Radical Uncertainty: Decision-Making Beyond the Numbers

British economists Kay and King (The British Tax System) criticize the quantitative direction of modern economic science in this witty yet overstuffed account. Arguing that people “cannot possibly assess the consequences of all conceivable choices,” Kay and King take behavioral economists such as Daniel Kahneman to task for dismissing humans’ cognitive mechanisms as biased or irrational. Hypothetical models and probabilistic thinking, the authors contend, fail to account for the “radical uncertainty” of the real world. They advocate for “the value of simple heuristics, or rules of thumb,” and highlight the central role that narratives and contextual reasoning play in decision making. Kay and King use numerous anecdotes to back up their claims, including President Obama’s 2011 decision to authorize the raid on Osama bin Laden’s hideout in Pakistan, the 2008 financial crisis, and the experiences of business tycoons including Warren Buffett and Steve Jobs. Though readers will appreciate the authors’ dry sense of humor and flare for thumbing their noses at academic peers, the book’s repetitions and overreliance on anecdotes (some of them fictional) undercut its central arguments. Even dedicated students of economics who are open to Kay and King’s perspective will find their patience tested by this dense call for reform. (Mar.)