drives individuals to undertake economically and socially useful activities—that fosters a healthy economy—also drives individuals to resort to deception and trickery. The book under review offers several examples of manipulation and deception that are pervasive across sectors: advertising and marketing, real estate, car sales, credit cards, lobbying and politics, food and drugs, and financial markets. Readers will find it great fun ploughing through 179 pages comprising 11 chapters, apart from links to source materials packed in 52 pages of footnotes.

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