THE GREATER FOOL is a term that will be familiar to many economic scholars and most who pay any attention to the markets. The Wikipedia entry for the greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants.[1] A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price.[2][3] Or one may rationally have the expectation that the item can be resold to a "greater fool" later.
That is the economic definition, but this is not an economics blog, so what gives? Here's what; taking this concept and redefine it in non-economic terms. Who is the everyday greater fool? He is the guy who puts his neck on the line and gets you out of a jam. He is a fail-safe for many of us. The "fool" is the reason the rest of us can be foxes; dodging, hedging, placing calculated bets. Someone has to take the other side; the fool.
Newsroom did a much better job of explaining this
How does that apply to me?
The world today is full of people who are afraid to be burned, so much so that hardly anyone takes genuine risks anymore. We have our guard up, protecting what is ours jealously and this means we don't take a chance on people nearly as often as we should. One heartbreaking quote that's been doing the rounds on social media recently is this one:
Don't cross an ocean for someone who wouldn't cross a puddle for you
Oh the likes that gets. The gist is that you shouldn't give your all for someone who won't do the same for you. This couldn't be more wrong. Since when is it only acceptable to treat others well if they treat you well. Where is the humanity in that? Where is the virtue?
In a sense, it's understandable. We all want the security that comes along with reciprocity. No one wants to be played for a fool. You don't want to be the guy left holding the hot potato. There are merits to living this way, it is safe, secure and protects your interests.
The question is though, are we really any good at it? Protecting our own interests, taking care of ourselves... sure, in the short run, but what happens to the man/woman who spends his or her whole life looking out singularly for numero uno?
We, as human beings, are conditioned to need others, a community, and by the same token, others need us; to sometimes draw the short straw, bend over backwards, take the L, play the fool. The greater fool.