February 2017

by Michael Lucy

‘The Undoing Project’ by Michael Lewis
Allen Lane; $45

Michael Lewis’ first book, Liar’s Poker (1989), provided an account of his time as a bond trader in the ’80s. That bestseller set a vivid retelling of the young Lewis’ disillusionment with the excesses of Wall Street alongside a no less vivid history of the invention of mortgage bonds and the onset of the precarious financialisation of the US economy. Lewis went into a career as a financial journalist, and after books such as Moneyball (2003), on data-driven baseball recruiting, and The Big Short (2010), on the US housing bubble, he has become one of the key pop-cultural explainers of and to the business world – a sort of more numerate Malcolm Gladwell.

In The Undoing Project, Lewis turns his eye to the story of two Israeli psychologists, Daniel Kahneman and Amos Tversky. They were an odd couple who became inseparable friends and intellectual partners, and over the course of the ’70s they shook psychology with their study of systematic cognitive biases. Kahneman and Tversky’s key insight was that people are not fundamentally rational, as had previously been thought, but often deeply irrational in understandable and predictable ways. This revelation also had profound consequences beyond psychology: Kahneman won the Nobel prize for economics in 2002, which Tversky would have shared had he not died in 1996.

Lewis has a marvellous ability to make complex ideas seem like simple common sense, sometimes to the point where you feel that they are almost trivial – as if you too could have revolutionised this science or that multibillion-dollar industry had you been in that right place at the right time. Perhaps to counter this tendency, Lewis goes to great pains to show how uncommon were the characters and friendship of Kahneman, a neurotic and self-critical experimentalist, and Tversky, a relentlessly charismatic former paratrooper and theoriser who always believed he was right.

The story of the men and their intense working relationship is a gripping one, of the meeting, collaboration and falling-out of two brilliant and difficult minds. (The falling-out, conveniently for Lewis, centres on an analysis of counterfactual reasoning – or how we mentally undo past events – that Kahneman and Tversky called “The Undoing Project”.)

Lewis notes at one point that Kahneman was suspicious the book couldn’t be done “without making us too large”, and if The Undoing Project has a fault, this is it. There is no suggestion that Lewis makes the science too large, however. The understanding of our cognitive biases has become pervasive, and has inevitably found application in attempts to control. It now informs benevolent public health policy no less than it does the UX design that ensures you check Facebook just a little more often than a rational creature might.

Michael Lucy

Michael Lucy is a writer based in Melbourne.


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