The Undoing Project by Michael Lewis (Non Fiction)

Fascinating book about the birth of the field now known as Behavioral Economics. Part biography, part history, part research summary, this is the story both of the evolution of a friendship and collaboration as well as the melding of two previously disconnected fields: Economics and Psychology.

After their first meeting around 1968, Amos Tversky and Daniel Kahneman were rarely apart. The decades long tight collaboration that resulted produced a stunning number of key insights and seminal papers on the psychology of Judgement and Decision Making. The primary idea: there is systematic bias in the way people make decisions. Their work was responsible for the fall of the concept of the “rational man.”

They studied the cognitive basis for common human errors and elaborated on a set of heuristics (simple rules) and cognitive biases that subconsciously influenced the way people formed judgements or made decisions. Many of the resulting concepts — such as Anchoring, Framing, Hindsight, and the Halo Effect — have become household terms. Their “Prospect Theory,” created in 1979 and developed in 1992, was a “psychologically more accurate” description of how people made decisions, replacing the previously accepted Utility Theory which claimed that people made decisions by rationally calculating the utility (or value) of all potential outcomes. Applications of this work are widespread, ranging across medicine (evidence based medicine), sports, finance, and military uses.

Some of the heuristics:
• Representativeness heuristic: the decision making shortcut that determines probability based on how well the subject is representative of a stereotype.
• Availability heuristic: the mental shortcut that makes decisions based on examples that come immediately to mind.
• Anchoring and adjustment heuristic: the influence of a previously suggested reference point (the anchor) on a person’s assessment of probability.
• Simulation heuristic: the shortcut for determining an event based on how easy it is to imagine – or “the power of unrealized possibilities to contaminate people’s minds.”

Some of the biases
• Recency bias: Decision making based on the relative ease of remembering something that happened recently rather than long ago.
• Vividness bias: bias based on the ease with which an option can be recalled.
• Hindsight bias: the tendency of people to overestimate their ability to have predicted an outcome that they could not have possibly predicted.
• Present bias: The tendency of people to undervalue future with respect to present.

The structure of the book follows the story of the two men. Though the closest of friends and collaborators until the last few years of Tversky’s life, their personalities and background were quite different. While both Israeli, Amos came from an aggressive Zionist family, while Danny and his family escaped from Nazi Europe; Danny was an appeaser, Amos a bully; Amos loved theory while Danny liked practical application of psychology, “Amos was built to fight, Danny was built to survive.” The book includes captivating detail about their backgrounds and interactions, and the process by which the work took flight and captured the interest of researchers and practitioners around the world.

The journalistic style of the story makes the personal bits easy to remember, with the research results a little harder to grasp in its entirety. The narrative jumps around a bit and the down side of watching a theory evolve (and not necessarily in a linear order) is that it can be harder to comprehend the whole. I found reading the Wikipedia articles on Kahneman and Tversky helped supplement my understanding of the actual work.

Some great quotes:
Asked if their work was related to AI, Amos said: “We study natural stupidity instead of Artificial Intelligence.”

In response to evolutionary psychology proponents Amos said, “The mind was more like a coping mechanism than it was a perfectly designed tool.”

On “Creeping determinism,” Amos says: “He who sees the past as surprise-free is bound to have a future full of surprises.”

“Economics was meant to be the study of an aspect of human nature, but it had ceased to pay attention to human nature.”

“Theories for Amos were like mental pockets or briefcases, places to put the ideas you wanted to keep.”

The Art of Power by Jon Meacham

Writing: 5 Coverage: 5

An insightful and well-written biography about one of the Founding Fathers and the author of our Declaration of Independence. Jefferson didn’t fit the traditional view of a “hero.” He was an intellectual with refined tastes and while he played a huge role in the establishment of the new country, he played a small, and often maligned, role in the revolutionary war itself.

His politics focused unwaveringly on liberty — he felt that a personal liberty would create a sense of free inquiry that would help usher in “the reign of reason” and pave the way to a “war-free world of open markets.” He applied this focus on liberty and free inquiry to everything — including religion. We have him to thank in large part for the separation of church and state that formed part of the country’s foundation. While he professed a deep belief in God, he stood firm against the establishment of religion. He hoped that “subjecting religious sensibilities to free inquiry would transform faith from a source of contention into a force for good.”

When he finally became president, he said he would spend his presidential years “pursuing steadily my object of proving that a people, easy in their circumstances as ours are, are capable of conducting themselves under a government founded not in the fears and follies of man, but on reason… This is the object now nearest to my heart.” In his first presidential address — fresh from electoral machinations and utter hatred between his party (the republicans) and the federalists — he brought people together by pointing out that they were experiencing a difference of opinions, not of principle. Wouldn’t it be nice to hear this message a little more often today?

I started the book with a negative view of Jefferson (gleaned from reading the Hamilton and Adams biographies) and left with a far more positive view. While Jefferson was obviously a consummate politician, I didn’t really see the hunger for power that Meacham claimed, although Jefferson was an excellent wielder of power. He was raised to be a leader — on a large plantation if not of the whole country. He clearly would have preferred a life at home, engaging in his curiosities, and spending time with the family that he cherished. In his last years, he was able to indulge in the life of the mind that he craved. He created a university that was to be based on “the illimitable freedom of the human mind.”

It was hard to align this image of a man I grew to admire — one who fought for liberty, scientific enquiry, and religious tolerance, who believed in education for women, and who cared deeply for family and friends — with the man who kept slaves, and fathered children with his wife’s enslaved half-sister. Many have suggested that it was a different time with a different set of norms while others have pointed out that there was a strong abolitionist movement already and that a few of his local contemporaries had already freed their slaves. I liken it to meat eaters today — I can see a vegetarian future where the norm is horror at the thought of killing animals to eat their meat; but although we are exposed to that opinion today, the norm is still to eat meat, even if there is a part of us that thinks there is something “slightly unpleasant” about it. Regardless, I’m not willing to throw away the good that a person has done because they participated in a practice that I find abhorrent today.

Excellent book both for the fair coverage and the Pulitzer-worthy writing. Strongly recommended.

Benjamin Franklin: An American Life by Walter Isaacson

new words (to me):
orotund – full round and imposing
obloquy – strong public criticism or verbal abuse

Another strong biography from Walter Isaacson, written in his trademark lucid style and ordered linearly from birth to death. A bonus chapter provides a survey of commentary about Franklin over the last 200 years as his popularity waxed and waned.

Franklin is best known for his discovery that lightning was of the same stuff as electricity (aka kite flying), the surfeit of quotable quotes from his Poor Richard’s Almanack(sic), and being one of the (by far oldest) Founding Fathers of the United States. What was new for me was how many elements of the American stereotype came directly from him. He was driven by practicality and curiosity, had “an inbred resistance to establishment authority,” and was a champion of middle class values. In the 200 years since his death, his legacy has been bandied about both by those who admire these values and those who label them bourgeois and scorn them. In any case, he was the first and they have largely stuck!

He led through seduction, rather than argument; he “embodied a spirit of Enlightenment tolerance and pragmatic compromise”; and he was an inventor and purveyor of scientific curiosity until the day he died. His inventions were legion and he was writing long treatises on scientific subjects to the very end. One of the things I liked best about him was that at 48, once he had built up a large, franchised, printing business that brought him enough money, he simply retired and devoted his time to science and politics. He also refused to patent his inventions from that point forward, wanting to freely share what he had discovered as he did not need more money.

Pragmatism was a core value for Franklin, even when it came to religion. When he was near death, he was asked whether he believed in Jesus. After expressing surprise that nobody had ever asked him this directly before, he replied that “The system of morals that Jesus provided was the best the world ever saw or is likely to see.” But on the issue of whether Jesus was divine: “I have some doubts as to his divinity; though it is a question I do not dogmatize upon, having never studied it and think it needless to busy myself with it now, when I expect soon an opportunity of knowing the truth with less trouble.”

As a Founding Father, Franklin was by far the best travelled, having spent several years in England and France as well as having travelled throughout the colonies as Postmaster General. He was also far more comfortable with real democracy than many of the delegates as he actually trusted “the people.” Yale scholar Barbara Oberg summed up both his closing speech at the Constitutional Convention of 1787 Congress and his life in general saying the speech was “the culmination of Franklin’s life as a propagandist, persuader and cajoler of people.”

It’s a long, comprehensive, book full of details that I didn’t personally always find interesting, but it was easy enough to skim to those that were. However, I found the overarching themes, conclusions, and some of the stories fascinating.