This book claims a purpose.  The authors want to make people more aware that, alongside its many benefits, the free competitive market produces incentives for exploitative behaviour.   The introduction sets out a wide range of intended audiences, as well as defining ‘phishing’ – here not an illegal act, but rather a cynical attempt to make profits from our weaknesses.   These are ways in which the ‘phisherman’ acts to their benefit, not ours.  

In arguing that the free market is open to exploitation, there is inevitably reference back to Adam Smith.  He in fact fully recognised the necessity of good institutions if markets were to function in the optimal manner he suggested, and notoriously also commented that traders tended towards a ‘conspiracy against the public’. But the charge against markets here is not just about tricks to drive up prices (though some of these are included), it is more fundamental.  The problem is that there are incentives to lead us to act in ways that are not in our interest.   

The authors describe how the weaknesses of individuals are preyed upon, using the example of addictive slot machines, such that although in the developed world we are all much richer than 50 years ago, nevertheless many are still perpetually anxious about their finances.  At the other extreme, the way in which risk was concealed and bundled up during the financial crisis is an example of how large firms and intelligent people can fall for a myth.  In both cases the operation of the market produced highly damaging outcomes – although in the latter it is unclear where the deliberate phishing came from, as opposed to an ‘irrational exuberance’ about mortgage-backed securities. 

The bulk of the book is taken up with a series of examples of what is described as phishing – starting with the way in which advertising works and moving on through topics such as real estate, car sales, pharmaceutical approvals and alcohol.  Of these the one that seemed the starkest was the relationship between private funding and politics – which is more obvious in the US than here.  However, keeping both voters and business happy, involving the presentation of different faces to different audiences, is a concern for our politicians too.  After all the negatives, there is a positive section on those who have stood up against phishing – in business, government and particularly regulators. 

The key argument is that economists are wrong to think that market outcomes give us what we really want, at the right price.  And that this is not just about the standard stuff of externalities, which are viewed as specific problems, but due to the basic characteristics of competitive markets.  It’s as though we only read the ‘invisible hand’ sentence in Adam Smith, and missed the one about ‘conspiracy’. The authors argue that economists put too much weight on ‘revealed preference’ and not enough on dysfunctional decisions. 

This book makes some large claims for itself, and the acknowledgments at the end suggest a considerable amount of effort was expended on researching the examples.  The outcome is certainly written in an engaging style, including several admissions of transactions where the authors have themselves been phished.  But it also disappointed – after all this effort the examples seemed very familiar and the overall argument downplays or neglects the healthy cynicism with which most people view the world. Of course markets tempt us to pay too much for some things, or, if unregulated, can present products as better than they are.   It could be summed up as: ‘A fool and his money are soon parted’ – an expression first used in the sixteenth century.   The title is striking but the contents don’t quite live up to it.