Michael Lewis’ Latest ‘Project’ is Brilliant
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In Michael Lewis’ new book The Undoing Project (Norton, 352 pp., **** out of four stars), he describes the Nobel Prize-winning, behavioral-finance theory that Israeli psychologists Daniel Kahneman and Amos Tversky created in the 1970s as “a truck packed with psychology that might be driven into the inner sanctums of economics and exploded.”
While Kahneman and Tversky were more genius than intellectual terrorist, their groundbreaking studies on how our minds trick us into making bad judgments were, and still are, nothing less than explosive.
Over the more than 40 years since, their theory has become one of the most influential in the history of economics. It not only single-handedly established behavioral economics as a bona fide field, it changed how other professions weigh objective evidence when making decisions.
Lewis is gifted at making scientific and financial jigsaw puzzles fit together easily. But, as Tversky and Kahneman are dismantling conventional economic theory later in the book, it’s slow going. Eventually, Tversky and Kahneman find paths into the everyday world where Moneyball becomes Moneymedicine, Moneylaw, Moneydiplomacy, etc.
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