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#904 - Rory Sutherland - The Secret Weapons of Marketing Psychology

Modern Wisdom

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  • Remote Work Benefits
    • Remote work allows for more autonomy and control over one’s work environment.
    • This can lead to better energy management and productivity, as seen with writers and other knowledge workers. Transcript: Rory Sutherland Because it was so effortful. Whereas email, the cost of actually sending an email to 100 people is far too low. Yes. Because then the burden of both filtering and prioritizing falls on the recipient not on the sender yeah it’s a terrible i mean it’s very it does amuse me this which is there’s this hostility To flexible working which is partly driven by the suspicion that people might be enjoying it now okay so it’s not really to do with productivity, but there are people, I mean, someone In my company, I won’t name, was driven practically insane by the fact that the Netflix CEO revealed that there was a spike in Netflix viewing between 12 and 1 in many countries. Lunchtime. Now, first of all, it’s lunchtime. Okay. You know, it’s accepted that people have a break. If they want to chill out by having a sandwich in front of Netflix rather than wandering around to Pret, it doesn’t bother me personally. But also, I would argue that a lot of people would be much more productive in work if they started work early, took a three-hour break in the middle of the day, and then worked later. Now, commuting makes that impossible to do. But I would argue that your energy levels would be much better managed if you did take a break in the middle of the day, with the additional bonus that you’d actually get a bit of sunlight And a bit of exposure. Chris Williamson You can maybe pick the kids up at the end of that. Rory Sutherland If you’re a Scandi, okay, in the winter, you go to work in the dark, you come home in the dark. So effectively, your exposure to natural light is Saturday and Sunday for three or four hours. So that doesn’t bother me, the fact that people are actually choosing. If you look at writers, you know, the people who are professional writers, journalists, novelists, they’re very different, by the way, but all of them have sort of conditions under Which they can and can’t write. And they vary. Some people demand complete silence. Some people go to a cafe because they want some background noise. But what these people clearly know is that they can optimize their productivity by controlling the conditions in which they write. And it strikes me as pretty plausible that’s true for other forms of knowledge work, where some people can’t work if there’s any background noise or chatter. Other people can’t work in complete silence because it spooks them out. I’ve known writers who, you know, if there’s someone operating an electric drill seven houses down, they’re incapable of producing anything. There are other people who are spectacularly disciplined. Now, it does strike me that you will make people more productive if you allow them some degree of autonomy to control the environment in which they produce their work. Now, I’m not suggesting that’s five days a week, but I’m suggesting it seems to be implausible that giving people some degree of autonomy won’t have benefits. But the interesting thing is, if you look at business, we’ve imposed loads of things on people, open plan offices, email, Slack, Teams, etc., without any real investigation of the Effect it has on productivity. But we don’t really care because the staff don’t really enjoy that, so we don’t have to worry about it. But the second you have an experiment where the workforce seem to welcome it suddenly everybody oh my god they’ve gone to sainsbury’s on thursday lunchtime well they’re gonna have To go to sainsbury’s at some time anyway okay um yes okay they’re doing it during daylight when the store’s quiet well if they’re working at nine till ten which they can do because they Don’t have to get up at seven o’clock in the morning, who cares? (Time 0:10:14)
  • Impatience vs. Intelligence
    • We often prioritize urgent tasks over important ones, hindering intelligent decision-making.
    • This impatience can lead to suboptimal choices, as seen in the example of email versus slower communication methods. Transcript: Chris Williamson Do you mean when you say that we’re too impatient to be intelligent? Rory Sutherland Oh, that’s simply a question which is, I think it’s a wider question. So, I mean, email, which I mentioned earlier, is an interesting case in point in that it was assumed that there could be no finer form of communication other than immediate and free. And we automatically assume that faster is better. And one of the questions I raised, which I still think is a serious question, by the way, is do we need slow AI? Do we need slow Tinder? Do we need slow right move? Let me explain just what I mean by this, which is that in most processes of search, if you look at consumers, what they do is they refine their preferences according to what they find out There. So they go into the property market, the dating market, the holiday market, and they have a set list of preferences to begin with. If you talk to any real estate agent, most people who deal with a human real estate agent end up buying or renting a property which meets remarkably few, if any, of their initial criteria. That’s probably true of the people people marry as well, I would guess. That if you ask someone effectively to write down, put it very simply, we think we know what we want, but we don’t, is probably the simplest way in which. And the way we discover what we want is by a kind of exploratory process of discovery, where we explore the market and what’s available and what they cost and what we experience when having A look at a particular house or person then refines our preferences. And so this, what you might call the right move approach to decision-making, which is define what you like, we give it to you, you buy one of those, okay, looks to us as if it’s a perfectly Sensible and efficient way of choosing a house. But actually, we don’t see what we don’t see. Actually, I was talking to someone this morning, I better not give away who they are, who discovered that right move, there are areas of London which are holes. In other words, they don’t fall into any predefined area on right move. And property prices in those areas are disproportionately low because you can’t search for any property that’s in that area. Now, it might be if you’re looking for a much bigger area. But in other words, in other words, they’re not in Kensington. They’re not in Notting Hill. In other words, they’re these weird little islands of undefined location where you can actually have disproportionately cheap property because right move is kind of blind to their Existence. Wow. You also have the problem, which is you can’t sell a property apparently now for £850,000. Your estate agent or anybody else will tell you, no, no, you’ve got to make it say 810 or 890. Okay, that’s fine. And the reason is that people search for property either £900,000 and down or £800,000 and up. And two things happen. One, they’re less likely to find you at all because you’re further away from their searching point. Secondly, if they do find you, the people who are searching 900 and down are a bit disquieted because they think you’re too cheap. And the people who are searching 800 and up think you’re a bit too expensive. So the extent to which what seems like a completely rational filtration process in online searching activity or decision making may be deeply flawed because it doesn’t reflect the Way in which we make decisions in the real world, which is we recalibrate what we want according to what we find. Chris Williamson We’ll get back to talking to Rory in one minute, but first I need to tell you about Element. For the last three years, I’ve started every morning with Element. Element is a tasty electrolyte drink mix with everything that you need and nothing that you don’t. Each grab and go stick contains a science-backed electrolyte ratio of sodium, potassium, and magnesium with no coloring, no artificial ingredients, or any other junk. Proper hydration isn’t just about getting sufficient water in you, it’s about having the right number of electrolytes to use the fluids that are inside of your body. You might not be tired, you might not need more caffeine, you might just be dehydrated, and proper hydration requires electrolytes. Best of all, they have a no-questions refund policy with an unlimited duration, so you can buy it and try it for as long as you want, and if you do not like it for any reason, they’ll give You your money back and you don’t even need to return the box. That’s how confident they are that you love it. This thing tastes phenomenal. It’s like a sweet, salty, orangey nectar first thing in the morning. And I love it. And that’s why I’ve used it for probably a thousand days now. (Time 0:13:50)
  • The Genie’s Offer
    • Rory Sutherland shares an advertising joke about a copywriter, art director, and account man encountering a genie.
    • The account man’s wish highlights the prioritization of immediate needs over long-term aspirations. Transcript: Chris Williamson Right now, you can get a free sample pack of all eight flavors with your first box by going to the link in the description below or heading to drinklmnt.com/modern wisdom that’s drinklmnt.com/modern Rory Sutherland Wisdom what was that uh parable of three men getting onto an airplane oh the story at the beginning no that’s just a story about how undoubtedly, in all kinds of areas, driven partly by Technology, what’s urgent crowds out what’s important. And it’s a joke. It’s an old advertising joke told me by someone who is literally from the Mad Men era, which is you have a copywriter, an art director, and an account man, okay, who are boarding a plane To present work to a client. And they open the overhead locker and somewhat implausibly a genie gets out and says, I’ve been trapped in that overhead locker for years. To thank you all for releasing me, I’ll give you each a wish so you can choose anything you want. And they go to the art director who says, I’d like Picasso’s life. You know, I don’t mind my life, but I want Picasso’s life, the locations, the eye, the artistry, you know, probably the women folk, the romantic life. That’s what I really want. And whoosh, the art director disappears. And then the genie turns to the copywriter who goes, it’s got to be Hemingway. You know, he enumerates a whole load of reasons why he’d like to be able to write and live like Hemingway, and whoosh, disappears. (Time 0:18:37)
  • Short-Term vs. Long-Term Value
    • Short-term measurable results are often prioritized over long-term value creation in business.
    • This can lead to neglecting important aspects like customer loyalty and experience. Transcript: Rory Sutherland And then the genie turns to the account man and says, what about your wish? He says, I want those two guys back. I’ve got an important meeting in two and a half hours. Okay. The shareholder value movement to business quarterly reporting to the extent to which in advertising too much money is spent on short-term performance advertising and too little Is spent on long-term brand building and that’s not because it’s necessarily more valuable it’s because it delivers measurable results faster so i’ll give you i’ll give you a fundamental Problem. The FT wrote a very, very good article specifically about the UK, but I think it applies more widely, which is, how did customer service get so bad? Now, the point is, I felt like writing an article to the FT saying, well, if you occasionally acknowledged there was something interesting about business other than their quarterly Financial forecasts, maybe the problem wouldn’t have happened. If you actually discussed marketing occasionally or customer experience or the value of repeat business, if you looked at business from the point of view of what you might call a competition For customers rather than the competition for operational efficiencies and cost cutting. Maybe we wouldn’t have gone into this total shitstorm, okay? But parking that rant for a moment, what seems obvious, okay, if you spend some money on acquiring customers, you can see whether it’s working very quickly. And you can say very confidently, we spend X and the value of the acquired customers was Y. Let’s say you want to make a corresponding investment in customer loyalty or customer experience. In other words, ensuring your existing customers have a great experience and so they come back or dealing with problems very well so that your customers don’t leave. Generally, you could perfectly well prove that that was cost effective and indeed my hunch would be that money spent there would be more cost effective in many cases than money spent On acquisition however it might take you five years to prove the efficacy of what you do because it’s slower there are businesses which are fast there are businesses which are slow. There are fast feedback businesses which you learn very quickly. An example, by the way, of very fast feedback business is comedy. You have an instant feedback mechanism from the audience, which basically tells you whether or not a joke is any good and whether you’ve landed it. And so apparently, if you go to small comedy clubs, you’ll occasionally be surprised because you’re sitting there and there are only sort of 20 tables and Chris Rock will come in. And effectively, it’s all a bit weird, but he’s trying out his new material for the next run. Before you go to bigger theatres, you try your material out on a small scale. And that’s a fast feedback business. Amazon’s a pretty fast feedback business, I would argue, because it has a very high degree of frequency of interaction with customers. Something like banking or insurance is unbelievably slow. I mean, if you’re a bank and you piss off a customer, they don’t even leave, by the way. They just go inert. It’s not like people go, I’m going to close my current account and i’m going to walk off they just open another current account somewhere else your current account they don’t buy anything Any other products from you but it’s not the same as uh as something like comedy where you know within seconds how whether you’ve landed something or not and then there are also things Which which bother me which is there are also things where I was talking to the guy who founded AO and they have this lovely little system where when they deliver a washing machine or a Dishwasher or whatever, if there are children in the house, because they deliver things themselves, they give the children a little branded bear. OK, now, as he said, perfectly right, you know, someone in finance is going to say, OK, what’s the cost benefit analysis? Okay, on that. And his point is, it’s impossible. You just have to make a judgment, subjective judgment, that the cost of the bear is trivial and the long term effect is likely to be quite high. (Time 0:20:06)
  • Jaguar’s Bold Rebrand
    • Jaguar’s rebrand, while alienating some existing customers, aims to move upmarket.
    • This bold move is compared to Dylan going electric or the Beatles’ Sergeant Pepper, signifying a major shift. Transcript: Rory Sutherland If things go badly, you lose your job. Speaking of things going badly, Jaguar’s rebrand. What do you reckon? I’m in a small minority of people who would argue that before you criticize what someone does, you’ve got to understand what they’re trying to do. And they have been completely forthright about the fact they expect to lose all but 15% of their customers. All but 15% of their customers. Exactly, of their customers, by moving to a much more upmarket, expensive car on an electric platform. And The argument I might make is that normally what they did is anathema to anybody who loves what you might call brand maintenance and brand management. Because, but by the way, they didn’t change their name. Okay, they didn’t call the car Zog. They still call it Jaguar. They still, contrary to rumors, have kept the leaping cat motif, etc. But what they’ve done is a very, very bold of okay in a sense it’s look bet the farm here okay either we do this we either succeed in which case great or if we fail to be honest we were heading For disaster anyway because you’ve got to be slightly careful this is where uh you know uh okay when dylan electronic, okay, someone shouted Judas, the crowd in the Manchester Free Trade Hall absolutely hated it. Jaguar purists are going to hate anything. By the way, I’ve had six Jags, by the way. So I’m, you know, I’m a loyal Jag enthusiast. I love the brand. And in many ways, I love a lot of the heritage about that brand. But equally, I love red telephone boxes, but I don’t think it should be the BT logo. Okay, I love, you know, Giles Gilbert Scott’s design for red telephone boxes, but I’m also cognizant of the fact that I don’t make many calls from payphones anymore. And I like Burberry Max, but I’m also cognizant of the fact that because of various things like, you know, central heating and Uber, not many people wear Macintoshes anymore, you know, Apart from Americans and Flashers, in my experience. I was saying this the other day. Now, there are occasions where you might argue that electrification completely reshapes the competitive landscape for any car brand or any car manufacturer and that what you have To do is a fairly dramatic pivot i’m going to i’m going to join get get that in you yeah absolutely not (Time 0:27:42)
  • The Future of Cars
    • Electrification changes the automotive landscape, shifting the focus from mechanics to other aspects.
    • Rory Sutherland questions whether interiors, design, or other factors will define car brands in the future. Transcript: Chris Williamson Complex supply chain, etc. Rory Sutherland I mean, you know, there’s a whole German, you know, which supplies, you know, fan belts and weird bits. All of that goes because I mean, this one thing by the way which i think we ought to say about electric cars which i think is missed by a lot of people which is that if you look at a petrol engine Which is you know it’s a cathedral it’s a magnificent achievement a really advanced you know petrol engine all of those things that move and rattle and bump and filter things and need To be replaced and and the gearbox and all that stuff all of those things exist for only one reason which is to rotate a shaft to provide form forward movement okay now i’m team faraday Here because the way an electric motor works is you put electricity in, it rotates, which explains why, with the possible exception of your lawnmower, every single rotating, moving Thing in your house uses electricity as the motive power, not petrol. Okay. You know, there is a wonderful advertisement, by the way, which was done, I think, for, I think it was either Renault. I think it was the Renault, the first electric Renault, which is equivalent to the Nissan Leaf, where they simply showed someone getting up in the morning and what would have been their Electric toothbrush was actually powered by a little gasoline engine. They shaved and there were sort of fumes coming out of their razor. That’s very good. Okay. And it made that very simple point that nearly everything else in your life has gone electric. It was only a matter of time before battery technology, driven actually probably by the mobile phone industry, made this possible for the car. I mean, by the way, Henry Ford and Edison worked together on an electric car. It’s interesting the resistance that people have, especially around vehicles. (Time 0:36:00)
  • Addition vs. Subtraction
    • We tend to solve problems by adding rather than subtracting, often overlooking simplification.
    • This bias toward addition can lead to unnecessary complexity and inefficiency in various systems. Transcript: Chris Williamson That’s L-I slash modernwisdom and modernwisdom at checkout. Talk to me about this problem with seeking solutions through addition rather than subtraction thing that you’ve been on recently. Rory Sutherland That’s an interesting observation, which is that we have an automatic default when we want to solve a problem, that we add things rather than removing them. There is actually a very good point. I think Nassim made this point when Elon was appointed the, was it, the Director of Government Efficiency, where he said, quite rightly, you should be the Director of Government Effectiveness, Because it’s perfectly impossible to do things very efficiently, which you shouldn’t be doing at all. And that’s a Peter Drucker quote, which is, I think it’s nothing, nothing’s more wasteful or stupid than to see something done efficiently that shouldn’t be done at all. And undoubtedly, I think there are, particularly among things which are ostensibly well-intentioned, okay, we never ask the question, would we be better off if we just got rid of this Entirely? And so there’s a great quote from Cybernetics, a guy called Stafford Beers, where the quote is, the purpose of the system is what it does, which is quite a lot of systems, quite a lot of Bureaucracy has this ostensible purpose, which is entirely praiseworthy and worthwhile. And so we actually attach much less scrutiny to that kind of thing than we do to something that’s actually selfish. I mean, you know, one thing about being a commercial company is people go, what’s in it for them? Okay. What do they get out of this? I’m suspicious. This is too good to be true. I’m not really comfortable with this. You know, we deploy, quite rightly, you know, high degrees of skepticism towards the private sector because we want to know what they’re up to. Now, to some extent, if you’re working in, for example, something that’s altruistic or charitable, we suspend that level of skepticism. We go, oh, it’s so well-intentioned. Isn’t it brilliant? Okay. Okay, oh, they’re working for so-and Isn’t that great? Now, it’s nonetheless perfectly possible that the ultimate consequences of that well-intentioned action, first of all, it’s possible that the motivation isn’t nearly as wholesome As we may like to think. But secondly, it’s also possible that just because something is well-intentioned doesn’t mean the consequences are necessarily positive or benign. And so, I mean, there is undoubtedly a really interesting question of what should we stop doing. I mean, I’m very interested. One of the reasons I’m very interested in flexible work is it occurs to me that companies looked at in one way are actually very inefficient. I tried to get, I did actually get our finance department. I said, forget about the usual method of financial reporting, okay? How much does a client have to pay us in fee income in order for my younger colleague, and by the way, the fact that they’re younger is relevant because they’re not kind of vested in the Property market as someone my age is, in order for my younger colleague to go out and have a curry. And what you look at is the client pays us, then there are various overheads and costs, and there’s HR and finance, and there’s office space, and there’s all that other expense. Then finally, the money trickles down to the salary of the person actually doing the work, once the kind of landlord has taken their cut, and the shareholders have taken their cut and Everything else, trickles down to my colleague. Then from that incremental amount of money, 40% will probably go in tax. Then of the remainder, 40%, maybe 50% will go in housing costs and transportation costs, commuting costs. So works out that in order to buy my colleague, you know, a trip to the Koh-i okay, a client has to give us about 250 quid. Now, my argument is, if you could get rid of all that shit and just do the work on Zoom, okay, in other words, the people, this seems to be an extraordinary extent to which, you know, in large Organizations, the people who are creating the value, the people who are doing the real work. I mean, it’s amazing that capitalism functions at all when you look at the extent to which, you know, money goes in and then incidental costs, particularly property, I’m Georgest, Okay, particularly, you know, property costs. Chip, chip, chip, chip. Chip away at all of that. And so the actual incentive for the person to perform valuable work and the reward they receive for it has mostly disappeared. You were talking about feedback loops (Time 0:46:49)
  • UK Tax System Inequity
    • The UK tax system disproportionately benefits unearned wealth, creating intergenerational inequity.
    • This leads to situations where hard work doesn’t guarantee financial stability, while inherited wealth provides significant advantages. Transcript: Chris Williamson Obviously, two million people just signed a petition to, we are disgruntled with Mr. Starmer, Sir Starmer. We want to make some changes there. We’ve seen a lot of sort of turmoil and stuff across this year, generally 2024 in the UK. What do you make of the state of sort of British culture, the milieu that we’re in at the moment. Rory Sutherland I did make the joke that voting Labour and having a chancellor who’s come from the Bank of England is a bit like going on a Club 1830 holiday and taking your parents along, which it kind Of defeats the object of the exercise a bit, in that one of, you know, one of the things I think we would like to see as voters, and I’m perfectly happy to give this government a, you know, I think you have to give the people the benefit of a few years before you get pissy about it. I mean, that is actually, I’d be interested to know who’s signing that petition. Is it people on the left who are just disappointed? Is it reform voters? Is it conservatives? I don’t know. Who is it who feels most kind of cheated? I mean, you’ve got to remember that there are an awful lot of people who didn’t vote for them, if you consider the size of their majority, okay? They’ve got a massive majority, but the share of the popular vote is fairly… Yeah, I’m not sure if you can be disgruntled with somebody that you didn’t vote for. Well, it’s interesting who’s demanding a kind of run again. Some of the things interest me because we kind of, I think a lot of people know that there’s fundamental iniquity, intergenerational iniquity, which is because salaries are taxed Very highly and wealth, particularly capital gains from your main property, are barely taxed at all. And that leads to, I think, a kind of absurdity, which is that one piece written about this is it’s not actually intergenerational inequality that’s the problem. It’s going to be intragenerational inequality when people start inheriting houses or not inheriting houses, because you can literally have the situation where you can work incredibly Hard for 30 years and reach a position of some eminence in a business or in an institution. And because your parents happen to live in an area of low house prices or didn’t own a house at all, you’re still living somewhere crap. Whereas your underlings, you know, whose parents lived in Surbiton or Kensington or whatever it may be, okay, are basically swanning around in palaces going on cruises all the time. And that does strike me as a fundamental flaw that we’ve created this system where unearned income, which is not really particularly meritocratic or inherited income, is treated Incredibly generously. Whereas earned income, I think the top, if I’m right, is it the top 5% of taxpayers pay 50% or 60% of all income tax? Chris Williamson So in America, it may be the same here too. Rory Sutherland Probably the same here. I mean, that’s, by the way, it’s a kind of statistical artifact. You generally, you usually find those power law effects. So it’s not quite as weird as it sounds, but nonetheless, that is quite weird when you think about it. Now, one thing I thought was extraordinarily interesting as an idea is, you know that chap who wrote The Trading Game? Gary Stevenson. Gary Stevenson. He makes a very valid point, okay? Whatever else you think, which is that nearly all economic models use single representative agents to populate the models, which is they assume that the person whom they’re trying To optimize for is an average of everybody. And as a consequence, inequality doesn’t feature in those models because you’re simply dealing with an average. And so if Bill Gates walks into a football stadium, everybody in the football stadium is actually a millionaire suddenly, on average, okay? It’s simply not a reliable thing to do. And one of the things that strikes me as genuinely horrific is the extent to which I think the tax system is kind of garantophilic. There are huge huge concessions in terms of pensions that are given out, huge concessions in terms of inherited property, huge concessions in terms of capital gains and existing property. You also get this utter absurdity, which fascinates me, which is that there are five-bedroom, four-bed houses which have one or two pensioners knocking around in them nothing wrong With that you might argue except those pensioners are often skint okay now it’s a weird kind of way of being a millionaire that you live in a massive house that you don’t entirely need Now by the way if if you simply saved a hell of a lot of money and you just like living in a big fuck off house well you can argue that’s kind of, you know, you’re entitled to that. But you literally get people living in these extraordinary houses who are, you know, going to Lidl and worried about the price of lemons. Yeah. Okay. Pretty weird. If someone told you and your kid, you’re going to be a millionaire one day, but you’re going to be really worried about where you buy lemons. You’d think this is a pretty weird world. I mean, one great idea, Roger L. Martin’s idea, is that you should, at the moment, you get your first 10,000 or whatever it is of your annual salary is tax-free every year. Roger L. Martin, a Canadian, proposed that that should be a lifetime tax allowance. 250,000 pounds. So the first 250,000 Canadian dollars you earn in your life is tax-free, after which the tax system kicks in. Now, that would be extraordinarily beneficial to younger people who need the money more and who could build up some… Actually, you don’t need that much in the way of savings. I mean, one of the interesting things about the benefits to wealth is that there are inflection points. Chris Williamson First house deposit. Rory Sutherland Well, actually, having £5,000 you can call on in a crisis is a really, really big difference. It fundamentally changes what people can do. Very interesting thing. When I first went to America, was i think i was 29 roughly and i remember thinking i’m glad i never came here when i was skid okay it’s a bad it’s a bad country to be pouring it’s a terrible Country in which not to have ten thousand dollars living there correct you know um you know one bad thing goes wrong and suddenly you know in Leavenworth doing a nine stretch. And so there are these inflection points where you can take people. One of them I always think is that when you start earning a bit above median income, you notice that actually it’s quite nice because things are priced for people who are a bit poorer than You. (Time 0:52:53)
  • Improving UK Culture
    • To boost the UK’s attractiveness, Rory suggests making it more entertaining and reducing taxes on social spaces.
    • He also proposes attracting high earners by offering lifestyle arbitrage opportunities, similar to Portugal. Transcript: Chris Williamson That’s functionhealth.com/modern wisdom. Just going back to the UK for a second, let’s say that Starmer brought you in or whoever it is that does tourism brought you in to improve UK culture, sort of tourist destination type thing. Have you got any sort of branding or psychological interventions, which would maybe be low cost that could make the UK more attractive across the board? For tourists? Yeah, for tourists or for people to stay. We’ve got the second in the world. The UK is second in the world for millionaire exits in 2024. China, fucking literal communist dictatorship authoritarian hellscape, was first with about between… Rory Sutherland You’ve got to watch the super rich because the super rich don’t give a shit about democracy, okay? Because they can capture power using money rather than using rights. And the super rich, I mean, if you look at Dubai, which has done a fantastic job of effectively saying, we’re just going to make this place unbelievably attractive for wealthy people To live here in terms of low taxes, okay? Very low crime rate, okay? You have cheap labor, which rich people really love. You know, most of us are, you know, in other words, you get lots of people doing stuff for you. So the service industries are fantastic. And to be honest, very rich people aren’t that bothered about being able to vote because they only get one vote, which is the same as the, you know, the teacher down the street. Why would I want something I can’t have more of than somebody else? So it doesn’t surprise me, by the way, that actually very rich people are often quite drawn to authoritarian spaces because they don’t suffer the downside. But in some respects, they can profit from the upside. Chris Williamson China lost about 13,000 to 15,000 this year. The UK lost 10,000 millionaires leaving. But we have 3% of the population of China. We have about 5% of the population of India, and more millionaires left the UK. Second in the world in millionaire exits, we have the same number of universities in the top 10 as America do, but only 20% of the number of startup founders and entrepreneurs. Rory Sutherland So why? What is it that’s going on? One thing you could do, and the Portuguese are playing this game. I mean, a lot of people have, I mean, I had an interesting conversation, okay, which is that where people spend wealth is increasingly, I think slightly undesirably, okay, being detached From where people earn it. Now, I grew up in the Welsh Valleys. My Scottish ancestors moved down to South Wales because it was the Dubai of the late 19th century. It was coal money. It was actually booming. I mean, my great-grandfather, I think, moved down to Edinburgh, intending to join from a croft, intending to join the police force, and was told, don’t bother here, South Wales is where You need to go to make money. But the people, including the coal owners, lived somewhere within, they didn’t live next to the mine, but they lived somewhere within the proximity of that thing. I remember my grandmother, who’s not remotely left-wing, okay, quite the opposite, standing on Cardiff Station looking around, and by the way, Cardiff was a lot grimmer back then, This was in the 70s than it is now. It’s rather nice now. Lovely. And saying, just think of the money that’s been made here and spent in more exotic places. I always remember that. It was a strangely kind of socialistic sentiment from a pretty right-wing grandmother. And what you see, I remember having this conversation with people who are responsible for invest in kent and i said to be honest it doesn’t really matter whether you attract businesses To kent if you can get people who earn money in london to come and live in kent and their families all spend their money here okay that’s good enough and so when you have this detachment Of where people make money and where people spend it, one thing the Portuguese are doing, they’re proposing lower tax rates for people under 30. They’re proposing these nomad visas. Lisbon, very cool, very attractive city. Likewise, Porto, you know, attracts people who like kite surfing and other excitement. (Time 1:06:23)
  • Trump’s Marketing Assessment
    • Trump’s marketing success can be attributed to the Democrats’ misreading of certain demographics and their focus on album politics.
    • This creates an artificial worldview that hinders their ability to connect with a broader audience. Transcript: Chris Williamson You’d come and do a quiz at the end. Talk to me about your assessment of Trump’s marketing campaign. Rory Sutherland I didn’t think you need to do that because actually what he did was fairly consistent with what he’d done before. He had probably, Elon was a little bit of a clever. Signal boost. Signal boost. I think what you really have to analyze is the Democrats as a marketing entity and how spectacularly bad they are in that you end up the problem with living in a very tight urban bubble I did talk with rick rubin for the christmas edition of the spectator he’s great absolutely glorious man and he made the interesting point that he had a kind of interestingly bipolar Childhood and he spent weeks on Long Island, which was effectively a blue-collar existence. And then he spent his weekends in Manhattan with an aunt who, as a kind of creative services director for Estee Lauder, was taken to concerts, you know, the usual cultural events, books, Poetry, etc. And the interesting observation, he said, is there was a downside to that, which is that the cultural life in new york was entirely driven and hence constrained by what other people Thought of your tastes whereas people on long island the blue collar culture basically you like things because you like things it’s similar to um uh rob’s point that what is it that that Uh middle-class food posh people food looks better than it tastes and working-class food tastes better than it looks okay um uh that’s you know and and that the constraints on you on Your opinions on your tastes on what you could enjoy because you had to defer your primary concern was what does this say about me to other people within my group? Now, in a blue-collar environment, you can like what you like. There are certain musical forms which tend to be gospel, I was mentioning this, country, where nobody really cares. There’s no particular, okay, there’s no particular kudos to be gained from liking country or liking gospel. Okay. And therefore, you’re free, basically, to exercise honest, subjective taste without having to pretend to like things that you don’t in order to fit into a particular milieu. And there is a problem when the Democrats become… I’ve got a skin in this. I’ve got a dog in this fight. Actually, Woodrow Wilson was like my third cousin twice removed, weirdly. Everybody’s got a racist in the family. My misfortune is that my racist was the President of the United States. But his mum was born in England to Scottish parents. But the Democrats fundamentally, I think, are in this bizarre hall of mirrors where effectively their own opinions and thoughts have now become subordinated to a kind of artificial Worldview where you have to buy the entire album, as it were. There’s a times journalist who talks about this which is sort of album politics in other words it’s not just that you have left-wing opinions you have to buy into every single opinion That is believed to be uh from the left and you have to buy the whole package deal and consequently you end up with this very very strange group of people thinking their norm. And it’s very similar to the phenomenon that Gillian Tett spotted. I don’t know if you’ve read The Silo Effect. Have you had Gillian on the show? No. Very, very interesting because she’s an FT journalist, but principally her training was as an anthropologist and ending up as a business journalist she brought her anthropological Skill set and eye to what was going on in business and by happy coincidence well in a sense she ended up looking at what was effectively the um securitization of mortgages that whole business Before the events of the big short, before the crash. And she immediately spotted that you had this group of people in a particular habitus or mindset who were incapable of understanding the world outside their own particular reference Points. And just an amusing detail about that, which which i thought was just hold on a second i remember thinking okay so there was a trump event at um that huge new york hall what the hell is it Called madison square gardens okay where there was a comedian i think he’s a texan comedian if i’m right tony hinchcliffe and he he told a little joke about um Rico, okay, which is, we Won’t repeat it here. And the immediate assumption, because in their worldview, all Latinos identify as Latinx and have a massive sense of solidarity towards all other Latinos, okay, because that’s their Peculiar worldview, was that by countenancing this joke, Trump had lost the entire Latino vote. I was sitting there going, okay, that’s a bit like saying that if the guy had told an anti-French joke, he would have lost the European vote. Okay. The idea that Latinos are so kind of homogeneous as an ethnic group that they identify, you know, attack They’ll band together with the Puerto Ricans. I mean, Cubans thought that joke was hysterically funny. Okay. Chris Williamson I would imagine that the other, the other Latinos found that funnier given that it’s jibbing someone that’s close enough to them. Rory Sutherland You watch Narcos, right? I mean, you know, the Colombian Mexican tension is enormous. I mean, yes, that, you know there are points of shared commonality but you also have this thing between actually precisely because the countries are quite similar you get this kind Of narcissism of small differences yeah uh and i always remember i remember looking at that and they’re going he’s lost the entire latino vote now it’s going you clearly have a view of A community, which is one which is based on, you know, probably, you know, some Marxist ideology about race, which is in complete denial about nationality or nationhood. And it just struck me as really interesting that you could misread that so badly. And something, you know, fundamentally the way they go about appointing people the way the whole thing appears to be kind of a coronation um it’s it’s very sad because you know this should Be you know this could be a you know really wonderful there are lots of aspects i mean yeah in by european standards I’d lean politically right. I’ll be honest about that by Euro (Time 1:16:16)
  • Taxpayer Privileges
    • Offer higher taxpayers privileges to incentivize tax payments and make the system feel more rewarding.
    • This can create a sense of value exchange, similar to how luxury brands cater to status-seeking customers. Transcript: Chris Williamson That’s shopify.com/modern wisdom to upgrade your selling today. But you had this thing about uh people that pay lots of taxes needing additional priv or it may be an idea to offer them extra privileges okay i’m a big i’m loving this i’m a big slowly accumulating Rory Sutherland More flavors this is great it’s brunny the it’s a thought experiment which we’re one of the things i think we’re lacking in is that i would argue, yes, that my joke suggestion was that People who pay a higher rate tax should be allowed to drive in the bus lanes. Now, just to be clear about this, I didn’t mean that entirely seriously. I didn’t mean that it should be enacted. It was purely a thought experiment based on the observation that rich people are pretty happy paying for things. Small amount so the when you are poor a large part of your disposable income is spent on what you might reasonably call utility as you get richer both attractively and unattractively As i said um what you might call relative status in other words, the relative quality of something matters more than its absolute value. And so if you look at car manufacturers, the top of the range X probably costs 25% more to manufacture than the bottom of the range X, but the sticker price might be doubled. And that’s simply because the people buying from the top of the range are more interested in status and more interested in you know leather seats and heads-up display and you know adaptive Cruise control they’re more interested in what you might call things you can show off about or things which are just novel whereas the poorer person is buying the car as a mode of transportation Okay it’s closer to the economic idea of utility. And consequently, it struck me that government should play the same trick that car manufacturers do, which is to say, yes, you pay a lot more tax, but in return, you get certain privileges, You get certain advantages. Now, by the way, the evidence that something of the kind, which is that if it was simply reframed with a thank you. So there’s an experiment from Singapore, which I think was adopted in the UK by a housing association, which had trouble getting people to pay their rent time. And one of the most, they tried a variety of behavioral economic interventions, but one of the most successful was simply every time you paid your rent on time, you got a text saying thank You. And that massively reduced the incidence of late payment subsequently. It’s one of those weird things. And that’s a total just, it’s a tiny little reframing which is you did a good thing we’re grateful to you we noticed yeah yeah i mean whereas i don’t feel when i when i pay whatever vast amount I pay to the exchequer if they just said kind of we noticed thank you for doing the right thing by the way just to be clear on this i do do the right thing because my wife does my finances she’s A vicar in the church of england which is like having the shittest accountant in the world in terms of tax. She’ll say, Rory, when you attended that conference, they gave you a free pen. I really think you ought to declare this. I actually declared all the capital gains on my bloody Bitcoin. (Time 1:27:08)
  • Frozen Paratha vs. Sourdough
    • Rory Sutherland praises the frozen paratha, an innovative Indian food product available in the UK, highlighting its convenience and quality.
    • He contrasts this with the trend of sourdough bread, emphasizing the problem of winner-take-all effects in a globalized economy. Transcript: Rory Sutherland By the way i’m trying to start a little tradition that the guests on podcasts get to advertise something as well whatever you would like it always strikes me as very unfair santa fe opera The santa fe opera is my a major old podcast i was on jamie lang’s podcast and started i think i was plugging a italian jamaican cafe in west room um probably giving it a greater level of Chris Williamson Indiscriminate fame i wonder how many people have bought air fryers and mustang mackeys off the back of you i do think it’s had a market impact on the the mustang i’ve got a new one for you Rory Sutherland Uh only relevant for brits really although also possibly relevant for expat indians in United States, the frozen paratha. Chris Williamson I saw you tweet about this the other day. Rory Sutherland I bought this from Ocado. I thought, why the hell has this frozen paratha got 170 votes and is like a five, literally five stars on Ocado? What’s Ocado? Oh, my goodness, you don’t know. You see, there are lots of things in the UK. So it’s it’s grocery delivery home grocery delivery very innovative bunch of people who started you know effectively robotic picking so they have it’s very very high tech mode of grocery Delivery they used to have a partnership with waitrose they’ve now got a partnership with marcus and spencer okay um it’s actually probably better than anything you’ve got in the u.s Actually we know by the way in britain we never really celebrate our so i would i would include octopus energy and ocado as you know and perhaps a um wise okay we occasionally do these things Incredibly well and in the united states you’d be fated for doing this whereas in britain you’re just treated with kind of mild suspicion. Okay. And there is, I think there is that British problem, which is there is an acceptable social ceiling to the amount of wealth you have. That Americans have observed, even in what you would think of as pretty cutthroat businesses like investment banking, that once they’ve got a flat in London, you know, a former rectory In the Cotswolds, you know, a wife called Polly, you know, a Labrador, two children at private school, a Range Rover, and an Arga, okay, basically that’s it. You’ve hit your ceiling and anything more would be slightly dubious, you know. So there is that kind of weird kind of class-based ceiling to, you know, it’s quite difficult to create a dyson in the uk okay but but what what’s interesting in ocado is the frozen paratha Is uh it was invented in what i call cinnamon valley which is this area around wembley and london which is where an enormous amount of innovation in indian food preparation goes on which Is one of the great, I think, one of the great reasons I still live in the UK, is the quality of Indian food surpasses it. Very difficult to find in America. I imagine, Austin, you must have a large enough expat community that it started to raise its game. Chris Williamson I’m yet to find a good Indian meal in Austin, Texas, much to my dismay. Okay, we’ll go looking. Rory Sutherland I’ll crowdsource it maybe someone can comment below someone can comment but the frozen paratha is a remarkable thing it just sits in the freezer you can have an onion one you can have Aloo paratha there’s a garlic one but basically you take it out of the freezer where it’s basically completely long life bang it in a pan with a little bit of oil about one and a half minutes Either side turn it over you’ve had the kind of paratha which is literally you know if you went to a three-star michelin indian restaurant you would not be disappointed by the paratha It’s the great i mean what the hell is sour what’s this sourdough thing it’s fine right sourdough has a place in my bread repertoire but the extent to which it’s come to dominate artisan Bread rather like ipa dominated artisan bread. Chris Williamson Salted caramel in the dessert world. Yeah, you got it exactly. Yeah. Rory Sutherland These things, these kind of, these winner-take effects in a globalized economy are actually problematic because they’re like the gray squirrel. You know, they eliminate the indigenous alternative. (Time 1:35:13)
  • Open-Plan Office Woes
    • Open-plan offices can hinder productivity, especially for those needing quiet.
    • Rory shares an anecdote of a colleague finding solace amidst a discarded Harry Potter jigsaw puzzle. Transcript: Chris Williamson They have complete silence. You also don’t want to be in that all the time, necessarily. It is a barbell, you’re right. If you have the final proofread of this particular piece of copy that absolutely needs to be right, if you’re writing a best man speech, probably best to be in somewhere that’s a little Bit more chill. It’s your final run through. You’re trying to remember a presentation. You’re trying to do whatever. Do you really want to be in the cafe? But yeah, I mean, you’ll have seen this as well. To introverts, an open plan office is probably very tiring. Well, I mean, I think on average, it seems like open plan offices really, really damage down productivity. The difference even between noise cancelling headphones and complete silence is marked. A mutual friend of ours worked at a place a social media management agency years ago and they had this huge harry potter fan page thing and as a part of that they were doing a time lapse of Them building the world’s biggest harry potter jigsaw puzzle so they were going obsessed they had an entire room you know it’s one of these many many many stories and there was open plan Office and fucking astroturf on the walls and you know ping pong Wednesdays or whatever. And he just, he couldn’t work. He couldn’t think, he couldn’t focus. So he had found that they’d kind of given up on this huge Harry Potter thing. Then maybe got stuck at some stage of the jigsaw. So he, there was a point where every morning for a couple of weeks, he went up and sat in amongst disused harry potter jigsaw puzzle pieces on the floor because it was the only place he could Get any fucking peace yes yeah yeah (Time 1:48:32)
  • Bonding Through Experiences
    • To foster bonding, invest in staff outings and shared experiences rather than expensive office spaces.
    • Shared adversity and informal settings can create stronger connections than formal office environments. Transcript: Rory Sutherland I mean you know we we have we have some weird sort of mysterious lavatories on the ground floor which i notice the occupancy rate is surprisingly high given that they’re not signposted Yes and i strongly suspect people are using them as a kind of escape pod. Need a little bit of chill time. Yeah. Yeah. And I, you know, the other thing I think is interesting is if you really want to bond people, one interesting thing is to reduce the amount of money you spend on rent. But I think you have to correspondingly ring fence a bit of that saving and spend it on what you might call staff jollies. Now, I don’t mean total self-indulgence, but I mean, you know, away days where maybe we should take some office space by the sea somewhere like Margate, Folkestone, Brighton. Okay. Just because actually, if you want to bond people, I don’t think an office is a particularly good place for bonding. I think if you take people on a trip together, you find people bond very, very tightly. I mean, famously, you’ll love this story from advertising, the Coke Hilltop ad, I’d like to teach the world to sing, was actually, it was conceived at, I think, Dublin airport, because There was a massive flight delay. And effectively, there’s a quote from Bob Dylan in Brownsville Girl where he said, isn’t it funny how people who’ve suffered together have more in common than those who are most content? And these people had basically all been together, you know, and they were stuck at Dublin Airport overnight. And he noticed that effectively people were all going to the coke machine and because of the shared adversity they were all bonding in ways that they never would have done had the flight Chris Williamson Been on time it’s one of the reasons that throughout history armies have been encouraged to get drunk together a few nights before the first battle not because the sure the bonding thing The fact that it’s more difficult to lie the fact that you’re a better liar detector when you’re drunk than when you’re sober do you remember that carlsberg campaign you know who your Rory Sutherland Mates are no it only lasted i think it was um um it interested me from an anthropological perspective because there’s a theory that the reason young men get drunk and do stupid things Is to find out who your mates are. In other words, the person who at the first sign of a police siren hoofs it around the corner is not your mate. And so it’s a kind of loyalty testing thing, just as to some extent, you know, rude banter is a kind of proof of- Stress testing. It’s a stress test of a friendship. If we weren’t really good friends, I couldn’t say this to you. Therefore, the fact that I’m saying this to you is proof of our friendship. Signal (Time 1:50:00)
  • Simplifying Cookie Banners
    • Simplify cookie banner regulations by allowing browsers to automatically delete old cookies.
    • This would improve user experience and avoid unnecessary clicks and frustration. Transcript: Chris Williamson Of friendship. I wanted to show you this. Europeans, according to a study by Simple Analytics, Europeans spend approximately 575 million hours per year clicking through cookie banners. Rory Sutherland The prompts which appear on websites asking humans to accept cookies. Of the brexit dividends should have been that we got rid of that because it was an absolutely stupid piece of legislation which adds and by the way it’s also counterproductive because Every now and then i go onto my google chrome and i get rid of effectively all the cookies right so you’ve to restart it. Which means that for the next two weeks, it’s even worse than usual in that every goddamn page I go to, I have to effectively give permission or deny it to see whatever this thing was. That was a classic case of what I think is sometimes called, you know, the, what was the famous thing in British India where they created a bounty on cobras? Python. Yeah, cobras. Poisonous snakes. Yeah. And people started farming them to claim the bounty. Chris Williamson There was something to do with trying to reduce the number of cars on the road. So they logged the registration plates in one form or another, and all of the rich people just bought second cars. So they doubled the number of cars that were on the roads. That was Athens, yeah. Rory Sutherland I think you could come into Athens with an odd-numbered number plate or an even-numbered number plate to reduce traffic. And so everybody lined up at the Greek equivalent of the DMV when they were handing out car license plates. And basically, they said, oh, I really need an even number because my other car is not another car. And so they’d all shuffle into order, effectively. I’ll swap you. Yeah, yeah, yeah. In the queue. And no, I mean, if you think about it, there were extraordinarily intelligent. If you’d given the job to some nudge theorists rather than to lawyers, you could have come up with a very simple solution, which I would have thought would be fairly amicable to everybody, Which is you can set your browser to delete cookies more than X weeks old. OK, and that would be, you know, you might mandate that that’s an automatic option that’s made available to you. But, you know, the problem I have is that I like to purge all these things. I never quite know what clearing your cache actually means, but I like to do it regularly because it feels cathartic. But I like to clear cookies every now and then because it occurs to me there’s probably an unwholesome buildup of the things. But then every time I purge the damn things, it makes my browsing experience painfully bad. We could have got rid of that within weeks of 2016, if we wish to. And I have no idea why nobody’s done it. (Time 1:52:36)
  • Charitable Yield Management
    • Implement charitable yield management for services like queue jumping and parking.
    • This allocates resources based on willingness to pay while benefiting charities and reducing resentment. Transcript: Rory Sutherland Treasury absolutely hate hypothecation. I also think that, for example, fundamentally, I mean, I’ve got an interesting idea, which I’ll share with you, which I think is actually a usable idea, which is what I call charitable Yield management. Okay, let me explain. There are lots of things where you want to allocate resources according to willingness to pay. So I’ll give you an example. I’m at Athens airport. There’s a massive queue for passport control. There are people in front of me in the queue. I’m paranoid. I turn up at airports like three hours early. I’m totally paranoid like that. Other people, these people had left it a bit late. Their flight was leaving in 40 minutes. The queue was about 20 minutes long. I was pretty sympathetic. Now, what you could do is you could simply have, in the end, someone spotted them and let them through. It was quite intelligent. But you could have a system where you pay 20 quid, you jump the queue. Most people find that repugnant, but also they see that as the airport effectively profiting from their own incompetence. Okay, which is you’re probably deliberately creating a long queue so you can maximize revenue from queue jumping. If you had certain things where you paid, but the money went to charity, that is an interesting thing because it still identifies willingness to pay. In other words, you’re clearly desperate to catch your flight. It removes the incentive for fuckering. It removes A, the incentive, and also the resentment of the people doing it because, yeah, they may be richer than you, but at least they’re doing a good thing. So that could apply to parking. In every car park, there should be five station car parks. There should be five spaces where it’s 25 quid to Oxfam on top of the parking charge to park there. The reason being that someone who is absolutely desperate to park will always be able to find a space, whereas someone who’s got 40 minutes to spare can drive off somewhere else. Chris Williamson You’ve got maximizing area under the curve. Rory Sutherland You’re maximizing exactly that, the area under the curve, without creating resentment. You can apply that to street parking, one parking space in 10, and it’s easy to do with Ringo or pay by phone or what you use in Austin. What’s the parking app in Austin? Chris Williamson I had no idea. It’s just tap your card on the front. Oh, you tap, you’ve got that. Rory Sutherland So with those apps, it’s really, really easy. If you’re in one of those charity spaces, you have a different code and you just put in a different number and 20 quid goes to Oxfam on top of your cost of parking, which means that the parking Spaces go to the people who most desperately need them without anybody feeling rooked and charities make a lot of money. Now, that strikes me as quite an interesting, you could apply that to road pricing as well, by the way, how so uh well if people felt that a component of let’s say you had a you had a high-speed Lane if there’s a traffic jam on the m25 you can pay 20 quid to use the it’s equivalent to the multi-occupancy lane you get in the US. Okay. There’s a premium lane, which lets you jump the queue a bit. Okay. Now I would use that if I were going to Heathrow, probably. Okay. If I’ve got a plane to catch, if I haven’t got a plane to catch, I went, no, the great thing is what would create a lot of resentment is if people just saw a load of Bentleys and, you know, flash Cars jumping the queue. It creates fundamental resentment. But actually, if you made the thing charitable, it would be less repugnant. And you would still be allocating the road to the people who were most in need of the road. (Time 1:57:56)
  • Price as a Feeling
    • Economists often view price as a number, while consumers perceive it as a feeling, influenced by context and frequency.
    • This difference in perspective can lead to policies that seem logical but are ultimately unfair or ineffective. Transcript: Rory Sutherland And that, again, is down to Gary Stevenson’s observation, actually, that if you optimize for the average, you don’t distinguish between one person paying something a hundred times And a hundred people paying something once. I always notice when you drive down the French motorway, which is called the Autoroute des Anglais from Calais down towards, I think this one is towards A10 or something it’s called. Can’t remember the exact number. And you always notice that for the first sort of 50 miles, basically all the cars are English. There’s a bloody road. It’s a bit odd. Don’t the local French want to use their auto route? And then you realize, of course, if you’re English, you drive to France once a year. You pay the French motorway tolls. If you drive a long way down to the south of France, it’s going to come to a few hundred euros. But that’s a lot less than you’d pay for a higher car if you flew. And it’s just something you just, you suck it up if you want to drive down to the south of France. If you’re French, okay, and you’ve got a stretch of motorway of 20 miles and it costs you five euros a goddamn day. Okay. That’s a thousand euros a year. It’s completely different, completely different equation. And so one of the things we need to understand much better is to economists, price is a number, but to consumers, price is a feeling. And fundamentally, economists have this weird idea of money that it kind of, I mean, one of the most important topics, I think, in economics is how to spend it. I mean, Scott Galloway did quite an interesting piece on this just a few days ago, which is, in other words, it’s not just about investment, it’s not just about wealth optimization. The level of skill with which you translate available money into meaningful experiences, into happiness, well-being, flourishing, whatever you want to call it. I mean, that’s a skill in itself. And there are undoubtedly people who do it very, very badly. By the way, not only people who are extravagant, but actually people who are too stingy. So there’s a wonderful piece of research by George Loewenstein, which looks at the fact that we all acknowledge in economics that there are people who spend too much. In other words, they get into debt, they’re extravagant, they live for the moment. They’re probably, you know, they kind of have short time horizons and optimize for the moment to a point where they neglect their long-term wealth. But George Lowenstein also made the point that correspondingly, you would expect there to be people who are not spendthrifts, he called them skinflints, who actually find the act Of spending money so painful. Just the act of parting with money is something, you know, the very transaction itself is so painful, they spend far too little. And I think he did a kind of survey on this. And roughly speaking, about 40 to 50% of the population get it roughly right. And then you have a chunk of people at one end, actually, skinflints outnumber spendthrifts, if I remember his data. So there is, I mean, one of his points is that he’s a very big believer in buying experiences rather than stuff. And that’s one of the reasons I think Americans, by the way, should have more vacation time because Americans have quite a large non-working population, but it’s all people at the beginning Of life and at the end of life. And the Americans massively over-index in terms of leisure or lack of economic participation in terms of students and in terms of retirees. But they’re massively too busy in the middle of life. And one of the things I would argue is that if Americans spent more money on experiences, leisure, travel, etc., which tend to be quite labor-intensive, rather than, say, buying more Goods, which is what you do when you have very little spare time, would the actual American economy benefit? Chris Williamson Because you can’t. Rory Sutherland Because you’ve got… In other words, it’s better off having people working in a New Orleans cafe than it is importing a Chinese device that, you know, I don’t know, robotically cleans your cappuccino machine Or something. Okay. Whatever it is that people are buying. And that’s, now having said that, you’ve got to be very careful about dividing what is a good and what is an experience. Because if you buy a guitar and then spend a lot of time playing the guitar it’s both it’s both yeah so it’s very dangerous to say oh no it’s just it’s just goods are solid things experiences Are intangible because there’s a combination of both rory (Time 2:03:09)