Sunday, March 5, 2017

The wealthy are disproportionately targeted

An interesting argument being made in Only The Rich Are Poisoned: The Preference of Others by Nassim Nicholas Taleb.
When people get rich, they shed their skin-in-the game driven experiential mechanism. They lose control of their preferences, substituting constructed preferences to their own, complicating their lives unnecessarily, triggering their own misery. And these are of course the preferences of those who want to sell them something. This is a skin-in-the-game problem as the choices of the rich are dictated by others who have something to gain, and no side effects, from the sale. And given that they are rich, and their exploiters not often so, nobody would shout victim.


It is easy to scam people by getting them into complication –the poor is spared that type of scamming.


Very few people understand their own choices, and end up being manipulated by those who want to sell them something.


This reasoning be have just shown that exists a sophistication that causes degradation, what economists call “negative utility”. This tells us something about wealth & the growth of “GDP” in society: this shows the presence an “S” curve beyond which you get incremental harm. It is detectable only if you get rid of constructed preferences.

Now many societies have been getting wealthier and wealthier, many beyond the positive part of the “S” curve.
Put another way, the richer you become, the more a target you become for grifters. You take on an incremental additional burden of risk simply by being a target and have to deploy quality-of-life sapping energy and cognitive attention to avoid being fleeced either by law or by deception.

Given that an increasing portion of the population are increasingly wealthy, this might be one of the roots to societal discontent. More people are having to spend more time being distrustful of more people, simply because they have become more prosperous.

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