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Noted economist and philosopher Adam Smith had a lot of good things to say about free markets and the benefits they bring. However, in a book on duplicity in free market economy, the economists (Akerlof and Shiller) talk about how free markets encourage deception and manipulation; and how the manipulators or phishermen, as the authors call them, make fools of people to sell products or services. The authors also emphasize that if others (companies and people) do not carry out this manipulation, they would be left behind as the phishermen have a competitive advantage over those who do not do phishing. It all gets interesting (because it would tell you whether you are one of the ‘phools’ or wise people) with examples – investors follow the crowd and make bad decisions about their investments; insurance companies manage to push products which do not truly serve the customers’ interests; credit card payment is encouraged even when credit cards are a major reason for personal bankruptcy; tobacco and alcohol lobbyists ensure that the consumption of these clearly toxic products remains or increases; or people despite knowing what is healthy or unhealthy reach out for coke and chips.

http://www.nybooks.com/articles/archives/2015/oct/22/why-free-markets-make-fools-us/

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