The Undoing Project by Michael Lewis 2017
I truly believe that Michael Lewis could write a book about ‘paint drying’ and I’d love it! The man can write about anything from the shift from ‘insider knowledge’ to analytics that changed baseball (Moneyball) to the importance of the left tackle in pro football (The Blind Side), from the fortunes made by those who saw the opportunity in short-selling bad mortgages (The Big Short) to the risks involved in the disastrous entry of the Trump administration to the Federal Government (The Fifth Risk). And then there’s this incredibly interesting book about two Israeli psychologists whose work changed the world.
Amos Tversky and Daniel Kahneman were among the first members of the Hebrew University’s Department of Psychology. They were temperamentally nearly opposites but both first rate minds who believed that “a part of good science is to see what everyone else can see but think what no one else has ever said’, and did they ever do that. Taking on the fields of decision analysis, economic utility theory, and the rational mind basis of the market, they showed how the human mind functions in making judgments with inadequate information. Probability and statistical thinking go out the window and rules of thumb (heuristics, in their terminology) lead to biases such as representativeness, availability, and anchoring that lead to irrational choices (e.g. spending money on fire insurance which costs much more then the costs that would be incurred by a fire!). Further writing about what they termed ‘framing’ led to the appreciation of the importance of how questions are posed and the difference in the mind between potential gain and real loss.
Their work has had profound impacts on government policy, behavioral economics, marketing, and evidence-based medicine and has been much honored— Tversky received a MacArthur grant and numerous honorary degrees and Kahneman received the Nobel Prize, Tversky being ineligible when he died at 59 in 1996 from malignant melanoma.
Those are the facts, but what distinguishes this book is Lewis’s engaging style of telling the story of each individual, their unique collaboration, and the impact of their work at ground level. Choosing a title is one of Lewis’s special talents, and this one has a double meaning. ‘Undoing’ is the term that Kahneman used to label the way the mind works to run ‘what if’ scenarios to come to terms with bad outcomes. Similar to the way in which he and Tversky identified the mechanisms by which the mind makes choices in the face of uncertainty, Kahneman identified ways in which we try to remake the world in the face of tragedy and disaster. ‘Undoing’ also referred to the disintegration of the special relationship between these two brilliant men after 15 years of collaboration after they both left Israel, Tversky for Stanford and Kahneman for the University of British Columbia, then Berkeley, and finally Princeton. Though their friendship had a sad ending, at a very deep level it remained central for both of them. Kahneman was the second person Tversky called after he learned of his fatal diagnosis and Kahneman gave the eulogy at Tversky’s funeral, also appending it to his Nobel acceptance speech.
This book, like all the ones I’ve read by Lewis is readable, informative, and ultimately very human. I loved it.