There are many problems with this book. The short review is that if you’d like a long lecture from a dishonest, uncreative, Liberal, Jewish-Puritan, this is the book for you.
Behavioral economists, including this author, are like many lawyers. They’ll tell any lie if it advances their cause and does not cost them money or get them punched in the nose. The author describes a dozen experiments that involve lying to people in order to perform experiments on them. Often, these are children who have not volunteered to be subjects of an experiment. Even with such agreement, as a society we have agreed that children do not have the capacity to consent to be subjects of sometimes destructive psychological experiments. The author is blind to her own immorality on this point. In one experiment, some children are given prizes for drawing, other children draw but do not get prizes. The children are not told why some are favored and others are not. The result, many children stop drawing or drew less because their love of drawing had been damaged or perhaps eliminated. AH! ANSWERS! What if one of the children would have been the next Charles Schultz, but now he or she has lost the motivation to draw, because of this experiment? Because the behavioral economists are unconcerned with the long-term effects of their experiment, the author lies to herself and the reader, pretending no damage could have been done. It was difficult to continue reading the book beyond this point, as I was feeling a little sick. Rather than being lauded, as the author does, the behavioral economists who ran that love art/hate art experiment on children should be expelled from academia.
People are like quarks. When observed, their motion changes. When the observations stop, quarks and people continue on the newly established track. I call this the “Seven Up Effect,” after the British TV show “Seven Up!” This show was meant to give the audience insight into average kids growing up in the UK. Instead, the observation caused the kids to become a group of messed-up adults. We see this effect in most reality television programming. This author doesn’t see herself or her colleagues as affecting the subjects once the experiment ends. She is wrong.
The author is uncreative in that she and most behavioral economists understand human behavior changes when the stakes are large, but fail to see how the behavior also changes when the stakes are minimal. She breathlessly describes an experiment in which here optimized answer is to flip exactly 2 of 5 cards to solve a logic problem. The correct answer, when stakes are low, is to flip all 5 cards. Why? In this experiment, people are not paid to be correct. The subjects probably got $10 for their time. There is no reward for giving the best possible answer. Therefore, the “cost” of looking at all 5 cards is exactly the same as looking at 2 cards. The “rewards” of looking at all 5 cards are a) it’s easier to solve the logic problem, b) we see both sides of all the cards satisfying our curiosity. Maybe there’s a $20 bill taped to one of the cards. Maybe another question will be asked, and it could be quickly answered with the information provided by looking at all 5 cards. When the stakes are low, satisfying curiosity dominates the decisions of creative thinkers. This author puts too low a value on the importance of curiosity. This failure leads to the misinterpretation of several experiments.
The word “we” suffers intense abuse in this book. The author writes “we do abc”; “we like def”; and “we avoid xyz.” But in her use of “we” she really means most people. She should write “most people.” I hate zucchini. I mean I really hate it. If 99% of people love zucchini, this author would write “we love zucchini.” The hell we do. I’m not a part of the group called “we” when it comes to zucchini. When using the word “we,” all authors should use this Zucchini Test. Any idea failing this test calls for the use of a few more words, “most of us” or “most people,” etc. This test is especially important when we think of cultural differences. The author writes as though all people act as the educated class does in the U.S. and Europe. This generality is carried throughout the book.
Behavioral economics’ basic argument is that people do not really maximize their utility. This book is written as though we are failing if we do not maximize our utility. Does the author write 15 or 30 times we should eat healthy? I lost count. But remember, cookies are bad. Donuts are bad. Drinking alcohol is bad. Not maximizing one’s output is bad. Not exercising is bad. Not eating healthy, still bad. This is why I write the author is a Jewish-Puritan. She writes about goals as though only goals which increase our economic utility are good. What if my goal is take more vacation? Relax by drinking too much wine on Saturday? Eat the best tasting donuts? Try the best cookie in every coffee shop? From the author’s point of view, these are all such alien options, separated by light years from her optimal utility path, she can’t bring herself recognize them as possibilities. Her demand that people maximize their utility, although the word utility is not used, gets old one-third of the way through the book.
When I first studied behavioral economics 30 years ago, I often thought, “This is just economists trying to figure out what we already know in advertising.” Today, I think behavioral economists have gotten further away from understanding people and how they think. Economists have become a lot like mathematicians studying string theory. They spend more and more of their time talking about things that only matter to their academic colleagues, with little application to the real world, and with experiments that don’t prove a thing but are only interpretive events, a sort of intellectual dancing.
The author’s Liberal leanings come through strongly in the book's last third. In the aggregate, Liberals have recently lost their minds. This is the reason Chicago has become so bleak. There’s a strange mental schism in which Liberals continue to believe their party and their ideas are virtuous, no matter how crappy the observable results from their ideas being put into practice by their party.
A few small corrections and clarifications: Making bicycle helmets mandatory leads to fewer years of healthy life when we aggregate the results across all people. This makes bicycle helmets a terrible first example, as it is in this book. No, it does not take a village. I understand Liberals want to teach other people’s children their many crazy ideas; hands off. Perhaps when the U.S. gets a Margaret Thatcher to come up through the ranks, we will have a well-qualified woman elected President. I do not see the author celebrating such an achievement. While the author pines for a woman to be elected, she really means Hillary. Finally, the WSJ’s book reviewer did not adequately do his job in this case.