If Books Could Kill - ＂Nudge＂ Part 1： A Simple Solution For Littering, Organ Donations and Climate Change

00:00:00.000 Wait, do I say it first or do you say it first?

00:00:01.560 Uh, you say it first.

00:00:02.260 I was about to say Michael. 1.00

00:00:03.680 Shit. 1.00

00:00:04.900 Great start. 1.00

00:00:05.700 Uh, Peter.

00:00:07.100 Michael.

00:00:07.560 What do you know about a book called Nudge?

00:00:10.060 Is it about how whenever I see Cass Sunstein's name, I want to nudge myself off a cliff?

00:00:14.300 so as we were workshopping your zinger i was surprised to learn that you don't know anything

00:00:34.000 about this book peter yeah this one just sort of like blurred together with all the other

00:00:38.120 verb books you know like remember that we had like blink and then there's nudge every book for a few

00:00:44.260 years was just a verb it's like honk how to let the guy in front of you know that you want him

00:00:49.880 to go faster yeah i don't understand what this era of books was um and i was surprised that we

00:00:55.840 were getting so many requests for this book because i had only really vaguely heard of it i don't know

00:01:01.060 anything about it it's different from other books we've covered recently in that it wasn't like a

00:01:04.880 huge bestseller. I mean, it did sell a lot of copies, but like nowhere on the order of the

00:01:09.340 secret or rich dad. But I would argue that this is one of the most influential books of the 2000s.

00:01:16.100 It's part of the entire Ted talk of occasion of American intellectual life that happened around

00:01:21.300 this time where everything was like a cute little rule. You thought it was this, but it's actually

00:01:27.200 this. Yeah. So the full title of the book is nudge colon improving decisions about health,

00:01:33.420 wealth and happiness it's by richard thaler and cass sunstein one of whom is a university of

00:01:39.880 chicago economist and the other is a harvard law professor almost immediately after this book

00:01:46.800 cass sunstein gets a very high profile role in the obama administration and nine years after

00:01:52.600 this book comes out richard thaler wins the nobel prize for the kind of work that this book contains

00:01:56.720 Okay. This whole kind of concept of nudging gets taken up by numerous actual countries. So the UK famously had a nudge unit. America had a nudge unit that is headed by Cass Sunstein. According to some of the academic stuff that I read, 51 countries set up like nudge units within their governments to do this kind of policymaking.

00:02:17.480 I don't even know what it is yet. And I'm still upset. So this episode is going to be a little

00:02:24.800 bit different in that we're going to spend the first like third to one half talking about what

00:02:30.460 is good about this idea. Okay. At the core of this, I think is like a true insight. We're going

00:02:36.600 to start with basically laying out the basic idea of a nudge. Okay. So I'm going to send you the

00:02:42.520 first couple paragraphs of the book. All right. A friend of yours, Carolyn, is the director of

00:02:48.140 food services for a large city school system. One evening, she and her friend Adam, a statistically

00:02:53.560 oriented management consultant who has worked with supermarket chains, hatched an interesting

00:02:58.140 idea. Without changing any menus, they would run some experiments in her schools to determine

00:03:03.340 whether the way the food is displayed and arranged might influence the choices kids make.

00:03:08.740 in some schools the desserts were placed first in others last and still others in a separate line

00:03:15.640 in some schools the french fries were at eye level in others the carrot sticks simply by

00:03:21.260 rearranging the cafeteria carolyn was able to increase or decrease the consumption of many 0.99

00:03:27.180 food items by as much as 25 percent boom nudged only an economist and a law professor could think 1.00

00:03:33.440 that this was a cool way to start a hot pop science book we're talking about the carrots

00:03:38.260 We're starting with carrots.

00:03:39.780 So this is essentially the core insight of the book. 0.98

00:03:42.940 And I think this is fucking true. 0.73

00:03:45.260 The way that things are presented to us and how our options are described changes the choices that we make. 0.98

00:03:52.660 Like all of us think that we're free actors and we just choose, I'm going to eat carrots or I'm going to eat a cookie.

00:03:57.060 But of course, those are profoundly affected by things like cost, visibility.

00:04:03.300 We're nudged. 1.00

00:04:04.340 God, I just used the fucking word. 1.00

00:04:05.560 We're nudged into various choices through these like invisible structures all the fucking time. 0.99

00:04:11.380 It's one of those things where you might not know the precise mechanics of something. 0.96

00:04:15.480 Right.

00:04:15.920 But you had the general sense that this sort of thing was true, right?

00:04:18.640 Right.

00:04:18.780 That the order in which information is presented to you affects how you process it, etc.

00:04:23.860 And there's a million other examples of this.

00:04:25.360 Like one of the big ones is that road design sort of teaches you how fast you're supposed to go.

00:04:30.760 The width of the lane and how sharp the corners are.

00:04:34.080 You're like, this feels like a 25 mile an hour road versus this feels like a 50 mile an hour road.

00:04:39.380 That's true.

00:04:40.120 That's why in 2005, when I was ticketed for going 51 in what I later found out was a 25, it had the vibes of a 45.

00:04:49.960 Those kids were asking for it.

00:04:51.320 Those kids that you flattened.

00:04:52.220 I got nudged.

00:04:52.880 I got nudged into that ticket and no one's talking about it.

00:04:56.760 So they then delineate a little bit more about this example.

00:04:59.580 So once you realize that your choices of like, you know, what foods to put next to the cash register have a profound impact on what people buy, the question then becomes like, what do you do with that information? Right. And they talk about like Carolyn's decision making strategy. Right. That she is going to pick a theory of how to arrange the food. Right. So she can arrange it to maximize profits for the cafeteria. She can arrange it to maximize like nutrition for the kids.

00:05:27.520 The main insight that they're trying to lead you to is that any theory that she uses to arrange the food is going to be a nudge. 0.98

00:05:36.620 There is no non manipulative way to present options to people, basically. 0.99

00:05:42.260 Right.

00:05:42.520 So I'm going to send you one more paragraph.

00:05:44.240 This is the conclusion of this section.

00:05:46.260 This is like as good as the book gets.

00:05:48.060 And then it's going to sort of start to start to trail off into nonsense.

00:05:51.700 So I really want to dwell on the like the non nonsense parts. 0.92

00:05:55.080 Carolyn is what we will be calling a choice architect. A choice architect has the responsibility 0.81

00:06:01.200 for organizing the context in which people make decisions. Although Carolyn is a figment of our

00:06:06.960 imagination, many real people turn out to be choice architects, most without realizing it.

00:06:12.320 If you design the ballot voters use to choose candidates, you are a choice architect. If you

00:06:18.200 are a doctor and must describe the treatments available to a patient, you are a choice architect.

00:06:22.900 If you design the form that new employees fill out to enroll in the company healthcare plan, you are a choice architect.

00:06:29.860 If you are a salesperson, you are a choice architect, but you already knew that.

00:06:34.700 There's a real lesson here, I think, for policymakers, right, that it's become kind of a slur for policymakers to talk about something as ideological.

00:06:43.420 Right.

00:06:43.620 But there's no non-ideological way to design systems, right?

00:06:47.980 Like if you design an intersection with traffic lights or with stop signs, those are both architectures that are going to produce predictable outcomes.

00:06:55.780 But they're both equally ideological.

00:06:58.200 Yeah.

00:06:58.400 All of this is fine.

00:06:59.380 Ideology just means that we have values and morality that guide our decisions.

00:07:03.200 It does feel like a lot of this, like I think, for example, using the ballot example, this is post Bush v. Gore.

00:07:08.940 Like everyone knows that the way you structure a ballot is important.

00:07:13.980 Yeah.

00:07:14.120 But I do think that there's a utility to just putting a vocabulary onto this stuff where it's like you're a choice architect, right?

00:07:21.760 And then like, you know, whoever is doing this stuff has like a basic framework such that they can maybe see what they're doing a little more accurately.

00:07:31.380 The rest of the introduction they spend defining this, they don't call it an ideology, but basically their idea.

00:07:36.900 And they define it as libertarian paternalism.

00:07:40.280 Okay.

00:07:40.400 They talk a lot about how if people were able to choose it for themselves, a lot of people kind of like wouldn't smoke.

00:07:47.460 You know, most people want to eat more fruits and vegetables.

00:07:49.800 And so what policymakers should be doing is designing environments to encourage the choice that people themselves would make.

00:07:58.580 Yeah, yeah.

00:07:59.140 They define a nudge as any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives.

00:08:13.140 To count as a mere nudge, the intervention must be easy and cheap to avoid.

00:08:18.320 Nudges are not mandates.

00:08:20.300 Putting the fruit at eye level counts as a nudge.

00:08:22.960 Banning junk food does not. 0.99

00:08:24.780 In the micro, this is like very like correct and harmless to me, but I can already see the burgeoning technocratic monstrosity that is going to emerge based on this shit. 0.97

00:08:38.680 We're on page, like, seven. The rest of the book is slowly building the monstrosity, basically. 0.95

00:08:45.380 So the first section of the book is basically laying out, like, the structure of why this

00:08:51.460 happens. We're not going to go super duper into this because eventually we're going to talk about

00:08:55.360 Daniel Kahneman's Thinking Fast and Slow, which is essentially the same thing. The basic idea

00:09:01.040 is that human beings are not rational benefit maximizers, right? The economist, traditional

00:09:08.380 economist understanding of behavior is that we're just sort of looking around at all of our options

00:09:13.420 and you're like that's going to give me the most utils yeah that obviously is not how humans behave

00:09:18.460 yeah and the second insight of the book is that we behave in predictably irrational ways we know

00:09:25.040 that people are going to like grab a brownie if it's next to the cash register we know that people

00:09:30.460 aren't going to sign up for like a retirement plan if it's like hidden in their employment

00:09:34.740 papers on like page 17 right okay the basis of all of this is basically these two systems have

00:09:40.560 you heard of this this like system one and system two thing no so this is the daniel kahneman work

00:09:44.880 about how you have one system of your brain is like reflexive it's kind of like your lizard brain

00:09:51.140 just like operating on instinct even though lizard brains are fake and you can listen to maintenance

00:09:55.480 phase about that and then there's like the reflective system so it's like you have these

00:09:59.240 like little impulses and then you're like wait a minute i should think this through uh-huh they 0.99

00:10:03.360 illustrate this with a couple of math problems which i'm going to make you do fuck i know i'm

00:10:09.400 sending these to you because they're much easier to do if you can actually see the numbers in front 0.99

00:10:13.380 of you okay oh god this is i'm gonna are you gonna fuck it up this is gonna be embarrassing 0.64

00:10:18.520 get your reflective system get you get it ready i want to tell you there was a time when i was good 0.97

00:10:23.280 at math i don't know what happened but when i was like in third grade i was a whiz they put me

00:10:29.060 in a little mini group with the smart kids one kid was valedictorian the other went to yale

00:10:35.700 and then there was me the guy who did the most shrooms before graduation all right a bat and

00:10:43.440 ball cost a dollar and 10 cents in total the bat costs one dollar more than the ball how much does

00:10:50.580 the ball cost what are what are your different systems five cents is that right uh yes it is

00:10:55.840 yeah that's right there it was i was channeling third grade peter so most people say it costs a

00:11:03.120 dollar they just say a dollar because it's you're just doing like neuron yeah you're like there's

00:11:07.420 like association you see a dollar 10 you see a dollar there's an extra 10 cents and you basically

00:11:11.540 subtract one number from the other and you're like ah 10 cents right and that's your that's

00:11:14.820 your instinctive system right there's one more peter let's see if you get this one let's see 0.99

00:11:18.580 if you're still gifted oh fuck they're getting harder if it takes five machines five minutes 0.97

00:11:23.380 to make five widgets how long would it take 100 machines to make 100 widgets five minutes yes 0.95

00:11:30.820 because each one this is why well done i get to be a podcast host right the tippy top of the

00:11:38.540 intelligentsia because i am unfazed by these things the little lizard inside of you just

00:11:44.580 absolutely owned that's right i don't actually need the reflective part of my brain system two

00:11:49.660 not necessary so this is what like most of the first third of the book is about is delineating

00:11:55.900 all of the ways in which we are predictably irrational right so one of the things they

00:12:01.640 mention is this concept of anchoring this is why oftentimes on menus the restaurant will have like

00:12:09.360 a 200 bottle of wine which then kind of makes you think like oh maybe this 75 bottle of wine like

00:12:15.500 isn't that much, right? It's not the most expensive, right? They also have one about

00:12:20.240 framing. If you're about to get a surgical procedure and the doctor says of 100 patients

00:12:25.580 who have this operation, 90 are alive after five years. That affects your choice much more than

00:12:32.160 of the 100 patients who have this procedure, 10 are dead after five years.

00:12:36.660 Sure. This one I actually thought was pretty interesting. It says in one experiment,

00:12:39.780 college students were asked two questions. How happy are you? And how often are you dating?

00:12:45.500 When the two questions were asked in this order, the correlation between the two questions was

00:12:50.040 non-existent. But when the question order was reversed, so the dating question was asked first,

00:12:55.840 the correlation was much higher. Right. Because you're being, you're being reminded of something

00:12:59.960 that you think should map onto your happiness, right? So you're like, if you just get asked,

00:13:05.440 how happy are you? You're like, oh, pretty happy. And then they ask you like how often you're

00:13:09.720 dating. And then you're like, oh, right. I'm not, I'm not getting late at all. I forgot about that.

00:13:14.680 But if you get asked that first, you are reminded that you're a big loser. 1.00

00:13:18.880 You're a fucking loser. 1.00

00:13:19.560 I haven't been on a date in like a week or whatever. 1.00

00:13:21.120 Yeah, and then it impacts your next response.

00:13:22.320 Exactly.

00:13:22.800 Okay, yeah, sure.

00:13:23.640 Again, a very important insight.

00:13:25.540 And I think for like public opinion surveys, the way they do political polling, we know

00:13:29.720 that the way that you word a question, the order of the questions is like profoundly

00:13:33.720 impactful on like what people say their preferences are.

00:13:36.320 How do you feel about trans rights?

00:13:38.980 How often are you dating?

00:13:39.860 and then there's are you familiar with this loss aversion thing um i'm familiar with the

00:13:46.340 concept of loss aversion sure what is it it's aversion to loss

00:13:49.120 it's very sophisticated stuff peter i don't know if you get it completely no the loss aversion

00:13:56.120 it means that you're um you're i'm trying not to use the word aversion um but you're impacted by

00:14:02.940 loss more than gain right losing a dollar hurts more than gaining a dollar exactly feels good

00:14:09.520 Again, not groundbreaking stuff, but, like, one of the reasons I think these things don't feel so groundbreaking is because pop economics has become so widespread.

00:14:19.080 Yeah, that's fair.

00:14:19.880 But, like, the reason these are kind of boring to us is, like, because of books like Nudge.

00:14:25.180 Like, I know that I can bend the universe to my will using my mind because of the secret.

00:14:31.520 Einstein tells us the world emerged from thought.

00:14:33.720 Before we get to kind of complicating this a little bit more, we get a couple examples.

00:14:39.520 So the big one that this shows up in like almost all of the articles about this is in

00:14:45.540 the Schiphol airport in the Netherlands, they added little flies to the urinal because that

00:14:52.620 way the men had like something to aim for. 0.99

00:14:54.940 Is that why some urinals have little fucking flies in them? 0.99

00:14:57.180 Yeah, this is why. 0.98

00:14:58.040 So apparently the guy that designed this was in the military before and in the military,

00:15:03.840 they put a red dot in the toilets.

00:15:06.260 And so he was like, oh, let's try this in the airport.

00:15:08.660 And apparently it reduced spillage by 80% and reduced cleaning costs by 8%.

00:15:14.360 That's true.

00:15:14.800 If you don't put something for me to aim for in a urinal, I barely aim, you know, it's

00:15:18.420 just flying all over the place.

00:15:20.000 I just spin around like I'm swing dancing, just constantly just twirling. 1.00

00:15:23.800 I love this because it makes us look so stupid. 1.00

00:15:28.660 Like you're literally pissing in an airport. 1.00

00:15:32.620 You're like, Ooh, I can aim for that little fly.

00:15:35.440 But no, it works.

00:15:36.280 In an interview with the airport guy, he also says you can like put a brick of wood in there because men try to like turn it around with their pee.

00:15:43.220 Like if it's like a little wood chip. 0.99

00:15:44.440 Oh, that is incredible.

00:15:45.380 People try to do like little tricks.

00:15:46.800 That makes sense, though, because that's fun.

00:15:48.500 That's just good fun.

00:15:49.540 You just want a little sense of accomplishment in your life. 0.96

00:15:52.840 You get out of the bathroom and your wife's like, hey, how was it?

00:15:56.060 And you're like, really good.

00:15:57.780 Really good.

00:15:58.380 Flipped a wood chip.

00:15:59.340 Flipping wood chips today.

00:16:01.000 So there's other examples.

00:16:02.700 So people think that a door is pull rather than push, depending on the shape of the handle.

00:16:08.640 ATMs have started doing this thing where they give you your card back before your cash because they know that after you get your cash, you're like, I'm done here.

00:16:15.380 And then you leave your card in the machine.

00:16:17.920 And then the biggest one that they use and that comes up in every single TED Talk, PDF, whatever about nudges is organ donations.

00:16:27.820 Are you familiar with this one?

00:16:29.120 No. I mean, something about, you know, the default choice for organ donation?

00:16:33.500 Yes. So there's a whole kind of story that goes along with this, right, where people are looking

00:16:39.280 at organ donor rates in various countries. And it's like some countries are like 15% and some

00:16:45.160 countries are like 80%. And like, what could explain this, right? Like, is it culture? Are

00:16:50.060 there better public information campaigns? Like there's billboards in some countries.

00:16:54.640 In the book, they note that in Germany, it's 12% of people are organ donors, and in Austria, it's 99%.

00:17:02.520 And it turns out on the form, at the DMV or whatever the equivalent is, some countries have, if you would like to be an organ donor, tick the box.

00:17:12.140 And some countries have, if you would like not to be an organ donor, tick the box.

00:17:16.560 And it turns out people just don't like ticking boxes.

00:17:19.620 so if you redesign these forms you can get the number of organ donors like triple quadruple like

00:17:27.480 huge profound effects uh-huh this is at the heart of the selling point of nudges right you can get

00:17:34.000 around politics right you don't have to spend any more money all you have to do is change the default

00:17:40.560 on the form this feels a lot more meaningful than like we will help reduce the piss splatter in

00:17:45.820 airport bathrooms right so as we get into sort of complicating all of this stuff i think ted talks

00:17:54.240 and the way that these lessons get truncated and spread is a huge part of this right because

00:17:59.660 if you're given this in like a little short you know whatever six minute animated explainer video

00:18:04.660 or something about like the benefits of behavioral economics you're like wow think of all the other

00:18:08.700 things right that this this could help but then if you actually sit down and think of the other

00:18:14.300 things. Organ donation actually differs from other political issues in like very significant ways,

00:18:19.400 right? So what we're essentially talking about here with this organ donation example is like

00:18:23.660 filling out a form. We would like people to fill out a form differently. Most political issues

00:18:28.780 don't involve filling out forms. Right. You can't nudge people into supporting gay rights in quite

00:18:34.160 the same way. Exactly. We're not ticking boxes for most political issues. And also 97% of the

00:18:40.700 population thinks that being an organ donor is good. It's not politicized at all. It's like,

00:18:46.080 it's like asking people like, do you like puppies?

00:18:48.620 So using this as the sort of archetypal example is perhaps overstating the promise of the nudge.

00:18:56.720 It's the same thing with the math problems, I feel like, where, yes, you look at the math

00:19:00.440 problems, your reflective system is like, oh, this is the wrong answer. And then you think

00:19:04.420 about it a little bit more. But is a word problem really a useful metaphor for solving much larger

00:19:10.420 problems. It's just your brain doing really quick associations, right? You're not, it's not really

00:19:15.340 math. One of my favorite things when I'm researching episodes is finding an academic who's like on a

00:19:21.840 crusade to debunk the book that I'm looking into. When I was researching this, I found a researcher

00:19:28.360 named David Gall, who's like spent years now basically trying to debunk this book. And like

00:19:34.900 all of these like underlying concepts, things like sunk cost fallacy, framing effects,

00:19:41.340 loss aversion, et cetera. I gave him a call and had him walk me through his work and kind of where

00:19:46.840 the field is. The first thing that he pointed out is basically that like this whole idea of

00:19:51.860 economists think we're all rational, but it turns out we're irrational. That's kind of a straw man.

00:19:57.540 I'm not really in the business of like defending the economics field very often,

00:20:01.260 But like as early as the 1970s, people were winning Nobel Prizes in economics for like

00:20:06.920 showing this.

00:20:08.340 You're having this sort of battle in the mind of the public that took place in economics

00:20:14.700 40 years prior.

00:20:15.960 They're doing the same thing that the Freakonomics guys did, where it's like we're maverick

00:20:19.720 economists pushing back.

00:20:21.160 But again, this is a Harvard Law professor and a University of Chicago professor.

00:20:25.300 Yeah.

00:20:25.580 This behavioral economics stuff is like very much part of the establishment at this point.

00:20:30.300 David Gall also pointed out that like what this really represents, this whole kind of behavioral economics, pop economics turn is really a triumph of marketing.

00:20:40.540 People in this field were able to define what are essentially psychological principles, right?

00:20:46.780 This is the kind of thing that was in psych textbooks when I was majoring in that in college as economics principles, right?

00:20:54.240 as something that takes on the same kind of legitimacy as like, you know, GDP figures or

00:20:58.760 like the much more quantitative work that economists are traditionally doing. So David

00:21:04.000 Gall has mostly looked into this loss aversion thing. He says in one of his papers, he says,

00:21:08.620 there's no general cognitive bias that leads people to avoid losses more vigorously than to

00:21:13.960 pursue gains. Price increases do not impact consumer behavior more than price decreases.

00:21:18.820 Messages that frame an appeal in terms of a loss are no more persuasive than messages that frame

00:21:23.260 an appeal in terms of a gain. It is true that big financial losses can be more impactful than big

00:21:27.720 gains, but this is not a cognitive bias that requires a loss aversion explanation. If losing

00:21:33.200 $10,000 means giving up the roof over your head, whereas gaining $10,000 means going on an extra

00:21:37.980 vacation, it is perfectly rational to be more concerned with the loss than the gain. Likewise,

00:21:42.580 there are other situations where losses are more consequential than gains, but these require

00:21:46.220 specific explanations, not blanket statements about a loss aversion bias. This is why pop

00:21:52.080 science sucks, kind of, right? The appeal of pop science is this like general sense that you are 0.99

00:21:59.280 now one of the smart ones with the secret knowledge. And it's like, no, of course not.

00:22:05.080 Right. Like, I mean, you have to think about that for a second. Of course you're not. You're just

00:22:08.420 some guy who's reading a book. Right. It's just a way in which these types of books are just ego

00:22:15.420 padding for like the formerly gifted children who are no longer remarkable. What David Gall

00:22:21.180 told me with like all of these concepts right which are just psych concepts are just they apply

00:22:27.560 in some cases and do not apply in other cases yeah like everything fucking else it's like

00:22:33.620 sometimes loss aversion is an interesting rubric to use to understand human behavior sometimes it's

00:22:39.400 not and it's not always clear in advance yeah whether it's going to be useful but it's the 0.94

00:22:44.800 it's the aesthetic of counterintuitiveness right that people find so appealing in this shit this

00:22:50.040 is a very good point because what this book is like pretending to be doing is like we're pushing 0.99

00:22:54.080 back against the overconfident predictions of these fucking economists who think that we're 0.92

00:22:58.980 all rational actors right but actually we can make overconfident predictions about people behaving 0.97

00:23:04.940 irrationally right right they're reproducing the central error they're just reproducing it in like

00:23:10.060 follow our rules not their rule yeah that's a really good point i i think that the

00:23:14.680 hmm god i i have a half formed thought about this you could just say mike you're right and very

00:23:20.120 handsome you're correct everyone likes you all right yeah just record why don't you record me

00:23:24.820 saying that in various tones and then we can just i'll just have a soundboard yeah it'll be like a

00:23:30.620 little john soundboard give it enough time you won't need a podcast co-host that's what i'm

00:23:35.360 working toward god damn it part two of the book this is like the middle third of the book is all

00:23:40.700 about social influence. So one of the main ways that we are predictably irrational is we're 0.94

00:23:46.760 subject to all kinds of conformity bias. Are you familiar with a study where it was like a bunch of

00:23:52.640 people in a room and there's an optical illusion where like one line is very obviously longer than

00:23:57.600 the other line and you're in a room with like six other people and they're like, they're the same

00:24:00.800 length. They're the same length. And then by the time it gets to you, you're like, uh, they're the

00:24:05.900 same length, even though you know that's not true. I'm not familiar with the study, but I would

00:24:09.120 absolutely pretend to think they were the same length. I understand it. So to illustrate this

00:24:13.920 point, this, this goes through a couple of chapters, but the three main examples that he

00:24:17.820 uses first is a grad student. There's a grad student in the same department as Richard Thaler

00:24:23.520 and he needs to finish his PhD and he knows he needs to finish his PhD. He's not a full professor

00:24:29.300 until he finishes his PhD, but he just can't get the gumption to do it. And he's missing out on

00:24:35.020 retirement matching benefits, which is worth something like $10,000 a year. Really big

00:24:39.500 monetary incentive for him to finish his PhD. And yet he can't do it. But then Richard Thaler

00:24:44.140 comes up with this innovative idea. He says, why don't you write me a bunch of checks and post

00:24:50.040 date them? So like March 1st, April 1st, May 1st. And if you don't give me a chapter of your PhD

00:24:56.160 every month, I will cash the checks. You will be paying me. And so within the six months,

00:25:00.960 this grad student is able to finish his PhD. Yeah, because he has a reverse job. Yeah. The

00:25:07.620 whole reason they joined, they went to grad school was to avoid having a job. And yet he's been

00:25:12.700 tricked into sort of having one. We then get a genuinely pretty interesting example of a tax

00:25:18.780 compliance experiment in Minnesota, which I'm going to send to you. Okay. In the context of

00:25:23.840 tax compliance, a real world experiment conducted by officials in Minnesota produced big changes in

00:25:29.120 behavior. Groups of taxpayers were given four kinds of information. Some were told that their

00:25:34.080 taxes went to various good works, including education, police protection, and fire protection.

00:25:39.860 I can already tell you that one didn't work. Others were threatened with information about

00:25:44.380 the risk of punishment for noncompliance. Others were given information about how they might get

00:25:49.560 help if they were uncertain about how to fill out their tax forms. Still others were just told that

00:25:55.740 more than 90 percent of Minnesotans already complied in full with their obligations under

00:26:01.140 the tax law. Only one of these interventions had a significant effect on tax compliance,

00:26:05.640 and it was the last. Apparently, some taxpayers are more likely to violate the law because of

00:26:11.060 a misperception, plausibly based on the availability of media or other accounts of

00:26:15.600 cheaters, that the level of compliance is pretty low. So this is the use of social conformity

00:26:23.520 to get good outcomes, right? So if you think other people comply with their taxes, you're like,

00:26:29.680 oh shit, I should comply with my taxes. They're doing a little bit of ball hiding as usual with 0.98

00:26:35.840 like all of the anecdotes in this book. They say only one of the letters produced a significant

00:26:41.120 effect. What they mean is statistically significant. The difference between the people

00:26:46.880 who got this letter and the control group was $12. They paid $12 more in taxes. And it turns out

00:26:53.920 that with these four letters, when you split people into subgroups, right, of like different

00:26:59.760 kinds of professions are like much more likely to cheat on their taxes than others. Once you break

00:27:04.800 out people who needed an adjustment the previous year, which might mean that they like tried to

00:27:10.280 cheat and got caught, the most effective letter was actually the one threatening them with an

00:27:15.260 audit okay that produced 700 extra dollars in tax payments okay and okay there is a subgroup

00:27:21.260 for whom this like social letter whatever produced a 275 dollar increase okay the actual lesson here

00:27:29.540 is that like when you split people up into groups different messages work right you're not you're

00:27:34.360 not necessarily playing to some like broad-based human tendencies there are different impacts

00:27:39.620 across different demographics and whatever so again the only real like rule you can pull out

00:27:43.740 of this is like, it depends. Different messages work for different people. Okay. Then the third

00:27:49.800 example they give us, we're going to spend more time on this one. Are you familiar, Peter, with

00:27:53.400 where the phrase don't mess with Texas comes from? I guess not. This was an anti-littering campaign

00:27:59.500 in the 1980s. I love that they turned that into just like a really obnoxious declaration of loyalty

00:28:07.020 to their state. I know. Add some AR-15s and it just becomes like general purpose. So basically

00:28:13.000 the story here is that the Texas Department of Transport was getting very frustrated in the 1970s

00:28:19.100 and 1980s with like the sheer amount of roadside littering. So Nudge says, many of the litterers

00:28:25.840 were men between the ages of 18 and 24 who were not exactly impressed by the idea that a bureaucratic

00:28:31.320 elite wanted them to change their behavior. Public officials decided that they needed a

00:28:35.280 tough talking slogan that would also address the unique spirit of Texas pride. Explicitly targeting

00:28:40.700 the unresponsive audience, the state enlisted popular Dallas Cowboys football players to

00:28:45.440 participate in television ads in which they collected litter, smashed beer cans in their

00:28:49.700 bare hands, and growled, don't mess with Texas. Within the first year of the campaign,

00:28:54.520 litter in the state had been reduced by a remarkable 29%. In its first six years,

00:28:59.360 there was a 72% reduction in visible roadside litter. All this happened, not through mandates,

00:29:05.360 threats, or coercion, but through a creative nudge.

00:29:08.440 Okay, sorry, I can't get over the fact that an anti-littering campaign was turned into like a vague threat of violence towards non-Texans.

00:29:18.440 It's so American.

00:29:19.740 It's just so essentially American.

00:29:21.780 So, okay, we are going to watch together the first advertisement for the Don't Mess With Texas campaign.

00:29:29.760 This is an ad that ran in 1986 during something called the Cotton Bowl.

00:29:36.040 Something called the Cotton Bowl.

00:29:37.620 Some sort of sporting event.

00:29:39.740 I love that you'll talk to any expert about the details of behavioral economics, but you will not Google the cotton wool.

00:29:47.880 No, no.

00:29:48.880 You see those words and you're like, no.

00:29:51.220 This is not a coincidence, Peter.

00:29:52.480 I refuse to learn anything about sports.

00:29:54.240 This is a choice.

00:29:55.060 This is my choice architecture.

00:29:57.420 This is Stevie Ray Vaughan.

00:29:59.660 each year we spend over 20 million dollars picking up trash along our texas highways

00:30:14.040 messing with texas isn't just an insult to the lone star state it's a crime

00:30:23.340 don't mess with texas

00:30:25.220 do you feel threatened do you feel like you're never going to litter again it's actually i

00:30:35.860 guess do like they're trying to associate not littering with somehow being tough yes this is 0.97

00:30:42.080 the same basic play as just having the commercial be like flaming gay guys who are littering 0.99

00:30:50.120 and then it's it's the 1980s and you're watching it at home and you're like what the fuck no that 1.00

00:30:55.280 would have gotten me to watch sports like oh littering is gay that is that's the message that 0.99

00:31:00.720 they are trying to send with this yeah but then i mean they're actually trying to send something

00:31:05.460 very specific which the book does not acknowledge so i'm also now going to send you a photograph

00:31:11.520 of the roadside signs that accompanied this massive like years-long public information campaign okay

00:31:18.820 it says don't mess with texas and then in slightly smaller font up to two thousand dollar

00:31:27.320 fine for littering and in this psa stevie rayvon says it's not just bad to litter it's a crime

00:31:34.360 right in nudge they say all this happened not through mandates threats or coercion but through

00:31:41.280 a creative nudge well the nudge was telling people about the coercion right this is illegal

00:31:47.900 behavior and you pay money if you get caught doing it the signs didn't just say don't mess 0.96

00:31:52.940 with texas because no one would know that that was a fucking anti-littering campaign right it 0.86

00:31:56.580 appears that perhaps the threat of uh of a massive fine yeah that that works i can see that working 0.95

00:32:03.260 this is this is the other hiding of the ball that they're doing so the first clue that they're doing

00:32:09.920 a little bit of skipping over important context is that they say in its first six years there was

00:32:14.060 a 72% reduction in visible roadside litter. If people stop littering tomorrow, that does not

00:32:21.300 reduce the existing roadside litter. So when you start looking into this, it turns out that Texas

00:32:27.880 was the first state to have an adopt a highway program. This is something where like the high

00:32:34.600 school football team or like the local elf club adopts like a mile of highway, some stretch of 0.63

00:32:40.500 highway and four times a year volunteers like hundreds of volunteers go out and clean up litter

00:32:45.160 right this is something that texas basically came up with that like people will do this as a form of

00:32:49.500 civic pride because they're just privatizing government services in creative ways right

00:32:54.120 they're just like well what if we if we inspired people to take care of a highway right and also

00:33:00.500 it's it's also free advertising because you get to put up a sign right that says like this stretch

00:33:04.540 of highway cleaned up by like the the local arby's or whatever yeah yeah so like whatever

00:33:09.840 you think about this, it's like a fairly innovative program that Texas came up with. And they did all

00:33:14.340 kinds of public events. In 1987, they had something called the Great Texas Trash Off, where they get

00:33:20.840 volunteers across the state to pick up roadside trash. The weird thing about the way that they

00:33:26.420 present this in the Nudge book is that there is actually an element of social behavior here. I

00:33:31.300 spent like two days reading about littering because I think it's like genuinely fascinating

00:33:34.340 behavior. When there is less trash on the road, people don't fucking litter. Right. Because they 0.99

00:33:39.780 think nobody else is littering right so basically in texas it became this like rolling snowball

00:33:43.700 where it's like once you get the trash off the road people are like oh they don't think about

00:33:48.300 littering right whereas if you're driving around there's fast food wrappers everywhere you're like

00:33:51.740 oh fuck it i can just throw mine out the window too yeah so it did actually play on social 0.94

00:33:55.900 conformity and one of the most effective anti-littering interventions is actually adding 0.99

00:34:03.400 trash cans this doesn't really work on roadsides but in cities when you want to get rid of littering

00:34:08.940 that's actually like a pretty fucking smart nudge like if you look around and there's a trash can

00:34:12.900 five feet away you'll throw away your cigarette pack if there's no right trash can within sight 0.98

00:34:17.900 you're like oh fuck it you throw it on the ground well is it is it like everything sort of a nudge 0.98

00:34:21.920 like i i keep because i'm trying to like think of creative solutions to these types of problems 0.99

00:34:27.600 all of them you're trying to solve a problem of human behavior so like nearly every solution

00:34:34.800 becomes a nudge, right? This is just like a word that you can throw on to almost anything and be

00:34:41.420 like, see, nudge, nudge theory. Peter, I have led you to the river. You were saying exactly the

00:34:45.700 thing that we were going to reach with this section. None of these examples are fucking 0.94

00:34:51.500 nudges. Okay. The grad student who wrote checks for a hundred bucks, if he didn't turn in his 0.97

00:34:57.380 thesis, that's just a fine. He had to pay a hundred dollars for not finishing his thesis.

00:35:01.960 A fine is just a way of banning something, right, which they expressly said was not a nudge.

00:35:06.520 Exactly. This is just like a normal thing that governments do.

00:35:09.680 Like when they give you a fine for illegal parking, they're not like nudging you to park better.

00:35:14.540 And then the Minnesota tax example is like even more baffling to me because, first of all, sending people reminders to do something doesn't affect their choice architecture, right?

00:35:25.800 Whether or not you pay your taxes, nothing about that has changed.

00:35:29.240 The forms have not changed.

00:35:30.460 All they've done is, like, don't forget to do that, right?

00:35:33.100 But then the Minnesota tax people sent four letters, right?

00:35:37.220 The authors of Nudge explicitly say that only one of those letters is a nudge because telling people that, like, ooh, 90% of people paid their taxes, like, uses behavioral economics principles.

00:35:51.060 But you could easily cast those ineffective letters as nudges, right?

00:35:57.540 So the one that says, like, oh, pay your taxes because it goes to, like, schools and libraries, that's framing.

00:36:04.460 That's framing paying your taxes as a form of altruism, right?

00:36:08.520 Right.

00:36:08.880 And then the other two letters where they're like pay your taxes or we'll bust you and pay your taxes and we'll help you, those are, like, basically testing loss aversion.

00:36:18.200 Right.

00:36:18.460 It's hard not to look at the Minnesota tax thing and be like, oh, they're saying this is the nudge letter because it worked.

00:36:26.080 And the other letters aren't nudges because they didn't work.

00:36:28.820 Like it's totally arbitrary what they are and are not calling a nudge here.

00:36:32.320 So you can either broaden the concept out such that anything that impacts human behavior

00:36:38.280 in any way is a nudge, or you can keep it narrow and maybe more useful, but then it

00:36:45.000 only applies to like multiple choice checkboxes, which is so limiting that you couldn't possibly

00:36:52.360 build like a book around it.

00:36:53.920 Exactly. This is what's so weird about this concept and which comes up in like a lot of the academic reviews of this where it's like, no one can really say what is and is not a nudge. Like what we're talking about with these don't mess with Texas signs. They're basically billboards, right? You drive past a billboard that says don't litter. Well, does that mean that every single public information campaign is a fucking nudge? Like I drive past a billboard that says don't smoke. It causes cancer.

00:37:17.360 Right. The government is constantly like cajoling you into doing better behavior. And like these are the least effective forms of government interventions, like a billboard that says don't smoke. It causes cancer does fucking nothing. We've had decades of these. We know that they don't work. Right. And what is fucking wild to me is the fact that these campaigns don't work is part of the premise of this book. Right. Right. Consider the organ donation example.

00:37:44.960 the whole fucking thing was about how we've tried cajoling people we've tried telling people that 0.96

00:37:51.480 they should be organ donors right the only thing that works is changing the default on the form 0.98

00:37:56.440 that's why we're here that's the book people are not rational actors who you can just tell stuff to

00:38:02.200 and expect behavior change yeah it feel it feels like they ran out of examples of like

00:38:08.880 choice architecture real quickly right i mean it seems to me like what they're trying to go for

00:38:14.540 is a public policy angle when like what they really have is information on marketing.

00:38:21.360 Yeah.

00:38:21.580 Right.

00:38:22.060 They also they also note in passing that like other states did exactly what Texas did. 0.96

00:38:28.100 So Oklahoma tried and it was don't lay that trash on Oklahoma. 0.97

00:38:33.380 Good Lord. 0.97

00:38:34.160 You've got to be kidding me. 0.99

00:38:35.800 So like I actually think that like don't mess with Texas is a fucking great slogan. 0.96

00:38:39.500 And there does appear to be like some secret sauce with this slogan. 0.97

00:38:42.900 Like it's more powerful than other slogans. 0.98

00:38:45.000 Well, it's definitely better than don't lay that trash on Oklahoma. 1.00

00:38:48.400 What the fuck? 1.00

00:38:49.760 It's so bizarre. 1.00

00:38:51.280 Don't ramshackle our panhandle.

00:38:53.680 I don't know what it could have been.

00:38:54.960 But like, ultimately, we're just talking about marketing messages.

00:38:58.600 Right.

00:38:58.780 They're talking about like, oh, the don't mess with Texas thing was aimed at, you know, 0.99

00:39:02.840 18 to 34 year old men, which is like, yeah, OK, that's smart.

00:39:05.980 But that's just like smart marketing.

00:39:07.720 Find a target audience and craft your message toward the target audience.

00:39:11.200 I mean, they do this with breakfast cereals.

00:39:12.460 yeah is this interesting for like designing an anti-smoking campaign sure but like that's not

00:39:18.240 real policy change you can't really solve big problems with this right not without getting

00:39:23.480 more homophobic banning the sports just one one really just a visual of one really limp wrist

00:39:33.080 throwing a piece of trash out of a window then you then you get don't litter uh on the screen

00:39:40.340 that's a that's a win but then this is one of the weirdest things about this book that i am

00:39:45.820 genuinely shocked that this didn't come up in more of the reviews that were published when it came

00:39:49.800 out is that the vast majority of examples in this book are not fucking nudges a huge portion of this

00:39:57.520 book is just them describing public information campaigns they're like a an anti-smoking campaign 0.59

00:40:02.640 in montana told teens like most teens don't smoke okay but like that's not meaningfully a nudge and

00:40:08.220 there's been public information campaigns about smoking for decades, they have other things about

00:40:12.080 like sending like text reminders to people to like get vaccinated, which like it's a nudge in the

00:40:17.480 sense that like you're nudging me to remember something. It's like the literal definition of

00:40:21.160 a nudge, but it's not like a policy of a nudge. They talk about daylight savings time being a

00:40:27.420 nudge. How's that a nudge? They change the time. They say the simple change of the labels on the

00:40:32.720 hours of the day, calling six o'clock by the name seven o'clock, nudges us all into waking up an hour

00:40:39.600 earlier. Oh, shut the fuck up. Shut the fuck up. When you think, when you think about it, time isn't 1.00

00:40:44.360 even real. Oh, I got, I just got nudged into May by the calendar. There's also a ton of examples in

00:40:51.780 this book that are just like huge policies. So they have a section toward the end where they

00:40:58.020 talk about this pilot program in North Carolina that paid teenage girls a dollar a day not to get

00:41:04.480 pregnant. It says, Greensboro, North Carolina has experimented with a dollar a day program by which

00:41:10.640 teenage girls with a baby receive a dollar for each day in which they are not pregnant. Thus far,

00:41:15.960 the results have been extremely promising. A dollar a day is a trivial cost to the city,

00:41:20.260 so the plan's total cost is extremely low. But the small recurring payment is salient enough

00:41:25.780 to encourage teenage mothers to take steps to avoid getting pregnant again uh-huh so this is

00:41:31.620 actually a sort of pilot program that targets teenagers that have already had a baby because

00:41:37.320 30 of teenagers who have kids end up having a second kid within two years okay but then of 0.50

00:41:42.680 fucking course you go to the actual quote-unquote study it's not meaningfully a study there's no

00:41:47.960 control group it's basically just like an anecdote and it's not that they're paying teenage girls 0.99

00:41:53.820 is that they have a peer support group every like monday that they have to attend and they get an

00:42:00.380 actual envelope with seven one dollar bills in it when they attend okay it's basically a conditional

00:42:06.140 welfare program right you're paying people if they meet certain criteria this is the same thing as 0.97

00:42:11.580 like you get food stamps if you apply for four jobs a week right this is just a fucking welfare 0.74

00:42:16.880 program and of course if you look at actual studies of this of which there have been a decent number 0.98

00:42:22.660 they don't fucking work because seven dollars isn't that fucking much if i had to guess as to 0.98

00:42:27.620 whether a dollar was enough money to make a teenager not want to have sex i know let's try 0.99

00:42:34.000 five bucks a day you know it's something else so that's the social part of the book we now get to

00:42:40.260 the money part of the book obviously they have a whole section about like how we're weird about

00:42:45.280 money let's go remember this this book is written in 2007 and 2008 so there are some events uh which

00:42:53.600 have not occurred in america to nudge layman brothers out of bankruptcy exactly just a couple

00:42:59.720 nudges uh so this uh this is from a chapter of the book about like nudges for the financial system

00:43:08.460 they have now published a book called nudge the final edition in 2020 so they add a bunch of stuff

00:43:14.240 about COVID. They updated the original text like quite significantly. As you can imagine,

00:43:18.920 this text is not in the updated version. Yeah. Okay. This comes after a section where they talk

00:43:23.320 about how complicated mortgages have become and how these complications end up harming like the

00:43:28.260 poorest people. Okay. These factors are exacerbated in the segment of the market that

00:43:33.200 caters to the poorest and highest risk borrowers, the so-called subprime market. As is often the

00:43:39.540 case, there are two extreme views about subprime loans. Some, particularly those left of center or

00:43:45.640 in the news media, label all such loans with the derogatory term predatory. This broad brush

00:43:55.280 fails to recognize the obvious fact that higher risk loans will have to have higher interest rates

00:44:01.600 to compensate the people who lend the money. Subprime loans also give people a valuable second

00:44:08.700 chance subprime lenders provide funding for any large purchase more often than not these purchases

00:44:15.300 help people achieve an american dream better home ownership see subprime people are out here

00:44:21.240 smearing subprime loans i love that this like behavioral economics pitch is like everything

00:44:27.580 you knew about the rational actor in economics is wrong but then like when it comes down to it

00:44:34.260 they still are just like on the side of giant banks and their predatory loans, right?

00:44:39.740 Like nothing, nothing fundamentally changes in the way they view the world.

00:44:44.220 Right.

00:44:44.860 You're, you're getting to the conclusion of this little section, right?

00:44:47.780 So they're, they're fixed for this.

00:44:50.680 They're like, well, some people want to ban these kinds of loans.

00:44:52.640 And like that, that wouldn't work.

00:44:54.540 That's not libertarian paternalism.

00:44:56.540 They do this a lot where they're like, that's not even a nudge.

00:44:58.960 I like how we immediately get to like all policy solutions must be nudges.

00:45:02.720 Exactly.

00:45:03.220 So like if it's not a nudge. 0.97

00:45:04.260 any intervention that's not just like a little ticky tack fucking thing is like automatically 0.96

00:45:10.320 suspect, right? Like, ooh, that's a lot. That's a lot of government intervention. 0.96

00:45:14.480 The way they want to solve subprime mortgages, because obviously you don't want to ban them,

00:45:17.500 because like they're good, as we all know, in 2023. Of course, of course.

00:45:20.940 Their proposal is that banks would have to provide more information. So you have to give them

00:45:26.800 a report that gives them all of the terms in plain language, right? So they say lenders would

00:45:32.680 have to provide a machine-readable detailed report that incorporates all the fees and interest rate

00:45:37.700 provisions. This information would allow independent third parties to offer much better

00:45:41.880 advice. Our strong hunch is that if this data were made available, third-party services would

00:45:46.320 emerge to compare lenders. Care would need to be taken that the system did not foster collusion,

00:45:50.920 but we think this would be easy enough to monitor and prevent. This data would also make it much

00:45:55.560 easier to shop for mortgages online, which would make the mortgage market more competitive.

00:46:02.680 So this is just a part of this behavioral economics book that's about how to make

00:46:07.860 predatory subprime loans work for everyone.

00:46:11.060 Yeah, exactly.

00:46:12.140 Because we don't want to deny it to them because it's better homeownership, Peter.

00:46:15.140 This is dark.

00:46:15.660 How did this get so dark so fast?

00:46:16.960 I thought we were having fun.

00:46:17.940 I feel like economists have this tick in their brain where like a lot of people look at various

00:46:25.840 elements and machinations of the financial system and they're like, wow, that looks predatory

00:46:31.180 and unfair, right?

00:46:32.680 and economists are like actually it's great also it's as you alluded to earlier they're describing

00:46:38.260 this as a nudge but what they're actually talking about is a legal requirement for companies it's 0.84

00:46:43.120 just a regulation it's just a fucking regulation it's just a bank reg right like i don't i don't 0.78

00:46:47.080 really understand what i mean again you know we're obviously in a place where nudge has lost all 0.98

00:46:52.940 meaning uh and that happened right after the uh texas well i thought like the organ donation

00:46:58.320 like the last time I really, I've really understood what a nudge was. Now, now it's just like,

00:47:05.080 I feel like nudge is now it's colloquial use is what we're doing, right? Where like anything that

00:47:10.520 just like, like as a little, as a little push on human behavior is a nudge now.

00:47:15.780 But then what's, what's so fascinating to me is they, you know, they have a whole section earlier

00:47:18.920 in the book about how oftentimes people think that like giving people more choice is more freedom,

00:47:25.400 right if you get like oh you can have like 41 different health care plans but that doesn't

00:47:29.000 work because most people just like do the default and people get overloaded really quickly right

00:47:32.480 you need three but then when we get to this section of the book they're like oh we should

00:47:36.520 give people all these choices so that they can make the right decision yeah but the whole premise 0.96

00:47:41.040 of behavioral economics is that people fucking hate doing this shit right we kind of know that 0.97

00:47:45.740 the people who are being exploited by these mortgages are not people who have like a lot 0.99

00:47:50.720 of knowledge or time or interest in getting into the fucking details imagine mortgages but with 0.98

00:47:56.720 more middlemen exactly that's that's the pitch if you're gonna do a fucking bank regulation that 0.98

00:48:01.560 of course all the banks are gonna hate why wouldn't you just do something that like forces 0.98

00:48:05.000 them to actually offer people something good or like you can't do predatory shit no that's not a 0.93

00:48:10.940 nudge it's not a nudge nudges only from now on the whole like the next like three chapters they do 0.85

00:48:16.040 the same thing for student loans they're like student loans have gotten out of control and

00:48:19.420 their solution of course is to like make the forms easier and like integrate it with your taxes

00:48:23.980 that's that's the problem yeah with student loans is that the forms are a little too convoluted to

00:48:30.540 make it easier they then have a credit card thing credit card spending is out of control also

00:48:35.120 credit card companies have to issue you a yearly annual report that is like all the fees you paid 0.60

00:48:42.420 this year i don't want to constantly be drilling down into what the fuck is a nudge even but this

00:48:48.040 is just like a disclosure regulation, which is not a nudge because what they started off with 0.52

00:48:56.040 was like, all right, we're not penalizing anyone. That's not a nudge, right? But what a disclosure

00:49:03.360 regulation actually is, is a requirement that in this case, the bank make these disclosures

00:49:11.780 or else they will be penalized.

00:49:15.700 It's experienced as choice architecture for consumers.

00:49:19.080 Right.

00:49:19.460 But behind it is like a vast bureaucracy of coming up with these laws

00:49:24.180 and then presumably enforcing these laws, too, of disclosure requirements.

00:49:27.460 It seems like they're trying to include you having more information about your choices as a nudge.

00:49:34.980 Like it might fit their strict definition,

00:49:36.580 but it does seem like a very different concept than like this food is at eye level

00:49:40.880 when you're ordering nudges and wokeness two things that people have strong opinions on but

00:49:44.780 no one can say what the fuck they are it just seems like even if you want to grant that there 0.87

00:49:50.740 is some conceivable utility here you're still only talking about like one percent of what the 0.96

00:49:58.260 government even ostensibly does and this gets us to you knew it was coming the chapter on climate 0.90

00:50:05.380 change oh fuck yeah we're gonna nudge our way to having ice caps again yeah we're closing holes

00:50:12.900 in ozone layers all right so here's their little introduction to this chapter finally someone 0.98

00:50:17.520 proposing small incremental changes to address climate change it's time to do the small stuff

00:50:24.100 okay um most of the time governments seeking to protect the environment and to control the

00:50:29.880 harmful health effects of pollution have gone well beyond a nudge, and their steps have not

00:50:35.580 been libertarian. Typically, regulators have chosen some kind of command and control regulation

00:50:42.440 by which they reject free choices and markets entirely and allow people little flexibility

00:50:48.440 in promoting environmental goals. In the United States, national emissions limitations imposed

00:50:55.100 on major pollution sources have been the rule, not the exception. Such limitations have sometimes

00:51:01.000 been effective. The air is much cleaner than it was in 1970. Philosophically, however,

00:51:07.440 such limitations look uncomfortably similar to Soviet-style five-year plans in which bureaucrats

00:51:15.860 in Washington announced that millions of people have to change their conduct in the next five

00:51:21.420 years where's the architecture in all this okay so i i love like sure the air is cleaner but 0.98

00:51:27.260 philosophically i know i know this is my favorite shit they're like this thing that isn't a nudge 0.86

00:51:33.760 worked like gangbusters but what if it was a nudge also most regulations are not targeted 0.97

00:51:40.420 at causing the common person to change their behavior directly most regulations are just

00:51:47.960 targeted at industry that's how environmental regulations work right we have clean air because

00:51:53.540 of emission standards yeah because of the clean air act in 1970 and like punishments criminal 0.86

00:51:58.960 punishments for people who pollute right command and control shit it whips this whole concept is

00:52:04.700 like we really want to preserve the illusion of freedom yeah the whole um choice architecture 0.97

00:52:10.820 idea is built around the premise that the things that we perceive to be our choices are not really

00:52:17.940 our choices, right? We're influenced by all this stuff that we can't quite detect. And when you

00:52:23.540 lead with that, the idea that it's like philosophically, morally important to preserve

00:52:30.200 your right to choice is less compelling because you've already admitted that choice is sort of an

00:52:36.680 illusion in many respects. You know, we now have a lot of our political discourse now revolves around

00:52:43.320 like bullshit consumerist debates like gas stoves yeah right these things that no one gave a shit 0.97

00:52:50.600 about and you wouldn't even notice in a vacuum become the locus of these fights about like quote 0.98

00:52:57.520 unquote choice right it's all just sort of a proxy fight about these like abstract cultural values

00:53:03.160 and this is sort of making the same error the idea that our choices about these things are like of

00:53:10.500 the utmost importance and we must protect like the concept of choice in some way, it

00:53:16.860 seems inherently silly to me and at odds with their basic thesis.

00:53:21.940 This is like the fundamental contradiction at the heart of this mismatch between the

00:53:27.400 problems they are trying to solve and the solutions that they are proposing, right?

00:53:31.040 So the climate change chapter leads up to this solution.

00:53:35.740 It says, we can now sketch an initial low cost nudge for the problem of climate change.

00:53:40.500 The government should create a greenhouse gas inventory requiring disclosure by the most

00:53:45.840 significant emitters. The greenhouse gas inventory would permit people to see the

00:53:50.380 various sources of greenhouse gases in the United States and to track changes over time.

00:53:55.440 Seeing that list, states and localities could respond by considering legislative measures.

00:54:00.360 In all likelihood, interested groups, including members of the media,

00:54:03.660 would draw attention to the largest emitters. To be sure, an inventory of this kind might not

00:54:08.780 produce massive changes on its own but such a nudge would not be costly and would almost

00:54:14.780 certainly help i went into rich dad voice again i'm going to try to orchestrate my thoughts about

00:54:21.800 that first of all not a nudge it's just a disclosure regulation right it's just a disclosure

00:54:27.420 requirement it's a law for companies it's not a nudge should go without saying this is an

00:54:31.060 inadequate response to uh climate change like we we have a good sense of who like the polluters are

00:54:37.320 Disclosures wouldn't give us a ton more information than we already have.

00:54:40.420 But we don't know the specific amount they're polluting, Peter.

00:54:42.860 If we knew the specific amounts.

00:54:44.600 Right.

00:54:44.740 You think the average person looking at, oh my God, that many metric tons. 0.99

00:54:51.320 No one fucking knows what that means. 0.98

00:54:53.180 Loss aversion, Peter. 0.99

00:54:53.920 People don't want to lose their lungs.

00:54:55.960 It's actually behavioral.

00:54:57.960 Oh man, hold on.

00:54:58.840 What was my thought?

00:54:59.640 I love that you're melting down. 0.95

00:55:02.220 That's how shitty this idea is. 0.76

00:55:04.240 Even if you orchestrated this such that there were disclosure requirements and then, like, people are like, OK, Exxon is polluting, which we only know because of this disclosure requirement. 0.84

00:55:16.800 We learned it.

00:55:17.520 We are now going to implement regulations.

00:55:21.300 Whatever regulation they implement would no longer be a nudge, right? 0.50

00:55:24.800 Because it would have to be a fucking like a mission cap or something like that. 0.98

00:55:28.580 So why don't we just fucking regulate them then? 0.98

00:55:30.400 Exactly. All they're doing is saying, like, if we gave people more information, then maybe we would implement the policy that we all know we need to implement. 0.97

00:55:41.340 Yes. It says, seeing that list, states and localities could respond by considering legislative measures.

00:55:48.940 What are the legislative measures? Is it like to put a cap on how much you're allowed to pollute?

00:55:53.040 Why don't we just do that federally? Why would we wait until like West Virginia reads a fucking 0.99

00:55:57.380 report? And it's like, oh, it turns out there's pollution coming from the coal mine. We're just 0.99

00:56:02.200 kicking the fucking can down the road, ultimately. Yeah. They start off with this definition of 1.00

00:56:07.300 nudge as something that is about choice architecture. And they move into using it

00:56:14.760 colloquially to mean like a little thing that might impact people's behavior. And that sort of

00:56:22.240 reveals the project which is like never do a large policy thing right so exactly what you

00:56:30.940 are saying leads us back to organ donation when i said earlier that the organ donor example

00:56:37.600 is doing a ton of work for this concept and for this book and is the paradigmatic example of a

00:56:45.020 nudge i meant that derogatorily to review right there's countries that have opt-in systems where

00:56:51.980 like you have to tick a box to be an organ donor. There's countries that have opt out systems where

00:56:55.780 you tick a box if you don't want to be an organ donor. And they have very different rates of the

00:57:00.300 number of people who are organ donors, right? What they don't have is differences in the number of

00:57:06.420 actual organs that get donated. Organ donation systems have almost nothing to do with the

00:57:13.020 percentage of the population that ticks a box on a fucking form. So the country with the highest 0.91

00:57:17.840 rate of organ donations, like actual, like a functioning system of organ donations,

00:57:22.420 is Spain. When you look at Spain, what you find is not like one weird trick, right? You find

00:57:28.820 decades of dedicated reforms. So Spain changed from an opt-in to an opt-out system in the late

00:57:35.020 70s, but the number of actual donations didn't increase until the late 80s because there was

00:57:40.080 basically no capacity. There were only surgeons in Madrid and Barcelona who could do these

00:57:44.200 transplants right so they had to do a bunch of training for doctors in regional hospitals they

00:57:50.120 created a national registry that had been done at the regional level before they had to centralize

00:57:55.080 everything they have this really well integrated into end-of-life care now so if you are diagnosed

00:58:02.080 with like a terminal illness someone will come and visit you and be like hey you know have you

00:58:06.720 thought about saving somebody's life after you're gone let's do scans to find out what organs are

00:58:11.120 still functioning. There's dedicated intensive care units. There's dedicated staff. And

00:58:17.080 importantly, there's constant surveillance and improvement. So Spain has gone through

00:58:21.760 like three waves of improvement. They look at like, okay, what are the existing barriers

00:58:25.880 in the system? How can we get this even higher? You have to look at a system. You have to

00:58:30.100 dedicate funding to it. You have to take the specifics seriously. Maybe that's boring or

00:58:36.580 something, but it's like, that's how you solve problems. I'm sorry. It requires money. It

00:58:41.200 requires expertise. It requires not stripping them of context, but putting the context back in.

00:58:46.820 Right. Right. I read actually quite a bit about this. This is super fascinating. One of the best

00:58:51.300 articles I read is called Assessing Global Organ Donation Policies, Opt-In Versus Opt-Out by Harriet

00:58:56.700 Roseanne Etheridge. So at the end of her article, Harriet notes that America actually has a really

00:59:03.620 high rate of people ticking the box to be organ donors. It's like more than 60%, which is way

00:59:09.340 higher than other like opt-in countries. The barriers in America are not related to getting

00:59:14.620 more people to sign up as organ donors. This is a healthcare systems project. There's a whole

00:59:20.460 chain of events has to take place for organ donations to happen. And there are problems

00:59:25.200 with the other fucking links in the chain. And since this fucking book came out, a lot of 0.99

00:59:30.320 countries have actually switched from one system to the other, and they have seen no improvements. 0.99

00:59:35.520 This reminds me of the climate example where these guys want to come up with this like fucking 0.92

00:59:41.180 clever, like little fake smart guy solution to a problem that at bottom needs resources.

00:59:50.280 The other reason I really wanted to talk about this, and I don't know if this counts as a twist,

00:59:54.380 But as I said, they updated Nudge in 2020 with like Nudge, the final edition, responding to critiques, updating the text, right?

01:00:03.140 And they kept the chapter on organ donation.

01:00:06.100 But they've now made it this like weird scolding chapter about how everybody misread the book in the first place.

01:00:15.440 We never said that America should switch from one system to the other.

01:00:20.540 And they say that, to our dismay, in the years since, several countries, including Wales, England, and Germany, have considered or made the switch to presumed consent.

01:00:31.340 So it's like, you rubes, you children, you read our book, and you pass this policy when we never even said that that's what you should do. 0.74

01:00:39.140 Right. They were nudging us in that direction, to use a colloquial term.

01:00:42.740 So I am going to read the section of their book where they present the full context.

01:00:47.160 So to their credit, they did, in fact, mention in the original book that, like, you can't only do the opt-out system, right?

01:00:55.040 They added some caveats.

01:00:56.060 So this is the full paragraph where they talk about the caveats, the weaknesses of their plan, right?

01:01:02.620 So far, presumed consent looks awfully good, but we must stress that this approach is hardly a panacea.

01:01:08.660 A program that successfully gets organs from deceased donors to needy transplant recipients requires a complete infrastructure.

01:01:15.500 Currently, Spain is the world's leader in developing that infrastructure,

01:01:18.960 achieving a donation rate of nearly 35 donors per million people,

01:01:22.560 compared with a bit more than 20 donors per million in the United States.

01:01:25.520 The default consent rule, therefore, is not the only thing that matters.

01:01:29.280 Still, careful statistical analyses find that, holding everything else constant,

01:01:33.740 switching from explicit consent to presumed consent increases the donation rate in a country by roughly 16%.

01:01:39.560 Another analysis obtains a slightly smaller but similar effect.

01:01:43.000 Whatever the precise figure, it is clear that the switch would save thousands of lives every year.

01:01:49.880 So we never said you should make the switch.

01:01:51.880 We merely said that switching would save thousands of lives.

01:01:55.580 Right.

01:01:55.980 This reminds me of there's a thing on like investing social media where people are like,

01:02:03.440 buy this pump and dump stock.

01:02:05.500 And then at the very end of it, it's like, this is not financial advice.

01:02:08.480 Yeah, don't do the thing that I'm very obviously telling you to do.

01:02:11.160 I'm telling you that this would rule and it is absolutely the best thing to do.

01:02:16.500 I'm not technically telling you to do it.

01:02:18.900 This to me is also like the fundamental intellectual project of the book, right?

01:02:23.300 Where if updating the organ donation system requires a complete overhaul, then why is

01:02:28.120 there a chapter about it in your book about like little technical tweaks?

01:02:31.740 Why is your book called Nudge? 0.99

01:02:33.080 Why is your fucking book called Nudge, dude? 0.99

01:02:34.820 This ultimately is an example against your thesis. 0.99

01:02:38.540 Right.

01:02:38.700 The entire selling point of the book is that we can achieve great, significant changes.

01:02:44.040 They say this over and over again.

01:02:45.160 You can achieve big changes without getting bogged down in politics, without spending

01:02:50.700 a bunch of tax money.

01:02:51.980 And then you look at the specifics and they're like, oh, yeah, you know, you have to get

01:02:56.160 bogged down in politics and spend a bunch of money to do this.

01:02:58.280 Right, right.

01:02:59.080 The metaphor that I keep coming back to is, remember how cereal ads used to have like

01:03:03.460 part of a complete breakfast?

01:03:04.800 if you eat a bowl of lucky charms with like a glass of orange juice right with all of the other

01:03:10.340 nutrients that you actually need right if you eat it with healthy stuff then it's healthy

01:03:14.820 which is true of literally everything it's like right oh well if you do this with huge structural

01:03:20.240 costly reforms it'll work yeah but yeah like all you're doing ultimately is advocating for broad

01:03:26.440 structural reforms and like super just like bread and butter policy making right that's utterly

01:03:31.100 banal but it's like you've you've reached that conclusion between the lines of your book

01:03:36.300 explicitly rejecting and arguing against that approach yeah there's a problem with these

01:03:42.280 concepts where like if you zoom out enough they're correct but not very useful right and if you zoom

01:03:50.140 in you start seeing that they're not really correct in the micro right they're not explaining

01:03:55.720 a lot. And I see that here too, where it's like, we have this concept and like, it might be a

01:04:02.700 useful way to process certain types of things, but it's really just like a vocabulary. It's just

01:04:09.200 a way of sort of simplifying how we talk about certain things. You can't spin that into something

01:04:17.160 that can solve climate change, you know? But this also speaks to what I find so frustrating about

01:04:23.060 the quote unquote debate over the book when it first came out. There's some weird like

01:04:27.760 conservative objections to the book where they're like nudging is totalitarianism.

01:04:33.720 I love this because it's such a conservative thing where some technocratic liberal is like,

01:04:39.440 what if we just did the smallest little intervention and conservatives are like,

01:04:45.040 you are Joseph Stalin. Right. It's like, this is why you should just propose holistic regulations

01:04:52.440 or legislation or whatever the fuck you can't compromise with these psychos yeah don't bother 0.99

01:04:58.300 with this technocratic bullshit but then this is this is what frustrates me so much is because 0.99

01:05:02.040 this was presented to the public as a left versus right you know nudging versus nudging is 0.97

01:05:08.620 totalitarianism debate they sort of missed what i believe to be the much better critique i don't 0.98

01:05:14.180 have a philosophical problem with nudging right yeah my problem is they don't fucking work yeah 0.96

01:05:20.040 And they can't solve the problems that we have. 0.86

01:05:22.480 But like that critique of nudging didn't really appear in anywhere prominent for like another 10 years.

01:05:29.520 Basically, at this point now, there's been a number of meta-analyses of like various nudge.

01:05:35.240 You know, there's 51 countries have these nudge units, right?

01:05:37.460 And so there's these huge meta-analyses of like all the things that they've tried.

01:05:40.540 And every single one of them finds tiny effects.

01:05:45.080 This is from an abstract to one of them.

01:05:46.440 And it says, recent studies have found that providing households with information on their electricity usage compared to that of other households, a classic nudge, reduced electricity consumption by 2% or less.

01:05:57.180 There was a test where they sent text message reminders to high school students reminding them to apply for colleges.

01:06:04.360 68% of kids who got nudges applied for college and 65% of kids who didn't get nudges applied for college.

01:06:12.500 I'm impressed that it's 3%. 0.97

01:06:14.100 I'm sorry, but to be like, oh, shit, right. 0.96

01:06:17.140 I got the apply for college text. 0.96

01:06:19.440 And then it's fascinating to me that they start the book with this thing of, you know,

01:06:22.840 cafeteria nudges and where you place food and it can have an effective up to 25 percent. 0.98

01:06:27.880 No, dude, there's been a million of these fucking cafeteria nudges. 0.97

01:06:32.300 Some of them do actually affect kids' behavior, but they affect the behavior of taking fruit 0.99

01:06:37.720 and vegetables, not eating fruit and vegetables.

01:06:40.220 Right.

01:06:40.500 That's the hard part is getting kids to actually consume this stuff.

01:06:42.980 And once you boil it down to what the kids are consuming, it's like 0.1 of a unit more.

01:06:49.400 It's like a little slice of apple extra.

01:06:51.860 This is why this is so useful in like a marketing framework and so useless in a governing framework. 0.96

01:06:58.240 Because when you're doing marketing shit, getting 2% or 3% more purchases is massive. 0.94

01:07:04.860 You're driving revenue. 0.98

01:07:06.120 But that's because you can't mandate behavior when you're selling someone something.

01:07:12.020 Right.

01:07:12.480 Right.

01:07:12.680 When you're the government, you can just tell polluters to stop polluting.

01:07:17.580 You can make it a crime.

01:07:20.380 You have all kinds of tools at your disposal.

01:07:23.380 You are not limited to marketing gimmicks.

01:07:26.900 Right, exactly.

01:07:27.480 You can just take like the chocolate milk out of schools.

01:07:30.300 No cookies, bang.

01:07:31.460 Yeah.

01:07:31.960 There's also a huge problem of inconsistent effects.

01:07:34.580 So a huge percentage of these nudge projects don't replicate.

01:07:38.800 We've now had like 15 years of studies on these.

01:07:42.020 and like at best they have like a five percent effect yeah and most of them are short term

01:07:49.000 right like the i i there's no data on this because the the original fly in the urinal study

01:07:53.420 is basically fake but yeah the the flies in the urinals after a while you just get used to them

01:07:58.300 and you don't notice them anymore i'm gonna go back to my 360 peeing strategy

01:08:02.520 the centrifugal pissing strategy yes i guess that there's like a if you reduced the

01:08:11.440 scale of the problems that the book implies it might be able to solve, then you can sort of

01:08:18.640 view it as like, here's a low cost intervention that will produce small, but possibly meaningful

01:08:28.880 results in certain situations, right? But when you pitch it as like, all right, check out my

01:08:35.180 climate change solution. What if you gave people a little bit of information and then

01:08:41.240 maybe hopefully they'll do something with it right all of a sudden you show how insufficient

01:08:47.640 this framework is right for dealing with the problems that like we actually want to solve

01:08:53.100 right maybe this concept is part of uh an architecture of solutions in how to make kids

01:09:02.080 eat slightly healthier or whatever right but it can't be like the thing that barack obama is using

01:09:09.100 as his like guiding light for eight years of being the president of the united states this

01:09:14.760 is basically where we're going to stop for this episode next episode peter we have not gotten to

01:09:19.560 like the bad parts of the book yet hell yeah i'm pumped really shitty parts they get they they try

01:09:26.200 to solve other problems okay i'm gonna end with like a teaser quote we have to put ourselves put 0.88

01:09:31.100 yourself back in like 2007 2008 mindset peter i'm very dumb my hair looks like shit okay it says 0.80

01:09:37.240 We recognize that many people, including members of many religious groups, strongly object to 0.96

01:09:42.520 same-sex marriage. Religious organizations insist on their right to decide for themselves which

01:09:48.060 unions they are willing to recognize, with attention to gender, religion, age, and other

01:09:52.640 factors. We also know that many members of same-sex couples want to make lasting commitments

01:09:57.680 to one another. To respect the liberty of religious groups while protecting individual

01:10:01.820 freedom in general we propose that marriage as such should be completely privatized yeah sure

01:10:08.300 so whatever next time we're gonna talk about the bad stuff i'm gonna be irritated thinking about 0.99

01:10:13.120 that guys fucking gay marriage discourse it was such a bummer oh my god jesus christ it's 0.99

01:10:18.760 hearkening to this same problem like as soon as you identify a problem where there is political 1.00

01:10:24.820 will on both sides this is useless you can't nudge you can't trick people into going against

01:10:30.800 what they believe to be their core religious beliefs our strategy for nudging gay people back 0.99

01:10:35.320 into the closet 1.00

If Books Could Kill - May 04, 2023

＂Nudge＂ Part 1： A Simple Solution For Littering, Organ Donations and Climate Change

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