[lend000]

Sounds like a problem with a different part of the system (too many legal protections to effectively shut down ponzi schemes/cons/etc.). In general, I've never heard a compelling argument that the government should pass laws that limit people's freedoms, solely for the purpose of potentially defending people from their own willful decisions that affect only themselves.

[bsder]

> too many legal protections to effectively shut down ponzi schemes/cons/etc.

The problem is that the the person carrying out the scam is playing with "house money" while the ones trying to stop him are paying cash. He is paying lawyers with the money from the investors and burning up the assets. So, by the time you are done, it may be a Pyrrhic victory.

[lend000]

How many hedge funds fall into this category of scammers? And with our protective legal framework, how come you still had to deal with a situation like this?

Not only do I dislike the freedom limitations in principle, but I've been giving everyone the benefit of the doubt that limiting freedoms will actually prevent the targeted type of scams. In reality, scammers will always find a way, criminals are not bound by laws, and we're still stuck with the inherent flaws of only giving the rich access to wealth-generating funds.

[JabavuAdams]

> from their own willful decisions that affect only themselves

Handing your savings to a con man affects more than just yourself. It destroys your family, which increases crime, etc.

No one person wants to be constrained, but en masse these kinds of things can destroy a society. Especially when they are well-known cognitive exploits that work on people despite their own stated preferences.

[lend000]

> Handing your savings to a con man affects more than just yourself. It destroys your family, which increases crime, etc.

So by your logic, it should be illegal to get conned. Let's punish victims. Seems pretty backwards to me, even though your goal is to be proactive. Might as well outlaw suicide while we're at it.

> but en masse these kinds of things can destroy a society

An example might be good here to back up a pretty questionable claim.

[literallycancer]

>An example might be good here to back up a pretty questionable claim.

A civil war should be enough, no?

https://en.wikipedia.org/wiki/Albanian_civil_war_of_1997

[lend000]

> "and government officials endorsed a series of pyramid investment funds"

From your own article, sounds like the problem was corrupt government, not a government that protected and prosecuted fraud.

[CPLX]

Indeed. Preventing financial panics is one of the core purposes of modern government, the protestations of HN's resident Ayn Rand readership notwithstanding.

[lend000]

How is that working out? Booms and busts are inherent to a market, but with Keynesian policies we extend the busts and inflate artificial booms (see: housing crisis), and we rack up more debt every time.

[sanderjd]

> So by your logic, it should be illegal to get conned.

That really isn't what they said...

[JabavuAdams]

I'm surprised that this was your take-away from my response.

[lend000]

Perhaps this should not be a surprising takeaway.

I hear the same arguments all the time about protecting people from themselves. The argument typically goes "well it doesn't just affect you; your decisions could impact people who depend on you, so we'll add a 'protection' that may prevent you from harming yourself and your dependents." If it is acknowledged that it is indeed the decisions of the actor which affects his dependents, not the dangers of the world that may tempt the actor, and you want to protect his family from his own ineptitude through government force, then it sounds like you would have to make it illegal for that actor to make mistakes/get conned.

But of course, the whole 'protect people from themselves' argument is flawed long before that point, because it assumes that the government can and should try to create a world without risk. This is clearly impossible and subjective, and for the government to even come close, it would have to become so oppressive as to reduce freedoms to nothing. The same exact logic is used for keeping marijuana illegal, which I would speculate many of the dissidents on this thread do not support.

So in our current system, for example, we have rich people who get to use hedge funds (of which some very very low percentage turn out to be a Bernie Madoff-type of a scheme) and poor people who are protected from themselves and get to enjoy the Fed's ultra-low interest rates as inflation eats away at their savings. Clearly not a very good solution.

Maybe a better system would allow all people to use hedge funds, and instead we could focus on preventing/prosecuting fraud.