How Magic defies Economics

In an edifying blogpost Sabine Hossenfelder describes her puzzlement about how magic spells sold online can fetch a price as high as $200.

She says:

"After I figured she spent $200 on somebody sending her an email with some probably random generated "magical words" I could not but be stunned. It raised two questions for me: First, why do people waste money on entirely useless crap? Second, doesn't standard economical theory tells us that the value of a product reflects all the information about it? So why then doesn't the miracle of the free market accurately price useless spells at zero? (To be fair, they probably have some slight entertainment value and a psychological effect. But that's like saying you'd spend $200 on an iPod, and if it doesn't work the money was still well spent on making you feel better for helping the economy.)"

She goes on to answer the first question in her post. It is lack of education, more specifically, lack of understanding how science works that’s the culprit. But the second question is somewhat more perplexing. This blog post is to share my perplexity on this question and invite answers.


Here in India, astrology, palmistry etc are pretty big. Astrology/ palmistry experts usually recommend their clients to wear these rings with gems embedded on them. Different gems are associated with different planets (I don't know how they dealt with Pluto's demotion). By looking at your palm or studying your horoscope, the expert will know which stones you must wear to get beneficial effects. And behind all this there is a science!

According to one website :

"The Science of Planetary Gemology has been used in accordance with Indian astrology for thousands of years. It is the science of understanding how gem stones transmit and reflect planetary rays, and how they increase planetary influences in a person’s life. Thus, gemstone therapy can become a potent form of natural vibrational healing."

The Science of Planetary Gemology, no less!



To come back to the business side, almost every big enough jeweler’s shop has an astrologer attached to boost sales. I just went through an astrology/gem selling site to check the prices. Some gems (like Ruby, Sapphire, or Emerald) can cost between Rs. 4000 to 7000 ($80- $150) per carat, and a stone would be somewhere between 4 to 8 carats. There are very probably people who have spent Rs 60000 ($1300) on a single stone, and not because of it’s aesthetic value.
Why? How does mumbo-jumbo evade the rules of economical theory?




My own hypothesis is that people are unable to judge the value of the products. The promises the sellers make are not often specific: success, happiness, health. The users do not know the time period in which the spell/talisman is supposed to give results. If these products came with promises like ‘get your lover/box office stardom/hair back’ in a week/month or some specific time, people would know if it weren’t working. If it was a restaurant, you could judge immediately. If it was a gadget, you would know in a while. But with something as vague as a charm, it’s much more difficult to reach a definite conclusion.

And if they do eventually come to a conclusion, it will take a lot of time. By which time they will have already influenced their friends etc one way or the other.

Suppose Mrs. X bought a Ruby to boost her health. That doesn’t mean that she would give up her medicines or her yoga or whatever. Now obviously the Ruby has no effect on her health (except placebo). Her health will continue to improve and deteriorate as it would without the ring. The very next time her health improves, she’ll likely give credit to the ruby. This will induce her friends who are also looking to boost their health to buy gems for themselves. If they would study the fluctuations in Mrs X’s health on a long term and compare with that of other people who have similar health problems, take other possible factors into account then they could reach the conclusion that all a ruby does is look good on your finger. But people don’t take such long times to judge and certainly don’t show such scientific detachment.

OK, so that’s probably not a very good illustration. But hopefully you get the gist of what I’m saying. But perhaps you have a better explanation?

Why I didn't like the book "Ender's Game'

Ender, when he contemplates violence against Stilson, Bonzo etc never for a moment thinks of the damage he may do to them. In both cases the violence is so excessive that it ends up killing them. But we are reminded again and again that Ender is good. Clean to the heart. The book seems to pronounce these actions to be moral. Of course Ender wallows in guilt afterwards (not because he killed them without meaning to, he didn’t know that. For hurting them) but one could wonder why, as his violence was completely calculated. He hurt exactly as much as he wanted.

I am not saying Ender should have allowed himself to be beaten to the pulp. I am questioning the need to pass moral judgment on this act, to approve of it. In Bonzo’s case, intense violence wasn’t needed. Ender could have told Bonzo ‘look, if I win you are not to bother me again.’ Bonzo, with his sense of honor and overconfidence would have bought that. ‘Hurting him so much that his fear would be greater than his hatred’ or ideas to that effect weren’t necessary.

But for Card, I suspect it was necessary, as were Stilson’s and Bonzo’s deaths. He is leading us towards a moral philosophy. This philosophy, imlicit in Ender’s Game is pronounced by Ender in the sequel ‘Speaker for the Dead’ :

“Speakers for the Dead held as their only doctrine that good or evil exist entirely in human motive, and not at all in the act”

We are quite cleverly lead to this bit of wisdom: When Ender kills Stilson or Bonzo we are not told that they are dead. The facts are kept from the reader. Should we have known them then we’d have probably passed a different judgment on Ender’s actions. However the circumstances of his action make us likely to sympathize with Ender : It wasn’t his fault, did what he had to do, not a bad boy even he can deliberately unleash intense violence etc. And so when it is later revealed that he actually killed the other two boys, the reader’s are unlikely to revise their judgments. From there we are almost inevitably lead to the above philosophy : Ender didn’t mean no harm, so he is entirely innocent.

Now if I was prepared to accept the moral absolutism (which I am not, who is to decide what is good or evil etc.) I have to object to the judgment based on motives alone. That would in fact make Hitler a good man – by all accounts the man didn’t want anything other than the good of the race. Is that an evil motive now? You could object and say Hitler also intended to kill people, which is bad in itself. However, so did Ender. He agreed to go and attack the Buggers when they weren’t bothering the humans at all. He didn’t say ‘Umm, why don’t we try some more communication?’ Mazer Rackham had a pretty good idea how the bugger hive-mind worked, so why not try to build on that? Ender may have been innocent of the actual killing (he thought he was playing a game) but he did agree to the attack. He agreed to kill innocent intelligent creatures in a pre-emptive strike and in the second book he would be absolved of this on the ground that he didn’t know the buggers were human. Similar arguments would work for Hitler, right?

So, yeah, I don’t much like the morality Ender’s Game tries to sell.