MAIN IDEA:

The main idea of this book is that contemporary economics, especially mathematical economics based on unrealistic assumption that human beings are nearly perfect calculating entities (ECONs) that are nearly always capable to identify the best way to maximize monetary returns and consistently act to achieve it. The reality is humans are poor calculators and more often than not act or fail to act in contradictory ways quite often contrary to their best monetary interest. The real economy of humans consequently works quite differently from theoretical economy of ECONs, so makers of public policy should take it into account and act correspondingly to achieve best results.

DETAILS:

1. BEGINNINGS: 1970-78
2. Supposedly Irrelevant Factors

In this chapter author describes how he discovered that real people behave unreasonably if compared to ECONs and that Supposedly Irrelevant Factors have huge effect on peoples’ attitudes. He provides examples such as: Students perceive results completely differently if results presented as 80 out of 137 that 60 out of 100. Mathematically it is the same, but psychologically 80 points are good and 60 points are bad because people unconsciously retain benchmark of 100 in both cases. After example author presents his view of humans and then asserts that SI Factors in reality are very important to understand human behavior.

2. The Endowment Effect

Here author moves to specific types of human behavior inconsistent with expected behavior of ECONs, such as endowment effect when people value the same thing much higher when they own it than when they do not.

3. The List

Here author describes his initial discovery of work by Kahneman and Tversky about shortcut heuristics people use in their economic decisions and predictable errors they make in the process.

4. Value Theory

Here author provides more detailed analysis of value estimates supporting idea that people put significant higher value on loss than on gain of the same amount of money.

5. California Dreamin’

This chapter is about author experience at Stanford and initial interactions with the first behavioral economists Kahneman and Tversky.

6. The Gauntlet

This is about his experience at Cornell, author’s acceptance of behavioral economics and debates with traditional economists about key notions such as: Incentives, Learning, and especially Markets’ ability to correct human behavior by rewarding ECONs and punishing non-ECONs. Author is reasoning that it is not true and provides example such as GM that is consistently run poorly, but is still around overcoming market forces that supposed to do it away.

1. MENTAL ACCOUNTING: 1979-85
2. Bargains and Rip-Offs

This is about mental accounting that occurs in the mind of humans and it is somewhat different than regular accounting that would be practices by ECONs. As example author uses coupons purchase of the same product from two different sources at different prices only because one of the sellers is upscale even when purchase occurs remote and there are no additional advantages provided by upscale seller.

8. Sunk Costs

Similarly author discusses notion of sunk costs meaningful and acceptable for ECONs, but nearly completely alien to humans, even economically educated humans.

9. Buckets and Budgets

This time author looks at mental accounts that are important for human, but somewhat irrelevant for ECONs who understand that money is fungible.

10. At the Poker Table

This is similar difference when for humans history is important, for example poker players behave differently depending on whether they are winning or not, while for ECONs it is clear that every round of game is independent and history should be not relevant for decisions.

III. SELF-CONTROL: 1975-88

11. Willpower? No Problem

Another difference is human difficulty with will power that sometime forces them to act preliminary to restrict their own freedom of action in the future. There is practically infinite will power in possession of ECONs so if human children have really difficult problem in marshmallow test, ECON children would presumably have no problem at all waiting for reward, providing net present value of 2 marshmallow in 20 minutes is higher then NPV of one marshmallow right now.

12. The Planner and the Doer

This a little bit more detailed view at the use of planning to compensate for will power deficiencies. When human plays two roles: planner and doer, the planner creates limitations for future actions in order to force doer act more like ECON and avoid action under spur of the moment.

INTERLUDE

13. Misbehaving in the Real World

This chapter is illustration of behavioral economics ideas based on author experience with consulting for Greek Peak resort and for GM. In the first case intervention was successful in saving the company by changing ticketing option based on patterns of human behavior, while the second, dealing with seasonal auto sales was not tried due to complexities of decision making by GM’s bureaucracy, despite sincere interest of some senior bureaucrats.

1. WORKING WITH DANNY: 1984-85
2. What Seems Fair?

This is about another drastic difference between humans and ECONs. It presents results of research showing that for humans fairness is very important and they would even accept loses to punish unfair counterparts. Obviously for ECONs the very notion of fairness is meaningless.

15. Fairness Games

This is description of games used to test attitudes to fairness in various experiments.

16. Mugs

This is about an interesting point discovered and later confirmed in multiple experiments that when people deal with meaningless tokens they behave more as ECONs, however the same experiments with something meaningful, for example when mugs with university logo used instead of tokens, they behave more like humans demonstrating endowment effect.

1. ENGAGING WITH THE ECONOMICS PROFESSION: 1986-94
2. The Debate Begins; 18. Anomalies; 19. Forming a Team; 20. Narrow Framing on the Upper East Side

This part is mainly about professional struggle that evolved between classical economists especially Chicago school and behavior economists around newly discovered anomalies in economic behavior. It also includes discussion of specific anomalies, and personalities from all sides involved in this struggle.

1. FINANCE: 1983-2003

This part is about application of behavior economics analysis in financial area, the area where ECON attitude should be dominant.

21. The Beauty Contest

This chapter includes discussion of efficient market theory, its impact, and consistent failure of this theory to explain human action in financial markets. It also includes an interesting discussion about multiple layers of thinking involved predicting other people’s actions such as If my opponent do A, I’ll do B, but if he is smart he would expect B and therefore he will do C not A, so I should prepare to do D instead of B and so on in infinite iterations.

22. Does the Stock Market Overreact?

This is about predictability of stock market, or more precisely about its impossibility. Specifically it looks at overreaction to events.

23. The Reaction to Overreaction

Correspondingly this is about reaction to overreaction, which can clearly cause serious problems – example provided: failure of CAPM.

24. The Price Is Not Right

This is an interesting analysis of stock market over/under pricing as related to real price presented by present value of dividends:

25. The Battle of Closed-End Funds

This is a discussion about human illogical behavior in close-end fund trading when market price little related to fund’s asset value.

26. Fruit Flies, Icebergs and Negative Stock Prices

This is another wonderful demonstration of human lack of logic based on stock prices of 3M and it’s subsidiary Palm when stock price of subsidiary (Palm) was much higher than price of 3M that actually included subsidiary.

VII. WELCOME TO CHICAGO: 1995-PRESENT

27. Law Schooling; 28. The Offices; 29. Football; 30. Game Shows

It is about author experience in Chicago and another set of real live examples of human behavior with drastic differentiation from ECON’s expected behavior.

VIII. HELPING OUT: 2004-PRESENT

31. Save More Tomorrow; 32. Going Public; 33. Nudging in the UK

This is description of somewhat triumphal movement of behavioral economics into public conscious with publication of its findings getting wide popularity, important authors getting Nobel prices, and governments of Western countries happily jumping on its bandwagon in hope finally to get tool to nudge unwashed masses into behavior patterns deemed appropriate for them by elite bureaucrats and politicians.

Conclusion: What Is Next?

Author is very optimistic about future of economic of science overall and about inclusion of behavior economics into mainstream. He believes that future would bring dramatic improvement in economic data collection, economic education, and improved decision-making by everybody from individuals to governments.

MY TAKE ON IT:

I pretty much share author’s conviction that human beings are behaving quite differently from assumed ECONs who maximize monetary return in any situation. What I disagree with is the very notion that there is some correct mode of behavior that humans should be trained to understand and, if necessary should, be nudged or even forced to apply in their lives by some external entity either corporate or government bureaucracy. I believe that there is infinite variety of human objectives, goals, and wishes so there is no external entity that would have legitimate right to interfere with individual’s actions in strive to achieve these objectives as long as these action involve no violence, coercion, and deception. People should be educated to understand how economy works at both levels: individual where behavioral economics is supreme and ECON economics where simple accounting considerations play paramount role in business decision-making. I would fully support such education, especially if it goes beyond formal and becomes continuing support so individuals are provided with real time computer-generated analysis of their intended decisions based on ECONs approach to the world. However I absolutely reject idea of government using behavioral economics to nudge individuals into something they would not want to go.

MAIN IDEA:

The main idea is that human mind works in a very complex way when great many activities occur via interplay between conscious and unconscious parts of human mind resulting in “Aha” moments when after significant conscious effort to accumulate and analyze problem and related data the unconscious part of mind conducts background processing, which generates required solution. Examples of such solutions are provided in multiple areas from religion to math with more or less detailed discussion of how it happened.

DETAILS:

PART ONE: THE AHA MOMENT IN RELIGION

Chapter 1: Seeing the Light

This is presentation of a few selected cases of religious revelations. The first one is C.S. Lewis sudden conversion from an atheist into deeply religious Christian. Another, much more consequential case, is Mohammed’s revelation leading to creation of Islam, and finally, Josef Smith’s founding of Mormon religion. All these cases presented as religious Aha moments.

Chapter 2: Vision or Hallucination?

This is discussion of nature of such revelations whether they are visions or hallucinations. Biological foundation for such staff to be hallucinations is pretty solid. The various conditions when human brain undergoing some kind of stress such as lack of oxygen or impact of chemicals derived from mushrooms or drugs can easily produce fully blown and highly convincing mental presentations of anything from aliens to Gabriel. It would also apply to some health and mental conditions such as schizophrenia or epilepsy.

Chapter 3: Other People’s Visions

The most interesting process, however is not that some people come up with grand vision of direct contact with superior powers or god, but rather why and under what conditions such vision become accepted by significant numbers of other people and develops into religion. After all, being omnipotent, god should have no problem communicating with all people in the world, rather than with selected individuals. However it is not the case and any religion starts with one individual who converts some people close to him and then many others join the club attracted by vision and growing power of numbers. Typically the founder of religion gets discarded at this point and much more pragmatic and effective individuals codify it in some standard form as holy book and use it to obtain prestige and power over true believers.

PART TWO

THE AHA MOMENT IN MORALITY

Chapter 4: The Two Kinds of Moral Epiphany.

This part is about another type of Aha moment – moral epiphany. Examples are Gandhi with his sudden rejection of colonialism and racism and Thomas Clarkson who started crusade against slavery in USA. The trigger for Gandhi was direct experience of inferior racial status; while for Clarkson it was intellectual work involved in essay competition for a prize. Author also presents his own moral epiphany that led him to become vegetarian. The main point here is that such epiphany comes as resolution of cognitive dissonance intolerable for some people.

Chapter 5: Moral Feelings and Moral Codes

This chapter is about morality as code of behavior developed in humans based on both their genetics and socialization. Such code makes some actions impossible regardless of circumstances, even if there are no logical or practical reasons for such rejection. Author believes that moral feelings are imbedded deeply in our psyche all the way down to the limbic system. He provides review of a few typical psychological tests demonstrating working of such moral feelings.

Chapter 6: The Problem with Moral Reformers

This chapter is about secondary moral epiphany that pushes individual to try change the world, with the primary being urged to change oneself. Obviously people do not like their morals and/or views challenged so it is no wonder that such moral reformers have a difficult time. Author discusses two challengers to existing views: Socrates in ancient Greece and Christopher Hitchens in our time. Author does not provide analysis of under which conditions such contrarians cease to be just a source of irritation for other people and becomes source of admiration and generate converts to their views, eventually leading to domination of their ideas. My guess would be that whatever nudges contrarian and drives him to rebel also nudges many other people and contrarian’s actions allow other people to free themselves from restrictions by joining the movement. The key here is resonance with subliminal unhappiness of masses. If such resonance exists, the moral change happens in the society. If not, then contrarian just perishes, but not necessarily together with his ideas, which could contaminate other people and become dominant long after original contrarian is gone.

PART THREE

THE AHA MOMENT IN SCIENCE

Chapter 7: The Joy of Discovery

This is about joys of scientific discovery type of Aha moment. However this is different from religious or moral discoveries in general acceptance of inevitability of scientific Aha moments, because they represent just expansion of understanding of objectively existing world so such discoveries one way or another would be eventually done regardless of actual individuals doing it.

Chapter 8: On Keeping an Open Mind

Here author again bring idea of cognitive dissonance as driving force of Aha moment, only this time in scientific discoveries. In this particular case accumulation of new facts typically at some point demonstrate inconsistencies in existing paradigm, causing such dissonance to become increasingly intolerable and leading to invention of the new paradigm that successfully resolves the issue.

Chapter 9: Dealing with Rejection

The final chapter of scientific Aha moments deals with rejection of new ideas in science when promoters of such ideas suffer various levels of intensity punishment by establishment ranging from the death in labor camp for not supporting enough soviet biological “science” that was rejecting genetics to not getting tenure in American university for not complying with prevailing opinion of majority of professors. Sometimes innovators can overcome it, but generally according to old saying science progresses from funeral to funeral.

PART FOUR

The Aha Moment in Mathematics

Chapter 10: Moments of Pure Insight

Aha moments in mathematics have different nature due to the characteristics of math as purely abstract logical contraction that could not possibly be driven by any authority whatsoever. Mathematical ideas either logical and internally non-contradictory or not, so Aha moments are relatively easily accepted, but at high levels of complexity it is open to delayed discovery of errors in logic and therefore could always be rejected.

Chapter 11: The Magic of Incubation

This is about process of mathematical discovery that contains 4 phases: preparation, incubation, illumination, and verification. Author discuses all these phases in details demonstrating high levels of complexity for each phase requiring long time, sometime many years to complete.

Chapter 12: The After-Math

This is a review of one particular case of mathematical discovery related to notion of infinity and continuum hypothesis that was analyzed and discussed for nearly a century until it was proved that this hypothesis could not be proved.

PART FIVE

THE AHA MOMENT IN THE ARTS

Chapter 13: Lots of Little Ahas

This is a number of examples from arts when multiple small Aha moment leads to creation of valuable artifacts. Author compares it with math where logical construction of solution could have esthetical value for mathematicians. The bottom line is that sequential Aha moments in process of art creation are source of happiness for artist regardless of value estimate of this art by others.

Chapter 14: On Managing One’s Muse

This chapter is somewhat technical about methods of getting into the flow when multiple aha moments are generated.

Chapter 15: But Is It Art?

This chapter is looking in more details at interplay between art produced by artists and perception of this art my other people, especially authorities and government. It illustrates it with stories of Monet and Andres Serrano of Piss Chris fame. Author seems to be supportive to idea of government subsidizing art, but somewhat rebel against government persecuting or even killing artists for unacceptable art. He seems to be not completely clear about simple fact that both approaches are being two sides of the same coin – government violence in the first case by robbing bystanders to subsidize artist and in the second case by using violence against against artist.

Conclusion: Food for Thought

The final conclusion is that Aha moments are pretty much represent unique quality of humans that no other animas possess and that these moments are product of interplay between conscious and unconscious processes in human mind.

MY TAKE ON IT:

Ideas presented in this book are quite consistent with my believe that human brain is a complex network of analog computers without any centralized all-controlling unit whatsoever, where the conscious mind is just one of these computers working mainly in areas of communication with other humans, environment modeling, long term planning, and defining high level objectives to achieve. The actual achievement in form of finding solution for series of problems is occurring via mainly unconscious process of activation of multiple semi-independent neural networks (analog computers), which present solution to conscious mind in form ready to use. Since all this processing occur unconsciously it is not easy and requires lots of work and complete immergence into the problem in order to make one’s unconscious part of brain to work hard and eventually produce Aha moment. Finally, I do not agree that Aha moments are differentiate humans from animals. The chimpanzee that just discovered a way to open glass box with banana in it probably experience the same type of brain stimulation and human making new religious, moral, or scientific discovery. The only difference is probably that for humans this discovery becomes permanent addition to species wide database of ideas and knowhow, while for chimp it remains personal with minimal transfer of idea to nearby chimp via direct observation. However I would not exclude possibility that well designed experiment could prove chimp’s ability to transfer new idea via indirect communications, leaving humanity with even less differentiation from our close relatives, than it is commonly perceived now.

MAIN IDEA:

The main idea of this book is to present consistent set of libertarian approach to practically all main functions of contemporary society and demonstrate how this approach could leads to much better society than we live in now. The key foundation of this libertarian approach is private property and use of privately controlled entities to fulfill all functions that currently done by governments not only in economic, educational, environmental, safety net, and similar areas, but also in area of use of violence necessary to protect country, maintain order, and support effective legal system.

DETAILS:

Part I: In Defense Of Property

1. In Defense Of Property

This is a brief review of meaning of property and its link to human rights. Basically it is about human rights to property. It also reviews notions of public property versus private property and different forms of property from land to airways. It also looks at market as a place for property exchange and government interference with exchange and other activities, consequently reviewing socialism as a system of coercion incompatible with human freedom that necessarily includes uncontrolled behavior and free exchange..

2. A Necessary Digression: This is discussion about connection between effort and returns where author makes a point that in private property based free market society everybody gets what he deserves based on need for result of his/her activity.
3. Love Is Not Enough: This is about free market exchange while being selfish, nevertheless provides necessary goods and services to everybody unlike any other system either religious love based charity or socialist expert led allocation of resources that typically leaves people at best underserved and at worse dead, like Ukrainian peasants who were starved by communists who confiscated their food and sold it on the world markets to finance industrialization.

Interlude: This is a brief note noting that reality is always different from theoretical analysis. In theory one can talk about pure private property vs. public property when in reality everything is always mixed in unpredictable proportions.

4. Robin Hood Sells Out: This is an interesting point that majority of programs of welfare society in reality does not transfer resources from rich to poor, but quite opposite from poor to people who are better off. The typical example is social security that transfers resources from relatively poor young to relatively well to do seniors.
5. The Rich Get Richer And The Poor Get Richer: The point here is that in free market society without government intervention while rich are getting richer, the poor have a lot more resources as result, so despite relative increase in inequality, the conditions of the poor are getting better all the time.
6. Monopoly I: How To Lose Your Shirt: This is a very interesting and quite convincing discussion of impossibility to seriously benefit from monopoly on free market with multiple examples of how attempt to benefit from monopoly hurts monopolist at the long run.
7. Monopoly II: State Monopoly For Fun And Profit: The second part of monopoly discussion relates to monopoly enforced by government. These ones are really profitable in all their varieties because they all amount to limitation of free market and artificially restrict supply, forcing customers overpay.

8.Exploitation and Interest: This is a brief discussion of Marx’s theory of value and consequently critic of idea of exploitation with derived notion of unfairness of inheritance tax.

9. I Don’t Need Nothing: This is critic of use of notion of need as justification for claim on resources created by other people. As soon as needs are satisfied via government intervention, the individual ability to define own needs disappear, necessarily substituted by government decisions which needs are legitimate and which are not. Obviously such decision making process completely denies individual’s freedom.

Part II: Libertarian Grab Bag Or How To Sell The State In Small Pieces Paranoia

10. Sell The Schools: This is about school vouchers as libertarian solution for education.
11. A Radical Critique Of American Universities: This is critique of universities, as organizations in which interest of worker (teacher) does not really relate to the task of teaching. It is directed at obtaining tenure via publishing articles in professional journals and building career enhancing relationships.
12. The Impossibility Of A University: Contemporary universities become political organization and as such they are promoting political solutions beneficial for them, which always include resource transfer to universities to train bureaucrats and overall growth of government in order to provide jobs for increased ranks of trained bureaucrats.
13. Adam Smith U.: This is author suggestion for restructuring universities to make them flexible, market oriented, and capable to train professionals with skills valuable on free market.
14. Open The Gates: This is libertarian solution for immigration: open gates. Author believes that as long as government expense is at or below taxes paid by immigrant, everything will be fine.
15. Sell The Streets: This is suggestion to privatize streets and roads and make people pay for their use. It was written before GPS so technologically it become even more feasible now.
16. 99 and 44/100ths Percent Built: This is suggestion to reshuffle city transportation system. It is outdated, but could be characterized as expansion of idea behind the Uber.
17. A First Step: Here author discusses drastic localization of government as the feasible step in direction of libertarian future.
18. Counterattack: This is about capitalism’s counterattack against big government, which always decreases quality of life when it expands in another area. This opens opportunity to legal action government supported against monopolies that hurt people.
19. Might Have Been: This is about hypothetical development of space industry sans government intervention. It is quite possible that it would developed much faster and in more efficient way if it were private money used to try many different ways to achieve success and in process finding the most effective way. As it were, it become one and only way of development selected by bureaucracy that was used and whether it was efficient or not would forever remain unknown. Author even comes up with Friedman’s law: government invests twice as much as private sector to achieve the same result.
20. Is William F. Buckley A Contagious Disease? 21. It’s My Life: These chapters directed against conservatives’ proclivity to criminalize non-violent behavior such as use of narcotics and overall government interference in medicine and other areas to save people from themselves. Obviously such interference is completely against libertarian ideas.
21. The Rights Of Youth: This one is about libertarian attitude to children’s rights.
22. Creeping Capitalism 24. If You Want It, Buy It 25. Scarce Means Finite 26. Pollution 27. Buckshot For A Socialist Friend

This group of chapters is about tendency of capitalism to fill up for multiple deficiencies of real socialism of XX century. It uses example of Czechoslovakia to demonstrate how it happens. It also discusses how socialism fails in different areas and, very important, it states that capitalism does not impose any restriction on people who want socialism except preventing them from taking property and lives of people who do not want socialism. After all millions of socialists and sympathizers can combine their property, set up whatever organization they want to and live according to their ideas.

Part III: Anarchy Is Not Chaos: Anarchy

28. What Is Anarchy? What Is Government? 29. Police Courts, And Laws–On The Market 30. The Stability Problem 31. Is Anarcho-Capitalism Libertarian?
29. And, As A Free Bonus 33. Socialism, Limited Government, Anarchy and Bikinis 34. National Defense: The Hard Problem 35. In Which Prediction Is Reduced To Speculation 36. Why Anarchy? 37. Revolution Is The Hell Of It
30. The Economics Of Theft, Or The Nonexistence Of The Ruling Class 39. The Right Side Of The Public Good Trap 40. How To Get There From Here

These chapters present discussion about hypothetical libertarian society where everything including violent organizations of army, police, and legal system are in private hands and ruled by free market rules. Also is discussed a strategy of transfer from current society to libertarian one.

Part IV: For Libertarians: An Expanded Postscript

41. Problems 42. Where I stand 43. Answers: Economic Analysis Of Law Enforcement 44. Medieval Iceland, And Libertarianism 45. Is There Libertarian Foreign Policy? 46. The Market for Money 47. Anarchist Politics: Concerning The Libertarian Part 48. G.K. Chesterton-An Author Review

This is continuation of review of fine points of libertarian position on implementation of substitutes for government functions of violence and economic control via money supply with libertarian solutions based on private property right.

Part V: Further Thoughts

49. The First Legal System 50. Anarcho-Capitalism: The Kindergarten Version 51. Bargaining into Anarchic Order 52. A Positive Account of Rights: This part provides more detail on author views on non-governmental legal system, individual rights and libertarian approach to these issues.

53. Market Failure, an Argument for and Against Government 54. Anarchy and Efficient Law 55. Default Rules and Stability 56. The Hard Problem II: Author defines Market Failure as situation when individual rational decision leads to irrational decision by the group. Example provided is soldier’s behavior on battlefield that if runs away alone would save his live without significant change in outcome, but if everybody runs battle would be lost and defeated army including this soldier massacred. Group cohesiveness is a hard problem for libertarians so author provides his ideas of solution.
54. Initial Appropriation: This discussion is about libertarian ideas of initial creation of private property as moral foundation of libertarian society. Author reviews different approaches to this issue.
55. Welfare and Immigration:

This is brief discussion about link between welfare and immigration: the best approach is unlimited immigration on condition that welfare state is dismantled.

Part VI: New Stuff

59. Problems with Ayn Rand’s Derivation of Ought from Is 60. The Economics of Virtue and Vice 61. An Argument I lost: Here author discusses moral philosophy of libertarianism and critics Ayn Rand’s objectivism for logical deficiencies of its moral argument about life and death. Then he provides kind of economical point of view on vice and virtue.
60. Capitalist Trucks 63. The Conservative Mistake 64. The Misuse of Externality Arguments:

These chapters somewhat repeat earlier discussion on necessity of government for control of use of common goods like roads and attempt to demonstrate that libertarian society could handle this and no government would be required for this.

65. Unschooling: A Libertarian Approach to Children

This chapter is about author’s highly successful experience with educating and training his children at home.

66. Welcome to the Future

The final chapter presents author’s hope that libertarian order will be achieved sometime in the future and the world of strong property rights, minimal to non-existing government, and free market is eventually coming on the long run.

MY TAKE ON IT:

I consider myself rights libertarian so my main difference with author is limited to private property – author believes in its sanctity, while I believe that property is just effective and efficient mechanism to control and use resources based on violence and coercion and as such has no sanctity whatsoever. However being the best mechanism invented to support human lives and society of humans, private property need a small enhancement in form of equal rights for natural resources for everybody so an actual property owner who controls property in amount more than average would have to purchase rental rights for such excess from people who own and/or use less. This enhancement removes the reason for welfare state, which legitimacy comes from need to support people who are propertyless and unable to make living by selling labor, because with equal rights for resources nobody is propertyless.

Another significant, but much less important difference is that author believes in viability of private army, police, and legal system, while I believe in necessity, of government in possession of overwhelming violent power capable to suppress any competition. I think that democracy in conjunction with bureaucratization of violent organizations of army and police when individual leaders could not obtain effective control over these organizations proved to be quite sufficient mechanism capable to prevent coups and use of violence in order extract rents directly. In my opinion multiple private armies and police organizations would be less effective in protection from external threat and prone to fights between themselves. Other than these issues I agree with just about everything in this book.

MAIN IDEA:

The main idea is to demonstrate that contemporary knowledge of human psychology allowed developing methods of interrogation that are both effective and humane, making traditional methods of torture and violent psychological pressure outdated and rendering discussion of “to torture or not to torture” meaningless.

DETAILS:

1. Of Espionage and Infomercials: The Extraordinary Power of Short-Term Thinking

It starts with the story of discovery of a spy inside CIA during routine polygraph test when one of authors discovered inconsistencies that caused him to initiate detailed interview. The result was unexpected confession in treason. This amazing result was achieved by exploiting Four Factors of Short-Term thinking:

• Inherent vulnerability to influence
• Repetition
• Loss of Independent Thinking
• Lack of immediately identifiable consequences

2. The Best-Case/Worst-Case Continuum

In this chapter authors continue review of these technics using another example of discovering treason through interview. This time the technic involved is Interrogation / Elicitation: a process that is designed to influence or persuade an individual to reveal information that he has reason to want to conceal. This technic uses continuum of Worst/Best Case scenario when interrogator cautiously prompting interviewee to move along this continuum.

3. Transitioning to Interrogation Mode: The DOC and the DOG

This chapter is about important moment in investigation – transition to interrogation mode. In this mode investigator gradually increases pressure making statements that not everything is clear and vaguely indicating that while suspicion is growing, there is still a chance to get away if good explanation provided. This forces suspect to talk and provide more material for discovery of inconsistencies and elements of actual truth.

4. Uncovering a Spy: The Art of Creating the Monologue

Contrary to typical idea of interrogation, the real interrogation phase starts with monolog of interrogator. This chapter uses example of real cases to demonstrate how such monolog should be built in order to be effective.

5. How to Deliver Your Monologue

This chapter is about art of delivering monolog. The most important part of it seems to by subdue fear of the person under interrogation and provide opening for this person to expose truth and all justifications this person has for his/her actions, however ridiculous they are. It achieved by delivering monolog slowly in subdued voice and constantly engaging object, but without confronting him. The key is convincing object that there is relatively easy way out, that interrogator is trying to find this way and generally wants to help him, and that this way necessary includes full confession of the truth.

6. How to Tailor Your Monologue

This is more specific “how to” information about designing monolog. Here are key elements:

• Rationalize the actions
• Project the blame
• Minimize seriousness
• Socialize situation
• Emphasize the truth

7. How to Handle Resistance During Your Monologue

This chapter is about handling resistance. The resistance typically includes convincing statements, emotions, and/or denials. Convincing statements are neutralizing them by accepting everything that is true, while logically separating truthful part of statement from what it is trying to cover up and demonstrating that it did not work. Emotions are difficult to handle, but the key is not to respond emotionally, but rather demonstrate sympathy combined with calm assurance that emotions unfortunately do not relate to the matter and therefore could not possibly work. The method of quashing denials as with other methods of resistance is to demonstrate that it did not work by gestures and articulation, at the same time using objects’ first name and supportive approach as trying to help out from unbelievable denial by disclosing the truth.

8. Going for the Gold: Collecting Nuggets of Information

This chapter is about importance of homework in preparation for interrogation. Without collecting enough applicable information to see inconsistencies and holes in object’s version of events and behavior, interrogation would fail.

9. Crafting a Sincere, Empathetic Monologue: Fiction As an Option

This chapter is about use of deception in interrogation for various purposes often just to establish rapport with the object and convince him/her that interrogator understands the problems and basically is on the object’s side, trying to find way out. The typical deception is to accommodate interrogators’ personality and history to personality and history of the object. For example dealing with divorcee it help to tell that interrogator is also divorced, even if in reality the interrogator never was married in the first place. The tricky part is not overplaying it. It would probably be not advisable to tell chess master under interrogation that you are avid chess player if the closest to chess game you ever played were checkers.

10. Do No Harm

This is about effectiveness of approach when interrogator sincerely looking for best possible outcome for everybody involved, including the object of interrogation, obviously not at the expense of interrogation’s success. The key phrase here: you are a good person even if you did some awful things, so let’s find a way to leave this things behind by confessing and improving chances for leniency in punishment. The key behavioral characteristic of interrogator is ability to do it sincerely.

11. An Elicitation Case Study.

This is a case study of confession elicitation from individual who was pretty successful in convincing everybody in his innocence with no evidence to contrary in existence. It was achieved by pressing key points of the object’s psyche.

12. If O. J. Simpson Did It: The Interrogation That Might Have Been

This is another case study only not real, but rather “what if” case, when authors speculate about what would happen if they were able interrogate O.J. Simpson. They believe that they would be able extract confession with relative ease and probably in one setting.

13. The Elephant in the Room

The final chapter is an attempt to make a case in political issue of using torture in interrogation. The key point here is that effective interrogator does not need torture as interrogation tool, moreover it is typically counterproductive, making object to lock in and reject any cooperation. As example they provide story of Abu Zubaydah as H. Safran related it in his book. Author do not deny effectiveness of torture in extracting information, they rather point out that information provided would be not truthful and would cause moral damage to interrogator and humanitarian western society.

MY TAKE ON IT:

Long time ago I had a wonderful experience of being investigated by KGB and had to say that they used similar humane method, however severely backed up with threats, albeit indirect, of serious physical harm in the future. Interesting thing about it was that I had nothing to hide and all case was about me writing something that I would obviously gladly give to everybody who would ask casually. Interestingly enough attempt to get it via intimidation caused me to resist at least for a while. Based on this experience I would definitely agree that in trivial case of criminal or inappropriate behavior soft psychological pressure would work perfectly. However I seriously doubt that humane conversation would elicit specific actionable truth from terrorist in “ticking bomb” case. The most probable behavior by somebody who is prepared to die for a cause would be complete refusal to talk with infidel. History of torture goes back for centuries and demonstrated its usefulness in making people to confess anything and tell everything, albeit not always and not truthfully. In short it is disgusting, but well-known tool of interrogation and as such, its automatic exclusion diminishes assortment of tool interrogator can use. As to the issue of morality of torture, I do not understand how somebody could seriously claim that it is immoral to prevent torture of thousands potential victims of terror who could be burned alive as it happened on 9-11-2001 even at the cost of inhumane treatment for terrorists. Unfortunately in real live win-win solutions inherent to business driven cultures such as western culture is not always possible and win-lose solutions inherent to conquest driven cultures and ideologies such as traditional Islam and various mutations of National/International socialism are often the only conceivable methods to achieve objectives of members of these cultures and ideologies.

MAIN IDEA:

The main idea of this book is that America throughout its history went through 3 major revolutions each of which dramatically changed society despite mainly retaining formal features such as constitution and democracy. The first revolution was the triumph of agricultural democratic republic of Jefferson over mercantile republic of Hamilton in 1800. It established dual agrarian democracy based on uneasy union independent farmers of the North and plantation owners and slaveholders of the South. It lasted for 60 years and was destroyed in bloody Civil war (the second revolution) when contradictions between sections of the union exploded and led to conquest of South by the North. The consequences of this revolution destroyed slaveholding agricultural south and opened way for industrialization, pushing into secondary role independent farmers f the North. The development of following 70 years brought into play two new dominant forces: industrial capital and hired labor. The tension between these two forces came to the boiling point in 1930s as result of great depression and were resolved by the 3d revolution: New Deal. This revolution brought in new powerful force – ideologically liberal government bureaucracy, which to high degree subdued both labor and capital and established control over the country. This arrangement seems to be falling apart under weight of government regulation and increases in power of bureaucracy that created unsustainable welfare state and limited productive abilities of the country. Author believes that we are on the brink of the 4^th revolution, which will resolve this crisis, but he does not know how it would be resolved.

DETAILS:

Introduction

The introduction presents this book as analysis of change in American political landscape that moved from general consensus between two main political parties on Keynesian approach to economy, growing welfare state, increases in government regulations, and resistance to Soviet communist expansion to two widely polar views with Democrats moving far to the left especially in international and security issues all the way to accommodating anti-American Islamic theocrats, while republicans moving to the right in economic issues away from Keynesianism to free markets, much stronger security posture, including actual wars if necessary. More important the whole population seems to be broken into two camps with levels of hostility unseen for a long time. The main point authors made is that old consensus does not exists anymore and we are at the brink of huge changes comparable with Civil War and New Deal in the scale of its consequences.

PART I. THE POLITICAL ECONOMY OF THE POSTWAR ORDER

1. John Maynard Keynes and the Collapse of the Old Order

This is retelling of Keynes’ story and main ideas of his work that pretty much came down to notion that free markets failed because economies become too complicated and only wise government management remediating these failures could save capitalism from its deficiencies.

2. The Keynesian Revolution in Political Economy

In this chapter author reviews real live history of implementation of Keynes ideas over 75 years. Initially it was seemingly successful, creating illusion of control over economy, but eventually it failed bringing us deep recession that is currently moving into secular stagnation. Interestingly Keynesian era lasted 75, approximately the same as preceding it Laissez Faire era.

3. The New Deal Metaphor

This is analysis of attempts to use New Deal as metaphor for contemporary period circulated by Keynesians who still fail to accept reality of real New Deal failure to restart economy and continue crediting it with after war boom that was in reality created by need to restore economies in countries nearly completely destroyed by the war. As soon as recovery was accomplished by early 1970s, a Keynesian policy led to stagflation that was overcome only by ‘s market revolution of 1980s.

4.American Capitalism and the ‘Inequality Crisis’

This is look at inequality “problem” popularized by occupy movement and supported by Piketty analysis of income distribution between labor and capital.

5. America’s Fourth Revolution

The final chapter of this part analyses current economic and political situation in America with its polarization of various group of population many of them rent seeking and/or redistribution oriented. In author opinion situation is clearly developing in direction of 4^th revolution that would radically change American society similarly to changes brought in by previous revolutions:

1. Democratic-expansionist regime that starting in 1800 destroyed attempts to limit settlers’ expansion and establish big government federalist state. This regime slowly deteriorated under pressure of sectional divide between North and South and eventually was destroyed by Civil War
2. Republican-capitalist regime from 1865 until 1930 that expanded unlimited capitalism throughout the country, destroying in process old farmers’ republic and substituting it with industrial democracy. This regime deteriorated at the end of XIX century, being incapable accommodate city dwelling labor that lead to polarization, union battles and progressive movement to control business. This regime was destroyed by the Great depression
3. Democratic –welfare regime established by New Deal and economically based on Keynesian ideas. This regime started falling apart in 1970s and was corrected and approved, but not radically changed by Reagan revolution. Now this regime is quickly moving to destruction incapable to meet new challenges of automation and globalization.

As usual in such situation at the brink of next 4^th revolution it is absolutely unpredictable what will be next. The only clear thing is that it is not going to continue as it is now.

PART II. LIBERALISM AND CONSERVATISM

6. Liberalism at High Tide

This is about apex of liberal ideas achieved in 1960 when just about everybody was Keynesian in economics, liberal supporter of anti-poverty programs and racial quotas, feminism, and radical changes in culture. Even conservatives supported all of this, albeit claiming that they would be better managers of welfare state. After the small scare of McCarthyism in late 1940s liberals practically won ideological struggle, eventually moving to establish any non-conformism as expression of irrationality and defining republicans as anti-intellectual “stupid party”.

2. Conservative Nation

This is another side of the story of American intellectual development in which economic ideas of Misses and Hayek took hold, Bill Buckley created popular periodical promoting conservative ideas, Ayn Rand produced anti-liberal novels promoting unabridged capitalism, and Barry Goldwater and Ronald Reagan start taking over republican party, pushing out semi-liberal trust fund rich republicans of Rockefeller type.

8. Is Conservatism Dead? 9. Is Liberalism Dead?

This 2 chapters designed to refute ideas that either Liberalism or Conservatism is dead periodically popping up every time when one or another side has significant improvement in its electoral standing. In reality country is deeply divided with 1/3 of population mainly more productive people receiving a lot less from government than they lose to government intervention moving to conservatism, 1/3 of mainly government provided rent receivers and seekers moving to liberalism, and 1/3 of people with lower productivity level and significant share of resources available to them being provided by government continuously vacillating between two sides. So far both movements are alive, well, and demonstrated remarkable ability to bounce back after electoral defeats. Nevertheless the depth of separation growing and both sides are working hard either to increase productive opportunity for people in the middle for conservatives, or increase amount of government supported resource transfer to their clientele for liberals.

10. Investing in Conservative Ideas

This is story of conservative movement, which being pushed out from officially supported intellectual positions of influence in mass media, education, academy, and arts, developed separate parallel intellectual infrastructure in think tanks, independent foundations, talk radio, cable TV and local political structures of republican party. Eventually conservatism moved from outside into mainstream of political debates with huge support from liberal politicians who consistently provide examples of complete failure of vast majority of their attempts to implement liberal idea in real life.

PART Ill. THE KENNEDY LEGEND AND THE LIBERAL IDEAL

11. The Kennedy, Legend; 12. JFK & Camelot; 13. Revisiting the Kennedy; Assassination after Fifty Years; 14. Was JFK a Conservative?

This part is dedicated to John Kennedy, his presidency, and liberal idolatry build around this story. It also restates amazing story of myth creation in which noble liberal Camelot was cut down by evil environment of America saturated with right wing conspirators. Author believes that this myth was a spark that ignited fire in the belly of liberal movement forcing it push ahead with major changes in American life. Never mind that by usual measurement Kennedy was quite conservative in this ideology and action, being democrat mainly due to his background as Irish Catholic. It is also discusses an amazing feat of ideological myth building when liberals managed to hung blame for Kennedy’s assassination on right wing, despite the fact that killer Oswald was far left individual with history of worshipping Castro and defecting to USSR.

PART IV. THE POLITICS OF HIGHER EDUCATION

15. The Left University; 16. Reflections on The Closing of the American Mind;
16. What’s Wrong with Our Universities? 18. Columbia Beats Harvard; 19. Liberalism versus Humanism

This part is about leftists taking over American universities and turning them into indoctrination centers of liberalism. It retells in details the story and positions stated in famous book by Bloom “Closing of American mind” published in 1987. In the following 30 years this process moved a lot further turning not only university, but the whole educational system run by government into ideological bastion of leftism, protecting prosperity of credentialed individuals within this system by turning young people into foot soldiers of democratic party.

Epilogue

Here author restates the main thesis of this book that American postwar consensus supporting limited capitalism with welfare state for all practical purposes is dissolved, leaving country divided between two camps:

Left, politically represented by united, under Obama Democratic Party, which main objective is expansion of predatory government and limitation of all economic and political freedom for everybody else.

Right, politically represented by Republican Party more or less combining traditional conservative wing and libertarian wing both of which mainly agreed on policy promoting decrease in size and influence of government in economy, but divided on government role in culture and values.

Author believes that the most probable outcome would be the next fourth revolution when one of these two camps win decisive victory forcing another camp to accommodate their positions to the new secondary role similarly to what happened in 1930s with New Deal.

MY TAKE ON IT:

I mainly in agreement with ideas expressed in this book and find framework of periodic revolutions quite plausible. The consensus of New Deal that prospered after the war is dead as well as Keynesian understanding of economy, and socialist ideas of government control over production. However I would expand the view of crisis from America to the whole world and would call it crisis of capitalist method of production based on government or business control over resources and labor sales by individuals situated outside of government bureaucracy and business managing hierarchies. This crisis caused by progress in communication, transportation, and data processing brings the whole world into one global market and increasingly makes human labor redundant for production of goods and services. I think that the revolution resolving this crisis is bound to occur in America and then expand itself throughout the world moving it into much more libertarian place than it could be imagined now. I think that preceding this revolution would be restructuring of the Right wing ideology in such way that would bring wide masses of middle class to their side by providing feasible alternative to limited government support of their needs. As soon as this restructuring completed, the 4^th revolution leading to newly energize, highly productive and inclusive capitalism would be unstoppable. The alternative scenario of consolidation and victory of the Left wing ideology seems quite unfeasible to me, mainly because this ideology could not possibly satisfy deeply seated human needs for self-control, self-direction, and pursuit of happiness, even if at current levels of productivity it could satisfy minimalist needs in food, shelter, and entertainment.