I know it is bad form for a would be pundit to admit to having second thoughts, but that is precisely what I am going to do here. When this topic first struck me, I was hesitant to write about it, as it seems to contradict another essay of which I am quite proud.Not only that, but when I first conceived of this essay, I was a bit troubled by the underlying assumptions, as, not only did they contradict one -- actually several -- of my essays, they also went against many of my personal beliefs, or at least appeared to do so. Even worse, the implication of much of what I intended to say seemed to argue in support of the negative assumptions about other people that I normally associate with liberal theories (cf "Liberalism, Its Origins and Consequences", "Our View of Our Fellow Citizens", "Those Other People", "Seeing People As Stupid", "Arrogance and Gun Control", "Appealing to Arrogance", "The Intellectual Elite", "The Essence of Liberalism" and "Bad Arguments"), a position I have been criticizing since this blog started (see, for example, "Sheep").

However, after I gave it a bit more thought, I realized that my initial thoughts had been a bit too broad, had failed to thinking things through and distinguish between specific cases. What seemed a contradiction of much of what I believe and have argued for years was nothing of the kind. Instead, it was simply the consequence of other problems, and what I was describing was not innate human behavior, not part of human nature, or even an inherent part of our culture, but the consequence of many social and political ills about which I had written as well.

But now I fear my essay is getting a by cryptic, and, in my efforts to avoid giving away my entire topic in the introduction, I am sounding like a teenager trying to keep a secret ("And a certain person said a certain thing to another certain person, understand?"), and rather than clarifying, or just providing foundation, I am simply annoying my readers. So allow me to end this intentional obfuscation and begin writing on the topic itself, as, with a few paragraphs, hopefully all of what I have said so far will be made completely clear.

This essay came about because, a few nights ago, I was musing about how easy it is to deceive consumers when selling health and beauty aids, or diet programs or some other items of a similar nature. It struck me that the reason that such programs succeed is remarkably similar to the way many other cons succeed, such as those emails asking you to smuggle large sums out of various foreign nations, or the more dangerous ones asking you to help process payments for overseas companies¹. In every case, the customer is most likely not completely deceived (though some probably are total naifs) almost everyone who has been taken in has doubtless felt at least a hint of suspicion, but in the end, the great "What if" won out.

That "What if" is a dangerous thought, but one almost all humans seem to experience at some time. It is the thought that, though something sounds too good to be true, though it seems a remote possibility, though it sounds absurd, "what if" it is true and I miss out? That is the thought process that makes people buy products making absurd claims. That makes individuals spend a fortune on no money down real estate plans. That lets one respond tot he most obviously fake email offers. And, in the interest of full disclosure, that led me to leave my money in the stock market a little too long².

But the more I thought about it, the more I came to realize that the same thought process had implications far beyond con games and scam emails, even beyond the sale of shoddy merchandise. The same "What if" is also what keeps people in bad relationships, that nagging question "what if" he or she really does change, and does it just after we break up? It is what keeps people in all sorts of bad situations, the question "what if things improve right after I stop?" And, on the opposite end, it also causes others to dive headfirst into unlikely situations, the question "What if" something that sounds unlikely really is true? Maybe someone who seems a blowhard and a liar is really telling the truth. And what if I dismiss him and miss out on something incredible?

But, as my readers must know by now, as I have not already begged forgiveness for wandering far off topic, there must be an economic or political point to this. And there is. "What if", the fear of missing out one something potentially beneficial, is also at the root of many bad economic and political doctrines. In case after case, political doctrines promise the moon, and do so in a terribly implausible way, but voters, disaffected, with no confidence in their current system, have learned to worry, what if the promises are true and they turn them down? The current situation is bad, so what is there to lose in chasing a long shot?

You can see how this train of thought would be a problem for me, as not only does it suggest that individuals are foolish and incompetent, both beliefs against which I have argued repeatedly ("Liberalism, Its Origins and Consequences - Chapter 4 - Our Foolish Compatriots", "Liberalism, Its Origins and Consequences - Chapter 5 - We Don't Need No Education ", "Liberalism, Its Origins and Consequences - Chapter 10 - We're All Above Average", "Liberalism, Its Origins and Consequences - Chapter 12 - I'm OK, You're A Mess", "Liberalism, Its Origins and Consequences - Chapter 13 - Oh Lord It's Hard To Be Humble", "Recipe For Disaster", "The Endless Cycle of Intervention",  "The Cycle of Compassion", "Consequences", "Perverse Incentives", "When Help Hurts", "When Help Hurts II", "Subsidizing Irresponsibility and Poor Planning", "The Problem With Some Conservative Solutions"), but it also contradicts the very explicit statements I have made about the power of advertising. ("Regulated Speech")

But one should always beware initial impressions. Granted, the initial appearance given by my topic is that people are inherently unable to tell true opportunities from cons, but that is not the case at all. Instead, people are responding to their environment, to their education and to popular beliefs, all of which make them susceptible to such things. For example, as I have said many times, out culture tends to understand very poorly cost-benefit analysis. We adopt all-or nothing positions ("Absolute Values") or else we look at either cost or benefit to the exclusion of the other ("Cost-Benefit Analysis and Environmentalism") Likewise, we have been taught very little about the benefits of the free market ("Misunderstanding the Market", "In Praise of Contracts") or small government. ("Why Freedom Is Essential") And so, when people are offered an alternative promising the moon, they do not realize what they are trading away for, in essence, a handful of magic beans.

In fact, those factors alone help to explain very well why we so often see the snake oil salesmen of big government becoming so successful. ("Government Quackery") First, the public is disillusioned with freedom and a free economy, maybe even blame it for their problems. ("How to Blame the Free Market") Even if they understood the value of the free market, it is likely they could not properly assess the costs of doing away with the market in favor of a long shot pipe dream, as they do not comprehend how to assess such exchanges. Instead, they see the huge promised reward, and ignore the incredibly low probability. And so, once more, the great "What if" comes into play, and the promised treasure eclipses out all other considerations.

Worse still, in many areas of life, we have made the lesson even more difficult to learn, mostly by indemnifying the public against the costs of their mistakes. When they risk money and lose in some bad business venture, or some shoddy purchase, many times the state steps in to make them whole once more, teaching the less that costs and risks do not matter. ("Subsidizing Irresponsibility and Poor Planning") Likewise, when the people risk it all on a bad government policy, when it finally fails, rather than give up and make the people bear the costs, the state steps in and inflates or taxes its way back into liquidity, pays off those who lost out, and starts over with new promises of unearned wealth, again telling everyone that nothing truly has consequences.

And that is, in the big picture, why we have such a problem with people buying into unbelievable big promises. We have taught people two lessons through our culture and government^*. We have taught them that cost-benefit analysis is pointless and we have taught them that they need not fear consequences as someone will bail them out. Thanks to those beliefs, they will chase any absurd scheme for fear that it might just be right and they could be missing out on something good. And, since they need not face the consequences, what is the down side?

Similarly, in government, we have not only taught them the same, but we have failed to teach them the benefits of freedom in economics and freedom in government, we have not sufficiently emphasized self-rule, ans so, when they agree to surrender their freedom for a long-shot big win, what do they think they have risked? Nothing. And that is our fault as well**.

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* Our legal system as well teaches them that whenever something goes wrong, it is the fault of SOMEONE, and that someone should pay. Which, again, is just another way to remove all consequences, which inevitably results in riskier behavior.

** Not that all who are gullible are gullible because of our cultural shortcomings, there are obviously "suckers" in every society and every age. All I am saying is that we have set up a culture destined to produce a larger than normal number of them.

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POSTSCRIPT

A recent news story emphasized the point I made in the first note above, as well as my essays "The Perversion of Liability Law"and "Still More on Liability Law". It is a tragic story, and I feel for the family involved, but the legal principles involved horrify me.

A child in a county camp was apparently crushed to death by a hollow tree while playing outside on a windy day. The county, for reasons I cannot fathom, refunded the mother's money, but then did something puzzling by also inviting her to some county function. It was a tactless and stupid response, but that is all.

However, the mother is now suing the county on the theory that the tree was dead and should have been cut down, and that it was a windy day, and the kids should have been kept inside.

Some may think this makes sense, but I think that response is an example of arguing in hindsight. ("Arguing In Hindsight") Under normal circumstances, dead trees are rarely cut down unless they are likely to fall on roads or houses or power or phone lines. Maryland is heavily wooded, and dead trees are common. So it makes little sense to say the county should cut down every dead tree in a wooded campground. And the wind argument is similarly absurd. How often have you stayed inside because of 20 or even 30 mph winds? Never is my guess. Unless it is a tornado, or hurricane force winds, very rarely do we think of wind as a reason to stay in.

Of course, the lawyer will argue the catastrophe was "foreseeable", and since it happened, many jurors will imagine it must have been foreseeable, but that is absurd. Yes, now that it happened, we can see how the factors lead up to it. But the day it happened, how many of those jurors, or the lawyer, or the mother, went outside? Passed by dead trees? And never thought of the risk. It is only because it happened that it now seems inevitable.

Yet, sadly, the jury will probably award money. And the county, knowing that will probably settle. And our culture will continue to teach the lesson that whenever something bad happens, someone else will make it right. A terribly dangerous lesson, yet one that is hard to fight, as so often you end up arguing against sympathetic parties such as this poor mother. But, whether it is sad or not, sometimes bad things happen and no one is to blame, and no one can fix it. We need to grow up and realize that, or we will end up either enslaving ourselves in the search for a savior, or creating total chaos as we sink into total irresponsibility. ("Life Is Not Fair - And Trying To Make It So Makes Things Worse", "Doing Something", "Don't Blame the Politicians", "Solving Problems We Created", "Defending Freedom?", "The Single Greatest Weakness")