Thinking, Fast and Slow by Daniel Kahneman – Book Review

Did you know that you are more likely to believe a headline if it is in bold typeface? Were you aware that a judge is less likely to grant you parole if you are sentenced before lunch? In his book, Thinking, Fast and Slow, Daniel Kahneman shows us why human thinking is often faulty – and what we can do about it to improve our lives and those of others.

Kahneman’s book is illuminating in that it reveals how our brains are often facing a battle between two contradictory systems – fast, intuitive thinking, and slow, rational thinking. One system may win out against the other at a given time depending on the situation, our emotions and what we are thinking. The result of this inner conflict is often errors, false judgments and flawed decisions. The good news is, there is a lot we can do about it!

“There are two important facts about our minds: we can be blind to the obvious, and we are also blind to our blindness..”

Kahneman is a Nobel laureate and an economist by trade, so he naturally turns to strong evidence to back up his arguments. He shows how Brain System 1 is automatic and impulsive, guiding our instincts and quick reactions. Conversely, Brain System 2 is conscious and deliberate, helping us to exert self-control and focus our attention. The first system is a hangover from our evolutionary history when instinct was vital for survival in a predatory wilderness. Whilst it was vital for helping us survive attacks from saber-toothed tigers, it is not helpful when we need to solve complex problems.

To train ourselves to rely more on System 2, we all need to practice separating emotions from decision-making. A big part of this process is to grow your self-awareness and to understand the cognitive biases which often influence you. This is very important in the realm of finances. For instance, when people invest, they are often more driven by a desire to avoid loss – rather than seek gains (even when the odds are the same). Instead of being driven by emotions, we should be relying on statistics, probabilities and other objective factors to guide our investment choices and strategies.

Overall, Daniel’s book is a captivating exploration of the two systems in our brain and their influence on our behaviour. Although written over a decade ago, its insights and research are still relevant and timely in today’s fast-paced world. The potential applications are very wide. For instance, should you engage in a debate on social media about a controversial topic – or not? If you do engage, what is the best way to conduct yourself? Relying on System 1 could land you in trouble. Using System 2 could help you dodge a bullet and uphold your reputation!