Thinking Fast and Slow – Daniel Kahneman (2011)
Brilliant. If I had to choose one book to take with me to a deserted island, this is the one. It’s insightful, erudite, innovative (at least to me). It took me a while to read, because every single page is interesting and makes one think. For example; we all suffer from focusing illusion: nothing in life is as important as you think it is when you are thinking about it. Chew on it for a while.
Central to the book are behavioral economics – we’re not rational in our decisions, we are led by hubris, emotion and act against our own interest. This is in sheer contrast to the notion of rational agent, as promoted by the Chicago School of Economics, that believes that since we have all the facts, ‘freedom is free of charge’.
The big question is if we should protect individuals against their mistake. As a liberal thinker, this reasoning questions some of my core beliefs, e.g. regarding the free market. Having said this, the most important lesson is that we should be aware that we usually chose the easy answer or solution. The trouble is that this impulsive reaction hardly ever is the best one. We need to activate System 2, as Kahneman calls it, to deepen our judgement and put it in context.