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Nick Spencer: Humans are not as rational as they think

05 April 2024

Daniel Kahneman showed the limits of utility theory, writes Nick Spencer

Alamy

Daniel Kahneman in London in 2014

Daniel Kahneman in London in 2014

DANIEL KAHNEMAN, perhaps the greatest psychologist of the 20th century, died last week. He was 90.

Kahneman survived the Nazi occupation of France, emigrated to British Palestine, and worked as a psychologist for the Israel Defense Forces. In 1969, he met Amos Tversky, with whom he was to collaborate on groundbreaking work over the coming decades.

Tversky introduced Kahneman to utility theory: the idea that human preferences are consistent and rational, and reliably based on the value that people assign to possible outcomes. The theory is grounded in the idea that human beings are ruled by rational self-interest, and it is foundational to the economic and social sciences.

Kahneman wrote that he “did not know enough about utility theory to be blinded by respect for it”, and he found its underlying conviction wholly unconvincing. In our everyday life, Kahneman and Tversky argue and demonstrate, human judgement is nothing like as rational and consistent as we think. Rather, it is plagued with problems.

We deploy heuristics — cognitive shortcuts — that fail to get us close to the truth. We often estimate the relative importance of something from the ease with which we recall it (the “availability heuristic”), which is why we constantly overestimate the risk of terrorism.

Our thinking is riddled with biases — such as the so-called “confirmation bias”, in which we look for evidence that confirms our existing beliefs rather than data that might challenge us. We are persistently blind to the impact of chance in events, preferring, instead, to find a meaningful causal narrative in things that lack them. Our thinking is highly vulnerable to framing, priming, and our emotional state when we happen to make decisions. We are, in short, nothing like the rational, consistent, and self-interested creatures that we like to imagine ourselves to be. That means that we are constantly apt to make choices that are bad for us.

That conclusion led to the coining of a new word — “miswanting” — to describe the desire for things that we don’t actually want at a deep level: things that don’t ultimately make us happy. It is a concept obvious to most people: familiar not only to any parent ever, but to any person who has known another deeply. It would be hard to find a better term to describe exactly what occurred in Eden: Adam and Eve miswanted the apple.

But it is a word that we cannot easily use in a liberal society that is based on the premise that there is no authority higher than an individual’s autonomous and sovereign will — because, if anyone knows what is best for me, it must be me, not the State, not tradition, and certainly not religious authorities.

The fact that we are now using “miswanting” may be an indication that we are moving away from the unconvincing rational self-image that we have cultivated for ourselves, and towards one that is less arrogant, humbler, and more self-critical. Moreover, it may be an indication that we are going back to the future. Although our ancestors did not use the word “miswanting”, they, having an understanding of creation as both moral and relational, and being cognisant of human sin, did have a rich vocabulary — “miswill”, “miswishing”, “misintention”, “misinclination” — for just this kind of problem.

Nick Spencer is Senior Fellow at Theos. His long read exploring Daniel Kahneman’s work can be read at: theosthinktank.co.uk

Paul Vallely is away.

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