I read the rest of my way through Daniel Kahnneman’s Thinking, Fast and Slow during the rest of the plane ride to the UK. A fascinating book and worth the read but it did not disappoint in its eventual anti-market bias. Economic theory, which began as a theory of why markets are the road to growth and prosperity has now largely become a subject devoted to explaining why market based solutions are frequently if not even usually sub optimal.
It’s a dangerous book, and if we are looking for an anti-Enlightenment tract you would not need to go far from this book. Essentially the message is that leaving our own lives to ourselves to manage as best we can, with such self-management the optimal approach politically, socially and economically, has major limitations. Because we are exposed to reasons to believe that we are easily misled by our own prejudices and uninformed zones of bias, there is a need for limits on our right to choose our own lives for ourselves. This is from the conclusion:
Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can help. These claims seem innocuous, but in fact they are quite controversial. As interpreted by the important Chicago school of economics, faith in human rationality is closely linked to an ideology in which it is unnecessary and even immoral to protect people against their choices. Rational people should be free, and the should be responsible for taking care of themselves. Milton Friedman, the leading figure in that school, expressed this view in the title of one of his popular books: Free to Choose. (p 411)
The answer is “libertarian paternalism” to this mis-statement of Friedman’s position. I can only say that anyone who accepts the words “libertarian paternalism” as a basis for policy is a more likely to stress the paternalism side ahead of the the libertarian. A lot more.
the question is how do people adapt to uncertainty and error not as isolated individuals but together. Behavioral economics is not be a proper picture of what humans are or have become unless linked up with specialisation and exchange.
I assume that this guy has never heard of Hayek?
Jim Rose
27 Aug 12 at 9:08 pm
Cliched maybe
sums up a good philosophy.
stackja
27 Aug 12 at 9:23 pm
Hey Steve have you (or anyone else) read ‘Capitalism’s Achilles heel’?
I started reading it & got a bit bored, basically wondering if it is worth completing. the guy is going on about “illegal trade practises” without defining on what basis they are illegal and what pure and unblemished governmental authority decides the legality of such.
Chris M
27 Aug 12 at 9:35 pm
An interesting read here somewhat aligning with what you say:
Matt
28 Aug 12 at 5:37 am
Here’s the link, it didn’t appear in the above post.
http://sultanknish.blogspot.com.au/2012/08/starving-amidst-plenty.html
Matt
28 Aug 12 at 5:38 am
Great link Matt, if the day is slow I will put up a post on it.
Rafe
28 Aug 12 at 8:09 am
Hi Steve
I thought Ben Pile’s latest post at Climate Resistance was well worth re-posting somewhere on the Cat.
And I think there is a lot of synergy between Ben’s post and your observations on Kahnneman’s book that perhaps make this thread a worthwhile place to link.
As a taste, here is one of Ben’s comments from the comments thread – there is a lot more meat in his main article:
Myrrdin Seren
28 Aug 12 at 10:43 am
Whilst it is true that we sometimes need help, we don’t need compulsory assistance from ‘on high’. We can always call for help, but governments don’t want to wait to be called. I don’t mind having a police force, or a fire brigade, nearby- I do mind when we need licenses for everything! what next- a government overseer to make sure you switch the toaster on correctly? (Who could object to that- you don’t want to make the wrong choice, do you?)
Nuke Gray
28 Aug 12 at 10:47 am
Blink by Malcolm Gladwell is a better book.
Infidel Tiger
28 Aug 12 at 10:47 am
is this ideological?
Jim Rose
28 Aug 12 at 8:03 pm
So, slow thinking is an effective part of the mix? I guess he’ll be lining up to cheer for tradition, the Church, family, and so on? Possibly peerage, the traditional House of Lords, the Monarchy, AND the American Constitution?
Well anyway:
The opposite of that is that they should not be free and should not be responsible for taking care of themselves.
wreckage
29 Aug 12 at 1:43 am
“Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can help. ”
I presume Daniel Kahnneman is a human.
If he can’t spot the circular logic he’s also an idiot.
Scott
31 Aug 12 at 8:50 am