If Everyone Else is Such an Idiot, How Come You're Not Rich?

Interesting post about Netflix by Megan McArdle. Click here to read it.

"When I catch myself thinking along these lines, I try to stop and ask a simple question: "If everyone else is such an idiot, how come I'm not rich?"

If you see a person--or a company--doing something that seems completely and inexplicably boneheaded, then it's unwise to assume that the reason must be that everyone but you is a complete idiot who is blind to fairly trivial insights such as "people desire inexpensive and conveniently available movie services, and will resist having those services made more expensive, or less convenient". While it's certainly true that people do idiotic things, it's also true that a lot of those "idiotic" things turn out to have perfectly reasonable explanations.

And in fact, if management of all these large public companies really were the staggeringly malevolent yet totally hapless lackwits that so many seem to believe, it should be really, really easy to get rich by outwitting them. Oh, sure, they'd probably get all their rich friends in Congress and Kiwanis to gang up on you, but since, according to the internet, almost all those people are also too dumb to come in out of the rain, you should be able to defeat them with a couple of well-placed banana peels.

If you've found it maybe not quite that easy to make a pile of money by outguessing all these benighted fools, then perhaps you should consider the possibility that they aren't quite as stupid as you are making them sound when you sniffily ask "Why don't they just . . . ?

Quite often, the answer to that exasperated "why don't they just . . . ?" is green, and it folds."