Book Review “Thinking, Fast and Slow”

Author Wheelan writes, "Life is about trade-offs, and so is economics." Indeed, so is Naked Economics. This book promises to be a good introduction to economics for the layman. Throughout the book, the author uses easy-to-understand language and vivid examples to illustrate his points in strategic places maintaining a sense of lightness with the readers in reading the material. Here is a summary of each of the 12 Chapters of the book Naked Economics: Undressing the Dismal Science by Charles Wheelan.

1. System Thinking: System thinking is nothing but instead of focusing on only one particular issue, we have to analyze and try to understand the entire system on the whole. With this kind of analyzation, we can easily find a solution to the problem as the problems are not confined to only a particular area or time. We might find a solution for a particular issue, somewhere in the whole system by analyzing the entire system completely. We should try to relate the actions and the consequences on the whole as the issues occur at different time levels, not confined to only one particular time level. We have to have knowledge of the relation between different departments of an organization and the relation between them and the functionality between the departments as to how they are related in an organization. We generally focus on only one particular issue rather than seeing the bug picture and that shouldn’t be done. In system thinking we analyze the big picture.

Americans believe that the more serious a crime is, the longer a person should spend in a prison. In reality it means that a law at discretion can sometimes just set a number of years that a person should spend in the jail, regardless of the situation. The time in the prison is often very long (Randall, Brown, Miller& Fritzler, p.216) because some states have definite

Kahneman’s systems of thought is largely built on the framework of Stanovich and West (2000; as cited in Kahneman, 2003). It describes two types of thought processes: system 1 (perception and intuition) and system 2 (reasoning).

Thoughts can be fleeting, however some of the feelings resulting from thought and can have a long lasting impact on the mental state of a person. In my metacognitive exploration I found an interesting comparison between the way in which I think and approach my past feelings and the methods which Tim O’Brien, from The Things They Carried, and Paul D from Beloved express their thinking about the past. I have discovered that the expression of thoughts, including memories and feelings, is the key to a healthy mental state of a person.

With today’s fast moving pace there are many challenges we face that demands more non-linear system thinking instead of cause and effect linear thinking. In The Fifth Discipline, Peter Senge stated, “system thinking is a discipline for seeing wholes,” rather than reacting to a specific part or event. System thinking involves shifting from the linear to non-linear thinking and/or the rational to the intuitive or thin-slicing type decisions. System thinking is

Today I’ll be discussing Patricia Smith Churchland’s Are Mental States Irreducible to Neurobiological States. According to The Norton Introduction to Philosophy, “[Churchland] is known for her work connecting neuroscience and traditional philosophical topics such as consciousness, the self, free will and ethics” (T.N.I.P, 424).

“An incentive is a bullet, a key: an often tiny object with astonishing power to change a situation” (Levitt & Dubner 16). Freakonomics is a book written in 2005 by award winning economist Steven Levitt and former New York Times journalist Stephen Dubner while they both resided in different states. The use of simple diction makes it so a larger audience can be reached; readers vary from everyday people to students to economists. In order to better explain economics, Levitt and Dubner appeal to their audience by forgoing economic jargon and using simpler terms to ensure that the readers understand and relate to what is being explained throughout the passages. The authors also appeal to the readers through their credible background and logically by using statistics, researches, facts and parallelism.

“..the System includes the Situation, but it is more enduring, more widespread, involving extensive networks of people, their expectations, norms, policies, and, perhaps, laws. Over time, Systems come to have a historical foundation and sometimes also a political and economic power structure that governs and directs the behavior of many people within its sphere of influence. Systems are the engines that run situations that create behavioral contexts that influence the human action of those under their control. At some point, the System may become an autonomous entity, independent of those who initially started it or even those in apparent authority within its power structure. Each System

Kahneman argues that the illusion of validity comes from fast thinking because it is “prone to doubt.” Meaning, people naturally think quickly because they need a reason and so they do not have time to question their explanation. However, Kahneman neglects to mention that fast thinking roots itself in the fear of uncertainty. Kahneman begins his essay by describing his experience in evaluating

Systems thinking is the capacity to see the master plan and to recognize patterns as opposed to conceptualizing change as segregated events. System thinking requires the other four orders to empower a learning organization to be figured it out. Additionally system thinking demonstrates that there is no outside that the reason for your issues at a piece of a solitary system.

In Dwight MacDonald’s Reading and Though, he disagrees with Henry Luce’s Idea of functional curiosity. Luce coined the term “functional curiosity,” meaning “the kind of searching, hungry interest in what is happening everywhere.” MacDonald’s opinion of functional curiosity is that it only encourages practice in reading rather than giving beneficial information. He considers today’s literature as flimsy and overwhelming. MacDonald assumes that all reading done in today’s society is “shallow thinking.” I agree with MacDonald that there is a great amount of mediocre literature floating around, but he does not take into account the technological advancements, the lifestyles of people today, and students.

This distinctive book called, “Thinking, Fast and Slow” by Daniel Kahneman, is one of very few exquisite readings I’ve completed so far. Daniel Kahneman is a psychologist in Princeton University, and due to his research, he won a Nobel Prize in 2002 in economics. In the beginning of his book, he speaks of our cognitive System 1 and System 2 ways of thinking. System 1 generates feelings, impressions, and memory. It is very instinctive, automatic, and is considered quick thinking. System 2 on the other hand, is alert during complex problem solving, while dealing with facts and knowledge, and is attentive while working with difficult calculations. For example, a problem such as 24 x 13, this takes more time and knowledge to figure out (System 2), rather then recognizing an emotion from face expressions (System 1). When System 1 is strained, your System 2 steps in to help you process through that specific instant. Now aside from the psychological portion of this book, Mr. Kahneman divulges about a consolidated economic analysis with elemental intuitions from the psychological perspective; such as, luck and skill, overconfidence, risks in the stock market, factors of success and the decision making process. This book is overall concluded with the understanding of behavioral economics, which is the social and cognitive components on economic decisions that are defined by individuals and have consequences that reflect from making those decisions and taking those risks.

The book starts by clarifying the two fundamental modes of thought: ‘system-1 (the fast thinking system) and ‘system-2’ (the slow thinking system). System-1 is fast, automatic, effortless, and intuitive. And it cannot be turned-off. While, system-2 is slow, effortful and lazy. But in all, system-2 is a very supportive system.

Systems thinking is a method of thinking that looks at the interconnectedness between different elements rather than a linear cause and effect approach and sees patterns of change rather than fixed “snapshots”. In essence it is a view on the “whole picture” (Anderson, R 1994).