Thinking Fast and Slow by Daniel Kahneman (review)

In Thinking Fast and Slow, a richer psychology dismantles the assumptions of rational agency that have fueled the discipline of economics, but the book’s import extends further than this—to a disclosure of the way our intuitive or “fast” modes of thinking favor forms of bias that lead to bad decisions: hindsight bias, the inability to acknowledge “sunk costs,” as well as the tendency to misremember (based on how things felt at their worst, and how things ended) and to “miswant” (given our optimism bias and our tendency to discount risk). When experience or cost is persuasively quantifiable, the claims of this book are compelling—should financial pressures force one to sell off parts of a portfolio, it is indeed a bit crazy to hold onto a stock that has underperformed rather than one that is performing steadily. Similarly, the lazy or fast assumptions that cause a genuine mathematical error in the answer to a trick question are undeniable evidence of habits of thinking that govern what Kahneman refers to as the powerful (fast) System 1.

When, however, this book ventures into the existential or meaning-laden realms of life, a number of questions arise. One of the late-introduced distinctions of the book is that between the experiencing self and the remembering self: we will choose to repeat a ninety-second cold-water immersion of our hand where the temperature is increased slightly during the last 30 seconds over a sixty-second experience of steady cold. Well, that does not sound so manifestly irrational to me. Experience of time is a complex thing, and the forms of meaning that structure our lives—the narratives and memories that give them integrity and value—are not reducible to quantifiable pain and pleasure units. The irony of this brilliant and thought-provoking book is that it remains partially governed by the very economic model that it aims to debunk. There is a profound gulf between a demonstrable mistake and an existential regret, between a bad investment and a commitment to a project that gives one’s life meaning, no matter the sunk costs. The book knows all of this to some extent but still aspires overall to a higher degree of vigilance against System 1 decisions, even in the blurrier realms of meaning-giving experience. Come to think of it (slowly, of course), this aspiration too may be respected as a form of existential integrity.