Friday, August 14, 2009

Nudge-it's another book review chock full of ideas.



Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler

I have trouble with Nudge.

Not with its first premise: people make bad decisions. Nudge backs up my current understanding of our lower lizard brain (as opposed to our higher (literally) thinking brain--the good-at-reasoning and math and statistics, real-smart-monkey brain) that I talked about earlier when reviewing the book Kludge—a sibling monosyllabic title that also explicates the two-brain theory of humans, but starting from evolution. (I understand that Blink does something similar but celebrates the lizard in us all).

Nudge avoids evolution and draws from research. Rather than dwelling on the non-evolving lizardness of your brain-bottom, it demonstrates lower functioning with examples from personal finance, health and school choice, and extended warranties. Homer Simpson personifies the lizard-brain man and pops up often. His inability to delay any gratification, start anything worthwhile or plan more than two seconds out from the present demonstrates our brain at work.

Then the book presents its second big idea. In crazed optimism the authors expect the government to exploit these tendencies of non-thought for the good of us all. Not by prohibitions or enforced actions, but by a nudge--a method that exploits our weakness to guide us to be our best selves. An example is to make the default option in any choice the best option, taking advantage of our inertia against making change (for example, 401Ks should be opt out rather than opt in).

The authors seem to forget how things are done here in the USA. We aim folks on the path to hell for an extra buck. We advertise exploiting sex (part of the lizard brain appeal) to sell toothpaste and floorclearner. But most of all, we don’t buy our congressfolks to make life better for everyone; we buy them to make life better for me, right now. That’s the American way. We have a marketplace and the market decides. He who pays most, gets most--and that means controlling those default choices, hiding outcomes, and downright lying.

Nudge technology, like atom bombs, can lead us to good choices or to very bad choices (well maybe there are no good choices with atom bombs, come to think of it). That most likely path is not discussed.

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