Incentivizing profit on elective credulity is a great way to drain tons of consumptive (and second-order productive) capacity out of your economy to the benefit of the ethically bankrupt.
"Idiots deserve to suffer" is a shaky assertion even in a vacuum. In the real world, where most of us are idiots about some things and are therefore surrounded by idiots at all times, it's just (self-)destructive.
It is, which is why I added my rider at the end. But as they say, make a foolproof world and watch it fill up with fools. The ethically bankrupt may benefit from fools, but if we protect foolish adults from the consequences of their actions, we take away precisely that which makes them adults - the ability to make a meaningful choice, and to take responsibility for the consequences arising.
> where most of us are idiots about some things
Yes, me too, and lots. But I learn from it and where I get hurt, well that's just the price of being an adult. The alternative is perhaps living in china or communist russia and have the government run your life.
I'd prefer not to have that. I don't like the many scars (some physical, some psychological) I've got through life but each one is valuable where I chose to learn from it. Adulthood is choice.
I'd prefer to live in a world where the government doesn't run my life and where I don't have to constantly watch my back (both literally and financially). Neither of those is freedom.
Now, you may be tempted to say "Sure, and you'd like a pony, too". But in fact, there are societies that are much less fraud-prone. Ravi Zacharias talked about going to a dairy in Holland, and being surprised that you could just walk in, take milk, and leave money in a bowl. There was nobody there to watch you. He said that in India, there would have to be somebody there to watch customers, or they would steal the milk. He told this to a man from Egypt, who replied that in Egypt, they would steal the cows.
A society full of people who are looking to steal is an objectively worse society to live in than one with people who are not looking to steal. The trick is, how do you create such a society when you don't have one (without a heavy-handed government)?
I think the difference between holland and india/egypt is a) relatively low prosperity of the latters leading to b) desperation leading possibly to c) a culture where theft is normalised (cos everyone else does it, why not me?).
The above is speculative but if there's truth in it then trust comes evolves where people aren't desperately poor.
That said there is a proportion of the population which are psychopaths and they are congenitally indifferent to such norms as are needed to make a trusting society work. They just don't care. It's how they are wired. It's not right or wrong, it's just biology - but having known a few, it certainly not pretty.
If that can be managed then you may have an answer.
"Idiots deserve to suffer" is a shaky assertion even in a vacuum. In the real world, where most of us are idiots about some things and are therefore surrounded by idiots at all times, it's just (self-)destructive.