Dylan Ratigan Show | November 22, 2011
>>> our specialist totd today is the only non-economist to earn a nobel price in economics. he's a non-economist who did it. one-up to all of us. his studies on the machinery of the mind explain how the world and our mind simply does not match up with the world as it actually exists. think about things in your head and things out here. we make irrational decisions because of that gap. daniel is a professor of psychology at princeton and a best-selling author. his book "thinking fast and slow" like chewing gum and doing something else, is out now. professor, pleasure.
>> my pleasure to be here.
>> we have had a number of folks come through and really try to explain to us, for instance, how much does it matter? how matters. the way you do things is more determinative than the outcome itself. in other words, the way you manage risk, the way you relate to these things, walk us through the human -- what that gap is between the human mind and the actual ability to evaluate risk.
>> well, in general, you know, the world in our minds is simpler than the world out there. we have a narrative ? that we have a story . we build a story what the world is like and we act accordingly. and we have much too much confidence in that story . so people end uptaking risks in many cases because they don't know the alternatives they're facing.
>> susan, go ahead.
>> when you talk about the fast and slow thinking, the methodical thinking versus gambling thinking if you will, does it separate when you think of someone like a scientist versus an artist? does it play out differently?
>> i wasn't thinking along those lines because within each of our minds there are those two modes of thinking. when i say two plus two, you think four automatically. you don't have to compute it. if i say 17 times 24, you've got to compute it. so that's the first is fast thinking, the second is slow thinking. we all have both.
>> so we each have the narrative that we live our lives by, but invariably things change that are in accordance with the narrative that perhaps we expected. i would say that what we're seeing in congress suggests we don't learn from those changes and mistakes, we keep making them. but yet some people do learn from mistakes. how does that factor into our thinking?
>> well, it's true that people learn less from what happens to them than perhaps they might. we keep our stories as in tact as possible. when something happens that surprises us, in the first place, we deny the surprise. people don't accept that they're surprised. and we tend to be -- to keep if we have an idea or an ie deology, we tend to stick to it. and people really do not move their opinions much. not only true for congress, it's true for all of us.
>> you're saying people are ? stubborn?
>> yeah. i'm saying they're not listening. they're interpreting the world . they have an interpretation, they stick to it.
>> is this a self-preservation thing? what do you think is the origin of the human narrative and human story we all create, all of us, and the difficulty that we have in reconciling that narrative with whatever is happening outside of our heads.
>> well, you know, having a narrative and having an interpretation, that's part of the way the mind works. it's not necessarily for preservation or anything else. the mind is set up to generate those stories. you present people with anything, they'll make the best story possible out of it. and it's not necessarily that -- and different people looking at the same thing will not make the same story . the story they construct depends on their prior believes and depends on what they want. it also depends on a lot of things they're not even aware of.
>> go ahead, jim.
>> all right. i buy all that. but here's my question. what makes people -- what makes some people -- what gives some people the ability to deal with pressure and with hardship, et cetera , et cetera , more easily than others who can't? and then take that and sort of then tell me when -- like congress, right, you've got people on the right and people on the left. and they have ied logical believes and political believes, but what makes them think that way? we had someone on the other day said my brain controls everything, said my brain may be gay, he gave some answer, yes. okay. great. how does the brain differentiate between people who can handle it and people who can't?
>> that's a pretty sharp distinction. they handle it or cannot handle it, some people are born much more resilient than others and can cope with stress better ? than others.
>> so it's dna.
>> dna has a lot to do with it. early upbringing has a lot to do with it. being stubborn is something else. in general when you start believing in something, that becomes part of your world and part of your identity. and you fit anything that happens into that story .
>> but that's learned behavior, correct?
>> that is learned behavior. certainly when you look --
>> bigotry is learned behavior. love is learned behavior.
>> well, i mean, we have a propensity for bigotry and we have a propensity for love. and we have a tendency to treat members of other groups very differently from the way we treat our own.
>> but we also have a propensity to change and learn from our mistakes or learn from -- right? doesn't that happen as you get older?
>> he's smiling.
>> i know.
>> hope springs eternal.
>> that was going through my mind. we learn slowly.
>> that's sad.
>> and when we have fixed believes, you know, like iedology, people in congress do not learn all that -- you know, they don't train their mind. you can just watch it. there is a political conversation you don't really expect people to change their mind mid-conversation.
>> what strikes me as part of this i think about as someone in politics, part of my job as a communicator is to tell a story about a candidate, about a rationale about an issue, what have you. part of the way we try to bring people to our side is to tell that story in a way where they can see themselves in that story . so in that way, does that mean we're manipulating the things that feel familiar to them rather than confronting them?
>> well, i mean, that's the way that people talk to each other. there is very little difference between talking to somebody trying to conr'ce them of something and manipulating. you're appealing to emotions. and you're appealing to simple ideas that people have. and that's the way we convince each other. that's the way the world is done.
>> we're about to run out of clock. but at the end of the day , what are we to do with this information?
>> the information --
>> in that book? you know, i was trying to educate gossip. i was trying to get people to look at the judgments and decisions of other people and be critical because i don't believe that people can be critical of themselves.
>> got it.
>> but i do believe that how they think about others can be improved.
>> so basically i should be more skeptical of these guys?
>> yeah. you know, i mean, you may learn some of their bias.
>> by being skeptical, can't you learn something --
>> you will learn from others around you being skeptical more than you will learn by becoming skeptical.
>> teach us a lot about markets.
>> nice to see you. have a good holiday. good to see all of you as well.
>> happy thanksgiving.