My recent comments on Nudge are supplemented by two other books I have recently read.
- The Paradox of Choice by Barry Schwartz
- Predictably Irrational by Dan Ariely
Both of these bring up many of the points discussed in Nudge but do so from a much more scientific point of view. I attribute this mostly to the fact that social scientists are, by that title, scientists and look at things from a viewpoint I find much more favorable to that of economists.
Where Nudge often misses some key elements to human behavior and actual understanding of social processes, The Paradox of Choice & Predictably Irrational go forward with great understanding and years of research experience and studies to back them up.
The conclusions of these two great books come together for some powerful thoughts.
Absolute freedom of choice does not make us happy. In fact, having too much choice may actually hurt us much more than it helps. We become less happy with decisions, less able to make any choices, and suffer from a great deal of regret. This seems to indicate the extreme benefit that rational default choices for many of the complicated choices we need to make in investments, insurance, and some other areas can have.
We make lots of errors in our daily lives. While economists tend to think of us as hyper rational, we actually exist as highly flawed machines. This is great in that it is what makes us human, but rather bad in that we generally make decisions that have little to do with how we imagine people should make choices.
We live in an irrational paradox. We desire unlimited choice, and suffer for it. We pride our systems of capital and business on the fact that we consistently make well informed and rational decisions, which in reality we frequently do not make. As a matter of point we seem to create systems based on an ideal of mankind that does not exist and them puzzle over why they fail.
In all of this, social scientists have been willing to nudge us into working systems. It seems that the world wants to learn more about how the human mind works, but we gleefully ignore any opportunity to apply the science of psychology to anything but therapy. The occasional I/O Psychologist will make some headway, but the MBA’s of the world keep hoping that the force of their business ideas will overcome the frailties of our body. We are an amazing specimen of logic and intelligence, but without systems that account for our very real limitations and tendencies we are running on a treadmill and hoping to gather enough lift to fly.
We can create a world of systems that function for us rather than against us. All we need to do is listen.