Kling on Phishing for Phools
The other Feature Article on Econlib today is “Phools and Their Money,” Arnold Kling’s review of Phishing for Phools: The Economics of Manipulation & Deception by George A. Akerlof and Robert J. Shiller.
A highlight, after Arnold gives their first example of manipulation, Cinnabon (which, by the way, I have literally never eaten, tempted as I have been):
Even if they fail to prominently display calorie counts, I do not think that Cinnabon’s success relies on deception. Nobody confuses iced cinnamon rolls with kale salad. Pretty much everybody who eats them has some sense that this is not health food. If Cinnabon is guilty of something, it must be manipulation, through the use of smell and location. But what are they supposed to do–set up shop in remote locations with no foot traffic and emit a smell of liver and onions?
Overall, I do not think that the authors chose well in starting with the Cinnabon example. They do not make the case that people who buy cinnamon rolls are doing something that those consumers would rather not be doing. Instead, it just seems that such consumers are doing something that Akerlof and Shiller find reprehensible. They need to come up with an objective way of making the distinction between satisfying consumer wants and manipulating consumers. It is demagogic to rely on one person’s disgust at another person’s consumption of fatty foods.
And Arnold’s ending:
Akerlof and Shiller are Nobel Laureates, which they earned with previous research. That is what makes this book so disappointing. People may enjoy reading Phishing for Phools, but it is lacking in real intellectual nutrition. It is the literary equivalent of a Cinnabon.