Policy makers, like most people, normally feel that they already know all the psychology and all the sociology they are likely to need for their decisions. I don't think they are right, but that's the way it is.
Interpretation
The quote highlights the overconfidence of policy makers in their understanding of psychology and sociology.
In this quote, Daniel Kahneman suggests that policy makers, similar to many individuals, often believe they possess sufficient knowledge of psychological and sociological concepts to inform their decisions. He challenges this assumption, implying that such self-assurance may lead to flawed or uninformed decision-making, emphasizing the complexity of human behavior and social dynamics that often require deeper understanding.
In practice
During a panel discussion on governance, a speaker could use this quote to illustrate the risks of overconfidence in decision-making.
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
Man spends his life in reasoning on the past, in complaining of the present, in fearing future.
I see nothing but Becoming. Be not deceived! It is the fault of your limited outlook and not the fault of the essence of things if you believe that you see firm land anywhere in the ocean of Becoming and Passing. You need names for things, just as if they had a rigid permanence, but the very river in which you bathe a second time is no longer the same one which you entered before
Time comes to us softly, slowly. It sits beside us for a while. Then, long before we are ready, it moves on.
Think on this doctrine, - that reasoning beings were created for one another's sake; that to be patient is a branch of justice, and that men sin without intending it.
Nobody saves America by sniffing cocaine. Jiggling your knees blankeyed in the rain, when it snows in your nose you catch cold in your brain.
The experience of every-day life fully proves that the armed individual is invariably anxious to try his strength. The same is historically true of governments. Really peaceful countries do not waste life and energy in war preparations, with the result that peace is maintained.
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