STA Blog

An obituary written by Martin Sandbu for the Weekend FT (30-31 March 2024) set me reminiscing – and wondering how things might have been. It took me back to autumn 1975 when I applied to study Social Psychology as an undergraduate at British Universities. In those days I think there were less than 10 (mainly red brick) colleges teaching the subject, and I chose the London School of Economics. This was well before I converted to a full time technical analysts in my first City job.

Daniel Kaheman

The School’s most famous son, Mick Jagger of the Rolling Stones was it’s big celebrity, but there were also a great many graduates who had studied economics and who then went on to be chancellors, ministers, prime ministers and presidents of a great many emerging market countries. In other words, economics ruled the world. As Martin so nicely put it: ‘’Economics is a notoriously imperialist discipline: economists are more prone to colonising other scholarly fields than to be colonised by them.’’

This was especially so in the case on Daniel Kahneman (1934-2024), a Nobel Prize winning Social Psychologist who, together with Amos Tversky, wrote ground breaking papers on the psychology of decision making. Their research into systematic biases, use of evidence (and lack of it) in difficult situations and previous experiences were then incorporated by economist Richard Thaler and hey! Behavioural Economics was born.

Currently all the rage among policymakers as well as rock solid economists, I prefer what Kahneman had to say: ‘’I went home more certain than ever that my mother was right: people were endlessly complicated and interesting’’.

Do read his book: Thinking Fast and Slow.