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.

ENLARGE

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.

In addition to giving us what we really want, markets also systematically target our weak spots. They will seek out our emotional and cognitive weaknesses. They will seek to block our channels of information and then exploit those weaknesses. Markets enable phishing for phools.

Three examples show that phishing for phools is deeply embedded in our economy, and more than a minor nuisance.

In the United States three quarters of all adults are overweight. Worse yet, a third are not just overweight, but obese. Weight Watchers, vegetables and diet Coke and Pepsi give some help to all of us who are concerned about our weight. But go to almost any mall in the country. And there will be the smell of those Cinnabons—sweet cinnamon rolls—waiting for you. That smell, like a moth’s pheromones, is a call to all of us overweight, obese people. It is doing a phish for phools. Between 1970 and 2003, the US daily food calorie intake increased by 23.4 percent. Of that daily increase of 523 calories, 480 were in fats and oils, grains, sugar and sweeteners: the stuff that Cinnabon is made of. Cinnabon is a metaphor for the temptations that the market strews in our path.

Or think how hard it is for many people to save money. When we asked an economist friend about financial adviser Suze Orman, he had the predictable reaction. He could not stand her mommy-knows-best voice. He had seen her for only ten seconds.

But that does not explain why Orman’s audiences lap her up. Orman’s most popular book, The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying, has sold some three million copies. Let’s contrast what she tells us there with the portrait of consumer spending in the economics textbooks. According to those textbooks, we decide on our demand for the proverbial apples and oranges by having a budget for our spending, and then we choose the combination of apples and oranges that we can buy that will maximize our happiness. But Suze Orman’s financial advice books tell us that consumers do not follow such a textbook protocol in their purchases.

How could consumers do anything other than what the textbooks describe? Orman tells us that people have emotional hang-ups with money, and with spending it. They are not honest with themselves. As a result, they do not engage in rational budgeting.

How could Orman know? She has a test. When she asks her financial advisees to add up their expenditures, those expenditures invariably fall short of what a documented accounting, from the records, turns up. Figuratively, relative to the proverbial trip to the supermarket to buy apples and oranges, it’s as if her advisees spend too much in the fruit section. By the time they reach dairy products, there is nothing left over for eggs and milk.

In real life, such budgetary failure translates into having nothing left over for savings. This failure to deal cognitively and emotionally with money, says Orman, leads to those unpaid bills. It is her mission to keep those bills down, so that her readers and her clients will no longer worry at night. It is worth noting that worrying, as noted in Orman’s subtitle, is a central concern of the financial advice books, but it is absent from books on economics.

We do not need to take Orman’s word for it. We can put together a statistical story. Here are four facts: Almost 50 percent of US respondents say they probably could not come up with $2,000 if an unexpected need arose within the next month. The bottom 50 percent of US households has an average of $10,000 in financial assets, much of it encumbered. For British workers paid once a month, expenditures are down 20 percent in the week before they receive their next paycheck. And 20 to 25 percent of US residents will go bankrupt over the course of their lifetime.

These statistics pose a theoretical puzzle. Back in 1930 economist John Maynard Keynes wrote an essay on what life would be like “for our grandchildren,” one hundred years later. He predicted correctly that income would have increased almost six-fold. But, in another respect, he was way off the mark. He said these grandchildren would be feeling so rich that they would spend most of their time in leisure; the workweek would fall to 15 hours. He failed to predict the housewife who was exhausted from the first and the second shift.

Contemplating Keynes’s error, along with listening to Suze Orman, gives us reason for this overwork: the goal of almost every business person is to get you to spend your money. Life in a capitalist economy is a continual temptation. Think about it. Just walk down a city street. The shop windows are designed to make you come in and buy. Everywhere—at the shopping mall, in the supermarket, and on the web—temptation is there, asking you to buy. These invitations, these attempts to lure us, are pervasive. Therefore, remarkably, so many of us in this richest of all ages are broke most of the time.

The third example that has affected most of us, in some way or other, is the financial crisis of 2008. It was spawned by sales of mortgage-backed securities, which were not properly rated. It was intensified also by real-estate agents, stock brokers, and bankers of different stripes, eager to promote a sale in an increasingly bubbly market. Once again, the temptation was there. Once again: temptation taken. The first story of the Bible, about Eve and the apple that the serpent tempted her with, is also the story of the first phish for phools by a clever marketer. It will not be the last, in financial markets or anywhere else.

—From “Phishing for Phools: The Economics of Manipulation and Deception” by George A. Akerlof and Robert J. Shiller. Copyright 2015. Excerpted with permission by Princeton University Press.