This episode of Hub Dialogues features host Sean Speer in conversation with Rory Sutherland, the vice-chair at the advertising and PR agency Ogilvy, a columnist at The Spectator, and author of the must-read book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life.
They discuss how behavioural science can inform policymaking, the importance of going against the grain, the limits of rationality, and why a doorman is not so easily replaced.
You can listen to this episode of Hub Dialogues on Acast, Amazon, Apple, Google, Spotify, or YouTube. The episodes are generously supported by The Ira Gluskin And Maxine Granovsky Gluskin Charitable Foundation.
SEAN SPEER: Welcome to Hub Dialogues. I’m your host, Sean Speer, editor-at-large at The Hub. I’m honoured to be joined today by Rory Sutherland, whose day job is as vice-chair at Ogilvy, a longstanding global advertising and marketing firm where he leads a practice dedicated to behavioural science. But that’s only scratching the surface. He’s taken his experience and knowledge with behavioural science, consumer and market trends, and broader societal norms and become a leading public intellectual on psychology, human nature, the limits of rationality, and on and on and on. He writes a regular column for The Spectator, and in 2018 published the must-read book, Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life.
I first encountered Rory’s thinking and ideas in his 2019 episode of EconTalk, which listeners will know is a favourite podcast of mine. I’ve since read many of his books and columns, watched his TED talks, and listened to his various podcast appearances. I’m grateful to speak with him today about, among other things, what he thinks economics is missing about the world and what Bob Dylan ultimately gets right. Rory, thanks for joining us at Hub Dialogues.
RORY SUTHERLAND: It’s a huge pleasure, and I’m glad to meet a fellow fan of Russ Roberts’s podcast, EconTalk, which I think is absolutely and unfailingly excellent. It’s also interesting that Russ has written a book also questioning what you might call hyperrationality in economics and in decision-making, which I think is a very, very good book indeed.
SEAN SPEER: Indeed, we were grateful to have him as a previous podcast guest, and I’ve been long looking forward to this conversation. So let’s dig in. Rory, you’ve been called the quote, “biggest influence in marketing,” in part because of your capacity to bring behavioural science to bear on the factors that guide and shape consumer preferences. Let me ask a two-part question. First, what did your industry do before the advent of behavioural science to underpin its work? And second, what was your great insight? How did you come to see the opportunity to transform the industry by incorporating the thinking and evidence from the world of behavioural science?
RORY SUTHERLAND: I’m not 100 percent sure how much I’ve transformed an industry. What I hope I’ve done alongside a lot of other people in this field—I wouldn’t claim any particularly unique role, except perhaps as a bit of an impresario—is to give people permission in decision-making. Not always to have to pretend that everything is a quantitative optimization problem with a single right answer that you can demonstrably prove. And as a consequence of which I hope I’ve just given people permission to be a little more creative, and as a consequence of that, thereby expand the potential solution space. It’s particularly, I think, pertinent in public policy, but it also applies to large businesses or organizations to a great extent, much less to say consumer decision-making, but the requirement to justify and defend your decision-making process to everybody else has an opportunity cost attached, okay?
Now, it’s a good career move because, regardless of the consequences, you’ll never get fired for being too rational. It’s much, much easier to get fired for being irrational than it is for being unimaginative, okay? And so, we tend to have this assumption that quality of reasoning is a good proxy for quality of outcome, and I just don’t think that’s a safe assumption. Not only when you do that, do you, by and large, deny the possibility of magic—because obviously economics as a discipline has a kind of mental trap attached to it which is everything has to be seen in the light of a tradeoff. And not everything needs to be a tradeoff. Sometimes you can do wonderful things that actually cost very little and benefit lots of people in multiple directions, okay?
So first of all, I think there’s a natural constraint. There’s the assumption, that I think is false in complex systems, that the size of the intervention is proportionate to the size of the effect. And again, I don’t think that’s true in psychology or in any other field which has complexity running through it. So that idea that the opportunity cost is that when everything has to make sense and you have to pretend this pre-rationalization in order to demonstrate the quality of your reasoning, you massively limit the solution space; nothing magical is allowed. You also, by the way, limit possibly the valuable role of luck, which maybe in some ways—I mentioned creativity as a valuable thing, that is an opportunity cost of excessive deployment of rationality and deference to rationality. I also think what you might call serendipity is probably another one. That actually, it’s very difficult for anybody in public policy or business to go, “I haven’t got a clue what we should do here. So, we’re going to do these five things and actually see which one flies.”
And, I mean, ironically, of course, that was exactly what Microsoft did. If you go back to the early history of Microsoft, it was basically betting on about four operating systems in parallel with Windows, the one possibly least expected to succeed. But ultimately what we do, I think, is we—first of all, there’s quantification bias in that we optimize everything for what we can measure, not for what’s really important. And that’s where the whole train joke comes from. The idea that we have to focus on making a train faster because that’s a quantity. Whereas making a train journey more enjoyable, that involves quality, and that involves subjectivity, and we don’t really have any numbers or metrics for it, and therefore, we naturally favour the thing that’s quantitative.
Which, if the objective is in some way behavioural or psychological, is a pretty unsafe assumption. Actually, I think the relationship between what you might call numerical quantities and psychological reactions is anything but simple and linear. And so, this is what I’m effectively saying, is we need to allow space for things for which there is no preexisting rationale. Or, to put it another way, there may be more good ideas we can post-rationalize than there are good ideas we can pre-rationalize. And so I think this is a point—by the way, your fellow Canadian, who you must get on the show at some point, who’s called Roger L. Martin, who is the Dean of the Rotman School in Toronto. You probably know of him.
I’ve always invited on, by the way, as this exotic international guest to shows in Canada and Australia. Whereas, I myself are convinced that Canada and Australia are two of the most intellectually interesting places on earth, and that we really in Britain should be actually importing more Canadians. But Roger L. Martin makes a very, very good point that actually if you demand an absolutely watertight, logical, sequential, deductive case for a course of action in business strategy, you’ll never get anywhere really interesting. And he goes back to not only, I suppose, Aristotle, actually to a degree, because Aristotle cautions extensively on the limitations of the scientific method. But he also goes back to an American philosopher Charles Sanders Peirce, who made the same point, pointing out that actually, what he calls “abductive inference”, which is an active hypothesis, possibly an act of imagination or even of wishful thinking what if. That’s an essential part we can’t actually live with through deduction and induction alone because the future is not a mere extrapolation of the past above all else. But have you had Roger on the show? You definitely should do if you haven’t.
SEAN SPEER: I’m afraid we haven’t. That’s good advice. Our producer, who herself is a University of Toronto graduate, will have to take down that idea.
Rory, your answer just begins to scratch the surface on the evidence and stories and ideas reflected in your must-read 2018 book. If I had to condense it into a fundamental idea, one answer might be that you’re arguing that people in the world are irrational and so that models that start with the assumption that we’re guided by logic and rationality are going to fail. You write, for instance: “We discovered that problems almost always have a plethora of seemingly irrational solutions waiting to be discovered, but that nobody is looking for them; everyone is too preoccupied with logic to look anywhere elsewhere.”
RORY SUTHERLAND: Yes. Not only that, but when you come up with a possible solution which appears to have no rational parentage, no one’s comfortable trusting in it or wants to believe it. So there’s actually a two-fold problem. No one looks in the first place, and if someone accidentally finds, they’re treated with suspicion, if you like. And I realize that even in an advertising agency, you notice that the majority of people, not necessarily the older, more experienced people, are preoccupied with what you might call process validity. In other words, did we get here through legitimate means? And my view as an old hand tends to be, who cares how you solve the problem? Right? Okay? And, I mean, evolution works after all for a process of not totally random variation. It doesn’t seem to experiment very much with asymmetrical life forms, for example. But broadly speaking, evolution undoubtedly makes its progress through trial and error, or stochastic processes, if you want to get fancy about it, and a certain mental randomness. I really worry about the treatment of people with ADHD, because I’m not sure you aren’t medicalizing creativity when you do that. It slightly concerns me. Maybe it’s the education system that’s wrong, not the pupils in this case.
SEAN SPEER: Just on that point, Peter Thiel has observed that it may not be an accident that most of the world’s most successful entrepreneurs may be on the spectrum of sorts. That they are less prone to being responsive to social pressures to conform, for instance.
RORY SUTHERLAND: That that’s a very—I mean, there’s a wonderful Keynes quote, which is that “worldly wisdom teaches that it is better for the reputation to fail conventionally than to succeed unconventionally.” And you might argue that the people on the spectrum are less under pressure to conform simply because they’re in this blissful position where they don’t understand the rules. I mean, if you think about it—okay, if you take the derogatory phrase anorak, okay? I don’t know if you have that in Canada because it’s probably a slightly different climate, but a derogatory phrase in Britain for a nerd is an anorak, which is, when you think about it, an extremely practical but totally unfashionable item of clothing. Or at least until Canada Goose came along and started charging 700 bucks for them, okay? Which one, or Moose Knuckles, is that one of yours as well? You’ve done a fantastic job of turning extreme weather gear into a fashion brand. So congratulations on that one. But the interesting thing is that, when you think about it, the reason anoraks wear anoraks is that they understand the importance of warm clothing but refuse to bow to the pressure of the fashion industry.
SEAN SPEER: If we spend too much time focused on the rational and quantifiable and not enough time on the behavioural and irrational, what are the upsides of rebalancing things? Maybe to put it differently, if you’re right in the book and “the biggest progress in the next 50 years may come not from improvements in technology, but in psychology and design thinking,” what do you think the implications will be for, say, economics and society as a whole?
RORY SUTHERLAND: Well, I mean, I certainly think that economics is more concerned with procedural and intellectual neatness than it is in many cases with real problem-solving, okay? Well, let me give you an example where I think it goes hopelessly wrong. There’s a very strong urgent economics to treat all markets as if they’re the same. Now, it seems to me self-evident having worked in advertising for 30 years, that markets are very, very different in the way, for example, social relations may be involved in some cases. If you have a transaction with a strong element of reciprocation, there’s an awful lot of implicit value exchange going on that isn’t really captured by the economic models. But let’s take something simpler, which is probably quite pertinent—I don’t know if you’re in Vancouver or Toronto, but it’s probably quite pertinent to Canada—which is insane property prices.
Now, what is absolutely self-evident to me is that when people go and buy a house, because they’ve been indoctrinated into the idea, really, it’s the only big bet they can make in their life. It’s the only chance most people have of a lottery win. If you go to your bank and say, I want to borrow half a million dollars to buy IBM shares, they’ll tell you to piss off. But if it’s a house, they continue the conversation. So, what happens is, patently, if you observe people’s behaviour, they cobble together a deposit, then they find out how much they can borrow on top of the deposit, they add the two sums together, and they immediately start looking for property at about that price. Now, if we all bought cars that way, half of us be cruising around in Aston Martins, right? We don’t buy cars that way. We have a mental idea that according to how much I drive, how much I like cars, all manner of other qualities where in that market we want to sit. We don’t automatically go, “I’m definitely going to max out on this one.”
But in property, I mean, education is another area that’s totally deforming. I think Scott Galloway’s right in describing it really as a luxury good; the Ivy League brands are really on a par with LVMH and Hermes much more than they are with what you might think of as an educational provider. But this has been almost unbelievably stupid in that, for example, the price of housing isn’t really included in the inflation rate in the U.K. What? Okay, I mean, my younger employees, after we’ve paid them and they’ve paid tax, about half their money goes in accommodation costs, but that’s not an inflation rate? Like what? Okay? Okay.
Now, the other thing, I think, is that—so actually, I suppose what I’m saying there is I’m probably being a little bit of a Georgist. In that Henry George’s argument, which is that you can’t treat land the way you treat other forms of capital seems to me entirely coherent and sensible, and the extent to it, by the way governments, haven’t experimented with land value capture adequately. And the governments will award planning permission to people, which is effectively giving away many, many millions to a random landowner almost arbitrarily rather than attempting to capture some of that for the tax base. That strikes me as pretty damn weird. But this is another weird thing with economists, by the way. All the good economists, going back to Adam Smith, recognize that rent-seeking was a pretty bad thing.
And yet, strangely, economists never really have a go-at-rent today. The shareholder value movement effectively prioritizes the rent seekers of an organization over either the customers who are providing the money or the employees who are doing the work. They’ve never really had a go at landlords. This was evident to Adam Smith, I think, wasn’t it? That rent-seeking is fundamentally a bad thing because what you are seeking to do is effectively earn the fruits of other people’s labour by monopolizing something essential to their existence. And I’ve got a vague theory that one of the reasons you can spot extraordinary growth in economic prosperity over the last few hundred years is partly down to technologies that allowed people to escape from that rent-seeking. So, the car, for example, allowed you to shop where the hell you liked, but it also allowed you to open a shop in places where you weren’t forced to open a shop in the middle of town anymore.
So, I find economics, by the way, weirdly inconsistent in that it always seems to side with the rich. It always seems to be weirdly sympathetic towards saving rather than spending, for reasons I’ve never fully understood either. I’ve got a little bit of sympathy for the Mandeville argument that it’s actually consumer extravagance that keeps the show on the road when it comes down to it. But for some reason, I suspect it’s because economists are basically quite tight. I suspect still there are a bunch of skin flints, and therefore it’s impossible for them to praise relative extravagance over prudence. But I’ve never quite understood why is this deferred expenditure good. Why are we indulging it? I don’t get it. Because patently we should tax wealth far more and we should tax income far less, and certainly we should tax land value far more than we do.
SEAN SPEER: Let me take up another of your insights about the economics field. In your conversation with Russ Roberts for EconTalk, you made another interesting critique of the economics profession. You said that it tends to like free markets for the wrong reasons. In particular, it frequently cites the efficiency of markets. But you say the real genius of markets is their inventiveness. What do you mean? What’s the key insight here?
RORY SUTHERLAND: The efficiency is to some extent at odds with the inventiveness. If you have five people in very efficiently all doing the same thing, that’s extraordinarily wasteful. So, what this forces them to do is to effectively diverge their offering. And they may try a different product approach, they may try a different marketing approach, they may try a different slice of the market, but it’s the very need not to—there’s a beautiful description at London Business School by Jules Goddard, where he says, “Strategy is the ability to stay one step ahead of the need to be efficient.” Once efficiency actually becomes your competitive edge, you can’t cost-cut your way to growth, you won’t discover anything particularly exciting. And ultimately you’ll become more and more alike to your competitors, which will destroy overall value in the category.
It’s actually the fact that people are forced to be continually inventive to escape the narrow comparison of efficiency that’s actually produced most of the real gains of capitalism. It’s much more to do with biodiversity, variation, experimentation, and exploration. That’s the real glory of the thing. Let’s be honest, I mean, control economies when doing something very, very narrowly can be quite efficient at it, but don’t expect him to discover a better way of doing it; that’s not going to happen. And so, there is this—yeah, I think the phrase I used was that admiring capitalism for its efficiency is like admiring Bob Dylan for his mellifluous singing voice. You’re very much right to admire Bob Dylan, but probably for the lyrics, right?
SEAN SPEER: I promise we’ll come to Dylan before we wrap up. But I want to take up another of your critiques of economics, and it’s encapsulated in what you call the “doorman fallacy.” What is the doorman fallacy, and what are its broader implications?
RORY SUTHERLAND: I suppose the doorman fallacy emerges from quantification, but of a particularly pernicious kind, which is defining, let’s say, a person by a very narrow single function. Now, management consultants tend to be engineers. And in engineering, most things you can point to a thing and say, “What’s that for?” And get a single answer. And therefore, the better it does that thing, the better the thing it is, right? Now, evolved or complex systems aren’t like that. What’s your mouth for? Well, breathing through, it’s for eating with, it’s for drinking with, it’s for speaking with. And it also has ancillary sexual functions, I suppose if you really want to take it. Okay. But what I’m saying is there isn’t a single answer. Now, what the doorman fallacy does is it’s like a bunch of consultants who come into a hotel and they go, “Okay, what does the doorman do and how much does the doorman cost?” “Doorman costs x. He opens the door.”
Well, notably, I mean, at a very shallow level, that’s what a doorman does. He opens the door. So, what they do is they get in touch with their tech partners, with whom they probably have a kickback arrangement, fire the doorman, and replace him with an automatic sliding door opening mechanism with an infrared detector. They point out that where the cost is amortized over so many years, this is saving the company so many hundred thousand dollars. And they walk away completely content in the fact that by replacing a human with a piece of technology, they’ve improved efficiency and saved money. And then you come back six months after the consultants have left, and the rack rates down by 50 percent and there is a load of vagrants asleep in the entrance of the hotel because, of course, the doorman had multiple functions. Partly recognition, partly if you want to be a five-star hotel and charge five-star rates, you got to have a doorman hailing taxis, security, gossiping with other doormen about possible problem guests. There are multiple functions that doorman was doing if he was given a reasonable amount of freedom to pursue his own tacit knowledge.
There’s an awful lot of value a doorman can add way above opening the door. And so this business of this kind of engineering style reductionism of everybody’s function—and, of course, the ultimate aim is to some extent to make junior jobs fungible and replaceable because they’re defined so narrowly. That you therefore have to pay no premium for experience. You don’t have to—and it actually creates jobs which are almost mindlessly unpleasant because there isn’t really the potential to improve at doing them because you don’t have the freedom or discretion to actually find out better ways to do things.
And it’s what someone called, I think, being beneath below—you are either above the API or you are below the API. And this creation of looking at less well-paid jobs and basically reducing them to a very, very narrow functionality is a horrible thing because a good postman is inordinately better than the bad postman. And having the same postman all the time is 10 times better, trust me, than having a delivery firm where there’s a different courier trying to cover the district every day where he can’t find your house and can’t be bothered to actually look or ask anybody. And so, I think this effective urge to make everything reducible into simple systems, which either can’t be reduced that way or shouldn’t be reduced that way, is catastrophic in all manner of different ways. And it’s all to do with the justification. It’s all to do with the, what you might call the legibility or the comprehension. It’s not really to do with accuracy at all.
SEAN SPEER: Listeners are hearing just a sliver of your application of behavioural science in general and what you’ve come to call “psycho-logical” thinking to a number of different areas, including the conventional world of economics. And you’ve started to apply this expertise in training to issues that go beyond traditional advertising or economics, for that matter. For instance, you’ve recently co-authored a book on public transportation. What’s the connection here? How can insights from your world extend into the public policy world, including making our public transit systems more responsive to human needs?
RORY SUTHERLAND: Well, the first thing is just to rethink things, which—okay, virtually everything we do, and this implies as much to me as to anybody else, we start off plagued with assumptions. And if you dig back and ask why is it that we made those assumptions, you often find that the reason that originally pertained no longer really applies. Let’s take something which is absolutely stupid in transport, which is the season ticket, okay? Which has been rendered absolutely hopeless by dint of flexible working. But when you go back to the season ticket, what you discover is the reason is that, back in the 19th century—the word commuter, by the way, refers to the act of commuting your ticket. It was something you did, which was you effectively took a bunch of collective tickets and commuted them into one. And then it came to refer to the act of travel instead of the act of changing the ticket.
But that was all you could do in probably, in 1870, is you could issue an annual ticket or you could issue a daily problem. Well, now we have technology that can do far more intelligent pricing algorithms than that, and you can have really intelligent things which reward frequency without demanding daily attendance. But not many people are doing that.
If you look at the tax system, your great compatriot, Roger Martin, had this brilliant idea, which I think is absolutely inspired, which I think the Conservative Party of Canada nearly adopted, which is that the tax-free part of your salary, the tax loans you get shouldn’t be annual. It should be a lifetime thing. And instead of giving you, I don’t know what it is, 11,000 Canadian dollars a year free of tax, instead, he said, “The first, let’s say, 200,000 Canadian dollars someone earns in their lifetime should be free of tax,” which makes perfect sense because that’s a way of looking at people’s financial needs in, what you might call, not in a stupid aggregate snapshot with a single representative agent who is weirdly derived from the average of everybody regardless of how different those people may be, but actually looking at the question through the lens of someone living life moving forward in time, which is currently the only option we’ve got with relation to time.
Now, that is a great case of just saying, “Okay, technologically, that might have been pretty difficult to do in the pre-computing age. Now, actually, it’ll be relatively easy. Now debates on what about people who move overseas, et cetera, et cetera are fine. But nonetheless, it’s a really, really interesting idea, and I don’t understand why in public policy these ideas get so little traction. It seems that we’ve taught economics as, again, just narrowing the solution of space or the Overton window so that the acceptable modes of high-status conversation are extremely limited to tweaking with interest rights, doing a little light fine-tuning with the tax system.
But the idea of doing something—okay, let’s just rethink this; let’s go back and ask what is it for and how can we better deploy it—doesn’t seem to get done. The other problem I think is a different one, which is, I think the reason why creative people are annoying is creative people don’t have a sense of proportion. But if you’re dealing with a complex system, you are wrong to have a sense of proportion because complex systems, including human psychology, don’t behave proportionately. And that’s basically phenomenology. It’s because of our evolved perception. We’ve evolved to pay attention to things which might be particularly decisive for survival. And that would go down to tone of voice or phraseology. You can say more or less what is ostensibly the same thing in two slightly different phrasings and get a completely different emotional response.
The difference between “There’s a draft, shut the door,” and “I wonder if you could help me, could you shut the door?” Et cetera. The difference in the way in which someone will respond emotionally to these things is monumental, even if the ostensible difference in the stimulus is pretty small. There are wonderful cases where, I mean, the example I always give is, if you want to win a customer for life and you’re a small shop, lock the door at five o’clock. And if anybody comes along and tries the door, make a big show of unlocking the door and saying, “I was just closing, actually, but why don’t you come in?” If you want to lose a customer for life, wait for them to come into the store and say, “I’m sorry, we’re closed.”
Now, the reason for that is because, although you might think this just refers to a trivial thing like closing time, in fact, the first one makes you feel high-status, valued, and respected. The second one, we don’t interpret as a, “Oh, they’re closed.” We interpret it as an insult. I bet if I were more attractive, richer, or somebody else, you would’ve actually opened the store for me. And we can’t help responding in those ways. And it’s absolutely foolish to design anything in a way that doesn’t acknowledge those human emotional traits. What’s interesting is that when we design a chair, we don’t just go, “Does it support the human frame?” We actually try and make it fit the shape of the buttocks—the evolved shape of the buttocks. But when we design a tax program, let’s say, we don’t account for the shape of our evolved psychology.
One of the things, by the way, tip to any government out there, and I can’t believe that none of them have done it. Nick an idea from consumer loyalty programs. Don’t reduce tax rates; never reduce taxes; give people a rebate at the end of the year. One, you haven’t created the expectation. Two, if you reduce tax rates 18 months later, everybody’s completely forgotten about the effect. If you have a rebate, it actually—first of all, people will spend interestingly and differently through receiving a lump sum. But secondly, it will actually retain its emotional potency year after year after year. Now, thirdly, by the way, you could ask some people to give some of their rebate back. So, you could actually say, basically, if you are feeling reasonably prosperous, why don’t you donate this to health care? Now it’s much, much easier to get someone to receive less than half a rebate than it is to get them to give money from nowhere. So these are just known psychological things, which, by the way, marketers have instinctively known for years but never really codified.
SEAN SPEER: Those are fascinating examples, Rory. I would just say in parentheses, the opposite is also true that I think one thing governments have discovered is that biweekly payroll deductions cause people to be far less averse to high-tax rates than if they were subjected to an annual payment for their entire tax bill.
RORY SUTHERLAND: Well, that’s a very good thought experiment because if you made people write a cheque, or at least realistically now go online and actually pay their tax every month, you’d pretty much end up with right-of-centre governments in perpetuity. I think that’s probably pretty fair.
SEAN SPEER: The payroll deduction, as I understand it, again, just in parentheses, was implemented at least in the United States during World War II as a means to finance the war machine. And Milton Friedman, the libertarian economist who spent time working in the Department of Treasury at the time, always lamented that it became a permanent feature of the tax system because, as you say, it would’ve created a constituency for tax reductions had it reverted to an annualized payment.
We don’t have a lot of time left together, but I just want to get two final questions to you that are a bit of a departure from some of the conversation today. The first is your regular column for The Spectator, which I’d encourage listeners to check out to discover just an extraordinary diversity of topics, everything from the prosaic to the profound, including the case for bottomless brunch, the future of work, unhappy vacations, and challenges facing electric vehicles. How do you decide what to write about, and how have you come over the years to accumulate such a tremendous scope for thoughtful analysis and commentary on such a wide range of topics?
RORY SUTHERLAND: That’s very nice of you to say. That’s a very good way of rebranding the fact that I skate over a whole bunch of unconnected themes. But no, what I discovered about behavioural sciences is it’s fractal. It doesn’t have rules, but it does have patterns, and the patterns recur at different scales, as with, I suppose, Mandelbrot sets. And so one of the things is, I always have this mantra, “Dare to be trivial.“ That we tend to think it’s a high-status discussion if we’re talking about interest rates, and it’s a low-status discussion if we’re talking about charging for public lavoratories. I have one very strong opinion on that, which is that we’d be much, much happier being charged for public lavoratories on the way out. Because it would then seem much less as if we were exploiting desperation, but anyway.
But you can actually take an insight into something extraordinary trivial, like how you sell chocolate bars, and actually scale it up. And equally, you can take things from one sector and translate them to another. We occasionally call it lateral category analysis, where you say, okay, interestingly, for example, train companies haven’t really thought of doing what airlines have all done, which is treating frequent passengers’ differentially well. Because things like waiting 25 minutes to check in are only mildly annoying if you have to do them once a year but are absolutely maddening if you have to do them once a week, hence frequent flyer programs. And in regards to your class of travel, you can check in at the first-class desk if you fly enough. Now, I’ve debated, why don’t you borrow that and actually make first-class rail compartments much more numerous but allow season ticket holders and frequent travellers, and the elderly, by the way, who I think have differential requirements for comfort and laboratory provision, allow the elderly to use them?
So if you’ve got an old person’s rail card or if you travel more than a hundred times a year on the railway, you basically sit in the comfy bit. Because, as I said, if you look at it, this is a very interesting thing, but my argument about high-speed rail is that in a mathematical model, saving a hundred people an hour once a year is the same as saving one person an hour a hundred times a year. It’s just an aggregate time-saving. And in the economic model, you put an economic value on the time saved on the totally erroneous assumption that time spent in transit is economically useless. It’s quite the opposite. It’s very productive, I find. As long as you’ve got Wi-Fi on the train, they’re completely different. One of them is life-changing. Oh, I can move to Canterbury and commute into London.
The other one is spending 60 billion pounds on what is a mild annual convenience. It’s not going to change anyone’s behaviour at all. And so one of the interesting things you can do is you can dissect quite a lot of what appears to be slightly weird or irrational in everyday life and you can find new ways to apply the insight. And you shouldn’t be frightened of looking at trivial things because, well, I’ll give you a perfect example. If you’d been in the Galápagos Islands sometime in the early ’90s century, you would’ve seen a man going around measuring the beaks of finches, and you would’ve thought, “What type of twat?” Okay? Right? I mean, there’s nothing more trivial than that, if any ways, okay? By the way, that’s in the British sense of the T word, not the North American sense. I want to make that absolutely right.
But actually, it is actually that Darwinian attention to detail that gives you the big idea. It’s much better actually going from small to big. What tends to happen, I think, is we go from big to small. A great book for all your listeners and I think it’s a guy called, James C. Scott, called Seeing Like a State. He’s anarchist, but he’s—what’s weird is he’s an anarchist, but he writes the best textbook justification for conservatism that you could ever read in many ways. But in many ways, I think going from small to big which I think governments to some extent lost the capacity to do because, yeah, this is fine in practice, but does it work in theory? I find that deeply worrying because I think—genuinely, I think looking at very small—one of the best things you can actually do, and this is why variation is so important, is go around and look for anomalies and then try to explain them.
SEAN SPEER: Let’s wrap up with the final question. You mentioned Bob Dylan earlier, and I’d be remiss if I didn’t ask about your August 2022 column for The Spectator in which you argued that quote: “Dylanomics,” as captured in his song lyric, “people don’t know what to believe in; they do just what’s most convenient, then they repent.”
RORY SUTHERLAND: I think it’s, “people don’t do what they say they believe; they do what’s convenient, and then they repent.”
SEAN SPEER: Pardon me. You say it has explanatory power for a lot of individual decision-making. I have to ask: are there any political or policy applications for Dylanomics? Can we, in other words, stretch the idea even further?
RORY SUTHERLAND: I think one thing you can do is stop always trying to change people’s minds in the hope that will change their behaviour. This is not an attack on the environmental movement at all. One of the things you got to be very careful about in this game is if you say someone’s doing a bad job of communicating something, they tend to assume you disagree with their objective. And that isn’t necessarily the case. If you say that, for example, some of the tactics of the woke movement are counterproductive, that’s a perfectly reasonable thing to criticize without necessarily dismissing the premise of what they’re attempting to do. But what I would say is that in many cases, a very hectoring approach to things is counterproductive. Ultimately, most people bought a Tesla because it was a great car, but having bought a Tesla, they then became more environmentally conscious. That’s the way round it works.
Make it really easy for people to recycle. We did a campaign in London which was One bin is rubbish. We realized that the principle obstacle to people recycling was it didn’t matter what their attitude was if they only had one bin. With the best way in the world, if you put Greta Thunberg in a house with only one bin, after about five weeks, you’d go, “Oh, fuck it. Put my can in there. I’m sick of staring at that bloody can.” And in the same way, it’s really, really important to understand that I think, we do things, then we post-rationalize our behaviour in order to make it effectively consistent with some idea of ourselves. And in many cases, I think change happens backwards. You change the behaviour, and then the attitude follows. And I think that quite a lot of political campaigning is demanding that you win the argument before you change the behaviour. And people really, really hate being told they’re wrong. They really hate conceding an argument. And it may just be easier just to get them to do the new thing for some entirely different reason.
SEAN SPEER: That’s a fascinating insight, and this has been a fascinating conversation that I could go on and on with you, but you’ve been so generous with your time. Amongst other things, the book is Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. Rory Sutherland, thank you so much for joining us at Hub Dialogues.
RORY SUTHERLAND: Always a pleasure. Thank you very much indeed.
