Joe Kennedy also exhibited keen rational self-interest in his personal life. After having an affair with the beautiful movie star Gloria Swanson, he jilted the actress when her movie went grossly over budget, and left her holding the tab. Later in life, he turned his ambitions from money to political power, becoming the American ambassador to England and plotting to have his eldest son become president of the United States.
But the luck of this particular Irishman did not pass on to his descendants. His handsome and charming eldest son, Joseph Jr., the one he hoped would someday become president, was killed at age twenty-nine during a World War II bombing mission. His beautiful daughter Kathleen seemed to be living a charmed life when she married William Cavendish, heir to the Duke of Devonshire. But she was widowed only four months later when Cavendish was killed in action; then she herself died in a plane crash in 1948. Joseph’s second son, John, was elected president, then famously assassinated in Dallas on November 22, 1963. His third son, Robert, was shot down during his own campaign for the presidency in 1968. And his youngest son, Teddy, narrowly escaped death in 1969 when he drove his car off a bridge on Chappaquiddick Island, drowning his passenger, Mary Jo Kopechne.
The next generation of Kennedys seemed to fare even worse. In 1984, Joseph’s grandson David died of a drug overdose in a Miami hotel. David’s brother Michael perished in a skiing accident in 1997. And in 1999, John F. Kennedy Jr., the strikingly handsome son of the former president, met a tragic end when the plane he was piloting crashed into the cold night waters off Long Island. At this point in the story, you should be able to hear that spooky organ music playing in the background. It was enough to lead one former New York Times editor to write a book called The Curse of the Kennedys.
How is it that Joe Kennedy could lead a life of charmed decisions, whereas his descendants seemed magnetically drawn to ill-fated choices? The mystery of the Kennedy family vividly exemplifies a much broader question: Are people’s decisions rational or irrational? Experts have been sharply divided on this question. Some assert that our choices are eminently rational. But others argue that our decisions are frequently irrational—and occasionally even tragically moronic.
In this book, we offer a third view, based on emerging scientific evidence that connects human behavior with that of the rest of the animal kingdom. Although human decisions often appear foolish, they are, if you probe beneath the surface, often deeply rational.
To see under the veneer, though, we need to radically reframe how we think about the human mind. Rather than asking whether the mind is good at solving modern problems such as investing on Wall Street or acing the SATs, we should instead ask how it solves the central problems our ancestors faced over hundreds of thousands of years. By looking at modern behavior through a wider-angled evolutionary lens, we can gain a fresh perspective on how people make decisions. This new way of thinking transforms how we think about rationality and reveals the surprising, hidden wisdom behind seemingly senseless decisions—including ones made by the Kennedys, your coworkers, your family members, and your stockbroker.
As we’ll discover, a deeper understanding of the Kennedys’ fortunes and misfortunes reveals something fundamental about us, about our friends and neighbors, and about the nature of human nature. Let’s take a closer look at the choices of Joe Kennedy and his descendants, as viewed through the eyes of three very different kinds of scientists.
RATIONAL MAN: PEOPLE AS ECONS
One explanation for the Kennedy clan’s fortunes and misfortunes is grounded in the classic view that dominated our understanding of decision making for over a century: rational economics. You are familiar with this view if you’ve taken a class in business or economics or merely perused the financial pages of the newspaper. This perspective is caricatured in the movie Wall Street, in which the coldly calculating Gordon Gecko proclaims, “Greed is good!” and high roller Roger Barnes asks the classic question, “What’s in it for moi?”
Rational economists view people as, well, rational. To get a better feel for the rational economist, imagine someone in a finely cut business suit seated in front of a computer, with a stock market ticker flashing overhead. Poring over mountains of data, our prototypical rational economist crunches numbers and scribbles mathematical equations on scraps of paper between triple-espresso coffee breaks. Although rational economists in the real world are a diverse lot and don’t all wear suits to jobs on Wall Street, they share a commitment to analyzing decisions in terms of rational self-interest. Any decision—be it to encourage one’s older versus younger child to run for president, to import liquor or to go into showbiz, or to frolic with a Hollywood starlet or dump her—boils down to the question: What’s it worth to me?
According to this view, we make decisions like ultrarational “Econs.” Like Joe Kennedy or Gordon Gecko, the average person is good at knowing which choices will best serve his or her self-interest. Like Joseph Kennedy did in deciding to sell his stock holdings or end his relationship with Gloria Swanson, we base our choices on the best available information. Of course, we can’t predict the future with certainty, and random, unexpected events do happen. Those random events average out statistically, but as in the case of stock market and airplane crashes, an otherwise well-reasoned choice sometimes turns out to have been unfortunate. From the classic rational economic perspective, the tragic succession of deaths among the second and third generation of Kennedys is not some mystical curse but more like a string of unlucky bets—nothing more magical than random bad luck.
IRRATIONAL MAN: PEOPLE AS MORONS
But there is a very different explanation for the Kennedy family’s calamities. Maybe Joe Kennedy’s descendants were cursed not with bad luck but with bad judgment. “The Curse of the Kennedys,” argued New York Times columnist Sandy Grady, stems from “their code of macho daring that crosses into recklessness.” That certainly applied to the very first tragedy—the death of Joe Jr. The eldest Kennedy son had already flown enough bombing missions to qualify for a discharge, when he daringly volunteered to fly a plane full of explosives directly at a heavily fortified German cannon site. The same rash judgment style was shown by grandson Michael, who died playing football while recklessly zooming down a tree-filled mountain slope on a pair of skis. And when Teddy’s car plunged off the Chappaquiddick bridge, random bad luck also had a little help from an evening of heavy partying and a dose of bad judgment.
This bad judgment theory of the Kennedy curse fits well with what is currently the most popular view of decision making—that our judgments and decisions are often flawed and irrational.
Consider the following situation:
Person A is waiting in line to see a movie. When he gets to the ticket window, he is told that he is the millionth customer and wins $100.
Person B is waiting in line at a different theater. The man in front of him gets to the ticket window and is told he’s the millionth customer and wins $1,000. Person B receives $150 for being the person right after the millionth customer.
Would you rather be Person A or Person B?
Unless you’re allergic to money (like the people who get a rash when they touch the nickel in coins), a rational economist would expect any sensible person to choose Person B, who makes off with $50 more than Person A. But in fact, most people would rather be Person A, making the irrational choice to pass up an extra $50, just to avoid the bad feeling they might have from being so close to getting $1,000.
This irrational bias is known as loss aversion—the tendency for people to focus more on losses than they do on gains. This bias was discovered by Nobel Prize winner Daniel Kahneman and his colleague Amos Tversky, two pioneers in the field of behavioral economics, the marriage of economics and experimental psychology. Behavioral economists are rigorous scientists who typically work in a laboratory, conducting experiments on people’s behavior. Although rigorous, the prototypical behavioral economist also has a sense of humor and loves to root out human foibles, point a spotlight at them,
and have a good chuckle over our shared irrationalities. Imagine someone in a white lab coat but wearing a Rolling Stones T-shirt underneath—the one with the big red tongue hanging out.
From the behavioral economist’s perspective, our brains are rather flawed contraptions. In contrast to the rational economist’s view, which sees the mind as a polished Rolls Royce with a purring V-12 engine and a state-of-the-art navigation system, the mind looks to a behavioral economist more like a rusty Yugo schlepping along on three cylinders with a compass sticker to help navigate. Behavioral economists have demonstrated in countless studies that our overworked brains are often incapable of making the logical choices expected by rational economists. While people might aspire to be rational, everyday choices made by us folks down in the real world simply do not adhere to the cold, hard principles of rational economics.
There are enough books and scientific articles exposing our mental flaws to fill up an entire library. If you look up “list of cognitive biases” on Wikipedia, you will find ninety-seven different mental defects identified so far. Since you may need a good chuckle as you wait in your broken-down Yugo for the AAA truck, let’s check out a few of our comical faults.
First take a gander at the gambler’s fallacy, an irrational tendency to think that past events influence future probabilities. This fallacy shows up when people flip a coin and get heads five times in a row, then guess that the next flip has an especially high chance of coming up tails. That’s silly, of course, since the next flip still has a 50 percent chance of landing heads or tails, no matter what happened earlier. In John Irving’s novel The World According to Garp, the hero, Garp, makes this error when he decides to buy a house right after a small plane crashes into it, reasoning that the chances of another plane hitting the house have just dropped to zero. And when one of our wives was expecting a third child after having two girls in a row, several people were confident that she was “due” to have a boy.
And then there’s the hindsight bias, the irrational tendency to react to new information with the feeling that “I knew it all along.” Before presidential elections, people are moderately confident that their candidate is going to win. But a few months later, when the count is in, those who supported a Mitt Romney or a John Kerry say they knew all along that he was going to lose!
Our brains are further riddled with biases like the clustering illusion, the tendency to see patterns where none exist, as when people are convinced a basketball player’s string of three-pointers is evidence of a “hot hand,” even though statistics reveal it’s merely a random streak of luck. Here’s one you can try at home: flip a coin twenty times, record the sequence of heads and tails, and then ask one of your buddies if he can see “the pattern.” If your friends are like most people, they will quickly see a meaningful pattern in the sequence, even though it is random.
The gambler’s fallacy, hindsight bias, and the clustering illusion are merely the tip of the irrationality iceberg. There’s also the baserate fallacy, the false-consensus illusion, the conjunction fallacy, the Barnum effect, the pseudocertainty effect, the ultimate-attribution error, the ostrich effect, and about ninety others. Based on all the evidence of mental errors, behavioral economists have disagreed strongly with traditional depictions of people as rational, computer-like Econs. From the behavioral economist’s perspective, you don’t have to be a Kennedy to make bad decisions. Hundreds of studies have demonstrated how people’s decisions are often simple-minded, irrational, and self-defeating, even when those people are so-called experts. All these inherent mental deficiencies suggest that, rather than being ultrarational Econs, we real people are often more like thickheaded morons.
DEEP RATIONALITY: HUMANS AS ANIMALS
But are people really bumbling morons, persistently making foolish decisions that go against their self-interest? A closer look at the Kennedy clan suggests that their decisions weren’t quite so foolish after all. Despite all the tragedies that transpired during the half century between the two plane crashes that claimed the lives of Joe Jr. and John Jr., the Kennedy clan has hardly been cursed. After the Chappaquiddick incident, Teddy Kennedy went on to become the fourth-longest-serving senator in US history and a powerful force on the world political stage, right up until his death at the ripe old age of seventy-seven. And the next generation of Kennedys includes US representatives, lieutenant governors, highly successful businessmen, film producers, and philanthropists. These descendants are similarly cursed with abundant wealth, opportunity, and social connections to other rich and powerful people. So despite occasional bad judgments, Joe Kennedy’s descendants seem to have made plenty of good decisions as well.
Although the Kennedys may not be ultrarational Econs, they are certainly not morons. The same goes for the rest of us. Although some of our particular decisions are annoyingly ill informed, we manage to get by reasonably well. And the decisions of our sometimes feckless parents and their uneducated and uncouth predecessors were, at the very least, good enough that we are now here to talk about them. The fact that you are calmly reading a book instead of scouring the forest for morsels of food and worrying about deadly predators is a testament to our sophisticated brains. Homo sapiens is the most successful member of the great ape family and arguably the most successful species on the planet, possessing an enormously powerful brain that has allowed humans to thrive in an incredible range of environments. How could it be, then, that modern science has declared the most inventive organism on our planet an irrational fool?
The debates about whether human decisions are rational or irrational have been handicapped by a crucial limitation: they have largely ignored the fact that humans are part of the animal kingdom. By focusing only on our exalted species and ignoring our place in nature, we have missed the forest for the trees. But by panning out with our cameras, to see where Homo sapiens is situated in the context of other primates, other mammals, and other members of the animal kingdom, we can get a new perspective on ourselves.
This wide-angle view is the one adopted by our third scientist: the evolutionary psychologist. Trained in experimental psychology, anthropology, and evolutionary biology, the evolutionary psychologist looks at the big picture, examining the commonalities and differences between animals and humans from all corners of the globe. Picture someone in a khaki shirt and sporting a pair of binoculars, with a copy of Darwin’s Origin of Species jutting out of a tattered backpack. Of course, all evolutionary psychologists don’t fit this stereotype (some wear suits and work in marketing departments), but they do all share that important connection to Darwin’s ideas, which inspires them to think about human beings in the same way evolutionary biologists think about other animals.
Biologists assume that all animals have brains designed to maximize evolutionary success, which they call “fitness.” Evolutionary psychologists apply this same presumption to the human animal. This doesn’t mean people are always consciously wondering: How does this choice improve my reproductive success? But it does mean that, as in the case of all other animals, natural selection has endowed modern humans with brains designed to make decisions in ways that consistently enhanced our ancestors’ odds of passing their genes to the next generation. The decisions made by you, me, and the Kennedys are informed by an underlying wisdom developed over millennia, during which our ancestors successfully solved the problems of existence and exchange. This means that our modern skulls house Stone Age brains, designed to operate in the environments inhabited by our ancestors and to make decisions in ways that solved the types of problems those ancestors regularly confronted.
From the evolutionary psychologist’s perspective, the classic rational economists and the modern behavioral economists got the story partly right but also partly wrong. Behavioral economists are right that our decision making is biased in ways that sometimes lead us to make silly choices. But this does not mean that our decisions are typically foolish. And rational economists are correct that our decisions are profoundly rational and smar
t, just not in the way they have long presumed.
LOSS AVERSION IN MONKEYS AND MEN
Which would produce a stronger emotional reaction: finding $50 on the street or discovering that a $50 bill was missing from your wallet? If you’re like most people, you’ll be more affected by losing money. Although people are reasonably happy to find money, they are really upset to lose it. This is the idea behind loss aversion: people are more psychologically moved by a loss than by an equal-sized gain. To an economist, loss aversion is irrational because $50 is worth exactly $50, whether it’s coming or going. But is loss aversion all that foolish? Let’s consider it from an evolutionary perspective.
Until recently, it was presumed that only humans were “irrationally” loss averse. But new evidence suggests loss aversion may run much deeper in our evolutionary lineage. In a series of experiments, Venkat Lakshminarayanan, Keith Chen, and Laurie Santos at Yale University gave capuchin monkeys tokens they could use to “purchase” tasty apple slices. Despite never having taken Econ 101, the monkeys quickly learned how to use the tokens as money. But the researchers then threw in a clever twist: they gave the monkeys a choice between buying apple slices from two different people. Person 1 always showed one apple slice and gave it to the monkey in exchange for a token. Person 2, on the other hand, always showed the monkey two apple slices but gave only one of the slices for a token. From an economic perspective, both were offering the exact same deal: one apple slice for one token. But by first offering two, then only delivering one, Person 2 focused the monkeys on what they were losing—the second apple slice. The monkeys strongly preferred dealing with Person 1, even though Person 2 was offering, from an economic perspective, the exact same deal. Just like humans, monkeys hate to feel like they’re losing out.
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