My attempt at defining scams would be something like "when you're actively using an information/knowledge gap between you and your customer for your advantage".
By that definition, casinos aren't scams: they are quite honest with the "house always wins (but we'll make sure you're having fun)" business model. The gender prediction would be, because this guy knows he's as good as flipping a coin, while anyone paying him to do so will be believing that he can actually do something (otherwise they'll just flip the coin themselves and save the $50).
The "are you going to heaven" guy might actually, honest to god, believe in what he's saying = no scam. (Although if he was, he'd probably be more likely to be explaining how joining his religion will secure admittance to heaven)
No, I still think it makes sense when separating knowledge as the product (consultants) and knowledge of the product (I'm selling you a coin-toss, but you think I actually know stuff). E.g. an IT-consultant who clams he knows everything about computers, but really just finished "PHP and MySQL for Dummies" might be a scammer -- and one I suspect many people here has spend some time cleaning up after at one point or another.
Your morality is subjective and therefore not applicable to a business transaction between to other parties. This is where your thinking fails.
A business transaction is an exchange of money for something of value. The "value" is only determined by the buyer (where the price is non-negotiable). If the buyer considers the product valuable, then the transaction is legitimate. This is why it's legal to sell $100 track pants and call them "yoga wear". The buyer is in agreement that the track pants are worth $100.
You seem to think that there is an ultimate morality that can govern the perception of value, which there is not. Your bargain is easily my rip-off. It's fundamental market theory.
The only time you can call a business transaction a "scam" is when the value delivered is not what was agreed to prior to the event. So, if I tell you I will fix your roof for $50,000, and after I do this it leaks like a sieve, you have a case that I wasn't honest in living up to my end of the bargain, or have not fully lived up to my previous agreement.
If I promise to sell you mythical cherries that make every woman you meet fall in love with you, and you, in sound mind, believe that these cherries work as advertised I am not a scammer.
The ability to exploit ignorance of all shapes and sizes is a fundamental concept of the operation of a free market. I know that this can sound disturbing, but it is true. If I can't benefit from your lack of something, I can never create value for anyone.
When pg says "create something of value" he is really saying "create something somebody values". His clearer definition of the statement is only a caveat - that is, if you think something is valuable, chances are a lot of other people do to. That doesn't mean however that there are a lot of people out there that perceive value in things that you do not.
But what you're describing as a scam is a "mere" breach of contract. I don't think that qualifies as a scam. I'm still partial to a definition that includes some sort of intentional malice, however subjective :)
Except in this case, he would have a 50% success rate. When you compare that to investment newsletters, fortune tellers, economists or anyone else who tries to predict the future, this guy would probably come out at the top of the list.
Most investment newsletters I've come across showcases a significant better than 50% buy/sell recommendation success rate, that's how they get people to listen to them.
All those other guys predict non-binary scenarios. If I try to predict the result of a dice-throw by throwing a dice myself, I'll get a success-rate of exactly 1/6, but when factoring in the number of outcome scenarios, I'm doing exactly as well as the coin-tosser.
Not really. Take any investment newsletter, fortune teller, economist or "anyone else who tries to predict the future" and ask them that same question, "What gender will my baby be?" The worst success rate any of them can have is the success rate of random guessing.
It's not quite 50%, males are born slightly more often than females. Something like for every 105 boys born there are 100 girls. You can stack the odds a little more in your favour by always guessing "boy".
Comments
My attempt at defining scams would be something like "when you're actively using an information/knowledge gap between you and your customer for your advantage".
By that definition, casinos aren't scams: they are quite honest with the "house always wins (but we'll make sure you're having fun)" business model. The gender prediction would be, because this guy knows he's as good as flipping a coin, while anyone paying him to do so will be believing that he can actually do something (otherwise they'll just flip the coin themselves and save the $50).
The "are you going to heaven" guy might actually, honest to god, believe in what he's saying = no scam. (Although if he was, he'd probably be more likely to be explaining how joining his religion will secure admittance to heaven)
when you're actively using an information/knowledge gap between you and your customer for your advantage".
Explain to me when you aren't doing that. You've basically described every consultant, lawyer and expert in existence with that statement.
True. Obviously the definition isn't complete :)
Or it's incorrect. :-)
No, I still think it makes sense when separating knowledge as the product (consultants) and knowledge of the product (I'm selling you a coin-toss, but you think I actually know stuff). E.g. an IT-consultant who clams he knows everything about computers, but really just finished "PHP and MySQL for Dummies" might be a scammer -- and one I suspect many people here has spend some time cleaning up after at one point or another.
No, it's incorrect.
Your morality is subjective and therefore not applicable to a business transaction between to other parties. This is where your thinking fails.
A business transaction is an exchange of money for something of value. The "value" is only determined by the buyer (where the price is non-negotiable). If the buyer considers the product valuable, then the transaction is legitimate. This is why it's legal to sell $100 track pants and call them "yoga wear". The buyer is in agreement that the track pants are worth $100.
You seem to think that there is an ultimate morality that can govern the perception of value, which there is not. Your bargain is easily my rip-off. It's fundamental market theory.
The only time you can call a business transaction a "scam" is when the value delivered is not what was agreed to prior to the event. So, if I tell you I will fix your roof for $50,000, and after I do this it leaks like a sieve, you have a case that I wasn't honest in living up to my end of the bargain, or have not fully lived up to my previous agreement.
If I promise to sell you mythical cherries that make every woman you meet fall in love with you, and you, in sound mind, believe that these cherries work as advertised I am not a scammer.
The ability to exploit ignorance of all shapes and sizes is a fundamental concept of the operation of a free market. I know that this can sound disturbing, but it is true. If I can't benefit from your lack of something, I can never create value for anyone.
When pg says "create something of value" he is really saying "create something somebody values". His clearer definition of the statement is only a caveat - that is, if you think something is valuable, chances are a lot of other people do to. That doesn't mean however that there are a lot of people out there that perceive value in things that you do not.
OK, I'm convinced. Good points.
But what you're describing as a scam is a "mere" breach of contract. I don't think that qualifies as a scam. I'm still partial to a definition that includes some sort of intentional malice, however subjective :)
Except in this case, he would have a 50% success rate. When you compare that to investment newsletters, fortune tellers, economists or anyone else who tries to predict the future, this guy would probably come out at the top of the list.
Most investment newsletters I've come across showcases a significant better than 50% buy/sell recommendation success rate, that's how they get people to listen to them.
All those other guys predict non-binary scenarios. If I try to predict the result of a dice-throw by throwing a dice myself, I'll get a success-rate of exactly 1/6, but when factoring in the number of outcome scenarios, I'm doing exactly as well as the coin-tosser.
Not really. Take any investment newsletter, fortune teller, economist or "anyone else who tries to predict the future" and ask them that same question, "What gender will my baby be?" The worst success rate any of them can have is the success rate of random guessing.
It's not quite 50%, males are born slightly more often than females. Something like for every 105 boys born there are 100 girls. You can stack the odds a little more in your favour by always guessing "boy".