When I said that this book is an unqualified delight, that was coming from System 1. System 2 tells me to lodge a couple of reservations. Kahneman claims too much for the practical utility of this endlessly fascinating work. Yes, in theory there are opportunities for policy intervention to improve decision making — but remember that if citizens are subject to these biases, so are their rulers. He briefly asserts that organizations are less susceptible to biases than individuals, but doesn’t go into detail. I’m not so sure. In my own experience as a company (and civil service) man, for every bias corrected by thinking in groups, another gets invented or amplified by groupthink.
Always affable and open-minded, Kahneman is nonetheless unfair, I think, to orthodox economists and their “rational agent” models of behavior. He accuses economists of believing, despite all the evidence he and others have gathered, that people are unfailingly rational. Surely few economists actually believe that. Perfect rationality is not an empirical claim; it is a simplifying assumption whose justification is that it yields useful models. Theories with more sophisticated psychological underpinnings would be great, so long as they can meet that same test. Whether behavioral economics — the field Kahneman and Tversky opened up — can do this is still an open question.
But System 2 always wants to spoil things. Thinking, Fast and Slow is a simply marvelous book. Let’s leave it at that.
- Clive Crook is a senior editor of the Atlantic and a columnist and member of the editorial board at Bloomberg View. His essay on the best business books about the 2008 financial meltdown appeared in the Winter 2009 issue of s+b.