Thinking, Quick and Slow – By Daniel Kahneman – Book Review
In 2002, Daniel Kahneman won the Nobel in economic science. What made this unusual is that Kahneman is a psychologist. Specifically, he is one-half of a pair of psychologists who, starting within the early Nineteen Seventies, got down to dismantle an entity lengthy expensive to economic theorists: that arch-rational resolution maker often called Homo economicus. The opposite half of the dismantling duo, Amos Tversky, died in 1996 on the age of 59. Had Tversky lived, he would definitely have shared the Nobel with Kahneman, his longtime collaborator and dear friend.
Human irrationality is Kahneman’s great theme. There are primarily three phases to his career. In the first, he and Tversky did a series of ingenious experiments that revealed twenty or so “cognitive biases” — unconscious errors of reasoning that distort our judgment of the world. Typical of those is the “anchoring impact”: our tendency to be influenced by irrelevant numbers that we happen to be uncovered to. (In one experiment, as an illustration, experienced German judges have been inclined to provide a shoplifter a longer sentence in the event that they had just rolled a pair of cube loaded to present a high number.) In the second part, Kahneman and Tversky showed that folks making decisions beneath unsure situations don’t behave in the way that financial models have traditionally assumed; they do not “maximize utility.” The two then developed another account of decision making, one more trustworthy to human psychology, which they called “prospect theory.” (It was for this achievement that Kahneman was awarded the Nobel.) In the third phase of his career, primarily after the death of Tversky, Kahneman has delved into “hedonic psychology”: the science of happiness, its nature and its causes. His findings in this area have proved disquieting — and not just because one of many key experiments concerned a deliberately prolonged colonoscopy.
“Thinking, Fast and Slow” spans all three of those phases. It’s an astonishingly rich book: lucid, profound, full of intellectual surprises and self-assist value. It is constantly entertaining and ceaselessly touching, particularly when Kahneman is recounting his collaboration with Tversky. (“The pleasure we present in working collectively made us exceptionally patient; it’s a lot easier to strive for perfection when you find yourself never bored.”) So spectacular is its vision of flawed human reason that the New York Occasions columnist David Brooks just lately declared that Kahneman and Tversky’s work “might be remembered hundreds of years from now,” and that it is “a crucial pivot point in the way we see ourselves.” They are, Brooks mentioned, “like the Lewis and Clark of the mind.”
Now, this worries me a bit. A leitmotif of this book is overconfidence. All of us, and especially experts, are liable to an exaggerated sense of how well we perceive the world — so Kahneman reminds us. Absolutely, he himself is alert to the perils of overconfidence. Regardless of all the cognitive biases, fallacies and illusions that he and Tversky (together with different researchers) purport to have discovered in the last few decades, he fights shy of the bold claim that people are basically irrational.
Or does he? “Most of us are healthy most of the time, and most of our judgments and actions are appropriate most of the time,” Kahneman writes in his introduction. But, just a couple of pages later, he observes that the work he did with Tversky “challenged” the idea, orthodox amongst social scientists in the Nineteen Seventies, that “persons are typically rational.” The 2 psychologists discovered “systematic errors in the thinking fast and slow audiobook summary of regular folks”: errors arising not from the corrupting effects of emotion, but built into our advanced cognitive machinery. Although Kahneman draws only modest policy implications (e.g., contracts must be said in clearer language), others — perhaps overconfidently? — go a lot further. Brooks, for instance, has argued that Kahneman and Tversky’s work illustrates “the boundaries of social coverage”; particularly, the folly of government motion to combat joblessness and turn the economic system around.