MAIN IDEA:

This book is kind of counterargument to currently very popular idea of behavioral economics that human thinking is often not rational and therefore not effective in dealing with challenges of contemporary live. This counterargument based on two insights: The first is that whatever human approach to economic behavior is, it developed as result of evolutionary success and therefore has deeper rationality than formal logic could provide. The second one is that such seeming irrationality comes from the fact that at any given moment any human is trying to achieve multiple evolutionary goals, which realistically could be in conflict, so decisions are made as compromise between these goals selecting the best mix of actions for this particular time and space.

DETAILS:

Introduction: Cadillacs, Communists, and Pink Bubble Gum

Why did Elvis gold plate the hubcaps on his Cadillac?

This chapter provides examples of human irrationality of famous people, posits question: why did they do it, and establishes direction of inquiry that authors believe would allow answer this question.

1: Rationality, Irrationality, and the Dead Kennedys

What do testosterane-crazez skateboarders have in common with Wall Street bankers?

This chapter introduces idea of deep rationality as synthesis that allows overcoming two usual approaches: humans as rational econs vs. humans as morons too stupid to behave rationally. Authors propose notion of deep rationality: humans as animals conditioned by evolution to act in such way as maximize their evolutionary fitness in fast changing, unpredictable environment when criteria of action is not optimization, but rather “good enough to survive.” In short – humans are rational animals with rationality defined as such actions that increase chances of survival.

2: The Seven Subselves

Martin Luther King Jr. had a multiple personality disorder? Do you?

Here authors discuss seven subselves, each of which works to achieve a specific evolutionary goal:

• Self-Protection Subself from other animals including hostile humans
• Disease-Avoidance Subself
• Affiliation Subself – humans survive in a groups so the survival of the group as important as individual survival
• Status Subself – If group survives then individual survival depends on status inside the group
• Mate-Acquisition Subself
• Mate-Retention Subself
• Kin-Care Subself, obviously the most important kin being one’s children

Here is a nice graph for priorities somewhat based on Maslow ideas:

3: Home Economics Versus Wall Street Economics

Why did Walt Disney play by different rules than his successors?

This chapter explores interaction between different subselves and other people and entities. It analyses human economic behavior based on 7 subselves, each of which requiring somewhat different approach, resulting in very dynamic patterns of integration depending on circumstances.

4: Smoke Detectors in the Mind

Why is it dangerous to seek the truth?

This chapter concentrates on mistakes and biases that each of our evolutionary subselves is prone to make. This is very interesting and somewhat counterintuitive approach. The question is how humans treat truth and accuracy of reality representation and answer is: as mainly irrelevant to action. In other word the lie that helps to survive preferred to the truth that would lead to demise and it is not only for external consumption, but also for internal individual believes. Author look at all 7 subselves as to what kind of biases and self-deceptions they promote.

5: Modem Cavemen

How can illiterate jungle dwellers pass a test that tricks Harvard philosophers?

This is a discussion of how our understanding of subselves could help to make better decisions. This chapter includes multiple examples of human logical mistakes and inconsistencies and then provides suggestions on how to avoid them: by using understanding of evolutionary meaning of our approaches and consciously modifying them to fit new contemporary environment when we are not hunter- gatherers any more, but rather members of complex groups interacting with environment via sophisticated technological systems.

6: Living Fast and Dying Young

Why do people who go from rags to riches often end up in bankruptcy court?

This is look at how subselves change human behavior at different stages of live from childhood to old age. The main point here is that all humans are different not only from individual to individual, but also for the same individuals during different periods of live, when different subselves become dominant in defining behavior. Authors identify 3 main stages during lifespan when different types of effort become dominant: somatic effort, mating effort, and parenting effort. They also discuss here fast and slow strategies and thinking that varies greatly between different individuals depending on their genetic makeup and environmental circumstances.

7: Gold Porsches and Green Peacocks

Do people buy a gold Porsche and a green Toyota Prius for the same reason?

This is exploration of mechanism of human decision making, quite correctly pointing out that whatever decisions are made they are always in interest of decision maker. As example for analysis authors use buying Porsche vs. buying Prius: the first one signaling wealth and prosperity, while the second signaling communitarianism and environmentalism. In actuality both behavior serve the same purpose: to demonstrate one’s fitness to the group one wants to belong and be accepted.

8: Sexual Economics: His and Hers

When is a gain for the goose a loss for the gander?

This chapter looks at variation of approaches to decision making between men and women and links it to different evolutionary goals that inherent to each sex. As usual this comes down to men distributing their sperm as wide as possible and women capturing a partner good enough to raise children. The interesting and not trivial point here is about jealousy: men jealous at women’s sexual infidelity, while women jealous at men’s emotional infidelity. Finally mating behavior is as much defined by supply and demand as any other human activity involving interaction between people and exchange of goods and services. When there are too few women as in American West in 1880s, men are chivalrous, respectful, and trying to please women as much as possible, while women are selective and powerful. When it is low supply of men as usual happens after big war, men are selective and often neglectful, while women often had to limit their search for reliable men and accept sex without commitment even if it means to have children to rise on their own.

9:Deep Rationality Parasites

How do snake oil salesmen exploit deep rationality?

This is an interesting look at our vulnerability: how knowledge of human subselves allows some human successfully exploit others. The examples provided mainly from sales strategies: selling diamond by creating the need where none existed before or drug advertisement campaigns or books like: “xxx, they do not want you to know”. The recommendation for counteraction: know thy enemy, know thy situation, and know thyself.

Conclusion: Mementos from Our Tour

In conclusion authors provide some mnemonics to remember their ideas and 3 lessons:

1. Don’t assume other people are morons
2. Rational self-interest is not in your self-interest
3. Don’t leave home without consulting your other selves.

MY TAKE ON IT:

This is a great approach to understanding of humans, their behavior, and results of this behavior. I think it clearly supports my believe that humans are way to complex and dynamically changing to try any attempts to control and manage them externally whether these are relatively soft attempts of American elite to “nudge” people into the “right” economic behavior for their own good or murderous concentration and “reeducation” camps of communist countries where alternative is either “right” behavior or death. The logical conclusion is to assure that people have resources to do what they want and forget any ideas about some elite thinkers knowing and having justification to force their ideas on people. I do not think that there is any non-destructive alternative to freedom with resources.