Monday, 24 November 2008

Predictably irrational – The hidden forces that shape our decisions: Dan Ariely

I’m happy to find another book that brings back the knowledge from before the neoliberal hegemony - that people are not calculating machines, that things are more difficult to measure than the market will ever show, that ethics play an important role in our lives, etc. The book is an easy read and don’t require a lot of concentration. Most of the examples are from everyday situations and are entertaining (although the background research sometime seem anecdotal rather than scientific, as sources are missing and references are not always correct).

The facts around different kind of “crimes” were very interesting and I would like to see a cross cultural study in this field. It is common to talk about “corruption” in countries outside the western hemisphere, but beside the fact that the power often in concentrated in a few families hands also in “advanced democracies”, (the Wallenberg family is a good example as their control over the Swedish industry is well in line with any chosen “banana republic”), I wonder how many that knows the relation between the crimes that media focus on and the crime that is hurting the economy. In the US 2004 the total cost for all robberies was $525 million at the same time employees’ theft and fraud at the workplace is estimated at about $600 billion (the cost of the extreme salaries among CEO’s are also discussed briefly).

He also used one of my favorite quotes: “It is difficult to get a man to understand something when his salary depends upon him not understanding it”… Upton Sinclair

Beside a number of interesting numbers (that I think would be good to double check) I found two major themes that was inspiring:

The first one is the need for a context and peoples’ unwillingness to think beyond incremental changes. It is easy to see how simple tools like the abatement curve that McKinsey developed or CCS as a solution appeal to people that have little time to think and are not used to innovation. They present people with a world they recognize and then change things on the margin. I wonder what it would take to create a “context” that allow more people to see sustainable options that are beyond the incremental. This is especially important as most of the current “solutions” are not really solutions only slightly less bad versions of the current situation. Shifting from energy to quality of life might be one option that will allow new stakeholders to enter into the debate and reframe the discussion from a supply side energy discussion to a “service” discussion. It is obvious that net producing houses and new resource efficient lifestyles that help push innovations that alleviate poverty at the same time is too much for most people engaged in the current debate about climate change, poverty, equity, resource consumption. One part of me, suspects that it also is due to the fact that the consultants that are engaged in the debate together with journalists and others have been living so close to the problem (sometime even being paid by them) that they are both unable and unwilling to think outside that box.

The second is greed as a driver towards instability. It is interesting that the book is written before the financial crisis but still it highlights the overconsumption in the US as a major driver for instability. A situation where a culture of overspending meets a financial and political system with a focus on ever increased consumption lacks any mechanism to say enough. Many of Ariely’s suggestion to introduce ethics and reflection into a secular society (or a society that forgets that it is supposed to follow certain ethics, such as the Christian ethic in the US) are simple and not always possible to implement on a large scale they are a most welcome contribution to a discussion that is sadly lacking in today’s society.