My 2020 Reading Wrap-Up: Thoughts on Intuition and Inequality
I read 12 books this year that fall broadly into two themes: Intuition and Inequality. Reading 12 books in a year averages to a steady 1 book per month, but I’ll admit: I read these all in the last 2 months of the year. I was a body in motion that remained in motion.
The first few books in my mini-marathon were actually re-reads of books I read in college. I remember enjoying them immensely because they offered vast insights into new topics I was passionate about. However, after a few years had passed, I had trouble recalling specific takeaways that I found so interesting. I decided to re-read them and this time, take more time to actively absorb and reflect upon them.
Reflection, I now realize, was the prime benefit of the dreaded book reports we all wrote as children. The assignment, dull as it was, forced us to digest and summarize vast amounts of information, then reflect on its significance to our current world. As an adult who now reads for leisure (who would have thought?), I decided I could once again benefit from a bit of healthy reading reflection. See below for my adult book report!
Intuition: Human judgment is more fallible than we care to admit. These books provide the proof, the personal / economic repercussions, and how we can actively adjust for these errors.
Moneyball by Michael Lewis
The Big Short by Michael Lewis
Blink by Malcolm Gladwell
Fooled by Randomness by Nassim Nicholas Taleb
Thinking Fast and Slow by Daniel Kahneman
Nudge by Richard Thaler and Cass Sunstein
Inequality: There is gross inequality in the world. Why is that the case, and how do we address it?
Guns Germs and Steel by Jared Diamond**
The Bottom Billion by Paul Collier
Saving Capitalism by Robert Reich
The Truths We Hold by Kamala Harris
Becoming by Michelle Obama
Long Walk to Freedom by Nelson Mandela
Narrative on Intuition
People love to assign meaning to random events because as humans, we understand things most easily as simple narratives. She did X, therefore Y occurred. However, we only observe actual outcomes and ignore other, possibly more likely, unobserved outcomes, the counterfactuals. This bias, known as hindsight bias as well as availability bias, representative bias, priming effects, and the endowment effect are all examples of errors that humans are prone to if we do not actively counteract them (Thinking Fast and Slow).
By design, our brains are built to be lazy, but we can actively invoke our thoughtful System 2. Evolutionarily, humans developed intuition to “think fast” and thus survive. Our “fast” intuitive decisions are a powerful thing, but they can also fool us in ways that we don’t immediately realize. As such, we all can do with a helpful nudge in the right direction when it comes to our own finances, health, and conservationism (Nudge). We have also seen that thoughtful algorithms often produce better outcomes in these same jurisdictions because they are immune to changes in human sentiment. (Blink).
As a general rule, humans can dangerously fall victim to The Emperor’s New Clothes phenomenon, thinking “I must be the one who is wrong”. Everyone is afraid to challenge the status quo, even when it plainly and simply makes no sense (The Big Short, Moneyball).
Nevertheless, the literature on human judgement errors offers a precise and promising definition of what it means to truly master a skill. It means that through years of practice, one can perform complex tasks as easily as if they were basic intuitions: think chess players, musicians, and firefighters. What they really accomplished was turning slow System 2 tasks into fast System 1 tasks.
Narrative on Inequality
Inequality is everywhere and the fight is never over, but we can celebrate small and big wins that occur continuously. Going back to the time of colonization in the Old and New Worlds (which was a snapshot in time rather than an ultimate fate), the vastly different levels of “civilization” was amazingly the result of simple geographic differences between the Old and New Worlds. Most notably were the differences in the continents’ axes and the abundance / scarcity of domesticable plants and animals (Guns Germs and Steel).
In modern times, how do we address growing global inequality and who will take responsibility for it? Economist Paul Collier suggests that the solutions are A) a critical mass of the informed public B) political, economic and environmental charters for developing countries to reference C) military invention when necessary and D) reimagining foreign aid policy to minimize bureaucratic red tape and maximize growth (The Bottom Billion).
In the US alone, we must face facts about economic inequality. Adjusted for inflation, working class Americans earn slightly less than they did in the 1960s, despite overall economic productivity more than tripling. This means all the gains went straight to the top. A well-functioning capitalist society is one that fairly defines property, monopoly, bankruptcy, contracts, and enforcement (Saving Capitalism). Vice President-Elect Kamala Harris urges us to continue to fight for American values. She lays out simple suggestions for addressing rising economic inequality such as a closer eye on credit markets, rethinking CEO incentives, and more accessible higher education (The Truths We Hold). Other prominent black leaders like Nelson Mandela and Michelle Obama have shared their life narratives on fighting inequality. Their stories are told with great optimism for the future, a feeling that they hope to instill in the next generation of leaders.
**If I could suggest only one book from this list, it would be Guns Germs and Steel by Jared Diamond. It’s an interdisciplinary book that masterfully tells the story of 13,000 years of human geographic, linguistic, and cultural history, all in plain English. The book’s stated mission to dispel racist arguments about the sources of today’s global inequality is very refreshing. Interestingly, I first heard about this book through an Economics class, but it has surprisingly little to say about traditional Economics and much more to say about Humans themselves.
About the Author
Bonnie Young runs the Amplified blog. She shares her insights on market trends from US to Asia and interviews founders shaking up the tech scene. If you want new articles directly in your inbox, subscribe to the Amplified newsletter. Please reach out to her at email@example.com