The issue with theory and system is not that the system is rigged or that only "cheaters" get ahead or can game the system as you seem to suggest. Rigging the system presupposes that there are some set of "fair" rules that equally apply to everyone. Not so. Cheating presumes that you are "going against the rules". Much of our economic system rewards people who play by the "rules" but take advantage of little known rules or ways of playing. The system of catching people who break the rules is actually pretty good. So the fact that the economic system is like a coin that lands heads up 99 of 100 times suggests not that the game is rigged but that our expectations of a 50/50 chance of heads is flawed.

Set your expectations right, bet that way (all playing by the rules) and you"win".

Poppycock. You say the system is unfair. I agree the system is unfair, and yet...
The issue is *perceived* to be (at least mostly) fair. People perceive that the possibilities of getting some reward for their investment is mostly decent (or about even). And so people invest, VC firms invest, the "system" rewards, and trust is *mostly* maintained.

You say that "cheating" is that which is damaging to the system if everyone does it. There are a couple of issues with this (aside from the philosophical arguments against such a Kantian categorical imperative applied to economic systems). Your definition of cheating still presupposes a definition of "system" which, since we're talking about economics, is a non-intrinsic system - meaning that it is something that does not define itself (like, say, the systems observed and measured by astronomers). It is still defined by a set of rules. The breaking of which would be "cheating". The system may (does, many argue) have internal and possibly fatal flaws that are permissible but not healthy for the system - especially if - as you point out, everyone did them. This is why those "in the know" have an interest in keeping the entry point of their advantages secret or setting the bar high enough to limit those who can participate. Again, not ideal for the system but not cheating, illegal or fraudulent.

At worst we can say they / we are "impolite", "greedy", unfair etc. But cheating or fraudsters - no.

we have to get over the notion that unfairness = cheating/fraud/illegal. Sometimes unfairness is simply, unfair.

I'm sensing that you're hesitant to criticize "unfairness," because then that could be used as a crutch for those too lazy to do the hard research. For example, if a contract is obviously unfair, but one party is too damn stupid to read it, then we shouldn't call it "fraud"... we should just say "well, you should have read the damn contract!"

To a point, I agree... but only if there was at least an attempt at a meeting of the minds... and the contract wasn't intentionally vague... and there was full disclosure... and the huckster wasn't taking advantage of a vulnerable person. Its a fuzzy line.

I also wish the public high schools did a better job of preparing folks for the business world. Contracts, mortgages, investment, saving accounts, etc. For purely selfish reasons, naturally... if too many idiots make bad investments, they can create a recession. Also, a foreclosed house invites the wrong element into the neighborhood, affecting even those who made smart investments in their homes.

I don't know what the answer is, but I strongly feel that by focusing on improving the fairness of the system, we'll improve the overall economy.

I think the importance you place on definition is what's wrong here. We're not looking at what cheating means, but rather if cheating, fraud, whatever-you-want-to-call it can be justified for positive moral means.

I fail to understand why you're hating on Economics so much here. Literally all the behavior you're talking about can be explained with economics. Steven Levitt, "the Freakonomics guy" is one of a great many economists who study the economics of crime; it's not a little niche he carved out, his book just generated a lot of interest outside economists who had been reading each others' works for years because of the abortion chapter (which was later proved wrong, by the way). Half of what you're talking about is game theory, and the rest is just where very basic economic models don't suffice - not necessarily where they completely break down. I mean Behavioral Economics is great, and you'd probably like it a lot more than traditional economics, because it DOES talk about where the models break down, but you still have to understand the underlying models and assumptions so you can understand comparative statics. You've got to walk before you can run.

However, if you did understand economics, you'd see that your supposition that "there's always something hidden from the model" and somebody smart will come along to take advantage of it does have some truth in it - if there is something that can be taken advantage of, chances are someone will do so, and do so quickly. But that's just arbitrage, which is making an economic profit (as opposed to a profit on the books). But it's not economists and their models who are blind to these opportunities. Economists are the ones who are most likely to find them without being specialists in a field, not some random guy with "street smarts" who happens to be in the area. Police understand a lot of implicit rules about crime that economists can figure out just by modeling incentives. The same holds true with education boards and economists. In fact, Levitt found evidence of cheating by Chicago area teachers because he looked at their INCENTIVES, and figured out they'd be likely to cheat. He tested to see if they were, and lo and behold, an economist figured out how people were gaming the system.

Seriously man. Go trash anthropology or something. But economics? If you think it's frivolous you're either misunderstanding something or you're stuck in an undergraduate intro course.

The human race deserves to be enslaved or destroyed by the first more intelligent species to discover the Planet Earth. They may decide to spray the planet, much as we do now to eradicate other pests. We waste time and life getting over on one another, while the population keeps growing. Resources can only go so far on a single planet. We have no viable way of maintaining life on this planet indefinitely, nor is conservation even the answer--it's just an idea the marketing rats use to appear caring and good while they are fleecing your pockets. We all deserved to be killed for our incredible lack of perspective and selfishness toward the future of the human race. We are a stupid race and deserve to die.