So what's the book?
A Nobel Laureate’s take on the failings of cognition as they matter to economics. In his own words, this is his overview of the state of behavioral economics, the field in which he was awarded a Nobel Prize in 2002.
So why did you read it?
So are you going to subject us to book reviews of every goddamn thing you read?
No, just every goddamn thing you recommended.
So what’s the book about?
It’s three parts: Cognitive bias (whereby you do stupid shit without knowing you’re doing stupid shit), Prospect Theory (whereby you do stupid shit because you don’t understand statistics), and studies in happiness (whereby you’re unhappy because you do stupid shit because you don’t understand statistics).
So you hated it. Got it.
I wanted to like it. Look -
This is really three books. The only thing they have in common is the two concepts that Kahneman really wants to catch on: “System 1 vs System 2” and “All you see is all there is.” A brief overview:
“S1vS2” is Kahneman’s justification for all human behavior. By his read, we act intuitively unless we actively try not to, and we rarely actively try not to because we’re lazy. There’s probably three chapters dedicated to the core idea that System 1 is a fucking idiot and System 2 is a lazy asshole. By extension, every time you do something that doesn’t make “rational” (from an economic perspective) sense, it’s because you’re an idiot or you’re lazy - IE, you’re not using your System 2.
“All you see is all there is” is Kahneman’s way of saying “because you’re not paying attention, you idiot.”
Kahneman further starts out the book by saying “I’m not going to say ‘some people’ when I use examples I’m going to say ‘you’ because you’ll understand things better and because you make these exact same mistakes all the time.” the subtext is “because you’re an idiot or you’re lazy.” Probably twenty minutes into a 25 hour audiobook, Kahneman is already letting you know he’s got a Nobel and you’re a fucking idiot.
So with that framework, we bust through three sections:
SECTION 1 is to “how the brain works” the way an Electronics 101 class is to “how a radio works.” I would conditionally recommend it if you already have a good basis in behavioral economics - I’m a big fan of Dan Ariely’s “Predictably Irrational” and “The Upside of Irrationality” (but we’ll get back to that). Dan Pink is good, too. These are writers who, if you asked “how does a radio work?” would tell you about tuners and speakers and power supplies and radio waves coursing through the air. Kahneman starts out with “this is a resistor. If you combine it with capacitors and inductors and batteries you might get a radio. Now go away I’m important.” If you’d already chatted with Dan Pink or Dan Ariely about radios, you’d have an appreciation for resistors and capacitors. If you wanted to know how radios work, you’d have learned just enough to be confused.
SECTION 2 is a paean to “reversion to the mean.” In other words, “if the average of a large group of people is a fucking idiot, then anyone who isn’t a fucking idiot will eventually act like a fucking idiot.” No matter the argument, no matter the problem, no matter the question, Kahneman’s argument is “you are a fucking idiot because statistically, you’re a fucking idiot.”
SECTION 3 is an application of the previous two sections to demonstrate that people are generally unhappy because they don’t know what’s good for them because they’re fucking idiots.
I was ready to conditionally recommend the book after the end of Section 1. Kahneman is a pedant who likes to break things up into bite-sized chunks to draw incremental, academic conclusions about incremental, academic experiments. Much of the stuff discussed I’d already read because everybody who writes one of these books uses the same data (more on that in a minute). My argument was that if you wanted to know how a radio worked, ask Dan Ariely. If you wanted to know how the pieces in a radio worked, ask Daniel Kahneman.
Then I plunged through Section 2 and it took sheer force of will to finish. The condescension and sheer quant self-righteousness was hard to take. Further, there is zero insight presented and zero discussion of alternate hypotheses. For example, Kahneman makes much about priming - he argues that we feel differently about “90% fat free” than we do about “10% fat” because we’re fucking idiots. There’s no room in his cosmology whatsoever to account for the fact that the reader might evaluate the order in which information is presented as a piece of information in its own right. Further, every argument made is a statistical one. Every piece of knowledge presented is based on the statistical mean of a large sample size. There is no information in Section 2 that is not statistical in nature - and all of Section 1 is about how people don’t understand statistics, don’t have the capacity to internalize statistics, and make the most grievous mistakes when evaluating statistical data!
Section 3 is where things really took a turn for the worse. See, here’s the thing:
Predictably Irrational was written in 2008. It uses a lot of original research, and quotes Kahneman papers in the text twice and in the notes six times. Daniel Kahneman even wrote a blurb recommending the book.
Thinking Fast and Slow was written in 2011. It uses plenty of original research, but largely name-checks other researchers.
Unless those researchers included Dan Ariely.
There are three studies used as examples in “Fast and Slow” that were conducted by Ariely. No mention is made. He’s in the footnotes once as “we disagree about what ‘irrational’ means.”
And that’s really the take-away for me - here’s a dude who has been so deep in academia that he can’t talk to the general public without arguing they’re fucking idiots, and who will name-check anybody except the guy who laid the groundwork for his book to have an audience. Meanwhile, Dan Ariely’s books are full of “I’m a fucking idiot because I don’t understand statistics” instead of “you’re a fucking idiot because you don’t understand statistics”. Ariely’s books are full of “here’s some real world examples with real experiments we conducted with real implications in your daily life” while Kahneman’s book is “your life would be much better if you were less of a fucking idiot as statistically proven by this abstract experiment I ran in 1977.”
Oh, and he name checks Nassim Taleb, too. Who lost me when he argued that nobody could have predicted Hitler. Because Winston Churchill never existed and Woodrow Wilson never said that the treaty of Versailles was sowing dragon’s teeth. Because “What you see is all there is” and if you have any insight beyond the mean it’s a statistical anomaly.
So you REALLY hated it. Got it.
Don’t get me wrong. I’m glad I read it. I’m still bummed because Jonah Lehrer is a liar; a lot of the shit Jonah Lehrer made up was cribbed from Daniel Kahneman’s research. I’m glad the dude has done the research he has. Behavioral economics is a valuable study if only because it gives lie to the field of economics.
The first third of the book is cool if you’ve already got a basis and about one tenth of the third part is cool in that he rushes through a whole bunch of studies that I’ve been referencing for a while without knowing the references. Of course, I did it as an audiobook so it’s not like I can highlight ‘em, but whatever. I can dive back.
The rest of it is a drag. An irritating, condescending, pedantic drag. If this was your first book on behavioral economics, it would likely be your last.
Are you going to be this harsh on all of these reviews?
God, I sure hope not. I’ve already started East of Eden and it’s fuckin’ lyrical. If I finish that book as pissed off as I was when I finished this one I’m gonna be bummin’.
So end on a high note, asshole.
I have a new appreciation for Dan Ariely. And I got to put a Scumbag Hat on a Nobel Laureate. That felt pretty good.
NEXT UP: EAST OF EDEN BY JOHN STEINBECK
Which is pretty much where I was in the book when I recommended it. I actually just finished it this past week and last night just read through "Appendix A" which is the study published in 1977. I have no desire to read "Appendix B" and wholeheartedly agree that Ariely's book is far better.
Though I wasn't really bothered by the tone, the statistical stuff had me scratching my head. Hang on, that's not quite right. I wasn't bothered by the tone until part 3 when he talks more about gambling. Kahneman basically says that most people don't learn from their statistical mistakes because they have no idea that they can frame things differently by "zooming out" and looking at the big picture. I'm not saying I'm the greatest gambler ever, but most of the low-level gamblers I know and including myself, did learn to do just that, at least to a degree.
I do feel like the book could have been much condensed, say from 450 pages to around . . . I dunno, 200?
I will say though, that the book made me aware of the Premortem exercise, which was conceived by Gary Klein, a guy with whom Kahneman disagrees on almost everything, except this exercise. Here's a link to the procedure, if anyone is interested. Personally, I think that's really great and can be applied to other social science scenarios, for example conflict management situations.
Anyway, I'm glad you finished around the same time as I did and were able to put into words exactly what it is that bothered you about the book. I'm still having trouble articulating what it is that doesn't quite sit right for me, but this helps. Next book I recommend, I'll make sure to finish before doing so! Sorry dude.