Mr. Kahneman and behavioral economics

Daniel Kahneman

It is difficult to find a book where the author blends a beautiful story of personal commitment with the science, a great discovery which changes the fundamentals of the economy, defeating the monetarism, and finally, a new trend on public affairs which starts a revolution on politics and economy of public goods.

In "Thinking, fast and slow" Mr. Kahneman is a storyteller that from the epistemological point of view, shares with the readers what he and his friend Mr. Tversky have been doing for a a whole life: finding questions and trying to answering them. Even though the book is not a biography, the author includes small snippets of his life, showing a undeletable commitment with the science. And everything seems to be so quite, so peaceful, just walking around during many hours at day, just talking with Mr. Tversky about the human and the rational decisions. Their experiencies should be a mandatory subject for every young researchers. Even I would say more, a mandatory subject for every STEM college.

From a scientific point of view, Mr. Kahneman and Mr. Tversky, across many years, were profiling how the humans think, finding at the end a new rational human being, with a richer concept of “rational’. As he said in his conclusions, it isn't a matter of irrationality, but just a richer concept of rationality. The remembering self and experiencing self bring a new schema for marketing and even more important those concepts could mean the end of the monetarism and the idea of the markets as we have been knowing so far. The contributions to the economics, psychology and sociology are endless: analysis of heuristics and biases, prospect theory, his contribution to the happiness theory or his model of rationality (System1/System2) are so important that it is worth to read the book at least a couple of times.  Every activity we do in our life has been affected by his scientific work. Every manager/entrepreneur/technologist  should read at least the chapter The Engine of Capitalism.

Finally, the Conclusions chapter contains one of the most interesting insights about public affairs that I never read before. Barely Mr. Kahneman exposes how, the new idea of rationality means the end one of the pillars of the monetarism. Even more, taking account the current situation about the economics and the disastrous effects that the debts have produced in the world, many people are thinking to bring back the Nobel prizes of Mr. Friedman's and the rest of the Chicago School. But more important than that, it is the actions taken by English Government enlightened for Mr. Kahneman and many others: the creation of the Behavioral Insight Unit or Nudge Unit. Don't miss their blog for more information.  Hopefully this will help the renewal of the many traditional politics, without answers for the current times.

Therefore, this book is totally a revelation.