Daniel Kahneman: An incomplete obituary - Hindustan Times
close_game
close_game

Daniel Kahneman: An incomplete obituary

Mar 30, 2024 09:53 PM IST

In an era where economists increasingly think of themselves as doctors who can fix ‘problems’, one may turn to Kahneman to learn a thing or two about humility.

What economists think today, other disciplines have perhaps thought about it yesterday, or the day before. We have our ways of seeing and thinking about the world and are often too proud to acknowledge that there exist more effective ways of seeing. It’s only rare, thus, for our discipline to accept an outsider who challenges the dominant foundations of the discipline, and yet, economics had no other option than to accept Daniel Kahneman – a psychologist by training, a Nobel laureate in Economics.

FILE - Psychology professor Daniel Kahneman poses, Oct. 9, 2002, at Princeton University in Princeton, N.J. Kahneman, a psychologist who won a Nobel Prize in economics for his insights into how ingrained neurological biases influence decision making, died Wednesday, March 27, 2024, at the age of 90. (AP Photo/Daniel Hulshizer, File)(AP) PREMIUM
FILE - Psychology professor Daniel Kahneman poses, Oct. 9, 2002, at Princeton University in Princeton, N.J. Kahneman, a psychologist who won a Nobel Prize in economics for his insights into how ingrained neurological biases influence decision making, died Wednesday, March 27, 2024, at the age of 90. (AP Photo/Daniel Hulshizer, File)(AP)

This is perhaps the most boring introduction one could write about one of the most exciting economists the discipline has ever seen. Someone who shook the grounds of economic theory deserves a more striking introduction. After all, this man showed how human beings have valid reasons to make decisions that protect them from prospective loss rather than opt for prospective gains. In many ways, it was because of him that economists accepted that human beings may not be driven by self-interest as much as they would like to believe. So, let me try introducing him again.

Daniel Kahneman and his friend Amos Tversky, through a series of experiments on human subjects and their behaviour, showed that the decisions we make in real life are hardly ‘rational’. This implied, that some of the most celebrated results in Microeconomic Theory that rested on the premise of economic rationality, would turn out to be utterly unrealistic. Soon, economics as a discipline had to open itself up to the field of behavioural economics. Such was the impact of Prof. Kahneman, an ‘outsider’ to the discipline.

Does this sound better as an intro? Nah. It does not capture the greatness of a man who could say, “What would I eliminate if I had a magic wand? Overconfidence”. Let me take another shot at introducing Prof. Kahneman.

Around the time when pro-market economists struggled to remain relevant with the rise of Joseph Stiglitz, George Akerlof and other economists who challenged the notions of perfectly competitive markets, Daniel Kahneman, a psychologist, hammered the last nail in the coffin of the soon-to-be-obsolete theories that dominated mainstream microeconomic thought. He demonstrated through experiments and models, how unrealistic the assumption of economic rationality is. No wonder why pro-market conservatives like Gary Becker refused to acknowledge such work as economics, but make no mistake, the heterodox tradition within Economics did not engage with Kahneman either. For them, any research that dealt with individual behaviour was to be dismissed as methodological individualism. Regardless, Kahneman’s work influenced subsequent generations of PhDs in Economics. Eventually, the field went somewhat rogue, but that’s a story for another time, and certainly not on Prof. Kahneman.

Does that introduction do justice to the giant that Kahneman was? Or, should I have introduced him as the author of Thinking Fast and Slow, a book that some would describe as equally influential as The Wealth of Nations or more interesting than Das Kapital for an entire generation? Controversial introductions warrant tons of justification. Rather, let me re-introduce Prof. Kahneman through his humility.

In an era where economists increasingly think of themselves as doctors or plumbers who can fix ‘problems’, often by prescribing policy solutions emerging from experiments that even violate basic human dignity, one may turn to Prof. Kahneman to learn a thing or two about humility. Daniel writes in his biographical note for the Nobel, “...I am now quick to reject any description of our work as demonstrating human irrationality ... I carefully explain that research on heuristics and biases only refutes an unrealistic conception of rationality, which identifies it as comprehensive coherence. Was I always so careful? Probably not.”

Well, that introduction relied on Kahneman’s own words! Not helpful. Let me try again, this time with an anecdote.

When was the last time an academic teamed up with someone who belonged to the opposite camp? Kahneman, who hardly believed in ‘expertise’, and rather framed real-life decisions as a product of heuristics and biases, teamed up with Gary Klein, who believed that in multiple contexts, natural decision-making involved high levels of skill. They collaborated for years, and wrote an article together, and not to miss the wit in the title: “Conditions for Intuitive Expertise: Failure to Disagree”. Economists of today, who would only take a second to dismiss their opposite camp, may learn from Daniel Kahneman – beyond his contribution to the discipline itself.

Wait. At a time when most of the ‘prominent’ economists refuse to take any political stand, should I have introduced Daniel Kahneman as a survivor of the Nazi aggression, who opposed the Israeli occupation of Palestine? Maybe not. It's too political for an obituary, you’d say.

See, the word count has exceeded and yet, here I am, struggling to find a way to introduce the most influential non-economist of our times. Let me try one last time.

Justin, my friend, never puts the fan on its highest speed. He explains, “Tomorrow could be hotter than today. If I put it on full speed already, it will lower my tolerance for heat. I will not feel comfortable tomorrow even if I put the fan on the highest speed”. Not surprising, that tomorrow never arrives for Justin, even at the peak of Delhi’s summer.

Until sometime back, my economist friends would have written Justin off as a deviation from rationality. Not that Justin cares, but thanks to Mr Kahneman, even the most conservative economist friends of mine will now be able to have a drink with Justin without losing their sleep over the irrationality of Justin’s choices.

Rest in peace, Prof. Kahneman. I hope to find that perfect way to introduce you, someday, but until then, let this remain an incomplete obituary.

Tamoghna Halder teaches Economics at the School of Arts and Sciences, Azim Premji University. The views expressed are personal

Tell us what your First Vote will stand for in a short video & get a chance to be featured on HT’s social media handles. Click here to know more!

Get Current Updates on India News, Elections 2024, Lok sabha election 2024 voting live , Karnataka election 2024 live in Bengaluru , Election 2024 Date along with Latest News and Top Headlines from India and around the world.

Continue reading with HT Premium Subscription

Daily E Paper I Premium Articles I Brunch E Magazine I Daily Infographics
freemium
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Tuesday, May 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On