Read John Kay's review of Lewis's The Undoing Project
“Donald Trump is this walking embodiment of faith in his gut,” said Michael Lewis (pictured below). “He thinks his first step, his first impulse, is always right then tells the story afterward—no matter what happened—how it was right.” Lewis was in London to discuss The Undoing Project (reviewed here by John Kay), which examines the work of Amos Tversky and Daniel Kahneman, the Israeli-American psychologists whose insights laid the foundations of behavioural economics. Central to their thinking was the idea that assumptions—gut instincts—can be deceptive, in that they lead people to think in terms of stories, which then act as a replacement for truth. “I’d say they are describing, among other things, what’s wrong with Trump: what’s wrong with his mind.”
Lewis’s book explains how Kahneman and Tversky analysed this tendency to rely on assumptions, in the hope that understanding it would allow them to find ways of improving decision-making—to use the brain to move beyond the gut. But Trump’s rise, the decline of the expert and the spread of fake news might suggest the gut is winning.
“I agree that there is a lot of stupidity in American life,” said Lewis. “There always has been. It has just organised itself a little bit more.” But, he added, “I don’t think of this moment in American life as being one in which experts are particularly on the run.” Our view of “who the expert is has changed,” he said. Experience used to be the defining characteristic, experience that refined the sort of gut instincts of normal people. These days, the old-fashioned type of expert that Kahneman and Tversky set out to analyse, who relied on guile and instinct, is being replaced bycalculating data-driven nerds.
“In sports, the expert used to be a former player who had this gut instinct, who had experience. But now he’s some geek, with a computer. On Wall Street the expert used to be Lewis Ranieri [former Vice President of Salomon Brothers, the investment bank that was the subject of Lewis’s first book Liar’s Poker]. It used to be guys who were old-fashioned, seat-of-the-pants traders. They got displaced by algorithmic traders.
“There is a large chunk of American society that doesn’t buy into the Enlightenment, that does not believe in science, that is superstitious, religious, angry,” said Lewis. “But they are not the majority of the society,” he said, and cautioned that the two heroes of his book would be wary of reading too much into Trump’s victory.
“What Danny and Amos would say,” said Lewis, “is we are taking Trump’s very lucky victory—he has three million fewer votes than his opponent with the help of Russian meddling in the election and the help of the FBI Director—and we are making huge generalisations about the whole of society because of it. If 100,000 votes had been different in three states you wouldn’t even be raising this subject.
“American life has always had this kind of moronic inferno quality to it,” said Lewis. Now, the anger and discontent has been turned into political influence by people who “felt shut out by… the rise of a more ruthlessly meritocratic mainstream society.
“If to succeed you have to be Nate Silver [the political data analyst] or you have to be fluent in science and the analysis of data… then if you are someone who doesn’t have the education, you get angrier and angrier about that situation. You might argue Trump and all this stuff is a response.
“I don’t think they’re gonna win,” said Lewis. “I think this is a brief moment and it’s going to pass. I don’t think that not-science beats science, or hostility to science beats science in the long run.” The ideas devised by the two had a very broad influence, not only on economists and psychologists, but also medical practitioners, airline pilots, on sports scientists and the military—the Israeli army still uses a test devised by Kahneman for recruiting its officers.
Though Tversky died in 1996, Kahneman is still alive. When he heard Lewis was planning to write a book on his life’s work, Kahneman “didn’t like it,” said Lewis. “He was afraid that because he was the living one that I was going to give him too much credit for the work and everyone was going to be angry with him for it.” Expert anxiety syndrome, perhaps. When it was completed, Lewis had the manuscript checked, by economists and psychologists.
Lewis spoke to Kahneman about his life and work for around eight years. In all that time, “he never actually said yes,” to the idea of a book, said Lewis. “He just never said no.”
Purchase the book here on Amazon
“Donald Trump is this walking embodiment of faith in his gut,” said Michael Lewis (pictured below). “He thinks his first step, his first impulse, is always right then tells the story afterward—no matter what happened—how it was right.” Lewis was in London to discuss The Undoing Project (reviewed here by John Kay), which examines the work of Amos Tversky and Daniel Kahneman, the Israeli-American psychologists whose insights laid the foundations of behavioural economics. Central to their thinking was the idea that assumptions—gut instincts—can be deceptive, in that they lead people to think in terms of stories, which then act as a replacement for truth. “I’d say they are describing, among other things, what’s wrong with Trump: what’s wrong with his mind.”
Lewis’s book explains how Kahneman and Tversky analysed this tendency to rely on assumptions, in the hope that understanding it would allow them to find ways of improving decision-making—to use the brain to move beyond the gut. But Trump’s rise, the decline of the expert and the spread of fake news might suggest the gut is winning.
“I agree that there is a lot of stupidity in American life,” said Lewis. “There always has been. It has just organised itself a little bit more.” But, he added, “I don’t think of this moment in American life as being one in which experts are particularly on the run.” Our view of “who the expert is has changed,” he said. Experience used to be the defining characteristic, experience that refined the sort of gut instincts of normal people. These days, the old-fashioned type of expert that Kahneman and Tversky set out to analyse, who relied on guile and instinct, is being replaced bycalculating data-driven nerds.
“In sports, the expert used to be a former player who had this gut instinct, who had experience. But now he’s some geek, with a computer. On Wall Street the expert used to be Lewis Ranieri [former Vice President of Salomon Brothers, the investment bank that was the subject of Lewis’s first book Liar’s Poker]. It used to be guys who were old-fashioned, seat-of-the-pants traders. They got displaced by algorithmic traders.
“There is a large chunk of American society that doesn’t buy into the Enlightenment, that does not believe in science, that is superstitious, religious, angry,” said Lewis. “But they are not the majority of the society,” he said, and cautioned that the two heroes of his book would be wary of reading too much into Trump’s victory.
“What Danny and Amos would say,” said Lewis, “is we are taking Trump’s very lucky victory—he has three million fewer votes than his opponent with the help of Russian meddling in the election and the help of the FBI Director—and we are making huge generalisations about the whole of society because of it. If 100,000 votes had been different in three states you wouldn’t even be raising this subject.
“American life has always had this kind of moronic inferno quality to it,” said Lewis. Now, the anger and discontent has been turned into political influence by people who “felt shut out by… the rise of a more ruthlessly meritocratic mainstream society.
“If to succeed you have to be Nate Silver [the political data analyst] or you have to be fluent in science and the analysis of data… then if you are someone who doesn’t have the education, you get angrier and angrier about that situation. You might argue Trump and all this stuff is a response.
“I don’t think they’re gonna win,” said Lewis. “I think this is a brief moment and it’s going to pass. I don’t think that not-science beats science, or hostility to science beats science in the long run.” The ideas devised by the two had a very broad influence, not only on economists and psychologists, but also medical practitioners, airline pilots, on sports scientists and the military—the Israeli army still uses a test devised by Kahneman for recruiting its officers.
Though Tversky died in 1996, Kahneman is still alive. When he heard Lewis was planning to write a book on his life’s work, Kahneman “didn’t like it,” said Lewis. “He was afraid that because he was the living one that I was going to give him too much credit for the work and everyone was going to be angry with him for it.” Expert anxiety syndrome, perhaps. When it was completed, Lewis had the manuscript checked, by economists and psychologists.
Lewis spoke to Kahneman about his life and work for around eight years. In all that time, “he never actually said yes,” to the idea of a book, said Lewis. “He just never said no.”
Purchase the book here on Amazon
