Review: Daniel Kahnemann, Thinking Fast and Slow

There is an awful lot of Experimental Psychology in the world; some of it must be true. Over the decades, the Military has been its biggest sponsor in search of ways to ensure that missiles are launched at the right targets; sometimes they are.

This highly readable, well-paced book is both autobiographical review of Daniel Kahnemann's life work as an experimental psychologist and a survey of the state of the field in which he is a dominant figure. The book gets better as it progresses and we get to the work in what is now called "behavioural economics" and which has undermined the assumptions of orthodox economics about utility, about risk, and about rationality (in the sense of coherence). The later chapters are, in fact, more argumentative than experimental and align with work on transitivity of preference and so on done by other Nobel prize winners like Kenneth Arrow.

Back in the 1970s, I stopped reading Experimental Psychology and turned my attention to Cognitive Science, Artificial Intelligence and theoretical Linguistics.

I had a number of doubts. In relation to Social Psychology, I got tired of reading tautologies which were independent of their supposed experimental support ("Extroverts are more likely to initiate conversation with strangers") but out of which whole textbooks were constructed.

And in relation to experiments to demonstrate how the mind works, I felt it likely that we were being shown how paid but under-motivated student "Subjects" responded to weird experimental requests and not much more. The experiments would not bear the weight of interpretation placed upon them.

I still felt that working my way through Kahenmann's opening chapters Specifically, I felt that if you brought to bear Relevance Theory (as developed by Dan Sperber and Deirdre Wilson out of the ideas of H.P.Grice) then you would get a different take on at least some of the key experiments Kahnemann (often in collaboration with Amos Tversky) devised.

Consider the apparently much-discussed Linda experiment (Chapter 15 in the book under review) . The core finding is that large numbers of undergraduates and even postgraduates can be got to say that

"Linda is a bank teller and is active in the feminist movement"

is more probably true than

"Linda is a bank teller"

despite the "obvious" set-theoretic logic that the class of feminist bank tellers is wholly included in the class of bank tellers and that therefore membership in the larger class is more probable than membership of the (presumably) smaller class.

However, when you look at the experimental set up, you see that a central element is the provision of information which sets a trap. Though setting traps is very much what Experimental Psychology is about (and we should "know" this by now), innocent students take the information they are given in good faith and proceed very much as Relevance Theory suggests we proceed in all contextualised language processing: we use least effort (Kahnemann's "System 1"), assume the relevance of everything that is said to us and try to maximise the informational yield from what is said paired with the context in which it is said.

So the students are told all this stuff about Linda's biography, they assume it somehow relevant, and they compute "Linda is a bank teller and is active in the feminist movement" as the maximally informative conclusion which can be derived from the information which has been ostended to them.

The students' mistake is not a mistake of logic; it is the mistake of assuming that the Experimenters are acting in normal conversational good faith. But they aren't. They are trying to prove that students are idiots and that is about all there is to it.

In support of this, look at two different descriptions which Kahnemann gives of the Tom W experiment, the twin of the Linda experiment. At page 147, Kahnemann gives us the information about Tom W. which was ostended to the student Subjects. It is preceded by the following contextual information, also ostended:

"The following is a personality sketch of Tom W written during Tom's senior year in high school by a psychologist, on the basis of psychological tests of uncertain validity:"

Then at page 153, after showing how the Trap succeeds, Kahnemann reprimands us,

"But you were explicitly told that the description should not be trusted".

"The description should not be trusted" is not synonymous with "tests of uncertain validity". In the Trap which has been set, the Subjects are permitted to accord some validity to the information ostended to them. They were not told to completely disregard it. In that case, what would be the conversational point of ostending the information in the first place? In terms of Relevance Theory, it would be wasted effort which invited more wasted effort.

Put more generally, I want to say that this kind of Experimental Psychology exploits the Trust Bias without which neither social life (N.Luhmann) or cognitive life is possible. It's like a Three Card Trick repeated through endless minor variations.

But as the book progressed, I felt Kahnemann's experimental set-ups increasingly escaped this line of criticism and I was convinced by his arguments about how we (and not just Subjects) approach gambles, risk assessments and choices which affect our wealth and health. It was an Ah Ha! experience to see how things like Nudge Theory ( Richard Thaler and Cass Sunstein, Nudge) developed out of the kind of Experimental Psychology Kahnemann has done in the latter part of his career. And there are moments when Kahnemann rounds off an analysis with a dramatic flourish which really does make you sit up. So he concludes a discussion of preferences and preference ordering with the claim, " framing should not be viewed as an intervention which masks or distorts an underlying preference ... At least in this instance ... there is no underlying preference that is masked or distorted by the frame" (page 370)

I am not really in a position to judge whether, having neglected Experimental Psychology for forty years, I am now up to speed thanks to one book. But there is much of real interest in this book from the pen of a major theorist now at the end of his career and I don't regret the time it took me to work through its 418 pages (498 with all the add-ons).

Review: Owen Jones, Chavs. The Demonization of the Working Class

This is a passionate, highly readable polemic. It makes a forceful case quoting from politicians in reflective mode, from Fleet Street stories and appallingly unreflective Opinion columns, and from informal person-in-the-Ashington-High-Street interviews.

Margaret Thatcher took on trade union power and won. But at enormous cost. She solved the problem of striking workers by closing down the mines and trashing manufacturing industry. Let them eat Benefits! She dealt with the solidarity of working class communities by attacking social housing, setting those able to buy under Right to Buy against those unable or unwilling to. She encouraged Every Man for Himself.

Her successors - Tony Blair included - ended up attacking the workless as shiftless and the inhabitants of the remaining social housing as feckless and feral. Chavs the lot of them.

The rich got richer (as both Thatcher and Blair intended) and the poor got poorer. The financial sector boomed until it (quite recently) busted. In place of manufacturing jobs, casualised, part-time and low paid service sector jobs were all that was on offer. Trade unions had no purchase on this new world of crap employment.

Largely ignored by New Labour, the C2DE classes eventually stopped voting, allowing power to pass to arrogant posh boys who don't know the price of a pint of milk. Some have bought into the argument that the jobs and the houses have been taken by immigrants but few have actually voted BNP.

The solution? A new class politics arguing and fighting for better jobs, affordable housing, a greater equality of income with differentials restored to the levels which prevailed from the 1950s to the 1970s,actual representation of working class people and their interests in Parliament and the media.

It's almost convincing, especially when twinned with something like Richard Wilkinson and Kate Pickett's The Spirit Level.

One problem, it may be too late. The long-term damage has been done and cannot be reversed. And even if that is too pessimistic, things can only get better for a new generation in new places not for those still living in the old industrial and mining heartlands.

It is not enough to say that Margaret Thatcher trashed manufacturing industry and that New Labour ignored it. There is a very complicated history which involves much more than "globalisation". For example:

- for long periods, the UK maintained an overvalued currency which made exports uncompetitive and imports the opposite; it also enhanced the role of the City long before New Labour
- education policy never coalesced around any core commitment to maintaining high-quality technical and scientific education surrounding and supporting research, development and innovation in manufacturing industry; in some cases, factories failed because they had become museums of how things used to be done. Compare Germany! is the obvious thought.
- no government succeeded - though Labour in the 1960s tried - to achieve a compact between unions and employers which would ensure both a share in the profits to workers and secure production schedules to employers. Owen Jones does not go back far enough in his history to have to confront the sheer counter-productive disruptiveness of strikes, official or "wildcat". Once again, Compare Germany! is the obvious thought.


Another problem, which the market has strikingly failed to solve, is that people without jobs (Jones interviews several) live where there are no jobs and that people without affordable or decent housing live where there is not enough housing.

Between 1997 and 2010, no less than 2.12 million new jobs were created. That hardly sounds like skid row. Of those jobs, 385 000 were taken by UK-born people and 1.72 million by people born abroad. (pp 238 - 239) BNP vindicated? No.

The migrant workers who arrived in this period, largely from the EU, went to places where there were jobs and not enough people or qualified people to fill them. In practice, London and the south east, though in agriculture they would have spread more widely (Jones never writes about agriculture). The UK-born unemployed were simply living in the wrong places.

In coming to London and the south east, immigrants came to areas where housing was scarce and expensive. Meanwhile, up North, houses were being boarded up and demolished by the thousand.

But what could government had done? It could (let us suppose) have acted directively in one of two ways: it could have told unemployed people up North (where they had housing) to move South where there were jobs (but no housing). Thus Norman Tebbitt and unacceptable.

Alternatively, it could have told employers to move their jobs up North and employ unemployed people. Unfortunately, most of the jobs were not in manufacturing. They were service jobs required by London's economy. You cannot tell someone to move their posh restaurant from Mayfair to Merthyr Tydfil. There ain't going to be any customers.

So much as I admire Owen Jones' defence of people who have been wronged, I think that a new class based politics will have worse than an uphill struggle. It will be a labour of Sysyphus.

The United Kingdom is a country in long-term historical decline. Had it stayed more democratic, with high levels of intelligent popular participation, it might have avoided some of that decline. Had it had a better class of politician, ditto - but now we really are scraping the barrel. And decline is just that: in the end, you can see it all around you as Owen Jones has done.

Review: Daron Acemoglu & James A Robinson, Why Nations Fail

I am not convinced. This book comes with 14 pre-publication product endorsements, five of them from Nobel laureates, so the weight of world opinion is against me. But let me try to make my case.

In a 529 page book, Acemoglu and Robinson (A&R) survey world history - Neolithic to the present - through a score or more of small or medium-sized case studies. They leverage these cases into examples of the thesis they wish to maintain, using just a handful of not very abstruse concepts.

Some of the case studies are thumbnails and, occasionally I had reservations: for example, I think Russia was more industrialised and wealthy before 1914 than they allow, collapsing between 1917 and 1921. It then grew from a much lower base than it had achieved prior to 1914. Some of the more extended cases are well-structured and carefully argued: those of South Africa and Botswana, for instance.

The general idea is that nations can sustain economic development over the long term only if they are open both economically and politically - "inclusive" is the concept A&R use: a useful concept because more inclusive than "free market" or "democratic".

For short periods, nations which are inclusive only at one level - economic or political - can make progress but then they will hit the buffers unless the non-inclusive level opens up. A&R reckon that this will happen to China where the control of the Communist Party will sooner or later come into conflict with the relatively inclusive economy it has unleashed. This thesis is not unfamiliar - I think I read it first in Will Hutton.

A&R use "extractive" as the opposite of "inclusive" and, in effect, write about extractive elites. At the economic level, these operate through guilds and monopolies and general hostility to outsiders and innovation. At the political level, they take the form of absolute monarchies, one party states and common-or-garden dictatorships which extract whatever they can from whatever is going. The two levels inter-connect, as in cases of "resource curse" where a single political elite monopolises the revenues from production and export of a nation's only valuable resource - diamonds, coffee, oil.

Extractive elites get even richer when they find ways of (further)depressing labour costs, whether through slavery, serfdom, land apportionment or other more subtle methods of confining a labour supply to just one kind of employment possibility.

Extractive economies and polities have serious problems accepting technological innovation and the "creative destruction" that implies or accepting independent entrepreneurship. With remarkable consistency, they end up banning them and killing people involved with them. A&R give many telling examples.

Extractive states also have serious problems of control, since the rewards from being the elite are so great that others may try to take over the act. From this, civil war. And the resources being extracted may run out or go out of fashion. Whatever, extractive societies - like the DR Congo for all of its history - generally end up producing mass poverty and political instability.

Whereas inclusive societies manage to get into a virtuous circle where things can only get better, extractive societies generally end up in a vicious circle and things only get worse. Thus Spain over many centuries in the past or North Korea today.

Exactly what happens to a given society depends a lot on contingent events which produce what A&R call "critical junctures". They use the Black Death in Europe as a paradigm example. The thesis they advance here denies historical inevitability and stresses historical contingency - things could have turned out otherwise.

So far so good. Now to what I think is the big problem. A&R paint some rosy pictures of inclusive societies, old and new: England after 1688, the USA, Australia, Botswana. And they paint some terrible pictures of failed extractive nations in Africa, Asia and Latin America.

They write about colonialism, emphasising the way in which in Latin America and Africa local extractive elites simply took over at Independence the role of colonial elites, doing nothing to enhance the lives of their citizens. But they do not write about the continuing role of former Imperial powers - or the United States - in sustaining these elites.

Yet a large part of world history of the 20th century is the story of cuddly-friendly inclusive Western societies doing their utmost to sustain extractive elites in power in Latin America, Africa and Asia. They did it - and continue to do it - either by direct military intervention against forces seeking more inclusive economic and political institutions, or by selling armaments on an extraordinary scale to the world's worst regimes so that they can keep themselves in power and their people poor. In this, France has played an appalling role in Africa; the USA in Latin America and Asia; and the United Kingdom wherever there is half a chance - Saudi Arabia, for instance.

This kind of vicious interdependency is not discussed by A&R.Developed and followed through, it would greatly alter the outlines of the world history they offer us. It does not mean that their concepts are not helpful, nor does it invalidate their often valuable analyses of the dynamics of development. But societies are not closed. And the Goodies from one perspective often turn out to be Baddies when looked at in a wider perspective.

Review: Bernard Wasserstein, On The Eve

Some years ago, I visited the Museé d'art et d'histoire du Judaisme in Paris for an exhibition of the photographs of Roman Vishniac under the title "Un Monde Disparu". I used a postcard from the exhibition as a bookmark while reading On The Eve.

Wasserstein does not mention Vishniac anywhere in his 552 pages and, though he uses some photographs as illustrations, he does not use one of Vishniac's. I don't know why, though I now read on Wikipedia that there is controversy over the way Vishniac put together and wrote up his work, for example, combining images from different sources as if they belonged to a single scene. But that doesn't seem enough to me to ignore the work totally.

Anyway, I found it all a bit disconcerting since Vishniac, working without the benefit of hindsight, saw the Jews of Europe through much the same lens as now does Wasserstein, "The demographic trajectory was grim and, with declining fertility, large scale emigration, increasing outmarriage, and widespread apostasy, foreshadowed extinction" (p 434).

Wasserstein's book is, at best, encyclopaedic and, at worst, miscellaneous: "In Hungary, where name-changing was particularly common, Joseph Löwinger, a banker, changed his name upon ennoblment, to Lukács de Szeged. His son, György, born in 1885, was therefore known as von Lukács. In 1919, when he served briefly as deputy commissar for education in the short-lived Communist régime of Béla Kun, he dropped the von. Writing mainly in German, it was as Georg Lukács that he became the best-known Marxist literary critic of the age" (p 197)

A lot of the prose is as plodding and inconsequential as this and, at many points, I just wanted to give up. One cannot read a very long book for snippets of information alone.

There is a sustained engagement with Yiddish, as language and as literature. Wasserstein transliterates and thus makes the language more accessible to an outsider, but at the price perhaps of making it seem more accessible than it really is. More importantly, I felt that here a general historian was trying to do work which needs the co-operation of some pretty heavyweight historical linguists or sociolinguists if one is to hope to understand the dynamics of a minority language whose spoken form is partly inter-intelligible with one surrounding and often dominant language (German) but whose written form is not, since it uses a different alphabet. (The same is true of Judeo-Espagnol, which Wasserstein also discusses).

Structurally, there were times when I would have welcomed some comparison with the situation of Europe's other minorities of the inter-war period, in particular, the Roma. I thought that would help one understand more clearly what is specific to the Jewish experience between the two world wars (essentially, the time frame of this book). And, perhaps for no very good reason, I would have liked just a little about the Kairates especially as the book includes extensive discussion of Jews in Lithuania and Crimea - both Kairate strongholds (well, as Kairate things go). They did, after all, practice a Jewish faith. It is only with hindsight that they become radically other because the Nazis classified them as racially not Jewish.

Wasserstein most of the time avoids the pitfalls of hindsight and most of the time he calls a spade a spade and a rascal a rogue. The Munkácser rebbe appears repeatedly through the book as a warning against religious fundamentalism of all kinds. (I hope I don't misread Wasserstein here). More generally, I found it impossible to read Wasserstein's descriptions of religiously-controlled Jewish primary schooling in inter-war eastern Europe without thinking about what I read in my newspapers today about Islamic primary schooling in,say, Pakistan.

Maybe this book just attempts too much - the apparatus runs to 116 pages - and therefore becomes encyclopaedic and not very readable. Maybe there is just not enough analytical or theoretical zest to focus the remarkable amount of information assembled here.

Review: Matthew Lynn, Greece, The €uro, and the Sovereign Debt Crisis

I nearly stopped reading this book on page 3. It felt like it was being addressed to American readers and therefore taking into account their woeful ignorance of history and current affairs (witness the repeated gaffes of Republican presidential hopefuls). And the prose was pretty wooden. But I knew it was a book which would challenge some of my assumptions and beliefs, so I kept going. It gets a lot better as it goes on and I finished the whole book.

Lynn writes from a generally monetarist and fiscal conservative position: they're bust, we're bust, we're all bust. Except for Germany, the real and only home of Prudence.

He reckons the €uro was doomed from the moment the EU agreed to bail out Greece, creating more debt as if it would solve the problem of old debt. If Greece had not abided by the terms of the Growth and Stability pact, simply continuing its profligate path, how would throwing money at it alter that? I felt at the time(2010) that Greece should have been allowed to go bust and this book does nothing to challenge that as a sensible view.

Indeed, a year on in 2011, everywhere I read (including The Economist) is talking about the good sense of an "orderly default". There is no possible future in which Greece will be able to pay its debts, so why not recognise that now instead of throwing good money at the riot police?

Interestingly, whereas most fiscal conservatives are unconcerned by a bit of deflation, Lynn's best arguments are designed to show that the €urozone has now trapped itself within deflationary policies. Because no individual country can devalue, every country in even a bit of trouble is pushed towards exaggerated austerity and that deflationary pressure works it way round the whole monetary area.

Quite persuasively, he argues the case for Greece's exit from the €urozone. It would allow Greece's currency to devalue, just as the UK has been able to devalue against the €uro. When the €uro was introduced, I decided to dual-price my stock. I still have stickers which say "£10 or 16€". Then I realised it wouldn't work, so I started pricing just in €uros - a decision which has worked in my favour. Today, £10 is under 13 €. If you want 16€ worth of stuff now, and want to pay in sterling, it will cost you £14.16. In other words, the pound has devalued 40% against the €uro in under a decade. No wonder Booze Cruises are a thing of the past.

But my mistake was to think of the €uro simply as a medium of exchange, in which case, one currency rather than 500 is a no-brainer. Lynn does show how the €uro was not thought through beyond this level, when in fact a common currency will only work if there are fairly standardised (and healthy) fiscal policies throughout the currency area. Greece should never have been admitted to the €urozone in the first place; it was a basket case and the €uro of itself could do nothing to change that. Except indirectly: it was the money markets which downgraded Greek public debt just because they could see that Greek governments did not give a toss about the terms of the Growth and Stability pact. Unable to devalue, Greece could not escape the judgment of the markets.

Something I did not know: in the build-up discussions on the common currency, the UK suggested a system of dual or parallel currencies: each country keeps its own money (and central bank) but alongside these there is a common currency. You take your pick (just as you do when offered dual priced goods). If the common currency works well, then its advantages as a medium of exchange will progressively reduce the role of national currencies. It will grow organically towards being the people's choice. This is an interesting idea and one which could be revived.

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Orignally published on my Blog, The Best I Can Do

Review: Ben Macintyre, Operation Mincemeat

Ben Macintyre is another journalist who knows how to do research and how to write. The result is a fascinating book, both thorough and highly readable, which has provided my relaxation this Easter weekend. Thank you!

The story (The Man Who Never Was) has been well known for over fifty years: Churchill's spooks mounted a deception exercise involving a dead body carrying fake papers washed ashore in Spain. By this means they succeeded in significantly misleading Hitler (possibly with some unexpected help from an anti-Hitler German aristocrat high up in German intelligence). As a result, Hitler had his forces in the wrong places when the Allies invaded Sicily in 1943. Thousands of Allied military lives were probably saved for a very modest outlay in pounds, shillings and pence.

Because it's in the News, I have been thinking about social mobility and internships. Put the spooks and other players in Operation Mincemeat through the grinder of those issues.

In many respects, the desperate struggle of World War Two forced the UK to open careers to talents. At the same time, as this book indicates, networks of privilege and sponsorship continued to operate - sometimes with disastrous results (think of the Cambridge circle of Soviet spies).

But I cannot at the moment convince myself that one would have got a better result than the clubland aristocrats and upper-class / upper middle-class eccentrics achieved in their Whitehall intelligence basements had one insisted on open recruitment and no sponsorship. It seems to me that these people were often the glitzy showmen or the nerds and anoraks of their day who would never had the chance to show their real abilities had they been put through some politically-correct recruitment procedure. Horses for courses, and not all courses are alike.

I will try to find something to read on this subject, specifically in relation to World War Two. Any suggestions?

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Originally published on my Blog, The Best I Can Do

Review: Oliver Bullough, Let Our Fame Be Great

When journalists are good they are very, very good. Oliver Bullough is terrific. His combination of historical research and contemporary reportage is an extraordinary introduction to the history and continuing conflicts of the North Caucasus - that barrier of mountains and Muslims which once lay between Russia proper and its imperial ambitions in Transcaucasia and is now a mess of unhappy partlets of the Russian Federation: Kabardino - Balkaria, North Ossetia, Ingushetia, Dagestan and Chechnya. Since the 2008 conflict with Georgia, add Abkhazia and South Ossetia.

Russia comes out very badly from Bullough's stories.

Imperial Russia in the 1860s drove the Circassians of what is now Abkhazia into the sea - by the hundreds of thousand - and, if they were lucky, exile in Ottoman Turkey.

Stalin, encouraged by his fellow-psychopath Beria, deported whole Caucasian populations en masse in the 1940s in the kind of closed rail wagons which were as good at killing mountain herders as elsewhere city Jews.

Post-Soviet Russia bludgeoned the Chechens into a kind of submission in wars of appalling brutality - though Bullough acknowledges, on both sides.

I read this 500 page book with unflagging interest. It is beautifully crafted and puts to shame the kind of dull prose which academics still deploy. But I would want to enter one corrective of perspective, which does not exonerate Russia but places it as just another Imperialist power.

Uniquely, Russia - both Imperial and Soviet - built its Empire by expanding overland North, East, South and West. At no point did it have to cross an ocean. All the colonial brutality it perpetrated occurred on the Eurasian landmass. This is one reason perhaps why Bullough thinks particularly reprehensible Russians' ignorance of their own terrible history.

But I do not think Russia is unique in the horrors it inflicted or in ignorance of them.

The atrocities of a squalid Imperial bit player like Belgium occurred thousands of miles away in the Congo. It is probably still possible for Belgians to think that it is not part of "their" history.

France has a poor record in Africa up to the present day under Emperor Sarkozy. The civil war in Algeria is the one "we" know about. How different would it feel if Algeria had been attached to the south of France rather than separated from it by the Mediterranean? I think we might expect the French to be more apologetic than they are, which is in any case not very apologetic.

British subjects have until the past few weeks been shielded from much of the truth about the late colonial wars we waged in such countries as Kenya.

Probably the Germans have done most to acknowledge and deal with their own past.

What is notable about Vladimir Putin's attitudes, which figure significantly in Bullough's account of the Chechen Wars, is that he is determined that there shall be no accounting for the past or the present in his own backyard. What is perhaps most frustrating is that such an attitude is unnecessary to any sound project of ensuring Russia its rightful place in the world.

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Originally published on my Blog, The Best I Can Do