'Irritation and anger' may lead to Brexit, says influential psychologist … British voters are succumbing to impulsive gut feelings and irrational reflexes in the Brexit campaign with little regard for the enormous consequences down the road, the world's most influential psychologist has warned. Daniel Kahneman, the Israeli Nobel laureate and father of behavioural economics, said the referendum debate is being driven by a destructive psychological process, one that could lead to a grave misjudgment and a downward spiral for British society. – UK Telegraph
Daniel Kahneman sees the Brexit debate as one motivated by irrational fear.
He explains that emotion is ruling people's perspective and that arguments regarding leaving the EU are based on "irritation and anger." He was interviewed by the Telegraph at the Amundi world investment forum in Paris.
Professor Kahneman, a Jewish child who survived the Nazi occupation of France, said the British people are being swept along by emotion. He added that they would "lash out later at scapegoats if EU withdrawal proves to be a disastrous strategic error."
His life's work is anchored in studies showing that people are irrational. They are prone to cognitive biases and "systematic errors in thinking", made worse by chronic over-confidence in their own judgment – and the less intelligent they are, the more militantly certain they tend to be.
People do not always act in their own economic self-interest. Nor do they strive to maximize "utility' and minimize risk, contrary to the assumptions of efficient market theory and the core premises of the economics profession.
Kahneman's perspective undermines assumptions about how people operate and whether they can properly analyze the world around them.
According to the article, he and his colleague Amos Tversky have had a big impact on psychology. By challenging "the assumption of rationality in economics," Kahneman won the Nobel Prize in 2002.
He wrote a book, Thinking, Fast and Slow that was a global best-seller. Comparisons were made between his book and Adam Smith's Wealth of Nations or General Theory by John Maynard Keynes.
In the article, Kahneman suggests that a "false narrative" has already been built around the Great Recession. "The crash was not as predictable as it now appears. We have learned the wrong lesson."
Of course this statement runs counter to analyses such as those presented by users of Austrian, free-market economics who did in fact predict the downturn.
Austrian-style investors like Peter Schiff were quite aware of what was coming and often said so.
In fact, we can argue that psychology is not a science at all but a series of observations that may appear to be clever or appropriate but cannot be proven.