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(London Times review)

Forty years of research into the ways our minds work, with a Nobel prize along the way, have driven Daniel Kahneman to an unequivocal conclusion. The manner in which we think is, in important ways, deeply flawed. "Most of us view the world as more benign than it really is, our own attributes as more favourable than they really are, and the goals we adopt as more achievable than they are likely to be."

Kahneman, a former professor of psychology at Princeton University, ascribes our self- deception to our overreliance on one side of the brain. We are very rarely the rational, logical creatures that we assume ourselves to be. Most of the time, even when we think we are thinking, we are jumping to conclusions, being radically influenced by random words or images we happen to have come across minutes before, and using prejudice and emotion instead of analysis to arrive at a thought.

Kahneman terms this intuitive side of the brain "system 1". It's the fast thinking he refers to in his title, and it is outside our conscious control. It's the way we reach the majority of our decisions, and it requires no effort, since its judgments are instinctive and instantaneous. It is permanently searching for ways to make sense of the world, so it is much more concerned with plausibility than truth.

In many ways, this system works wonderfully. We are brilliant at sensing that someone has been talking about us when we walk into a room, at assessing a political figure's leadership potential, or at swerving to avoid a collision on a motorway. Social groups and dominance, our immediate environment, and danger: we've evolved to be experts in those. Anything a little more complicated - mathematics, risk, the stock market, global warming, history, the future - well, in these our brains' glib assumptions don't give us the full picture.

It's in areas such as these that we would be better served by deploying the other side of our brains, "system 2". This is our slow, conscious, calculating, effortful capability; the one that argues with itself and weighs evidence, the one that feels like work. Yet as Kahneman demonstrates, we rarely even recognise when this kind of thinking is required. We are congenitally lazy, and use shortcuts instead.

I don't suppose you knew that if you want to lie in print, it's essential to make your layouts big, clear and easy to read. Lies are much more likely to be believed if taking them in involves no effort. Conversely, if you would like your children to pass a test in maths or reasoning, they'll do better if the test paper's fonts are faint and hard to make out. Difficult circumstances act as an automatic alarm system, telling us that vigilance is needed, and easy ones switch our sceptical brains off.

System 1 makes powerful snap judgments about people and is then reluctant to see them differently. Kahneman confesses that even he wasn’t immune; he realised some time ago that the way he marked his students' work was entirely determined by the quality of their first essay. Forcing himself to see that good work could be followed by bad, and vice versa, made him very uncomfortable. Defining people as clever or mediocre was much easier.

Kahneman points out that this halo effect, where we tend either to like or to dislike everything about a person, is a petrifyingly powerful factor in our lives. It means that first impressions not only count, but that almost nothing else counts at all. If we like a politician, for example, we jump from that to an assumption that their policies are less risky and less costly than the alternatives. We are always looking for labels and certainties, illusory as they may be.

Kahneman has hundreds of examples of the way our brains create errors. Our memories can't be trusted. Our entire view of any event is shaped by our last impression of it, so we may mistakenly repeat a miserable holiday or social event because the last day or hour was happy. We plan badly for the future because we think possessions will make us happy, when the evidence is that it's social relationships that do. At work we think we are being bold in meetings when in fact we are frantically editing our opinions to fit in with the first few people to speak.

By making us aware of our minds' tricks, Kahneman hopes to inspire individuals and organisations to identify strategies to outwit them. Chilling examples, such as judges' tendency to grant parole just after lunch and then refuse it as they get hungrier over the afternoon, or companies' inability to properly assess risk, persuade one that he is right. But as Kahneman knows well, it will take much more than his absorbing, intriguing book to bring about a lasting change in the way we're prepared to think.

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