The following is an excerpt from the new book “Phishing for Phools: The Economics of Manipulation and Deception” by Nobel laureates George A. Akerlof and Robert J. Shiller.

The world’s most powerful social and economic tool is the free global market. It enables the world’s adults to trade with one another. Worldwide, there are some 25 quintillion possible pairs of buyers and sellers. A quintillion is a big number, with 18 zeros. The selection that this huge amount of choice affords to both buyers and sellers makes us all better off.

Furthermore the new ideas that are created by free markets, year after year, make us better off. Think of it: Older retirees in the US were born in a country poorer than present day Mexico. Markets are capable of such power for good, because they allow so much positive selection. Even so, markets can produce a great deal of harm, because they also allow negative selection. Not all of those new ideas are good-for-you/good-for-me. Some of them are good-for-you/bad-for-me. And associated with such ideas come the tricks to inveigle me into buying in.

Free markets open us up to those who seek to influence us to do what they want, but not necessarily what is good for us. They allow us, in other words, to be phished in the broad sense of that term. We live in a world where some five billion adults can phish us for phools.

We have intentionally opened ourselves up to such exploitation because of the obvious advantages. But then we must also think about the other side of the bargain.