Podcast Transcript
april 23, 2020
50 min read
The Power of Perception, Permission and Choice in Society and Government
00:00
Jasmine Bina:
This is Unseen Unknown, I’m Jasmine Bina. We’re living in a time of major cultural change, and we’ve talked about how that change can look on an individual or tribal level, but what about on a country level? How can governments use different psychological and branding techniques to change behaviors around work, life, and crisis situations like the one we’re living in now with COVID-19? Not too many people are qualified to answer a big question like this, but Rory Sutherland is a unique person. He’s the vice-chairman of Ogilvy, a very respected thinker, prolific writer, and the author of Alchemy, which is one of the most popular brand strategy books around right now. His TED talks have been viewed over six-and-a-half million times, and a lot of his thinking has literally shaped the world around us.
Rory’s work has boldly explored human psychology and behavior for global airlines, international conglomerates and of course, governments. He calls himself an anarchist, I’ve seen others call him a contrarian, and NPR has labeled him one of the leading minds in the world of branding. There’s nobody like Rory, and this was truly an interesting conversation that I didn’t want to end, and I think you’ll feel the same way too.
01:34
The first question I want to ask you is like, we understand the policies in the rules are being put in place to control populations across the world, but what I really wanted to start this conversation with you about, was managing perceptions and emotions, especially of a population in panic, and I think we’ve seen different governments do different things, and you seem to have a real international perspective on branding and perception and persuasion and all that, what have you seen across the world that you think is working, where governments are taking psychology into account and people’s subconscious motivators and things like that?
02:12
Rory Sutherland:
It’s a really interesting debate between persuasion and compulsion, and one of the things I thing we were probably remiss about everywhere was it was assumed … now maybe I got this wrong, it’ll be very interesting to look at the final results, and to be honest it’ll be months before we fully know what’s going on I think, but I noticed that the UK had gone into voluntary seclusion to a significant extent before it was made mandatory, and that might be a mixture of fear, it might be a mixture of, as I said, slight laziness which is, “Well if I’ve got a good excuse to work from home today, which is the possible threat, I might as well do so,” and I think a very interesting thing will emerge when we need to come out of lockdown, which is what mixture do we use of rules, and there will need to be rules, for example I think it’ll be a long time before mass audience events reopen, whether that’s theatrical performances, cinemas, or sporting events.
That will need to be rule-driven. Some part of it could be voluntary. I mean I’ve always half joked but there’s a serious point to it, which is that a large percentage of the working population are introverted by temperament, and in many ways, quite like a degree of self-isolation or working from home, and it’s always worth remembering that the patterns of behavior in society tend to be disproportionately set by the most extrovert, the most sociable, and the most active, and it’s also worth remembering that the social norms are set by the active, because active people are visible, whereas people staying at home and watching television, by definition, aren’t.
04:07
So as soon as you leave your house you’re exposed to lots of active people, whereas inactive people, I mean people who are quite content with a screen and a book, are by nature, tend to be less salient and less visible. And so I think there’s a part of it which is that you can significantly reduce the amount of people traveling at peak times on public transport and the amount of people traveling into city centers if you legislate for a degree of choice. Now no one’s yet suggested this, it’s what I call libertarian legislation, which is that you actually legislate … now it’s generally assumed by libertarians that all legislation is welfare limiting because it’s choice limited, but I think it’s possible to legislate … if you read John Stuart Mill on liberty, as much of his concern about the constraints to individual liberty were directed at social norms and conventions, as were directed at government and government compulsion and forced action.
And it’s simply an area for discussion. I’ll give you an example of libertarian legislation which is here in the UK we have a first term female member of parliament for Faversham called Hellen Wakely, and her legislation is simply around what you might call a norm or a default, and she simply says that when you advertise a new job in any form, it’s assumed that the job offers a degree of flexible working unless the ad states the contrary, and so that’s simply changing a norm so that by default jobs are deemed to be flexible unless there’s a good reason for the opposite. Now at the moment what you tend to have is a default where jobs are assumed to be nine to five, five days a week, no flexibility of place, no flexibility of time, unless the advertisement specifically states otherwise.
06:06
And what was very interesting about this was it was intended, and rightly so, particularly to benefit women who were either careers or for example working mothers, but it was equally popular as she discovered to her surprises, that she got equally as much support among men, and it’s an interesting point about this, which is … I mean one of the things that always fascinated me about business behavior is how little use we made of video conferencing, if you consider the fact that in some respects it’s like a superpower, you know, you can talk to an audience of 50 people in Romania and 20 minutes later I can be talking to three people in Atlanta. Now you can’t even do that if my employer gave me a Learjet.
You know, it’s a pretty special ability, and yet I never fully understood why people didn’t sit down and go, “This is an important technology, it enables a significant improvement in quality of life, in freedom of whom we can employ and how, and under what terms, and I think brings with it pretty significant cost savings and productivity gains, if we use it intelligently.” But nobody really did that, they just kept on working as though it was 1984 and plowing into the office at eight o’clock. I mean this has struck me as weird for a long time, in that people get up early in the morning, they travel into work on crowded roads or crowded railway trains, and then when they get to the office at, let’s say, 8:45, they spend the first two hours doing their email.
07:36
But your email’s exactly the same at home, there’s no point in coming into an office to do something which is location irrelevant, and yet people still did. So I think there’s a role for what I call libertarian legislation, which is just giving people a right, according to their preference and their specific circumstances and needs, the right to do things differently in defiance of what are arbitrary conventions.
Jasmine Bina:
That’s really interesting, so it seems like you’re saying the choice isn’t enough, you actually have to sometimes change the defaults so that people are forced to make a choice?
08:12
Rory Sutherland:
Yeah, because I mean we’re a kind of … you know, very much a copying species, what is weird is generally defined by what most other people don’t do, and you can understand why the workplace, someone who’s slightly nervous about their job, is going to be terrified of working from home on a Friday if the other person who’s after the next promotion comes into the office on Friday, so there’s a kind of FOMO going on there, quite literally I think, which creates a kind of presenteeism. Now that may have absolutely nothing to do with productivity or the economic value you create while you’re at work, I mean famously the founder of my own company David Ogilvy says he never wrote a single word in the office. He’d go into the office to talk to people or administer things, but all the ads he wrote, all the books he wrote, he wrote at home.
Now he was obviously the company founder so he had the freedom to do that, and I’m a kind of vice-chairman so I have the freedom to adopt fairly whimsical working patterns that happen to suit my temperament, and I like long periods of discretionary time alone in order to work, I also am a bit of a night owl, so I have the freedom, I suppose partly because my job title’s eccentric, you know, pretty much to work at a pace and pattern that suits me fairly well, and I think my productivity is boosted by that. Now 95% of people in the workplace don’t have that same freedom. If you’re naturally an early bird and you’re naturally highly extrovert and you don’t like … some people like a very, very strong partition between their work life and their home life, and if you’re one of those people, the existing arrangement probably suits you fine, and you’re probably in, if not a majority, at least a fairly large minority.
10:04
But there are a lot of people who are essentially forced to go with the flow, it’s rather like if you were a bunch of friends at a bar and people buy drinks in rounds, you’re sort of forced to drink at the pace of the heaviest drinker in the group, because otherwise you miss out, and I think those same problems affect human behavior. I learned a lot of this, by the way, by reading books by a great guy who’s at Cornell, I think, called Robert H. Frank, and he’s written books called The Darwin Economy for example, and one of the points he makes is that there’s an awful lot of human behavior which is really signaling behavior, it’s all to do with things like imagery and presentation and self-marketing, which is not really about mainstream productivity, it’s done … so we travel to Frankfurt to visit a client not because the meeting couldn’t be performed more effectively on Zoom, but to signal our commitment to that client, and let’s say there’s a client issuing a pitch, if one of your four competitors decides to fly out to Frankfurt to take the briefing, then the other four companies are basically obliged to do the same, for fear of being placed at a relative disadvantage.
And there’s an awful lot of human consumption and consumer activity which is positional rather than absolute in its gains, and so it’s worth remembering that, you know, don’t think that naturally competitive behavior, as adopted by individuals, is necessarily the same as what is collectively optimal or rational.
11:40
Jasmine Bina:
Yeah that’s really interesting, this idea that you’re describing that you can give people permission, I guess, to kind of … especially, let’s say, introverts to kind of be introverts and not have to go with the norm by just changing some defaults or changing the way choices are made around things like video conferencing or visiting a client in person, like that can be very, very powerful, and that’s engineered by some governing body. What was also interesting to me that I wanted to talk to you about is that in some countries you did have the public reacting really positively to the pandemic, so like in Hong Kong for example, they did really well, they claimed an early state of emergency because they still remembered SARS, people already had their masks, they were pretty well organized, but it wasn’t perceived as a government effort or a government success, it was really perceived as a success on behalf of the people, because the government seemed to be lagging.
Rory Sutherland:
Yeah I mean those are … you know, according to the [inaudible 00:12:37] measure, Eastern societies tend to be more collectivist, so you have the opposite in the United States where you have a very strong individualist tendency, and a large group of people are actively resisting the lockdown and demanding to go back to work, for example, and so part of that I think does reflect cultural differences, and it’s worth remembering … it’s always worth remembering in any international setting, that Anglo Saxon cultures of which we’re both part of one, are anomalous in fact. I mean there are very, very many things about your typical … I don’t mean this racially, I mean this culturally, that if you’ve grown up in the United States or the UK, or to some extents, you know, Scandinavia for example, your particular world view is likely to be much, much more individualistic than is typical for the world as a whole.
13:39
And also there are simple patterns like our approach to extended families is completely different to that which would be seen as completely normal in three or four billion of the world’s people. You know, broadly speaking we have very, very nuclear families, we don’t live with our grandparents et cetera, et cetera. Now we think of that as perfectly normal, in the wider scheme of things it’s rather an anomaly. In fact David Brookes interestingly, who I think is a very interesting commentator in the New York Times wrote a piece recently suggesting that you know, the idea of the nuclear family was a mistake and it’s kind of a luxury for the rich.
Jasmine Bina:
Yes I read that article, and it kind of stopped me in my tracks.
14:25
Rory Sutherland:
Me too, because we know … we have … you know, there are strong elements where because Anglo Saxon cultures have been quite successful in some dimensions, we don’t ask ourselves nearly often enough whether at the absolutely personal level, at the level of lived experience as opposed to economic success, whether there’s an invisible cost, just as for example there’s an economic gain but an invisible cost to the extent to which Americans, until recently, were unbelievably prepared to up-sticks in search of pay rises. You know, you’d move to the other side of a continent in order to get a 20% pay rise, I’m sure that economists regard that highly desirable, I mean Brookes’ piece made the point that at some level in extended families there’s a mutual support network and an intergenerational support network, which protects people, I think, against all sorts of downsides.
There’s also, I guess, a kind of reputational framework if you look at something like the Indian divorce rate and compare it to the American divorce rate. The Indian divorce rate is absolutely minuscule, now you know, a large part of that may be cultural tradition, but some part of it may be wider parental pressure and societal pressure. So the degree to which a young Anglo Saxon person, this is often called WEIRD isn’t it? It’s … what’s it? White educated industrialized rich and democratic is the acronym, and a large amount of behavioral science work is done on students or graduate students from WEIRD countries, and it is worth remembering, for example, that people who are living in highly cosmopolitan settings in, let’s say, New York City or London, are in a megalopolis, they have lives which are hugely atypical, and I don’t mind that, by the way, the fact that they’re atypical, what I do mind a little bit is the assumption that their style of life is also inherently superior, more sophisticated and more desirable than someone who lives more locally.
16:37
Jasmine Bina:
Right.
Rory Sutherland:
And so there’s a degree of it, by the way, which I also think is actually dishonest. That in many ways people are forced to move to large cities for economic reasons and having done so, they confabulate the reasons why those cities are so great. I think if one’s being completely objective about it, there’s a hell of a lot to be said for living in suburbia, or living in smaller towns, simply in terms of convenience [inaudible 00:17:05] particularly … if you’re in defense of small towns, it’s worth remembering that the internet and online shopping and so forth, and online stimulus through Netflix or whatever it may be, the cultural deficit you suffer from living further away from a large city is a fraction of what it would have been 20 or 30 years ago.
You know, in other words I could go and live in West Wales or Snowdonia or something and my Netflix will be just as good as yours, and my Amazon will be just as good as yours, and you know, it’s not as if you’re no longer have access to interesting or exciting stimulus, regardless of the place you find yourself in, so logically the case for living somewhere out of a large city should have grown, but equally it sort of baffles me that young people, understandably to a degree, say, “Oh no, property is completely unaffordable.” And you go, well actually, if you’re prepared to put up with a sort of commute by train rather than a commute by tube, there is in fact fairly affordable, fairly attractive property, it’s just not the property that suits your own particular self-image.
18:16
And so this is where I think there is an economic trap in that once you’ve got into debt acquiring educational credentials, the only place you can actually pay that debt back in terms of salary differential, is by going to a huge megalopolis and therefore being forced to do so, and being forced to do so in order to keep up with your friends, to an extent, then forces people, I think, to post-rationalize reasons as to why city dwelling … because I’ll be absolutely candid with you, okay this is why I’m mixed, which is I pretty much thought I’d never leave London, and then I had twins. Now, had I had my children not through batch processing but one at a time, I think I would have stuck it out … I would have stuck it out in London for child number one, and then at the point of child number two and wondering where they went to school and so forth, I probably would have bottled it.
But what I in fact did is I moved out once we had twins, fairly rapidly, and in defense … and this may be a dose of post-rationalization as well, I suddenly discovered that there were extraordinary gains in terms of convenience, ease of movement, and actually that business which is you’re just bumping into the same people time after time rather than endlessly doing business with strangers, which do make life quite a bit easier. Maybe it’s something you care much more about when you’re 50 or 40 … I was … what was I then? 35, 36, maybe it’s something you care about more when you’re 36 than when you’re 26, but it struck me that there were all these extraordinary benefits to living slightly outside London, that up to that point had never occurred to me.
19:54
Jasmine Bina:
Well you bring up a good point though, when you sign on for that expensive degree, you don’t realize that you’re signing on for all these second order commitments as well.
Rory Sutherland:
That’s beautifully put by the way, that’s really … that’s a lovely expression of it.
Jasmine Bina:
Thank you. I wonder if also this common threat has allowed for other kind of exceptional things to happen, for example Apple and Google partnering up to create that contact tracing system, which so far in the media in the US has been pretty well received, even though you would imagine it brings up a lot of privacy questions, but I wonder if these kinds of things get fast tracked because public is so much more willing to embrace them because there’s a public enemy, they no longer see corporations like Apple and Google as the enemy, they see all of us aligned against a different enemy all together?
20:45
Rory Sutherland:
You’re absolutely right, and I think it was Ronald Reagan who made this point when he was negotiating with probably Gorbachev, was it? Which is if we were invaded by aliens, the Russians and the Americans would bury their differences within seconds, and the extent to which we’re only properly one in the presence of some external other, perhaps a regrettable facet of human psychology, but it may be at some level true. I mean the thing that’s fascinating me here, and I’ve just written a piece about this, is that we’ve seen a variety of engineers from companies … one area where Britain really excels is in Formula 1, in car racing. Car racing with curves, not where you go round, and round, and round, just for American listeners, you know, where you might actually make a right turn occasionally.
So strangely I think all but about three or four of the Formula 1 companies are headquartered in the UK and some of them have produced extraordinary prototypes and indeed started the manufacture of essential medical equipment, in an incredibly short period of time, and the question I was asking exactly in this article is how come we can do this under conditions of crisis? Why don’t people go to McLaren in ordinary … under ordinary conditions and say, “What can you do here which is spectacularly inventive?” And it is exactly that thing of necessity being the mother of invention, but what is it that’s possible that could motivate us to do exactly these things under normal conditions?
22:15
You know, I don’t think the economists have got it right, patent isn’t money. It may be that, you know, I did … one theory is that the levels of bureaucracy that normally apply and if you are someone who worked for the Formula 1 team I imagine, as I said in my piece, three hours dealing with healthcare regulators would leave you wanting to bite your own arm off with the sheer boredom of it. You know, if you’re used to working in the high octane, white knuckle world of Grand Prix racing, then dealing with the kind of bureaucracy or healthcare procurement might be a bit of an obstacle, but there is something there which we should be able to capture in normal times, and for whatever reason, we don’t do it.
Jasmine Bina:
Yeah, I always assumed that for some reason a crisis gives you the ultimate permission, like there’s just … it almost feels like no holds barred, in a way that I don’t know that your boss could give you.
23:09
Rory Sutherland:
It gives you permission to fail, certainly, in that you could argue that normal institutional businesses, and entrepreneurs are distinct from this, entrepreneurs have a very different approach to upside and downside risk to a desk jockey in a corporation, but your typical institutionalized man, actually, and I might actually use man in both senses here, is very, very biased towards what you might call incremental, quantifiable improvement under normal circumstances, but you might argue that something that has a 20% chance of spectacular success but an 80% chance of failure is actually a bad career move for that person, because 80% of the time he loses his job, fails to get the promotion.
Now, under wartime conditions, Churchill actually, if anything, as a wartime leader had too great an appetite for bonkers ideas and some of his advisors had to kind of throttle back on some of the more insane ideas Churchill would entertain. You know, things like, for example, the bouncing bomb, made famous in the Dam Busters Raid, you know, would that have been given much consideration in peace time? I rather suspect not.
24:25
Jasmine Bina:
I always felt like these grand, ridiculous but important ideas really characterize a time in the past, but I don’t … do you feel like these ideas, like this culture of coming up with these kinds of insane ideas, at least on like a cultural level is happening now?
Rory Sutherland:
Maybe it’s harder. I mean it’s worth remembering that, that … I mean if you look at probably the most significant period of innovation in world history, I mean people argue about this and there’s a huge argument because some people, and with some good reason, would say, “No, in its effect in human life, the washing machine was a bigger invention than the internet.”
Jasmine Bina:
Mm-hmm (affirmative).
25:07
Rory Sutherland:
Now the argument was before the washing machine, any poor to middle income household would have to spend … typically the wife of the household would spend a day in laundry work, so domestic appliances, by enabling women to join the workforce in much greater numbers, arguably had a bigger societal effect than something like the internet. I’m not, by the way, taking sides in that argument, I’m just saying the argument exists. Some people calculate that the 1930s was pretty much the high point for meaningful innovation, and that we … in many cases … so in some cases, like speed of transportation we’re up against the laws of physics, you can make a train go at 500 miles an hour but it’s really damn hard.
I would argue that it’s also slightly pointless in that for a large number of journeys, making the journey productive or entertaining gets you far better gains. I’d also argue that there’s something, if you think about it, which I always comment on, and apologies if anybody’s heard this before, which is that if you take my grandfather who was a doctor in a Welsh mining town, so you know, he was pretty well paid in fact, there were huge categories of goods that he could buy, that ordinary people couldn’t. The difference between a middle-class … a wealthy upper-middle-class salary which his was, and a median half salary in terms of what you might call, not numerical wealth, but actually effective utility, so just to give you an example, a bottle of whiskey in 1920 or 1930 would have been a week’s wages for a working man, okay?
26:46
That’s a bottle of spirits, now my grandfather could buy a car, he could employ some servants, he could buy a radio, he bought a washing machine, he bought a dishwasher, ultimately he could buy a television, these were absolutely transformative technologies which he could buy and other people couldn’t. Now if we take that experiment on another 50 years and we … you know, let’s take you and me, and you multiplied your salary by 10, or even 15, I’m not saying it wouldn’t make a big difference to your life, and you might retire early and do something like that, there isn’t actually something you can buy … okay, you’d sit at the front of the plane rather than in the middle, or you know, wherever it is you choose to sit, and your holidays would become progressively a bit more exotic or a bit more sybaritic, you know, you might go and stay in one of those sort of huts on stilts in the Maldives or something, but it’s not like your life would have been changed spectacularly by any of those things.
And so there is an interesting question, if you regard the fact that traditionally the rich have provided early funding … early stage funding for meaningful inventions which eventually trickle down to the less rich, we don’t really see that happening anymore. A little bit of our inner socialist would go, “If there is a reason for redistribution of wealth at the moment, it isn’t like rich people are funding things which would make a huge difference if only they could be manufactured at scale more cheaply.” In fact you know, very large amounts of wealthy people’s expenditure are almost spectacularly pointless, like luxury yachts and so forth. I mean don’t get me wrong, I’d be highly tempted if you gave me a billion dollars to buy a yacht, but to be absolutely honest I’d still … I’d buy it on the grounds that what’s the point of being a billionaire if you don’t have a yacht, I’m not sure the yacht would add that … even while I was writing the cheque, I wouldn’t be that confident that the yacht would add that significant into my happiness.
28:45
And at the same time of course we devalue things, you know I always make the point that King Louis the 14th would have given you half of Gascony in exchange for your 4K TV, and so there is that interesting debate which is maybe meaningful … I mean this is why I do ask questions like, “After this crisis can we change working patterns to some degree to give people a little bit more leisure?”
Jasmine Bina:
I did want to ask you about this, as a society whether it’s consumerism or work like you described, do you think anything will change permanently, or could?
29:17
Rory Sutherland:
I don’t know. I mean I hope there are enough people like me who will try our damnedest to make it change, I think it’s also meaningful that a lot of people have been exposed to remote working and technologies like Zoom, and have discovered that there’s a significant upside to working this way. It’s not all downside, the view of video conferences being a … it’s a very, very misjudged view that a video conference is a poor relation to a physical meeting, in many respects, not least the ease of attending, and the fact that it doesn’t have to last two hours, there are huge advantages to meeting in this way. That’s not even factoring in the environmental impact which is not negligible either, and so I hope it changes.
You see standard economic theory assumes that we choose the balance of work and leisure that is optimal for us. Now, this is so stupid as a model of human behavior, first of all because how hard do you work? Well in most environments you have to work a little bit harder than the person in the desk next to you, for symbolic reasons, not productive reasons. Secondly of course the unit of money is almost infinitely divisible, whereas the unit of leisure isn’t. There’s not much point in working a four-and-a-half day week is there really? Okay.
30:33
Jasmine Bina:
Right.
Rory Sutherland:
Well you know, … the other thing is, which I think is really interesting and something Ogilvy’s exploring and I’d like to share more widely, one of the things we debated during this commission, which we weren’t able to enact but I’m determined to keep alive, is an idea that either when a company runs into a bit of a rocky patch, or as a norm, certain people could go into a four day week for either every week, or three weeks out of four, for 90% of salary. Now, the mathematically able among you will go, “Well that’s far too much because if you’re working a four day week it should be 80% of salary.” No one is going to take that deal because they know damn well they take a 20% cut in salary, they’ll end up working about 92% as hard as they did before.
So you’d have to be a total mug to take the four day week deal if you are paid pro-rata, unless you worked in one of those fields where you literally … you know, you close down your laptop and you walked away and you didn’t do a thing, okay? And so no one’s going to take that trade-off, but the 90 for 40 trade-off where maybe you work a bit longer two days a week, and maybe you do work Fridays one week in three, now we’re starting to create exchanges which people might willingly opt for, either permanently or for part of the year. I would also hope that Millennials will start to factor this kind of thing into who they work for, the possibility of flexibility or work and one of the things I’m fanatical about with my team, because I’m a fanatical early Zoom convert is look, if you think you can be just as productive and you don’t have any meetings to attend and all your work can be done virtually without requirement of being in a specific place, if you want to go off to Marbella for a week and work there, it really doesn’t bother me.
32:28
Jasmine Bina:
I think Millennials in the US are a little primed for this already, because before any of this started there was this backlash starting against the idea of hustle culture and overwork which has really become romanticized in the last 20 years.
Rory Sutherland:
If I’m right, Bernie was keen that everybody in the United States should have a mandatory … was it three weeks paid holiday a year?
Jasmine Bina:
I don’t know, I’m not sure exactly what it was.
32:51
Rory Sutherland:
Certainly the North American approach to vacation entitlement is horrendous. I mean I have a friend who turned down a job at Google for this reason, and she was a Brit, and she said, “Look I’d absolutely love to work for you, the money you’re offering is fantastic, but let’s be realistic okay? I’m in a strange country which I want to discover and I need to understand better, I won’t be able to discover that country adequately with two weeks vacation, because one of those two weeks I’ll have to spend going back to the UK to visit my parents.” Hardly unreasonable.
Jasmine Bina:
Mm-hmm (affirmative).
Rory Sutherland:
“So what you’re saying is I would then have five days worth to discover America, and part of my reason for moving to the United States is that … I mean yours is a country with a hell of a lot of shit to see, I love going to the United States,” but the idea … this is a classic case because I can genuinely say this, I’ve never met anybody … this is an example of how social norms become very heavily enshrined, going back to John Stuart Mill’s point, I’ve never met anybody in Europe, at all, zero, okay? Who is so right-wing they think we should have less vacation.
Jasmine Bina:
Right.
33:58
Rory Sutherland:
No literally, I have met one or two people who think that there are too many public holidays or bank holidays, which is where you get a Monday off. So I’ve met one or two people, and they generally go, “Look it’s all a bit of a disruption, and then it means that a lot of people then take the next four days as holiday.” In France it’s even crazier because you often get a public holiday on a Wednesday, which means everybody does a thing called [French 00:34:21] which is to make the bridge, where they take the Monday and the Tuesday or the Thursday and the Friday off, and then that means the entire country’s dysfunctional for a week, just because of [inaudible 00:34:30] public holiday.
I’d sympathize to people, but in terms of the amount of vacation we get, I’ve met some right-wing nutters, but I’ve never, never heard anybody even suggest that, “Gosh, if you think about it we could get another 2% of GDP if we just had only two weeks holiday,” nobody’s ever said that. Robert Frank does an experiment where he says, “Would you rather live in a world where the average person earns $80,000 a year and you earn 60, or would you rather live in a world where you earn $50,000 a year and the average person earns 30?” And quite a lot of people say, “I’d rather live in the world where I earn 50 and most people earn 30, because it’s a relative measure.” Wealth matters … if I want beachfront property and other status goods, relative wealth is more important than absolute wealth, okay?
35:21
But on the other hand, if you do the same experiment with vacation entitlement, would you rather have four weeks vacation when everybody else gets six, or would you rather have three weeks vacation when everybody else gets two? Nearly everybody plumps for four weeks. So vacation and leisure is an absolute good, whereas wealth is a positional good. I think it’s a wonderful thought experiment actually, it’s one of the simplest things I’ve ever seen to prove a very, very simple point.
Jasmine Bina:
That is very interesting, I would have never thought of it like that. Can we talk really quickly about stimulus packages across the world?
Rory Sutherland:
Yeah, not an area of expertise, but interesting nonetheless. Yeah.
35:58
Jasmine Bina:
Well what do you think? I mean I know that, like you said, a lot of these things are complicated, and maybe we hesitate to draw conclusions, but what do they reveal, if you had to say something about them? The fact that the US has a one-time payment of $1200 or something like that for most families, whereas other countries are doing a high percentage of people’s wages, others are doing actual monthly payments in one or two thousand dollar amounts, do you think it reveals anything about our social contracts or anything interesting that’s kind of surfaced because of this?
Rory Sutherland:
I think from my perspective, the US has always had a slight … it’s been a slight outlier there, in that in some respects you believe something which is both very good and very bad, which is you kind of believe that everybody’s the author or their own success, which … you don’t really attach much belief in luck, really. Okay, and to some extent you venerate very, very successful business people in a way that most other … many, not most, many other countries don’t. You know, in Britain is someone’s very, very rich there’s admiration mixed with suspicion.
37:11
Jasmine Bina:
Yes. I know what you’re talking about.
Rory Sutherland:
Which is that … you know, they might be highly worthwhile people but they might be either a bit psychopathic or else, you know.
Jasmine Bina:
Right.
Rory Sutherland:
Now the fact that you believe everybody’s the author of their own destiny is in a sense a wonderful illusion, which has, by the way, very, very positive effects in that the extent to which people put an effort into doing what they do very, very well is generally gratifying. The only thing is it does make you correspondingly a bit merciless to the victims of misfortune, and sometimes misfortune, by the way, is self authored. I’m not one of those people who goes … although it’s complicated, you know, I’ve had friends who are alcoholic, is that their fault or is it genetic? I mean who the hell knows, you know? But you can be a bit merciless to the victims of simple back luck.
37:59
Jasmine Bina:
I also feel like it kind of engenders this belief that if you aren’t successful, it’s your own fault. Like it has this other opposite contextual story that it’s telling.
Rory Sutherland:
Yeah, the other thing I think that becomes awkward for America, which is never talked about, which always interests me, and by the way, do not take this badly because I’m a huge Americanaphile.
Jasmine Bina:
I can tell you are. No I love having discussions like this.
38:23
Rory Sutherland:
No, I’m also, as I said, a very broad Amaricanaphile, I’ve been to the Wisconsin State Fair, it’s not just the Statue of Liberty and … okay right, you know, it’s not just the Statue of Liberty and Mount Rushmore kind of stuff, but if you think about the United States, you’d have a very unusual position for about … 1950 it had about 50% of the world’s GDP, and for a long period right up until the 1980s not only were you much wealthier than the rest of the world, but when you went to the rest of the world, the rest of the world was a bit shit, okay? Now you know, Britain in 1975 was shit compared to the United States in 1975, now Britain is still poor in the United States, not so starkly as it was back there, but the extent to which Britain is crap compared to the United States is much less, visibly.
Or Mexico for example. So the extent to which the good things about America to some extent migrated outwards, you know, I occasionally watch … well as often as I can I watch North by Northwest, and you have to remind yourself as a Brit that this was actually filmed in … I think it was about 1955, is that right? The details of the film and the architecture and the train, which would have … my dad who’s 90, he and his brother when they were teenagers, they used to get American magazines, I’m not quite sure how, but they used to get the Saturday Evening Post and something like that, and they said, “When you were a British kid in 19 …” what will it be? 1940-something, they said the car advertisements were like science fiction, it was, you know, convertible cars with an electric opening roof and V8 straight, extraordinary stuff.
40:05
They said it was like another planet, now that isn’t the same as it once was, okay? It’s not like your cars are an order of magnitude bigger or shinier than ours are or whatever, so there is an interesting thing in America which I think is awkward for people who grew up where you would just automatically assume that everywhere else you went was a bit rubbish, that’s another change which I always mention, because nobody else … I’m not … think it’s hugely important but mentioning it because I think nobody else mentions it, the contrast you’d experience in going from the United States in 1960 to Britain or whatever, would have been absolutely enormous, and I think there’s something interesting going on there as well, but no, I think you can be a little bit merciless towards people who are simply the victim of misfortune for whatever reason.
You know Canada is different there I guess, isn’t it? You know, not that different in many respects, but the Canadians would have a slightly less individualistic strain to them.
41:02
Jasmine Bina:
Well I think at the very least, when Americans see what these packages look like across the world, it does invite these questions about what that means in terms of what our government is to us, or what we expect of it, and I think those questions have been coming up in the US at least for a while as more and more private or public companies take over more of the infrastructure and services that you would expect the government to handle for you, I think it’s just something that Americans have been negotiating for a while.
Rory Sutherland:
Well I also think there’s a fundamental misconception of economics, which is the belief in economics tends to lead … now you know, in most countries, the United States included, and the United States by the way has one fantastic advantage, which is you have a very gloriously optimistic consumer base, so the typical American tends to assume that life is capable of almost infinite improvement, in other words it’s very low in cynicism, and therefore if you develop a new way of doing things, you have an automatic and fairly sizable market for it, because of the United States neophilia, call it what you want, but willingness to adopt new practices and new things, and that by the way is a wonderful attribute, and the United States is growing in wealth and GDP growth in the US is pretty consistent over a straight line, and one of the things I think that tends to happen with economics is it’s kind of a science which arose under conditions of scarcity.
42:33
Now it tends to assume that what everybody wants is more crappier stuff at a lower price, I literally read this, by the way, in an economics paper and I was almost in guffaws of laughter, it was an American economics paper pointing out how much more efficient in the 1990s the American brewing industry was compared to the German brewing industry, and you know, I’m not German, I’m a Brit, but even so I was going, “But there is kind of a quality difference.” Okay? Let’s be candid here, German brewing offers extraordinary change of choice, variety, Weiss beers, you’ve got the purity laws, you’ve got extraordinary rich ecosystem, whereas the American ecosystem, a bit like the American ecosystem for cheese 20 years ago, was all around scale and efficiency and low price, and not around quality and variety and diversity.
And what you see now is America’s gone from being, I would argue, once the hipsters took over, America went from being about the worst country in the world in which to drink beer, to one of the best, because they abandoned this assumption that what people wanted was cheep beer produced in extraordinary quantities with enormous economies of scale. So I think there’s a really interesting thing there which is that so much of economics is probably driving government to produce what you might call … or driving just businesses to produce kind of lowest common denominator product, and yet a simple glance at who the most profitable companies in the world are, the most profitable companies in the world by a huge margin are luxury goods companies, whether you call that Apple, which is a kind of luxury goods company, okay?
44:16
Or it’s Louis Vuitton or whatever, it’s those companies that most ignore that kind of thing and concentrate the most on brand differentiation, brand value, and perceptual value, rather than on narrow definitions of efficiency, that make the most money.
Jasmine Bina:
So are you saying that maybe GDP is not really a measure of the real economics of a country?
44:40
Rory Sutherland:
I certainly wonder about whether … if you printed … I just ask this question because I’m interesting in behavioral science, if you printed a stack of money and gave everybody lots of money, the assumption would be you must not do that because it will cause inflation, and I’m simply not sure that’s true anymore. That patently … okay, if the price of something absolutely non-substitutable goes up, and that would be gasoline, bread, grain, if you have the price of bread doubled under the Roman Empire, that inflation caused inordinate problems because you couldn’t really substitute for it. Do I think in the same way that if you gave everybody huge amounts of cash there would necessarily be a huge inflation in the cost of, for example, flights? I’m not sure.
Because if you think about it, this is terrible marketing bullshit, but it’s always worth doing. When people buy a flight, what are they buying, okay? Well at the simplest level they’re buying transportation, but actually a marketer would say, “No they’re not buying transportation,” depending on how [wanky 00:45:41] the marketer was they’d say, “They’re buying self-actualization.” Or they’re buying … or they may say they’re buying status, they’re just showing off on Instagram that they’re in the Maldives and you’re not, but you can interpret these behaviors, consumer behaviors, in lots of different ways. Now you can’t really substitute for oxygen in the environment and you can’t really substitute for calories in our food supply, but you can substitute for a lot of those positional goods quite easily.
46:09
And then there’s the question of whether inflation necessarily matters in some of those areas.
Jasmine Bina:
That’s interesting. That’s a big idea.
Rory Sutherland:
I understand there’s a weird group of people who are involved in something called Modern Monetary Theory which more or less says something similar, which is that actually government could spend huge amounts of money basically apportioning it fairly willy-nilly and actually this would have actually a fairly paltry effect on actual behavior, and therefore an inflation. Now that seems an incredibly bold view, but it’s not … it’s one of those things which maybe you shouldn’t act on it, but it’s certainly worth exploring as a possibility.
46:49
Jasmine Bina:
And you seem to think that the probability of inflation actually happening with these circumstances is different now because people’s consumerism has changed?
Rory Sutherland:
And of course there’s the question of how undesirable a reasonable amount of inflation would be.
Jasmine Bina:
I see.
47:07
Rory Sutherland:
Which is that one thing about inflation is it does something which arguably is quite necessary which is it redistributes wealth from the old to the young. Inflation would also enable house prices to return to some sort of sanity in metropolitan areas, without necessarily leaving people under water. It would cancel debts fairly effectively, so you could argue that in a world where we generally regard intergenerational inequality as a major problem, inflation around the 3 to 4% mark may not be all that unhealthy.
Jasmine Bina:
This is fascinating, I kind of wish we had started the conversation with this. I’ve never heard an argument for inflation like this before, and it all seems so logical.
47:48
Rory Sutherland:
Now I mean the only thing is I’m always conscious of the fact that this is … I’m being deliberately contentious here, but equally the reason I’m contentious is that most thinking on most matters of this kind falls back to standard economic theory as a lazy default, and of course what we know about complex systems is depending on the circumstances, the same impetus can have very different behavioral results. We always talk about inflation, “Gosh isn’t inflation terrible?” Yet house price inflation, which is among the most disastrous things, hasn’t been included in the measure of inflation.
So how can you have a measure of inflation where a place to live and the cost thereof is not included in the basket of goods? Because there’s this delusional belief that increasing house prices is good news. It’s only good news if you’re planning to downsize, or if your parents are planning to die shortly, for everybody else through the course of their life, increasing house prices is a bad news story.
48:49
Jasmine Bina:
Well let me ask you something else that this brings up then, why are we so married to these really faulty measures of growth and economic gain?
Rory Sutherland:
I don’t know. I mean there have been attempts to kind of … Bhutan’s gross national happiness, I think a bunch of economists worked with the French president at one stage on trying to get better measures, and it’s worth remembering of course that part of the problem is we look at nearly all measures, are snapshot measures, whereas life is lived by an individual over time. Now I didn’t introduce ergodicity and non-ergodicity into the debate, because it would have added another half hour to the podcast, of which 15 minutes would be explaining the distinction, but what matters to your happiness is generally whether your wellbeing increases over the course of your life.
49:36
Now there’s … an awful lot of statistics are misrepresented because of this snapshot. Now this is … you know, if you look at the United States, the poorest 15% … 25% have hardly gained or indeed have lost out in relative terms, the richest 25% have gained fairly spectacularly, but they’re not entirely the same people. So you know, a trainee lawyer might well be in the poorest 25, certainly in terms of his assets, might well be in the poorest 25% of the American population. No one would think of him as poor, because his prospects are probably spectacular. So one of the problems is that it’s much easier to get and compare snapshot data of what’s happening to a particular group in a particular time, when actually the extent to which that translates to feelings of wellbeing may be incredibly inexact.
Jasmine Bina:
Yeah.
50:29
Rory Sutherland:
One of the reasons why you may … you know, you may have greater poverty in the poorest 25% of households is just smaller household size, or actually more people attending higher education is arguably creating more poor people.
Jasmine Bina:
Right.
Rory Sutherland:
So how the thing looks in a snapshot, and how the thing plays out over time, doesn’t even connect very well to begin with, and so we’re often looking at something at 90% off the angle we should be looking at.
50:57
Jasmine Bina:
That’s so interesting and I think so emblematic of this entire discussion which is really everything just seems to come down to a sense of perception, everything is so relative, and speaking of perception, I think that’d be a nice way to kind of end the discussion, I like to have these conversations come to a point where we ask you something personal and get your kind of more human take on what’s going on. So I’ll ask you, how has this pandemic changed your perception of your life, your work, your family, your world? Whatever it is, how do you feel that it’s changed you?
Rory Sutherland:
I’m a bit of an introvert. To be honest, in terms of … there’s mild anxiety all the time which I could do without, I had a bout of mild anxiety when our neighbors contracted the disease, so I could do without that mild sense of awkwardness. In general though I regard it as, and always have done, the ability to be content within your own head, which is despised by extroverts, I’ve always seen as a bit of a badge of honor. Just to give you an example, I love this fact, which I only discovered the other day, and it’s my favorite fact of the month, which is that there are only two sorts of … two animals on the planet who can watch television without having to be trained how to do it, which is humans and dolphins, isn’t that fantastic?
52:19
Jasmine Bina:
Oh that is very interesting.
Rory Sutherland:
So chimps don’t really get television at first, they go, “It’s a load of moving shapes, I don’t really get this,” and eventually you can kind of get them into, “No this is kind of a representation,” and apparently you can kind of train chimps, but dolphins get telly immediately, they go, “Oh look at that. What’s he doing with that fish?” Right? I always think that’s evidence that watching television is evidence of higher intelligence, and that the ability to enjoy this vicariously, by which I mean virtual tourism on YouTube’s great fun, have you ever done this? Just find some people who are walking around Prague with a 4K camera for two hours, and just leave it on on your telly.
52:58
Jasmine Bina:
Yeah.
Rory Sutherland:
It’s nearly as good as going there.
Jasmine Bina:
Is it? Okay.
53:04
Rory Sutherland:
So actually … no, the opportunity … one, I like working on Zoom, I like working remotely, and I like working through video calls to a huge degree. My writing has improved because I have more time at home to really, really focus on written output. The one curse is, and this is where we’ve got to fight it, the one remaining curse is email, that’s the one bane of my life, which is every moment I’m taking to someone, which is like my job, doing my real job, every moment I’m doing that, there’s an equivalent amount of unnecessary email building up in my inbox, and the extent to which email destroys your control over your time in a way that of course video calling doesn’t, video calling destroys the constraints of space, but it doesn’t impinge on your time in the same way. It’s email that we’ve got to fight.
And actually, that’s been, I think, a bane in most working life for ages, but I like the family time, I like the fact that the second I finish work I’m already at home. I like that fact that we eat together, I like the fact that if I go on walks, which I never did because you can work when it’s dark and enjoy the day while it’s light, to a degree, you know, I like the fact of the birdsong and the relatively empty roads. To a great extent it’s … you know, there are elements of this which are of course a huge human tragedy, we mustn’t forget this, but there are elements to it where we can turn it to our advantage by not losing sight of what we like about this.
54:35
Jasmine Bina:
If you liked this episode, share it with a friend. If you really liked this episode, sign up for our newsletter at conceptbureau.com/insights. We share a lot more than just our podcast, I also publish articles on brand strategy, we have videos, a lot of great discussions. If you’re on Instagram or Twitter, follow me at Triplejas, that’s T-R-I-P-L-E-J-A-S, I share my daily thoughts on brand strategy and culture, so come join the discussion, and if you’d like to see all of my writing, I’m on Medium, just find me under Jasmine Bina.
