Modern WisdomThe Psychology Of Irrationality - Rory Sutherland | Modern Wisdom Podcast 255
EVERY SPOKEN WORD
125 min read · 25,420 words- 0:00 – 15:00
Yeah. …
- RSRory Sutherland
Yeah.
- CWChris Williamson
Next polar bear, sex robots.
- RSRory Sutherland
Um, where do I put the thing?
- CWChris Williamson
(laughs)
- RSRory Sutherland
My cleaning lady is gonna find it, right? I mean, no, my cleaning lady is pretty tolerant. You know, I occasionally walk around the place in my underpants, but I think she'd draw the line on a sex robot. The great thing about those Scandinavian countries, I mean, if you're thinking about it, the climate's shit. Uh, you know, there are too many fucking trees. But the one upside is that everything is thought out. I don't like porn, actually, very much. I mean, I can't claim that I don't watch it ever, 'cause that would be ridiculous. Everybody's had a look. But I find the bits of porn where no sex is taking place vaguely interesting because here you can see the mental workings of someone who has to contrive a backstory, okay? And that's narrative and it's interesting. The actual act itself is actually unbelievably repetitive and tedious.
- CWChris Williamson
Being in a restaurant, QR code menus.
- RSRory Sutherland
There. Add- adds a completely unnecessary level of complexity. What restaurant has ever given you a menu that's two inches wide and four inches deep for fuck's sake?
- CWChris Williamson
(laughs) What do you think of TikTok?
- RSRory Sutherland
It's a thing. I don't fully understand. There are certain things I always get confused, 'cause I generally try and make an effort to understand, um, most things, and I don't find it that hard to understand things that other people find baffling, like Trump voting. And I always argue very simply about Trump voting, okay? Uh, look at it like this, okay? Imagine you work for a company and you can choose between two bosses, one of whom is slightly incompetent, you know, borderline alcoholic, say, but really likes you, and another person who's highly competent and technocratic but you suspect secretly despises you, okay? You're gonna vote for the first guy. Okay? Simple as that. Now, that's absolutely, that's absolutely incomprehensible to people in the technocratic elite because they've always had, you know, since, I don't know, Clinton, they've had highly academic kind of technocratic Ivy League professors who they see as essentially one of them. So the whole behavior is incomprehensible. TikTok, to me, it makes totally perfect sense. Uh, there are a few things I find hard to understand. TikTok, I, I think I understand. Um, it's, um, it's essentially video Twitter, isn't it? I mean, uh, you know, uh... But the, the music aspect of it, I think, is really, really interesting because everybody, I think, wants to make a music video of their own life, and by making it really easy and manageable... So it's always interesting to look at things like Twitter and TikTok through the lens of choice reduction, or Facebook for that matter, um, in that MySpace gave you too much choice and people felt, "Okay, I've got too much control over length of content, style of content. I'm not a graphic designer. My page is going to end up looking like shit." And then Facebook comes along and basically imposes some sort of aesthetic constraint on you, so there's a limit to the number of variables you have to agonize over. (laughs) And Twitter undoubtedly did that. Um, uh, Facebook did it relative to MySpace. And I think TikTok does that in a, in a, in a different form, uh, by enabling music, um, but in a way that you can't cock up.
- CWChris Williamson
(laughs)
- RSRory Sutherland
Um, so I think... I, I, I th- I th- I think there's something going on there. And a very interesting exercise in choice production, by the way. Go online and try and buy a Jaguar I-PACE and compare it to the choice architecture for the Ford Mach-E, you know, the Mustang Mach-E or the Tesla. Now interestingly, for products that are designed to be bought online, you don't want a huge amount of customization.
- CWChris Williamson
Why?
- RSRory Sutherland
Because, because... Th- This is a bit like the paradox of choice. It is the paradox of choice. Uh, conventional logic says that the more choice you have, the greater the chance you have of optimizing your own utility, your own expected utility, therefore the happier you should be. Actually, if you give people too many customization options, they will almost end up, almost certainly end up being unhappy with an element of their choice. So the Jaguar one, for example, I went in, and just as an exercise, I put in the top of the range base model, and then three pages later, I found myself asked the question, well, I wanted to pay £190 for fog lamps. And I kind of went, "I'm paying 70,000 for a car. I'm not gonna fucking pay a, you know, uh, uh, 100..." And the, the price of the fog lamps was immaterial. It was the fact that I was being made to pay for them. And eventually I became so resentful at the level of kind of a- addition. Now, if you go to the Tesla or the Ford process, it's basically five colors, two kinds of wheels, two drive trains. You know, um, I think with a Tesla you can pay 1,000 for the extra interior. With the Model Y, I think you pay a bit extra if you want the, the third row of seats. Well, fair enough. It's a degree of complexity. I'm not grumbling about that. But the extent to which the choice is enough to make you feel you're actually, uh, getting what you want and not paying for things you don't want, but at the same time it's manageable enough that you can actually go through it in a sequential process without feeling some sense of sort of seething confusion or resentment develop.
- CWChris Williamson
Mm-hmm. And TikTok, by constraining those, those guardrails, is, is helping people to be less shit. There's only certain degrees of freedom that you have, and by reducing that, the, the maximum amount of shitness that your content can be has been brought down.
- RSRory Sutherland
You've got it exactly. Yeah. Yeah.
- CWChris Williamson
Perfect. Hey, we've broken it. We understand it.
- RSRory Sutherland
And act- ac- yeah. Yeah. Yeah. And I think... It's always worth. That's pro- probably 50% of my obsession, which is why I'm such a big believer in this ergodicity debate, which is all about the mathematics of optimization under multiplicative dynamics, okay? Right? Okay. But a very simple way of looking at it, right? Okay.You've got a little formula that says one plus three. One plus three is four, or two plus two, or four plus naught, okay? Right? They all add up to four. And you can add one to either the one or the three. Well, it doesn't make any fucking difference, right? You can add the one to the one, or you can add the one to the three, and it'll now be five. All right? But under multiplicative dynamics, obviously that's not the same rule, right? You add the one to the lower of the two numbers, because if you take... uh, obviously, if you have four times naught and you add one till, to four, you still have naught, right? What you want to do is add it to, let's say, three times one. You want to add the one to the two, 'cause that way you get six, okay? Rather than, say, naught or f- five or something, right? Now, the reason that makes a difference is that under multiplicative dynamics, and lots and lots of things in human life are kind of more like multiplication than they are addition. It strikes me as an essential absurd, um, assumption of economics to assume that utility is additive, okay? That u- u- utility arises from a simple series of additive processes that net out. Strikes me as bonkers. I mean, look at reputation. You know the joke that ends, "You shag one sheep," right? Okay? Y- we all know that joke, okay? You know, uh, but do they call me Dimitri the Boat-Builder? But do they call me Dimitri the Church-Builder? But do they call me Dimitri the Philanthropist? You shag one sheep, right? (laughs)
- CWChris Williamson
(laughs)
- RSRory Sutherland
Now that shows that reputation's sort of multiplicative. If you hit a big fat zero and won, nobody, nobody nets out Jimmy Savile, do they? Nobody goes, "Yeah, bit of a kiddy fiddler, but on the upside, he did do a lot of work for charity."
- CWChris Williamson
Did some great work as a philanthropist, yeah.
- RSRory Sutherland
He did some great work, you know. No.
- CWChris Williamson
(laughs)
- RSRory Sutherland
Nobody nets out Jimmy Savile, okay?
- CWChris Williamson
(laughs)
- RSRory Sutherland
Right? Okay? And, um, (laughs) . And, uh... so-
- CWChris Williamson
(yawns)
- RSRory Sutherland
... the point I'm making is lots of things in life are patently more like multiplication over time than they are addition.
- CWChris Williamson
Yeah. Uh, so I'm in Dubai and I've misplaced my passport. I fly home this Sunday. I found it this morning.
- RSRory Sutherland
S- yeah.
- CWChris Williamson
But is it not stupid that I still need a physical paper object in my bag to move between countries? I could RFID it, we could facial recognition it, I could fingerprint it.
- 15:00 – 30:00
I get it. …
- RSRory Sutherland
you're in transit. And sometimes now you find yourself teleported into a meeting from a different continent with, like, one minute to prepare. And so I, you know, I, I mean, that's, that's another point I'd make, which is I, I just think the walk is good.
- CWChris Williamson
I get it.
- RSRory Sutherland
You know, it says, "Okay, I'm going here. I'm making a tolerable degree of effort." Um, uh, you know, I'm not just gonna basically tick a, tick a box and get it over with and I think it deserves that level of solemnity. That's, that's what I'd say.
- CWChris Williamson
Give me your thoughts on Dyson Airblade hand dryers versus paper towels.
- RSRory Sutherland
Oddly, I quite like the Airblade. I mean, I don't know whether they've been turned off because they're massive virus spreaders. I don't know what the effect of-
- CWChris Williamson
Well, they're just atomizing whatever was on your hands, aren't they? And just pushing it as particulates into the air.
- RSRory Sutherland
Mm. Um, I think... I never thought of it like that, but you're absolutely right. I mean, they do a good job of drying your hands, in fairness. I mean, that, that insight that actually you use sort of vortices and highly intense airflow, uh, a- as, as the device seems to be quite good. It also strikes me as... Uh, uh, what I really want to understand, and there is a podcast about this, is how you break into that bathroom market. So did, did they attack paper towels? Did they attack the existing dryers? 'Cause the installed base of the Berkeley, Illinois World Dryer Corporation, you know, those things where you can... with a twisty nozzle at the front and a big ba-
- CWChris Williamson
Can also do your hair as well for some reason. Yeah.
- RSRory Sutherland
Yeah. Well, but with the Dysons you can also do your genitals, can't you?
- CWChris Williamson
(laughs)
- RSRory Sutherland
If you need to dry your genitals. Uh, so, you know, it's, it's, it's horses for courses.
- CWChris Williamson
But you'd have to... you'd somehow have to-
- RSRory Sutherland
Have to straddle the-
- CWChris Williamson
... slide in sideways. Yeah, you'd have to get in sideways, wouldn't you? (laughs)
- RSRory Sutherland
It's a horrible thought. Um, (laughs) but actually, funnily enough, the Dyson, um, one thing with, um, wh- which is a use of a hair dryer is about one time in 100 when you have to give a talk and you have a minor chino accident when going to the loo befo- before your talk, which is, by the way, the most frightening bit of public speaking. And I had that happen once, only once, and the dryer was totally unsuited. No, in fact, it wasn't even a urine-related accident. It was a, it was a washbasin-related accident where the washbasin catapulted a load of water into my groin, okay? And I was left having to go on stage in about five minutes and there was a glorious natural solution, which is when I came out of the loo in a total state wondering what to do, like whether to turn my cardigan into a mini dress or something, it actually started pouring with rain. So I simply went outside the hotel, stood in the rain for five minutes, so I was all oversoaked and then went back in again. So I got away with it. That wasn't even urine-related, I hasten to add. It was simply water.
- CWChris Williamson
Very, very fortunate from you.
- RSRory Sutherland
But that is one of the, that is one of the public speakers' greatest fears. Yeah.
- CWChris Williamson
The final, the final urination prior to speaking-
- RSRory Sutherland
Mm-hmm.
- CWChris Williamson
... making sure that there's no dribble, making sure that there's no aggressive bathroom tap.
- RSRory Sutherland
That's why there are no public speakers over 60, I suspect. (laughs)
- CWChris Williamson
(laughs) That prostate's going. What, what are your, um-
- RSRory Sutherland
Yeah, exactly.
- CWChris Williamson
What are your views on the numbers on credit cards?
- RSRory Sutherland
Oh, I've made those fairly explicit. That's an extraordinary design failure, with one exception actually. I'll, I'll give American ex-... Actually, I won't show my card 'cause then someone will nick things and start chopping.
- CWChris Williamson
(laughs)
- RSRory Sutherland
With the exception of American Express, who now sometimes print the number in big on the back so it's readable, okay? They have a four-digit CVV which is actually, um, properly printed on the front, not in some blurry ink on the signatures strip, okay? With the exception of American Express, credit cards were never really designed for the number to be read out at all. 'Cause when they first came out, it was the rumble strip, okay? And the fact that very few designers have rethought the design of the card so the number is tolerably easy to read and the CVV number doesn't, um, basically blur off. If you've ever been in a, in a slightly sweaty climate and you've just carried a credit card in your shirt pocket, the chance of the CVV number remaining legible is minuscule. And the, the, the shiny things wear off a credit card, so that at some occasions you have to hold it at a strange angle to a bright light to have any chance of reading it. But eventually... One of the weird things about design is that one of the cases where functionalism loses out to aesthetics is undoubtedly caused by the fact that most designers are 20... And I, and I, and I... Just to be clear about this, I really venerate design and designers, so I'm not having a go. But most designers are 27 years old and they're working with something like a 38-inch 4K monitor, okay? On their desk. And what looks good on that is not necessarily readable in the real world, because, you know... I mean, okay, I mean, I, I, I actually have to leave th- this pair of reading glasses, um, on my desk at all times because if I need to read a credit card number or if I need to read... And ready meal, ready meal, um, uh, um, recipe instructions, you know, cooking instructions are unbelievably bad. I mean, you could... As I said on Twitter, I think, you know, you need an arc light and the Jodrell Bank telescope to have a chance of actually reading them.
- CWChris Williamson
(laughs)
- RSRory Sutherland
And, you know, and, and so these little things about usability in everyday life, the Don Norman, th- the... You know. To be honest, I, I, I vote for D- Don Norman. Um, he's still alive, isn't he? He's about 80. But I'd vote for Don Norman for president, 'cause I think a four-year term where the government was entirely dedicated to improving the design of everyday, uh, of everyday activities and everyday things would, would have be-... And something to that, that's Denmark, isn't it? The great thing about those Scandinavian countries, I mean, if you think about it, the climate's shit. Uh, you know, um, uh, you know, there are too many fucking trees. But the one upside is that everything is thought out. You know, Copenhagen Airport, you don't have a single moment of anxiety or, or confusion, you know? And I, and I, and I think that's why they're ha- so happy with large degrees of socialism, really, which is you don't mind paying a lot for government services if they're really competent.
- CWChris Williamson
Fair point. Taleb says that social science is a bollocks and unfalsifiable, and yet your career is being built on behavioral psychology insights.
- 30:00 – 45:00
It's a pulling, it's…
- RSRory Sutherland
one discussed what job they wanted to do until the third year. The third year, beginning of the third year, you actually had to put in some applications for shit. Nobody discussed that shit at all year one and two. Nobody was talking about... I didn't know... If someone had said, "I want to work in banking," I'd go, "Why do you want to sit behind a glass screen with a fucking pen on a chain?" Right? No one... And this is 19... This is not... This is, this is less than a lifetime ago, okay? Now, okay, you know, we acknowledge the fact that if you went to, you know, Oxbridge or you went to a Russell Group university, your employment...... you certainly, you, you thought that your chances of being unemployed were quite low. That, that was certainly true in the late '80s. But there wasn't this hyper competition that was going on. Nobody said, you know, an MPhil is the new, uh, you know, is the new BA or on that level.
- CWChris Williamson
It's a pulling, it's just a pulling strategy. That's all it is. It's just a da- it's just a dating strategy.
- RSRory Sutherland
Well, it's, it's-
- CWChris Williamson
Get your MPhil, up, up your Tinder rating, fine.
- RSRory Sutherland
Yes. This is kind of scary, isn't it?
- CWChris Williamson
Oh, yeah. Right. We're gonna play-
- RSRory Sutherland
But doesn't, right-
- CWChris Williamson
Rory, we're gonna play-
- RSRory Sutherland
Doesn't, like, do... Are, are men bothered that much about the educational level of women to the same extent?
- CWChris Williamson
So it doesn't look-
- RSRory Sutherland
Or the earning power?
- CWChris Williamson
It doesn't look that way, no. Um, a man... Uh, the, the problem is, right, that women are the gatekeepers to sex. Men are always gonna be the sexual protagonists. And given that, for the most part, we all have that friend who would take whatever he can get. And I think that that kind of shows out in more than just physical characteristics as well. Plus, there's a classic dynamic of resource acquisition and kind of resource giver from the-
- RSRory Sutherland
(coughs)
- CWChris Williamson
... ma- the male side, right? It's-
- RSRory Sutherland
(coughs)
- CWChris Williamson
... very rare to find a man who wants... Despite what my Instagram bio says, not many men want to be a trophy husband. Um, it just seems-
- RSRory Sutherland
No.
- CWChris Williamson
... emasculating and all the rest of it. Right. We're gonna play a game. Rory, we're gonna play a game. It's called bull or bear. And you're going to-
- RSRory Sutherland
Right.
- CWChris Williamson
I'm, I'm gonna give you, uh, some different things and you're gonna tell me whether you're bullish or bearish about it and a, a little bit of an explanation why.
- RSRory Sutherland
Fabulous. Fabulous.
- CWChris Williamson
QR code menus.
- RSRory Sutherland
What, what, for track and trace or for reading the menu?
- CWChris Williamson
For, for, for being in a restaurant, QR code menus.
- RSRory Sutherland
Bear.
- CWChris Williamson
Bear. Good. Uh-
- RSRory Sutherland
Adds, adds a completely unnecessary level of complexity and means... What restaurant has ever given you a menu that's two inches wide and four inches deep, for fuck's sake?
- CWChris Williamson
(laughs) It's all the rage in Dubai out here, and there's a nu- a number of different ways. Do you have it in a single feed, like an infinite scroll thing? Do you have it across multiple tabs? Do you have photos of the food? If you have photos of the food, you gotta scroll for longer. Are you... Do you allow people to order on the browser? Do you allow, do you have to wave the waiter over? It's very, very complex.
- RSRory Sutherland
There are two useful things about it. One, there is a heuristic that only fast-food joints have photographs of food for some reason, okay? Now logically, you'd always have photographs of food on the menu, okay? To prevent you ordering something that you hated the look of when it arrived. But there's a heuristic that menus are textual in upmarket joints. You know, it's okay for KFC to have a photo. It's okay for McDonald's to have a photo. Um, but you don't do that at, you know, the man ... where I have a cat season right now. And so, the QR code menu would allow you to look at photographs. I would also argue that you might, um... but then once you're in a large group of people, this doesn't really work. I mean, the QR code menu in a large group of people is gonna be a flaming disaster because all it takes is one person to be technologically incompetent in the whole process of ordering.
- CWChris Williamson
You've got a big bottleneck there.
- 45:00 – 1:00:00
Good. Uh, Boris calls…
- RSRory Sutherland
going in economy, and, uh, you know, the client's on another continent, that essentially means that, you know, half your profit's going in travel costs, as it were. And so there's something very, very interesting about this. And also because business, business exchange, there was no normal mode. Other than going to the pub after a meeting or going out for a meal, there was no informal means of business-to-business communication, okay? So businesses themselves were optimized around coffee shops and corridors where you had a blackboard so people could enjoy serendipitous encounters. When you look at B2B communication, it was either incredibly cold and textual, it was like email or a text message or a PowerPoint deck or a, you know, or, or a spreadsheet, more likely, okay? Or it was face-to-face, which was hugely expensive and time-consuming, and you could only face doing three of those a week. And what, what... it was a bit like having a weird world where you had, like, limousines and you had buses, but you had nothing in between. You know what I mean? You didn't have private cars. And this, the fact that business communication has become... Uh, my volume of email has halved, and most of my email now is just about arranging Zoom calls. And Marshall McLuhan would say Zoom is a warm or hot form of communication, whereas other than face-to-face, all the other business forms of communication were cold. So this actually ch- I, I find it much better, because you can actually go off on a tangent on a Zoom call. It makes things much less left-brained. And I think, I think it's a huge gift.
- CWChris Williamson
Good. Uh, Boris calls you up tomorrow and says, "Rory, mate, I'm struggling here. Behaviorally, how can we improve the public's view of COVID restrictions?" What do you say?
- RSRory Sutherland
I don't know yet, and I'm still puzzling, because I think it's possible to keep the disease in abeyance with some very simple heuristic rules which obey... We, they need to be visible in their breaking. So it needs to be visible when people break them, okay? Um-
- CWChris Williamson
What's that mean? What like?
- RSRory Sutherland
I don't... Um, I'm generally pro-mask wearing, on the grounds that it seems to make sense. And I also b- believe the theory of Monica Gandhi that there's a certain, um, variolation effect to mask wearing, which is if you become minorly infected with a small dose of COVID, the likely outcome is not that you become severely ill, it's that you become immune with minor ill effects. So I think masks work twice, not just by preventing infection, but by reducing the initial dose. Um, but bear in mind, this is not a, not a universally held belief, and I'll probably get kicked off Twitter if I say it. I'm not sure. Uh, but I, I, I generally believe, I think there might be a double win, uh, in that respect. I also think masks benefit other people as well as you, so there's a double win in that sense. So if you look at those dimensions, masks might be working in H different ways rather than just one.
- CWChris Williamson
And by doing that, it's quite obvious when someone breaks it, right?
- RSRory Sutherland
But my, I mean, my neighbor in Fulham, my neighbor in Fulham, her, her, her next, her upstairs neighbor in the flat above basically held a party for eight people, uh, the night before last. Now here's an awkward thing in a country like Britain. What do you do? You don't dob on your neighbor, okay? Right? It's, this isn't, th- this isn't like East Germany. And even she, who doesn't like her neighbor very much, goes, "Okay, my relationship would be impossible if I were known to have dobbed on my neighbor and rung the police." Um, so you need some degree of voluntary compliance, and among the young, that's disproportionately difficult because they don't, you know, they don't really perceive much risk. And I, I don't know quite what to do there, but I think it'd be possible to close certain mass events and to have, um, some sort of... We don't know the extent to which private parties are actually causing the hotspots, and I think it might be quite high. So maybe what you want to do is get people out- is actually ban parties at home and open pubs under, under stringent c- conditions.
- CWChris Williamson
Mm.
- RSRory Sutherland
... um, or create outdoor spaces. Um, it looks like the rate of outdoor transmission is pretty tiny, to be honest. Um, um, there are also things about ventilation which nobody's investigated. There are also things about sprays and ultraviolet light which nobody seems to have investigated. (gasps) So I think the mask is important because it acts as the bottleneck of transmission, okay, which is the mouth and nose. Um, we don't seem to have the level of contact-based transmission that people anticipated either, do we? And by which I mean we would have noticed if postmen had started getting very ill or something like that.
- CWChris Williamson
(laughs)
- RSRory Sutherland
Um, but I... Uh, it's a really interesting question, and I, I think we should look at ventilation, I think we should look at, uh, at sprays and, um, virucides, and also air filters, uh, indoors, and we should also look at, um, uh, uh, you know, uh, obviously masks, ventilation, and ultraviolet light and other, other, uh, virucidal things. So not just the mask. It seems a bit weird that we've focused purely on handwashing and, and masks and haven't investigated, uh, you know, sprays which can kill viruses quite effectively. Uh, what el- what else? I mean, the, the... I'm a bit sympathetic with the government, and the reason for that is the only people who seem to know exactly what we should've done are all working in journalism. Um, you know, journalists seem to have a ludicrous idea about how simple this is and how, uh, you know, it was obvious we should've locked down early. Actually, it looked like the rate of infection was already falling before lockdown was imposed simply because of voluntary measures, for instance. And in London and places, the absence of tourism, you see, would've been highly significant. So I mean, you know, it's incredibly difficult. What it- what this shows, so what this shows in total is that we're used to the pretense of knowing what we're doing, okay? Now I don't think we know what we're doing most of the time, but most of the time we have a discipline like economics which allows us to pretend we know what's going on, and so we can post-rationalize lots of outcomes, and that allows the kind of scientistic brigade to become overconfident. This is genuinely a case where, okay, we will know in about two years' time what we should've done, in, in defense of any government. I mean, the Belgian government, the French government, the Irish government, right? I mean, there may be things like Germany had a very bad flu season, okay? The UK didn't. Now those things can actually affect susceptibility going forward. So we look at the Germans and we naturally assume that's because of w- you know, it's like racism actually because they're highly competent. But the Austrians similarly had, uh, you know, very, very, um, light. Switzerland, weirdly, has now become very severe in the second wave, okay? So first of all, we often make total generalizations about countries and, and based on national stereotypes, you know, uh, w- where we... No, I mean, actually I think Greece had a fairly light COVID thing, but no one... Greeks are incredibly bright people, but nobody ever says, "We should look at the Greek model," okay? Because that's just not what you do. Um, er, very, very good medics actually, uh, generally. So o- so one of the interesting things is that there's an awful lot of national stereotyping going on, and there's an awful lot of generalization going on. We're typically looking at things at a national level which may not even be the helpful way to look at things at all. Maybe we should've localized more. But I, I, I just wanna know if anyone has got a solution for that fact of how you stop your neighbor having a, your younger neighbor having a party under lockdown without dobbing them to the cops, um, uh, strikes me as a really interesting question. Now in the first phase of lockdown you can do that because simple social stigma will be enough, but that's getting increasingly difficult. And I, and I, and I generally don't... Uh, I mean, my, my view is that, you know, at some point, we'll, we'll, we'll know what we should've done probably. It might even be a year and a half, two years. 'Cause there are really weird things. Why is Switzerland having a big second wave suddenly? Um, uh, you notice huge discrepancy between, say, Oman and the United Arab Emirates. Um, you know, certain, certain countries... New Zealand, of course, had the benefit of getting it late, w- and it's a bloody island in the middle of nowhere. So we're going, "Isn't the New Zealand government brilliant?" Well, yeah, they, they are brilliant, okay? They did it very well, but they had opportunities which other people didn't. Um, so it's kind of, you know, it's kind of complex. The other thing, by the way, is that if you lock down... Uh, it's worth remembering that if you lock down too soon and people don't have enough time to prepare for it, you end up with a lot of people breaking the rules, right? You know, if you basically said, "Right, we're locking down at midnight tonight," you would've ended up with mayhem on the roads with everybody who was at their London place trying to get to their holiday home, everybody who was separated from their spouse trying to get back home. You know, so at some point, you have to actually have a delay for behavioral reasons, not for epidemiological reasons.
- CWChris Williamson
Yeah.
- RSRory Sutherland
So this shit is not fucking easy, because you're at the intersection between ethics... I mean, I think we should've done more deliberate infection experiments actually on the young. Not, not, not, I mean, not, not at the very early stages, but, but, but I, I don't think... I, you know, I think some, some challenge trials, um, you know, a few months ago would've made sense actually to understand more about the, the, the... 'Cause we know, because it's asymptomatic for the early stages, we know very little about the early stages of development and what separates out a, a, a, an illness with severe outcomes to an illness with trivial outcomes.
- CWChris Williamson
Why do you think people are prepared to pay 10 times or 100 times the price of a book for a course on the same subject? I've been fascinated by this recently, so a lot of inter- internet entrepreneurs-
- RSRory Sutherland
Go for it, yeah.
- CWChris Williamson
... are creating a course of how to have the perfect this or how to do your... How, how to do, how to do habit setting and goal setting is a very popular online course where people are prepared to charge 100, 200, 300 pounds and add a community on the side, and yet you can get Atomic Habits by James Clear for, for a tenner.
- RSRory Sutherland
(coughs) Uh, yeah, I, um, it's a bit of a Nespresso effect, I suspect, because when you frame something in the field of education... I mean, I can remember at work occasionally, I'd buy a book for the team or, you know, a b- a behavioral science book, and I'd claim it out of the training budget, and that was considered actually a bit of a, you know, "I'm not sure you can do that." I said, "It's a book. It's fucking training," right? Why is it okay to claim for some person to come in and talk to us all, but it's not okay to buy a- buy everybody a book?
- CWChris Williamson
Potentially from the person who was giving the talk, even.
- RSRory Sutherland
Uh, yeah, no, no, no, absolutely, and there'll be more in their... But it's not like when I wrote a... I- as far as I know, when I wrote my book, I was not aware of saying, "Well, I've gotta hold back on these five things 'cause they're far more monetizable if I give a talk or a training course." It's not like you hold back in your book. You give everything, you put everything into your book you possibly can and hope it's enough to warrant the length, which it rarely is. I mean, a hell of a lot of books, to be honest, tail off towards the end, you know, there's a bit of barrel scraping going on to get it across the 80,000-word mark, right? Um, but I, yeah, I've never understood that, to be absolutely honest. Um-
- CWChris Williamson
Have you noticed it? You, do you know the, the particular sort of effect that I'm talking about here?
- RSRory Sutherland
Syn- synchronicity has a value. The fact that we're doing something along other- along with other people seems to have a value that we apportion some emotional value to, the fact that we're doing something with other people. Um, the... (laughs) Part of it is that the Richard Thaler experiment about beer, you know what I mean? Where he said, "You're on a beach, you've been parched, you're with your mates." Very famous experiment in behavioral science. And, um, you're on a beer, uh, you're on a beach, you're getting pretty thirsty 'cause you've been on a hot beach for the last three hours, and your mate says, "Okay, I've noticed a place along the beach that sells chilled bottles of Heineken," right? "Okay. Tell me how much you're willing to pay for a bottle of refrigerated Heineken, and if the price is below your maximum willingness to pay," okay, "I'll buy you a bottle and bring it back." Right? Now, the point about the along the beach is that you're not enjoying the ambiance of the place selling it. If you say shack selling chilled Heineken, this is in the 1990s or earlier, might have been the '80s, people are will- are willing to pay something like $1.59 for a bottle of c- chilled beer. If you describe the place as a boutique hotel, they actually, um, were prepared to pay $2.40 or something like this. Bear in mind, you've got to adjust for inflation, so it's like $5 or $2.80 or something like that, you know. Now what's weird about that, the utility they derive from the consumption of the beer, which is a branded bear and refrigerated in both cases, is identical, but they accept that given the overheads of a boutique hotel relative to the overheads of a shack, you should be prepared to pay more. So there may be a degree of labor component to it, which is, look, the mar- we all know that the marginal cost of a book is zero, um, whereas, okay, this course is actually involving effort on your part and it's taking up your time.
- CWChris Williamson
Mm. So my, my thought on it, the reason that I propose people are prepared to pay so much more, 10 times or 100 times the price of a book for a course that achieves the same thing, is that people are concerned with outcomes rather than-
- RSRory Sutherland
Yeah, ah-
- CWChris Williamson
... rather than they are with the process of going through it. If you were to tell me or tell anyone-
- RSRory Sutherland
So what you're saying is the course gives you a bit of paper that says you completed the course.
- CWChris Williamson
No, more that-
- RSRory Sutherland
'Cause you can't put on your CV, "I've read a book." Weirdly.
- CWChris Williamson
I read, I read, I read Alchemy. No, it's more that, um, what people read specifically in the, uh, self-development or non-fiction world, the reason they read partly is for the enjoyment of reading the book, but more so for the outcome and the new life that they think they're going to be able to achieve with the insights from Rory Sutherland's Alchemy or James Clear's-
- RSRory Sutherland
(laughs)
- CWChris Williamson
... Atomic Habits. And by taking the course, what I think that they presume they're going to achieve is more likely, more compliant, more effective outcomes. So you're paying for the new world that you're going to enter, and the presumption is that by taking the course, your outcomes are more assured.
- 1:00:00 – 1:06:27
But, you know- …
- CWChris Williamson
part of it as well. Last thing-
- RSRory Sutherland
But, you know-
- CWChris Williamson
... last, uh, last, last, last question, Rory. Uh, you say to be brilliant you have to be irrational. What's that mean?
- RSRory Sutherland
Oh, that you c- that nearly all really s- just to give an example from the field of entrepreneurialism, nearly all disproportionately successful businesses are disproportionately successful, not despite of, but because of some seemingly irrational or nonsensical component in their offering. So, um, the argument would be that, um, most people have a post-rationalized sense-making narrative of how a business works and what's important, okay, which is almost certainly wrong in some dimensions. And so if you... Uh, the example I always give, the most extreme case of this, is Dyson, okay? If... A- and I admit this of myself, that if James Dyson had come to me in the 1980s or nine- 1990s and he'd said, "I think there's a market for a 700 pound vacuum cleaner." (laughs) Okay? I would have said, "Well, let's have a look at the market, shall we, and do a bit of market scoping, and let's do a bit of market research." And if I'd asked people, "Would you pay 700 pounds for a vacuum cleaner?" Answers would have varied between, "I don't think so" to "Fuck off!"Um, and, um, if I'd looked at the existing vacuum cleaner market, I would have seen that Miele was ... It was a grudge purchase. It was a distress purchase. Nobody enjoyed buying a vacuum cleaner. You know, you had a Miele at around 250 quid. You probably had a Henry at around 80 or 100 or 110 or whatever they are. Maybe, maybe the Miele stretched to 300. But you basically go, "Okay, Jim. Look, mate, don't give up the day job." And then if James had turned back to you and said, "But wait, you haven't heard about my 400-pound hair dryer," you would have had him escorted out of the building, okay? And so what I'm saying is that, um, conventional marketing approaches probably encourage us to produce products that are kind of okay. But the point is, people have already solved ... People aren't interested in okay because they've already solved the problems that okay solves. What they haven't solved is the problems that weird solves. And so, you know, the, you know, the, the Uber map is an example of what I call psychologic. It's ingenious because it doesn't increase the speed at which your car turns up, but it massively reduces the pain we experience in uncertainty while waiting for it to arrive. You know, and, and I think, uh, you know, there are huge, huge things you could do, um, huge things you could do which would effectively make it possible. Um, we don't have metrics for the human emotions, and so we're trying to improve human emotional state by optimizing things which don't really correlate neatly at all. You know, we're trying to optimize speed and time and cost and distance and all these things. Like HS2, um, right? We're trying to optimize an engineering problem as though it will solve a human emotional problem or behavioral problem. But we don't have metrics for the things that matter. We don't have a metric for uncertainty. We don't have a me- ... We're not even measuring with High Speed 2 the end-to-end journey, right? 'Cause I've made the point repeatedly that you could incre- enormously reduce the, the journey time from London to Manchester not by actually making the train faster, but by having a service where if I've booked a pre-booked ticket to Manchester, and there are empty seats on the train 20 and 40 minutes beforehand, I can book one of the earlier tickets, right? If you let me do that, okay, I ... You can reduce the journey time to Manchester and increase capacity because it's better yield management, it's better load balancing of journeys if you allow people to go earlier. Don't let people go later. If you miss your train, stuff, stuff it. You can pay more. A lot ... You know, you can pay a full fare. But if you said, "Actually, there, you know, there are 50 empty seats in first class on the train that leaves 40 minutes before your train. If you pay us a fiver, you can jump on one of those," right, Virgin makes money, I save journey time hanging around Burger King for 40 minutes in, you know, at Euston, right? Everybody wins. It costs 500,000 to develop the app. Instead they're spending 60 billion on the sodding trains because they're measuring the wrong bloody things. I like the time on the train. Most Mancunians don't want High Speed 2 'cause they're fine with things as they are. And the reason is that most people don't travel to London often enough that a, you know, a let's say a sort of, I don't know what it is, I guess a 40% reduction in journey time or a 30% reduction time in journey time just doesn't make that much fucking difference.
- CWChris Williamson
The point that you made about Uber, it's one that I've heard you make before. Have you heard of teleo-anticipation?
- RSRory Sutherland
Now teleo is as in teleological.
- CWChris Williamson
Yes, correct.
- RSRory Sutherland
So it's go- goal-based anticipation. And we what? We find it painful, do we?
- CWChris Williamson
Yeah. So very much as you know about, uh, the way that Uber works or the way that, uh, Disneyland works where they say, "10 minutes from this point, five minutes from this point," it's not necessarily about the wait. It's about the ability to anticipate. But teleo-anticipation was a, a term coined by Hans Volkhard Ulmer to describe our knowledge of how an eventual endpoint influences the entirety of the experience, and he used e- endurance sports as the medium. So researchers in the field have probed what happens when you hide the finish line, surreptitiously move it, or take it away entirely. So there's this very famous backyard race which you might be familiar with where, uh, they have to run 4.16 miles every hour, which is like 100 m- 100 miles per 24 hours. But the point is that they just keep going until everybody stops, until the last person is standing. So there's no end to this endurance event. They just run this loop and run this loop and run this loop. Is that us running over, Rory? Is that your next call for me?
- RSRory Sutherland
I think that is. Uh, that's probably ... So, if there's probably someone panicked.
- CWChris Williamson
That's fine.
- RSRory Sutherland
That is actually fascinating because if you think about it, we knew about that teleo-anticipation thing. If you look at that photograph of Bob Dylan waiting for the Howth ferry in-
- CWChris Williamson
Rory?
- RSRory Sutherland
Yeah? Oh, I need to be on the next call. Okay.
- CWChris Williamson
Um, uh, Rory, thank you for your time.
- RSRory Sutherland
Uh, you'll see that they brilliantly ... A- alongside the car qu- ... Uh, okay, I'll leave you ... I, I better leave you now. I'm sorry about this.
- CWChris Williamson
No worries. See you later, Rory.
- RSRory Sutherland
Bye-bye.
- CWChris Williamson
Thank you, brother. Bye-bye. (instrumental music plays)
Episode duration: 1:06:27
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