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

Speaker 1 Wait, do I say it first or do you say it first? Uh, you say it first. I was about to say Michael.
Shit.

Speaker 2 Great chair.

Speaker 1 Uh, Peter. Michael.
What do you know about a book called Nudge?

Speaker 2 Is it about how whenever I see Cass Sunstein's name, I want to nudge myself off a cliff?

Speaker 1 So as we were workshopping your zinger, I was surprised to learn that you don't know anything about this book, Peter.

Speaker 2 Yeah, this one just sort of like blurred together with all the other verb books, you know? Like remember that we had like blink and then there's nudge. Every book for a few years was just a verb.

Speaker 2 It's like honk, how to let the guy in front of you know that you want them to go faster. Yeah.
I don't understand what this era of books was.

Speaker 2 And I was surprised that we were getting so many requests for this book because I had only really vaguely heard of it. I don't know anything about it.

Speaker 1 It's different from other books we've covered recently in that it wasn't like a huge bestseller. I mean, it did sell a lot of copies, but like nowhere on the order of the secret or rich dad.

Speaker 1 But I would argue that this is one of the most influential books of the 2000s. It's part of the entire TED Talkification.

Speaker 1 of American intellectual life that happened around this time where everything was like a cute little rule. You thought it was this, but it's actually this.

Speaker 2 Yeah.

Speaker 1 So the full title of the book is Nudge, colon, Improving Decisions About Health, Wealth, and Happiness.

Speaker 1 It's by Richard Thaler and Cass Sunstein, one of whom is a University of Chicago economist and the other is a Harvard law professor.

Speaker 1 Almost immediately after this book, Cass Sunstein gets a very high-profile role in the Obama administration.

Speaker 1 And nine years after this book comes out, Richard Thaler wins the Nobel Prize for the kind of work that this book contains. Okay.

Speaker 1 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.

Speaker 1 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.

Speaker 2 I don't even know what it is yet, and I'm still upset. Nudge units.

Speaker 1 So this episode is going to be a little bit different in that we're going to spend the first like third to one half talking about what is good about this idea.

Speaker 2 Okay.

Speaker 1 At the core of this, I think is like a true insight.

Speaker 1 We're gonna start with basically laying out the basic idea of a nudge. Okay.
So I'm gonna send you the first couple paragraphs of the book.

Speaker 2 All right. A friend of yours, Carolyn, is the director of food services for a large city school system.

Speaker 2 One evening, she and her friend Adam, a statistically oriented management consultant who has worked with supermarket chains, hatched an interesting idea.

Speaker 2 Without changing any menus, they would run some experiments in her schools to determine whether the way the food is displayed and arranged might influence the choices kids make.

Speaker 2 In some schools, the desserts were placed first, in others, last, in still others, in a separate line. In some schools, the French fries were at eye level, in others, the carrot sticks.

Speaker 2 Simply by rearranging the cafeteria, Carolyn was able to increase or decrease the consumption of many food items by as much as 25%.

Speaker 2 Boom.

Speaker 1 Nudged.

Speaker 2 Only an economist and a law professor could think that this was a cool way to start a hot pop science book.

Speaker 1 We're talking about the carrots. We're starting with carrots.

Speaker 1 So this is essentially the core insight of the book. And I think this is fucking true.

Speaker 2 Sure.

Speaker 1 The way that things are presented to us and how our options are described changes the choices that we make.

Speaker 1 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. But of course, those are profoundly affected by by things like cost, visibility.

Speaker 1 We're nudged. God, I just use the fucking word.
We're nudged into various choices through these like invisible structures all the fucking time.

Speaker 2 It's one of those things where you might not know the precise mechanics of something. Right.
But you had the general sense that this sort of thing was true, right?

Speaker 2 Like that the order in which information is presented to you affects how you process it, et cetera.

Speaker 1 And there's a million other examples of this.

Speaker 1 Like one of the big ones is that road design sort of teaches you how fast you're supposed supposed to go, the width of the lane and how sharp the corners are.

Speaker 1 You're like, this feels like a 25 mile an hour road versus this feels like a 50 mile an hour road.

Speaker 2 That's true. 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.

Speaker 1 Those kids were asking for it. Those kids that you flattened.

Speaker 2 I got nudged. I got nudged into that ticket and no one's talking about it.

Speaker 1 So they then delineate a little bit more about this example.

Speaker 1 So once you realize that your choices of like, well, you know, what foods to put next to the cash register have a profound impact on what people buy,

Speaker 1 the question then becomes like, what do you do with that information? Right. And they talk about like Carolyn's decision-making strategy, right?

Speaker 1 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.

Speaker 1 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.

Speaker 1 There is no non-manipulative way to present options to people, basically.

Speaker 1 So I'm going to send you one more paragraph. This is the conclusion of this section.
This is like as good as the book gets, and then it's going to sort of

Speaker 1 start to trail off into nonsense. So I really want to dwell on the like the non-nonsense parts.

Speaker 2 Carolyn is what we will be calling a choice architect. A choice architect architect has the responsibility for organizing the context in which people make decisions.

Speaker 2 Although Carolyn is a figment of our imagination, many real people turn out to be choice architects, most without realizing it.

Speaker 2 If you design the ballot voters use to choose candidates, you are a choice architect.

Speaker 2 If you are a doctor and must describe the treatments available to a patient, you are a choice architect.

Speaker 2 If you design the form that new employees fill out to enroll in the company healthcare plan, you are a choice architect.

Speaker 2 If you are a salesperson, you are a choice architect, but you already knew that.

Speaker 1 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.

Speaker 2 Right.

Speaker 1 But there's no non-ideological way to design systems, right?

Speaker 1 Like, if you design an intersection with traffic lights or with stop signs, those are both architectures that are going to produce predictable outcomes, but they're both equally ideological. Yeah.

Speaker 1 All of this is fine. Ideology just means that we have values and morality that guide our decisions.

Speaker 2 It does feel like a lot of this, like I think, for example, using the ballot example, this is post-Bush v. Gore.
Like, everyone knows that the way you structure a ballot is important. Yeah.

Speaker 2 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?

Speaker 2 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 doing a little more accurately.

Speaker 1 The rest of the introduction, they spend defining this, they don't call it an ideology, but basically their idea. And they define it as libertarian paternalism.
Okay.

Speaker 1 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. You know, most people want to eat more fruits and vegetables.

Speaker 1 And so, what policymakers should be doing is designing environments to encourage the choice that people themselves would make. Yeah, yeah.

Speaker 1 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.

Speaker 1 To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates.
Putting the fruit at eye level counts as a nudge. Banning junk food does not.

Speaker 2 In the micro, this is like very

Speaker 2 correct and harmless to me, but I can already see the burgeoning technocratic monstrosity that is going to emerge based on this shit.

Speaker 1 We're on page like seven. The rest of the book is slowly building the monstrosity, basically.

Speaker 1 So the first section of the book is basically laying out like the structure of why this happens.

Speaker 1 We're not going to go super duper into this because eventually we're going to talk about Daniel Kahneman's thinking fast and slow, which is essentially the same thing.

Speaker 1 The basic idea is that human beings are not rational benefit maximizers, right?

Speaker 1 The economist, traditional economist understanding of behavior is that we're just sort of looking around at all of our options and you're like, that's going to give me the most utils.

Speaker 1 That obviously is not how humans behave.

Speaker 1 And the second insight. of the book is that we behave in predictably irrational ways.

Speaker 1 We know that people are going to like grab a brownie if it's next to the cash register.

Speaker 1 We know that people aren't gonna sign up for like a retirement plan if it's like hidden in their employment papers on like page 17. Right.
Okay.

Speaker 1 The basis of all of this is basically these two systems. Have you heard of this, this like system one and system two thing? No.

Speaker 1 So this is the Daniel Kahneman work about how you have one system of your brain that's like reflexive.

Speaker 1 It's kind of like your lizard brain just like operating on instinct, even though lizard brains are fake and you can listen to maintenance phase about that. And then there's like the reflective system.

Speaker 1 So it's like you have these like little impulses and then you're like, wait a minute, I should think this through.

Speaker 1 They illustrate this with a couple of math problems, which I am going to make you do. Fuck.
I know.

Speaker 1 I'm sending these to you because they're much easier to do if you can actually see the numbers in front of you.

Speaker 2 Okay. Oh, God.
This is, I'm going to.

Speaker 1 Are you going to fuck it up?

Speaker 2 This is going to be embarrassing.

Speaker 1 Get your reflective system.

Speaker 2 Get it ready. I want to tell you, there was a time when I was good at math.
I don't know what happened, but when I was like in third grade, I was a wiz.

Speaker 2 They put me in a little little mini group with the smart kids. One kid was valedictorian.
The other went to Yale. And then there was me, the guy who did the most shrooms before graduation.
All right.

Speaker 2 A bat and ball cost $1.10 in total. The bat costs $1 more than the ball.

Speaker 2 How much does the ball cost?

Speaker 1 What are your different systems?

Speaker 2 Five cents? Is that right?

Speaker 1 Yes, it is.

Speaker 2 Yeah.

Speaker 2 That's right. There it was.
I was channeling third-grade Peter.

Speaker 1 So most people say it costs a dollar.

Speaker 2 They just say a dollar because you're just doing like neuron. Yeah, you're just like there's like association.
You see $1.10, you see a dollar, there's an extra 10 cents.

Speaker 1 And you basically subtract one number from the other and you're like, ah, 10 cents, right? And that's your instinctive system. Right.
There's one more, Peter. Let's see if you get this one.

Speaker 1 Let's see if you're still gifted.

Speaker 2 Oh, fuck. They're getting harder.
If it takes five machines five minutes to make five widgets, how long would it take 100 machines to make a hundred widgets? Five minutes? Yes.

Speaker 2 Because each one takes a little bit.

Speaker 2 This is why

Speaker 2 I get to be a podcast host, right? The tippy top of the intelligentsia. Because I am unfazed by these things.

Speaker 1 The little lizard inside of you just absolutely owned.

Speaker 2 That's right. I don't actually need the reflective part of my brain.
System two, not necessary.

Speaker 1 So this is what like most of the first third of the book is about is delineating all of the ways in which we are predictably irrational, right?

Speaker 1 So, one of the things they mention is this concept of anchoring.

Speaker 1 This is why, oftentimes, on menus, the restaurant will have like a $200 bottle of wine, which then kind of makes you think, like, oh, maybe the $75 bottle of wine isn't that much, right?

Speaker 1 Because it's not the most expensive, right? They also have one about framing.

Speaker 1 If you're about to get a surgical procedure and the doctor says, of 100 patients who have this operation, 90 are alive after five years.

Speaker 1 That affects your choice much more than of the 100 patients who have this procedure, 10 are dead after five years. Sure.
This one I actually thought was pretty interesting.

Speaker 1 It says, in one experiment, college students were asked two questions. How happy are you? And how often are you dating?

Speaker 1 When the two questions were asked in this order, the correlation between the two questions was non-existent.

Speaker 1 But when the question order was reversed, so the dating question was asked first, the correlation was much higher.

Speaker 2 Right, because you're being reminded of something that you think should map onto your happiness, right? So you're like, if you just get asked, how happy are you? You're like, I'm pretty happy.

Speaker 2 And then they ask you, like, how often you're dating. And then you're like, oh, right, I'm not getting late at all.
Yeah. I forgot about that.

Speaker 2 But if you get asked that first, you are reminded that you're a big loser.

Speaker 1 You're a fucking loser. I haven't been on a date in like a week or whatever.

Speaker 2 Yeah, and then it impacts your next return. Exactly.
Okay, yeah, sure.

Speaker 1 Again, a very important insight.

Speaker 1 And I think for like public opinion surveys, the way they do political polling, we know that the way that you word a question, the order of the questions is profoundly impactful on what people say their preferences are.

Speaker 2 How do you feel about trans rights? How often are you dating?

Speaker 1 And then there's, are you familiar with this loss aversion thing?

Speaker 2 I'm familiar with the concept of loss aversion, sure. What is it? It's aversion to loss.

Speaker 1 It's very sophisticated stuff, Peter. I don't know if you get it completely.

Speaker 2 No, the loss aversion, it means that you're,

Speaker 2 I'm trying not to use the word aversion, but you're impacted by loss more than gain. Right.
Losing a dollar hurts more than gaining a dollar. Exactly.
Feels good.

Speaker 1 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.

Speaker 2 Yeah, that's fair.

Speaker 1 But like, the reason these are kind of boring to us is like because of books like Nudge.

Speaker 2 Like, I know that I can bend the universe to my will using my mind because of the secret.

Speaker 1 Einstein tells us the world emerged from thought.

Speaker 1 Before we get to kind of complicating this a little bit more, we get a couple examples.

Speaker 1 So the big one, this shows up in like almost all of the articles about this, is in the Skipol airport in the Netherlands, they added little flies to the urinal because that way the men had like something to aim for.

Speaker 2 Is that why some urinals have little fucking flies in them?

Speaker 1 Yeah, this is why. So apparently the guy that designed this was in the military before, and in the military, they put a red dot in the toilets.
And so he was like, oh, let's try this in the airport.

Speaker 1 And apparently, it reduced spillage by 80% and reduced cleaning costs by 8%. That's true.

Speaker 2 If you don't put something for me to aim for in a urinal, I barely aim. You know, it's just flying all over the place.

Speaker 1 I just spin around like I'm swing dancing, just constantly, just twirling.

Speaker 2 I love this because it makes us look so stupid. Like,

Speaker 2 you're literally pissing in an airport. You're like, ooh,

Speaker 2 I could aim for that little fly, but no, it works.

Speaker 1 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, like if it's like a little wood chip.

Speaker 2 Oh, that is incredible.

Speaker 1 People try to do like little tricks.

Speaker 2 That makes sense, though, because that's fun. That's just good fun.

Speaker 1 You just want a little sense of accomplishment in your life.

Speaker 2 You get out of the bathroom and your wife's like, hey, how was it? And you're like, really good.

Speaker 2 Really good.

Speaker 1 Flipped a wood chip. Flipping wood chips today.

Speaker 1 So there's other examples. So people think that a door is pull rather than push, depending on the shape of the handle.

Speaker 1 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.

Speaker 1 And then you leave your card in the machine.

Speaker 1 And then the biggest one that they use and that comes up in every single TED Talk, PDF, whatever about nudges is organ donations. Are you familiar with this one?

Speaker 2 No? Is it, I mean, something about the default choice for organ donations? Yes.

Speaker 1 So there's a whole kind of story that goes along with this, right? Where people are looking at organ donor rates in various countries.

Speaker 1 And it's like some countries are like 15% and some countries are like 80%.

Speaker 1 And they're like, what could explain this, right? Like, is it culture? Are there better public information campaigns? Like, there's billboards in some countries.

Speaker 1 In the book, they note that in Germany, it's 12% of people are organ donors, and in Austria, it's 99%.

Speaker 1 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.

Speaker 1 And some countries have, if you would like not to be an organ donor, tick the box. And it turns out, people just don't like ticking boxes.

Speaker 1 So if you redesign these forms, you can get... the number of organ donors like triple, quadruple, like huge, profound effects.

Speaker 1 This is at the heart of the selling point of nudges. You can get around politics, right? You don't have to spend any more money.
All you have to do is change the default on the form.

Speaker 2 This feels a lot more meaningful than like, we will help reduce the piss splatter in airport baths.

Speaker 1 So as we get into sort of complicating all of this stuff, I think TED Talks and the way that these lessons get truncated and spread is a huge part of this, right?

Speaker 1 Because if you're given this in like a little short, you know, whatever, six minute animated explainer video or something about like the benefits of behavioral economics, you're like, wow, think of all the other things, right?

Speaker 1 That this, that this could help. But then if you actually sit down and think of the other things, organ donation actually differs from other political issues in like very significant ways, right?

Speaker 1 So what we're essentially talking about here with this organ donation example is like filling out a form. We would like people to fill out a form differently.

Speaker 1 Most political issues don't involve filling out forms. Right.

Speaker 2 You can't nudge people into supporting gay rights in quite the same way. Exactly.

Speaker 1 We're not ticking boxes for most political issues. And also, 97% of the population thinks that being an organ donor is good.
It's not politicized at all.

Speaker 1 It's like asking people, like, do you like puppies?

Speaker 2 So using this as the sort of archetypal example is perhaps overstating the promise

Speaker 2 of the nudge.

Speaker 1 It's the same thing with the math problems, I feel like, where, yes, you look look at the math problems, your reflective system is like, oh, this is the wrong answer.

Speaker 1 And then you think about it a little bit more.

Speaker 1 But is a word problem really a useful metaphor for solving much larger problems?

Speaker 2 It's just your brain doing really quick associations, right?

Speaker 2 It's not really math.

Speaker 1 One of my favorite things when I'm researching episodes is finding an academic who's like on a crusade to debunk the book that I'm looking into.

Speaker 1 When I was researching this, I found a researcher named David Gall, who's like spent years now basically trying to debunk this book and like all of these like underlying concepts, things like sunk cost fallacy, framing effects, loss aversion, et cetera.

Speaker 1 I gave him a call and had him walk me through his work and kind of where the field is.

Speaker 1 The first thing that he pointed out is basically that like this whole idea of economists think we're all rational, but it turns out we're irrational. That's kind of a straw man.

Speaker 1 I'm not really in the business of like defending the economics field very often, but like as early as the 1970s, people were winning Nobel Prizes in economics for like showing this. Right.

Speaker 2 You're having this sort of battle in the mind of the public that took place in economics 40 years prior.

Speaker 1 They're doing the same thing that the freakonomics guys did, where it's like, we're maverick economists pushing back. But again, this is a Harvard law professor and a University of Chicago professor.

Speaker 1 Yeah. This behavioral economics stuff is like very much part of the establishment at this point.

Speaker 1 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.

Speaker 1 People in this field were able to define what are essentially psychological principles, right? This is the kind of thing that was in psych textbooks when I was majoring in that in college as...

Speaker 1 economics principles, right? As something that takes on the same kind of legitimacy as like, you know, GDP figures or like the much more quantitative work that economists are traditionally doing.

Speaker 1 So David Gall has mostly looked into this loss aversion thing.

Speaker 1 He says in one of his papers, he says, there's no general cognitive bias that leads people to avoid losses more vigorously than to pursue gains.

Speaker 1 Price increases do not impact consumer behavior more than price decreases.

Speaker 1 Messages that frame an appeal in terms of a loss are no more persuasive than messages that frame an appeal in terms of a gain.

Speaker 1 It is true that big financial losses can be more impactful than big financial gains, but this is not a cognitive bias that requires a loss-aversion explanation.

Speaker 1 If losing $10,000 means giving up the roof over your head, whereas gaining $10,000 means going on an extra vacation, it is perfectly rational to be more concerned with the loss than the gain.

Speaker 1 Likewise, there are other situations where losses are more consequential than gains, but these require specific explanations, not blanket statements about a loss-aversion bias.

Speaker 2 This is why pop science sucks, kind of, right? The appeal of pop science is this general sense that you are now one of the smart ones with the secret knowledge.

Speaker 2 And it's like, no, of course not, right? Like, have you, you have to think about that for a second. Of course, you're not.
You're just some guy who's reading a book. Right.

Speaker 2 It's just a way in which these types of books are just ego padding for like the formerly gifted children who are no longer remarkable.

Speaker 1 What David Gall told me with like all of these concepts, right? Which are just psych concepts are just, they apply in some cases and do not apply in other cases.

Speaker 1 Like everything fucking else. It's like sometimes loss aversion is an interesting rubric to use to understand human behavior.
Sometimes it's not. And it's not always clear in advance

Speaker 1 whether it's going to be useful.

Speaker 2 But it's the aesthetic of counterintuitiveness that people find so appealing in this shit.

Speaker 1 This is a very good point because what this book is like pretending to be doing is like we're pushing back against the overconfident predictions of these fucking economists who think that we're all rational actors, right but actually we can make overconfident predictions about people behaving irrationally right right they're reproducing the central error they're just reproducing it in like follow our rules not their rules yeah that's a really good point i i think that the

Speaker 2 god i i have a half-formed thought about this you could just say mike you're right and very handsome

Speaker 2 correct everyone likes you all right yeah just record why don't you record me saying that in various tones and then we can just i'll just have a soundboard yeah

Speaker 2 it'll be like a little john soundboard give it enough time you won't need a podcast co-host

Speaker 1 that's what i'm working toward god damn it

Speaker 1 part two of the book this is like the middle third of the book is all about social influence so one of the main ways that we are predictably irrational is we're subject to all kinds of conformity bias are you familiar with a study where it was like a bunch of people in a room and there's an optical illusion where like one line is very obviously longer than the other line and you're in a room with like six other people and they're like, they're the same length.

Speaker 1 They're the same length. And then by the time it gets to you, you're like, uh, they're the same length, even though you know that's not true.

Speaker 2 I'm not familiar with this study, but I would absolutely pretend to think they were the same length as I understand it.

Speaker 1 So to illustrate this point, this goes through a couple chapters, but the three main examples that he uses, first is a grad student.

Speaker 1 There's a grad student in the same department as Richard Thaler, and he needs to finish his PhD, and he knows he needs to finish his PhD.

Speaker 1 He's not a full professor until he finishes his PhD, but he just can't get the gumption to do it.

Speaker 1 And he's missing out on like retirement matching benefits, which is worth something like $10,000 a year. Really big monetary incentive for him to finish his PhD, and yet he can't do it.

Speaker 1 But then Richard Thaler comes up with this innovative idea. He says, why don't you write me a bunch of checks and post-date them? So like March 1st, April 1st, May 1st.

Speaker 1 And if you don't give me a chapter of your PhD every month, I will cash the checks.

Speaker 2 You will be paying me.

Speaker 1 And so within within six months, this grad student is able to finish his PhD.

Speaker 2 Yeah, because he has a reverse job. Yeah.

Speaker 2 The whole reason they joined, they went to grad school was to avoid having a job, and yet he's been tricked into sort of having one.

Speaker 1 We then get a genuinely pretty interesting example of a tax compliance experiment in Minnesota, which I'm going to send to you. Okay.

Speaker 2 In the context of tax compliance, a real-world experiment conducted by officials in Minnesota produced big changes in behavior. Groups of taxpayers were given four kinds of information.

Speaker 2 Some were told that their taxes went to various good works, including education, police protection, and fire protection. I can already tell you that one didn't work.

Speaker 2 Others were threatened with information about the risk of punishment for non-compliance.

Speaker 2 Others were given information about how they might get help if they were uncertain about how to fill out their tax forms.

Speaker 2 Still others were just told that more than 90% of Minnesotans already complied in full with their obligations under the tax law.

Speaker 2 Only one of these interventions had a significant effect on tax compliance, and it was the last.

Speaker 2 Apparently, some taxpayers are more likely to violate the law because of a misperception, plausibly based on the availability of media or other accounts of cheaters, that the level of compliance is pretty low.

Speaker 1 So this is the use of social conformity. to get good outcomes, right? So if you think other people comply with their taxes, you're like, oh shit, shit, I should comply with my taxes.

Speaker 1 They're doing a little bit of ball hiding, as usual, with like all of the anecdotes in this book. They say only one of the letters produced a significant effect.

Speaker 1 What they mean is statistically significant, the difference between the people who got this letter and the control group was $12.

Speaker 2 They paid $12 more in taxes.

Speaker 1 And it turns out that with these four letters, when you split people into subgroups, right, of like different kinds kinds of professions are like much more likely to cheat on their taxes than others.

Speaker 1 Once you break out people who needed an adjustment the previous year, which might mean that they like tried to cheat and got caught, the most effective letter was actually the one threatening them with an audit.

Speaker 1 Okay. That produced 700 extra dollars in tax payments.

Speaker 2 Okay.

Speaker 1 And there is a subgroup. for whom this like social letter or whatever produced a $275

Speaker 1 increase.

Speaker 1 The actual lesson here is that like when you split people up into groups, different messages work.

Speaker 2 Right. You're not necessarily playing to some like broad-based human tendencies.

Speaker 2 There are different impacts across different demographics and whatever.

Speaker 1 So again, the only real like rule you can pull out of this is like, it depends. Different messages work for different people.

Speaker 2 Okay.

Speaker 1 Then the third example they give us, we're going to spend more time on this one. Are you familiar, Peter, with where the phrase don't mess with Texas comes from?

Speaker 2 I guess not.

Speaker 1 This was an anti-littering campaign in the 1980s.

Speaker 2 I love that they turned that into just like a really obnoxious declaration of loyalty to their state.

Speaker 1 I know. Add some AR-15s and it just becomes like general purpose.

Speaker 1 So basically the story here is that the Texas Department of Transport was getting very frustrated in the 1970s and 1980s with like the sheer amount of roadside littering. Okay.

Speaker 1 So Nudge says, many of the litterers were men between the ages of 18 and 24 who were not exactly impressed by the the idea that a bureaucratic elite wanted them to change their behavior.

Speaker 1 Public officials decided that they needed a tough-talking slogan that would also address the unique spirit of Texas pride.

Speaker 1 Explicitly targeting the unresponsive audience, the state enlisted popular Dallas Cowboys football players to participate in television ads in which they collected litter, smashed beer cans in their bare hands, and growled, don't mess with Texas.

Speaker 1 Okay. Within the first year of the campaign, litter in the state had been reduced by a remarkable 29%.

Speaker 1 In its first six years, there was a a 72% reduction in visible roadside litter. All this happened, not through mandates, threats, or coercion, but through a creative nudge.

Speaker 2 Okay, sorry,

Speaker 2 I can't get over the fact that an anti-littering campaign was turned into like

Speaker 2 a vague threat of violence towards non-Texans. It's so American.
It's just so essentially American.

Speaker 1 So, okay, we are going to watch together the first advertisement for the Don't Mess with Texas campaign. This is an ad that ran in 1986 during something called the Cotton Bowl.

Speaker 2 Something called the Cotton Bowl.

Speaker 1 Some sort of sporting event.

Speaker 2 I love that

Speaker 2 you'll talk to any expert about

Speaker 2 the details of behavioral economics, but you will not Google the cotton bowl. No, no.

Speaker 2 You see those words and you're like, no.

Speaker 1 This is not a coincidence, Peter. I refuse to learn anything about sports.
This is a choice. This is my choice architecture.

Speaker 1 This is Stevie Rayvon.

Speaker 3 Each year, we spend over $20 million picking up trash along our Texas highways. Messing with Texas isn't just an insult to the Lone Star State.
It's a crime.

Speaker 2 Don't mess with Texas.

Speaker 1 Do you feel threatened? Do you feel like you're never going to litter again?

Speaker 2 It's actually, I guess, doing like they're trying to associate not littering with somehow being tough. Yes.
This is the same basic play

Speaker 2 as just having the commercial be like flaming gay guys who are littering. And

Speaker 2 it's the 1980s and you're watching it at home and you're like, what the fuck? No.

Speaker 1 That would have gotten me to watch sports. Littering.
Like, oh.

Speaker 2 Littering is gay.

Speaker 2 That's the message that they are trying to send with this.

Speaker 1 But then, I mean, they're actually trying to send something very specific, which the book does not acknowledge.

Speaker 1 So I'm also now going to send you a photograph of the roadside signs that accompanied this massive, like, years-long public information campaign. Okay.

Speaker 2 It says, don't mess with Texas. And then in slightly smaller font, up to $2,000 fine for littering.

Speaker 1 And in this PSA, Stevie Rayvon says, it's not just bad to litter, it's a crime. Right.
In Nudge, they say, all this happened not through mandates, threats, or coercion, but through a creative nudge.

Speaker 1 Well, the nudge was telling people about the coercion. Right.
This is illegal behavior, and you pay money if you get caught doing it.

Speaker 1 The signs didn't just say don't mess with Texas because no one would know that that was a fucking anti-littering campaign. Right.

Speaker 2 It appears that perhaps the threat of

Speaker 2 a massive fine. Yeah.
That works.

Speaker 1 I can see that working.

Speaker 1 This is the other hiding of the ball that they're doing.

Speaker 1 So the first clue that they're doing a little bit of skipping over important context is that they say in its first six years, there was a 72% reduction in visible roadside litter.

Speaker 1 If people stop littering tomorrow, that does not reduce the existing roadside litter. Right.

Speaker 1 So when you start looking into this, it turns out that Texas was the first state to have an adopt a highway program.

Speaker 1 This is something where like the high school football team or like the local else club adopts like a mile of highway, some stretch of highway, and four times a year, volunteers, like hundreds of volunteers, go out and clean up litter.

Speaker 1 Right. This is something that Texas basically came up with, that like people will do this as a form of civic pride.

Speaker 2 Because they're just privatizing government services in creative ways, right? They're just like, well, what if we

Speaker 2 inspired people to take care of a highway? Right.

Speaker 1 And also, it's also free advertising because you get to put up a sign that says like this stretch of highway cleaned up by like the local Arby's or whatever. Yeah, yeah.

Speaker 1 So like whatever you think about this, it's like a fairly innovative program that Texas came up with and they did all kinds of public events.

Speaker 1 In 1987, they had something called the Great Texas Trash Off, where they get volunteers across the state to pick up roadside trash.

Speaker 1 The weird thing about the way that they present this in the nudge book is that there is actually an element of social behavior here.

Speaker 1 I spent like two days reading about littering because I think it's like genuinely fascinating behavior.

Speaker 1 When there is less trash on the road, people don't fucking litter because they think nobody else is littering.

Speaker 1 So basically, in Texas, it became this like rolling snowball where it's like, once you get the trash off the road,

Speaker 1 people are like, oh, they don't think about littering, right?

Speaker 1 Whereas if you're driving around, there's fast food wrappers everywhere, you're like, oh, fuck it, I can just throw mine out the window too. Yeah, right.
So it did actually play on social conformity.

Speaker 1 And one of the most effective anti-littering interventions is actually adding trash cans.

Speaker 1 This doesn't really work on roadsides, but in cities, when you want to get rid of littering, that's actually like a pretty fucking smart nudge.

Speaker 1 Like, if you look around and there's a trash can five feet away, you'll throw away your cigarette pack. If there's no trash can within sight, you're like, ah, fuck it, you throw it on the ground.

Speaker 2 Well, is it like everything sort of a nudge? Like, I keep, because I'm trying to like think of creative solutions to these types of problems.

Speaker 2 All of them, you're trying to solve a problem of human behavior. So, like, nearly every solution becomes a nudge, right?

Speaker 2 This is just like a word that you can throw on to almost anything and be like, see, nudge, nudge theory.

Speaker 1 Peter, I have led you to the river. You were saying exactly the thing that we were going to reach with this section.
None of these examples are fucking nudges. Okay.

Speaker 1 The grad student who wrote checks for a hundred bucks if he didn't turn in his thesis, that's just a fine. He had to pay $100 for not finishing his thesis.

Speaker 2 A fine is just a way of banning something, right? Which they expressly said was not a nudge.

Speaker 1 Exactly. This is just like a normal thing that governments do.
Like when they give you a fine for illegal parking, they're not like nudging you to park better.

Speaker 1 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?

Speaker 1 Whether or not you pay your taxes, nothing about that has changed. The forms have not changed.
All they've done is like, don't forget to do that, right?

Speaker 2 But then the Minnesota tax people sent four letters, right?

Speaker 1 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.

Speaker 1 But you could easily cast those ineffective letters as nudges, right?

Speaker 1 So the one that says, like, oh, pay your taxes because it goes to like schools and libraries, that's framing, that's framing paying your taxes as a form of altruism, right?

Speaker 2 Right.

Speaker 1 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.

Speaker 2 Right.

Speaker 1 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. And the other letters aren't nudges because they didn't work.

Speaker 1 Like it's totally arbitrary what they are and are not calling a nudge here.

Speaker 2 So you can either broaden the concept out such that anything that impacts human behavior in any way is a nudge, or you can keep it narrow and maybe more useful, but then it only applies to like multiple choice

Speaker 2 checkboxes, which is so limiting that you couldn't possibly build like a book around it.

Speaker 1 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.

Speaker 1 Like what we're talking about with these don't mess with Texas signs, they're basically billboards.

Speaker 2 Right.

Speaker 1 You drive past a billboard that says don't litter. Well, does that mean that every single public information campaign is a fucking nudge?

Speaker 1 Like I drive past a billboard that says don't smoke, it causes cancer.

Speaker 1 The government is constantly like cajoling you into doing better behavior. And like these are the least effective forms of government interventions.

Speaker 1 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.

Speaker 1 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.

Speaker 1 The whole fucking thing was about how we've tried cajoling people. We've tried telling people that they should be organ donors, right? The only thing that works is changing the default on the form.

Speaker 1 That's why we're here. That's the book.

Speaker 1 People are not rational rational actors who you can just tell stuff to and expect behavior change. Yeah,

Speaker 2 it feels like they ran out of examples of like choice architecture real quickly. Right.

Speaker 2 I mean, it seems to me like what they're trying to go for is a public policy angle when like what they really have is information on marketing. Yeah.

Speaker 1 Right. They also

Speaker 1 note in passing that like other states did exactly what Texas did. So Oklahoma tried and it was don't lay that trash on Oklahoma.

Speaker 2 Good lord. You've got to be kidding me.

Speaker 1 So like I actually think that like don't mess with Texas is a fucking great slogan and there does appear to be like some secret sauce with this slogan. Like it's more powerful than other slogans.

Speaker 2 Well, it's definitely better than don't lay that trash on Oklahoma. What the fuck?

Speaker 2 So bizarre.

Speaker 1 Don't ramshackle our panhandle. I don't know what it could have been.
But like ultimately, we're just talking about marketing messages. Right.

Speaker 1 They're talking about like, oh, the Don't Mess with Texas thing was aimed at, you know, 18 to 34-year-old men. Which is like, yeah, okay, that's smart, but that's just like smart marketing.

Speaker 1 Find a target audience and craft your message toward the target audience. I mean, they do this with breakfast cereals.

Speaker 1 Is this interesting for like designing an anti-smoking campaign? Sure, but like, that's not. real policy change.
You can't really solve big problems with this.

Speaker 2 Right. Not without getting more homophobic.

Speaker 1 Banning the sports.

Speaker 2 Just one, one really, Just a visual of one really limp wrist throwing a piece of trash out of a window.

Speaker 2 Then you get don't litter on the screen.

Speaker 2 That's a win.

Speaker 1 But then this is one of the weirdest things about this book that I am genuinely shocked that this didn't come up in more of the reviews that were published when it came out, is that the vast majority of examples in this book are not fucking nudges.

Speaker 1 A huge portion of this book is just them describing public information campaigns. They're like, an anti-smoking campaign in Montana told teens, like, most teens don't smoke.

Speaker 1 Okay, but, like, that's not meaningfully a nudge. And there's been public information campaigns about smoking for decades.
Right.

Speaker 1 They have other things about like sending like text reminders to people to like get vaccinated, which like it's a nudge in the sense that like you're nudging me to remember something.

Speaker 1 It's like the literal definition of a nudge, but it's not like a policy of a nudge. Right.
They talk about daylight savings time being a nudge. How's that a nudge? They change the time.

Speaker 1 They say the simple change of the labels on the hours of the day, calling six o'clock by the name seven o'clock, nudges us all into waking up an hour early.

Speaker 2 Shut the fuck up. Shut the fuck up.

Speaker 2 When you think about it, time isn't even real.

Speaker 2 I just got nudged into May by the calendar.

Speaker 1 There's also a ton of examples in this book that are just like huge policies.

Speaker 1 So they have a section toward the end where they talk about this pilot program in North Carolina that paid teenage girls a dollar a day not to get pregnant.

Speaker 1 It says, Greensboro, North Carolina has experimented with a dollar a day program by which teenage girls with a baby receive a dollar for each day in which they are not pregnant.

Speaker 1 Thus far, the results have been extremely promising. A dollar a day is a trivial cost to the city, so the plan's total cost is extremely low.

Speaker 1 But the small recurring payment is salient enough to encourage teenage mothers to take steps to avoid getting pregnant again.

Speaker 1 So, this is actually a sort of pilot program that targets teenagers that have already had a baby because 30% of teenagers who have kids end up having a second kid within two years.

Speaker 1 But then, a fucking course, you go to the actual quote-unquote study. It's not meaningfully a study.
There's no control group. It's basically just like an anecdote.

Speaker 1 And it's not that they're paying teenage girls. It's that they have a peer support group every like Monday that they have to attend.

Speaker 1 And they get an actual envelope with seven $1 bills in it when they attend.

Speaker 1 It's basically a conditional welfare program. Right.
You're paying people if they meet certain criteria. This is the same thing as like you get food stamps if you apply for four jobs a week.

Speaker 2 Right.

Speaker 1 This is just a fucking welfare program. And of course, if you look at actual studies of this, of which there have been a decent number, they don't fucking work because $7 isn't that fucking much.

Speaker 2 If I had to guess as to whether a dollar was enough money to make a teenager not want to have sex, I know.

Speaker 2 Let's try five bucks a day, you know, something else.

Speaker 1 So that's the social part of the book. We now get to the money part of the book.
Obviously, they have a whole section about like how we're weird about money. Let's go.

Speaker 1 Remember, this book is written in 2007 and 2008. So there are some events which have not occurred in America.

Speaker 2 To nudge layman brothers out of bankruptcy.

Speaker 1 Exactly, just a couple nudges.

Speaker 1 So

Speaker 1 this is from a chapter of the book about nudges for the financial system. They have now published a book called Nudge the Final Edition in 2020.
So they add a bunch of stuff about COVID.

Speaker 1 They updated the original text quite significantly.

Speaker 1 As you can imagine, this text is not in the updated version. Yeah.
Okay.

Speaker 1 This comes after a section where they talk about how complicated mortgages have become and how these complications end up harming the poorest people. Okay.

Speaker 2 These factors are exacerbated in the segment of the market that caters to the poorest and highest risk borrowers, the so-called subprime market.

Speaker 2 As is often the case, there are two extreme views about subprime loans. Some, particularly those left of center or in the news media,

Speaker 2 label all such loans with the derogatory term predatory.

Speaker 2 This broad brush fails to recognize the obvious fact that higher risk loans will have to have higher interest rates to compensate the people who lend the money.

Speaker 2 Subprime loans also give people a valuable second chance. Subprime lenders provide funding for any large purchase.
More often than not, these purchases help people achieve an American dream.

Speaker 2 Better home ownership.

Speaker 1 See, subprime, people are out here smearing subprime loans.

Speaker 2 I love that this like behavioral economics pitch is like everything you knew about the rational actor in economics is wrong.

Speaker 2 But then like when it comes down to it, they still are just like on the side of giant banks and their predatory loans, right?

Speaker 2 Like nothing, nothing fundamentally changes in the way they view the world. Right.

Speaker 1 You're getting to the conclusion of this little section, right? So

Speaker 1 their fix for this, they're like, well, some people want to ban these kinds of loans. And like, that wouldn't work.
That's not libertarian paternalism.

Speaker 1 They do this a lot where they're like, that's not even a nudge.

Speaker 1 I like how we immediately get to like all policy solutions must be nudges exactly so like if it's not a nudge any intervention that's not just like a little ticky tack fucking thing is like automatically suspect right like oh that's a lot that's a lot of government intervention the way they want to solve subprime mortgages because obviously you don't want to ban them because like they're good as we all know in 2023 of course of course their proposal is that banks would have to provide more information so you have to give them a report that gives them all of the terms in plain language, right?

Speaker 1 So they say lenders would have to provide a machine-readable, detailed report that incorporates all the fees and interest rate provisions.

Speaker 1 This information would allow independent third parties to offer much better advice. Our strong hunch is that if this data were made available, third-party services would emerge to compare lenders.

Speaker 1 Care would need to be taken that the system did not foster collusion, but we think this would be easy enough to monitor and prevent.

Speaker 1 This data would also make it much easier to shop for mortgages online, which would make the mortgage market more competitive.

Speaker 2 So this is just a part of this behavioral economics book that's about how to make predatory subprime loans work for everyone? Yeah, exactly.

Speaker 1 Because we don't want to deny it to them because it's better homeownership, Peter.

Speaker 2 This is dark. How did this get so dark so far? I thought we were having fun.

Speaker 2 I feel like economists have this tick in their brain where like a lot of people look at various elements and machinations of the financial system and they're like, wow, that looks predatory and unfair, right?

Speaker 2 And economists are like, actually, it's great.

Speaker 1 Also, it's, as you alluded to earlier, they're describing this as a nudge, but what they're actually talking about is a legal requirement for companies.

Speaker 2 It's just a regulation. It's just a fairly good idea.
It's just a bank reg, right? Like, I don't, I don't really understand what.

Speaker 2 I mean, you know, we're obviously in a place where nudge has lost all meaning. And that happened right after the

Speaker 2 Texas. Well, I thought like the Oregon donation felt like the last time I really, I really understood what a nudge was

Speaker 1 now now it's just like I feel like nudge is now its colloquial use is what we're doing right where like anything that just like like is a little is a little push on human behavior is a nudge now but then what's what's so fascinating to me is they you know they have a whole section earlier in the book about how oftentimes people think that like giving people more choice is more freedom right if you give like oh you can have like 41 different healthcare plans but that doesn't work because most people just like do the default and people get overloaded really quickly right you need three but then when we get to this section of the book they're like oh we should give people all these choices so that they can make the right decision yeah but the whole premise of behavioral economics is that people fucking hate doing this right we kind of know that the people who are being exploited by these mortgages are not people who have like a lot of knowledge or time or interest in getting into the fucking details.

Speaker 2 Imagine mortgages, but with more middlemen. Exactly.

Speaker 2 That's the pitch.

Speaker 1 If you're going to do a fucking bank regulation that, of course, all the banks are going to hate, why wouldn't you just do something that forces them to actually offer people something good?

Speaker 1 Or you can't do predatory shit.

Speaker 2 No, that's not a nudge. It's not a nudge.
Nudges only from now on.

Speaker 1 The whole like the next like three chapters, they do the same thing for student loans. They're like, student loans have gotten out of control.

Speaker 1 And their solution, of course, is to make the forms easier and like integrate it with your taxes.

Speaker 2 That's the problem. Yeah.
With student loans is that the forms are a little too convoluted.

Speaker 2 to make it easier they then have a credit card thing credit card spending is out of control also credit card companies have to issue you a yearly annual report that is like all the fees you paid this year i don't i don't want to constantly be drilling down into what the fuck is a nudge even but this is just like a disclosure regulation yes which is not a nudge because what they started off with was like, all right, we're not penalizing anyone.

Speaker 2 That's not a nudge, right?

Speaker 2 But what a disclosure regulation actually is,

Speaker 2 is a requirement that, in this case, the bank make these disclosures or else

Speaker 1 they will be penalized. It's experienced as choice architecture for consumers,

Speaker 1 but behind it is like a vast bureaucracy of coming up with these laws and then presumably enforcing these laws too, of disclosure requirements.

Speaker 2 It seems like they're trying to include you having more information about your choices as a nudge. Sure.

Speaker 2 Like, it might fit their strict definition, but it does seem like a very different concept than, like, this food is at eye level when you're ordering.

Speaker 1 Nudges and wokeness, two things that people have strong opinions on, but no one can say what the fuck they are.

Speaker 2 It just seems like, even if you want to grant that there is some conceivable utility here, you're still only talking about like 1% of what the government even ostensibly does.

Speaker 1 And this gets us to, you knew it was coming, the chapter on climate change.

Speaker 2 Oh, fuck yeah. We're going to nudge our way to having ice caps again.

Speaker 1 Yeah, we're closing holes in ozone layers. All right, so here's their little introduction to this chapter.

Speaker 2 Finally, someone proposing small incremental changes to address climate change.

Speaker 1 It's time to do the small stuff.

Speaker 2 Okay.

Speaker 2 Most of the time, governments seeking to protect the environment and to control the harmful health effects of pollution have gone well beyond a nudge, and their steps have not been libertarian.

Speaker 2 Not libertarian.

Speaker 2 Typically, regulators have chosen some kind of command and control regulation by which they reject free choices and markets entirely and allow people little flexibility in promoting environmental goals.

Speaker 2 In the United States, national emissions limitations imposed on major pollution sources have been the rule, not the exception. Such limitations have sometimes been effective.

Speaker 2 The air is much cleaner than it was in 1970. Philosophically, however,

Speaker 2 such limitations look uncomfortably similar to Soviet-style five-year plans in which bureaucrats in Washington announce that millions of people have to change their conduct in the next five years.

Speaker 1 Where's the architecture in all this?

Speaker 2 Okay, so I love, like, sure, the air is cleaner, but philosophically. I know.

Speaker 1 I know. This is my favorite shit.
They're like, this thing that isn't a nudge work like gangbusters, but what if it was a nudge?

Speaker 2 Also, most regulations are not targeted at causing the common person to change their behavior directly. Most regulations are just targeted at industry.

Speaker 2 That's how environmental regulations work, right? We have clean air because of emission standards.

Speaker 1 Yeah, because of the Clean Air Act in 1970 and like punishments, criminal punishments for for people who pollute. Right.
Command and control shit. It whips.

Speaker 2 This whole concept is like we really want to preserve the illusion of freedom. Yeah.

Speaker 2 The whole choice architecture idea is built around the premise that the things that we perceive to be our choices are not really our choices, right?

Speaker 2 We're influenced by all this stuff that we can't quite detect.

Speaker 2 And when you lead with that, the idea that it's like philosophically, morally important to preserve your right to choice is less compelling because you've already admitted that choice is sort of an illusion in many respects.

Speaker 2 Exactly. You know, we now have a lot of our political discourse now revolves around like bullshit consumerist debates, like gas stoves, right?

Speaker 2 These things that no one gave a shit about and you wouldn't even notice in a vacuum become the locus of these fights about like quote-unquote choice. Right.

Speaker 2 It's all just sort sort of a proxy fight about these like abstract cultural values. And this is sort of making the same error.

Speaker 2 The idea that our choices about these things are like of the utmost importance and we must protect like the concept of choice in some way, it seems inherently silly to me and at odds with their basic thesis.

Speaker 1 This is like the fundamental contradiction at the heart of this, this mismatch between the problems they are trying to solve and the solutions that they're proposing, right?

Speaker 1 So the climate change chapter leads up to this solution. It says, we can now sketch an initial low-cost nudge for the problem of climate change.

Speaker 1 The government should create a greenhouse gas inventory requiring disclosure by the most significant emitters.

Speaker 1 The greenhouse gas inventory would permit people to see the various sources of greenhouse gases in the United States and to track changes over time.

Speaker 1 Seeing that list, states and localities could respond by considering legislative measures.

Speaker 1 In all likelihood, interested groups, including members of the media, would draw attention to the largest emitters. To be sure, an inventory of this kind might not produce massive changes on its own,

Speaker 1 but such a nudge would not be costly and would almost certainly help. I went into Rich Dad voice again.

Speaker 2 I'm going to try to orchestrate my thoughts about that. First of all, not a nudge.
It's just a disclosure regulation, right? It's just a disclosure regulation.

Speaker 1 It's just a law for companies. It's not a nudge.

Speaker 2 Should go without saying this is an inadequate response to climate change. Like, we have a good sense of who the polluters are.

Speaker 2 Disclosures wouldn't give us a ton more information than we already have.

Speaker 1 We don't know the specific amount they're polluting, Peter, if we knew the specific amounts.

Speaker 2 Right. Like, if I, you think, like, the average person looking at, like, oh my God, like that many metric tons, like, they don't, no one fucking knows what that means.

Speaker 1 Loss aversion, Peter. People don't want to lose their lungs.
So it's actually behavioral.

Speaker 2 So you, oh man, hold on. What was my thought? I had this.

Speaker 1 I love that you're melting down. I like how shitty this idea is.

Speaker 2 Even if you orchestrated this such that there were disclosure requirements and then like people are like, okay, Exxon is polluting, which we only know because of this disclosure requirement.

Speaker 2 We learned it. We are now going to implement regulations.

Speaker 2 Whatever regulation they implement would no longer be a nudge, right? Because it would have to be a fucking like emission cap or something like that.

Speaker 1 So why don't we just fucking regulate them then?

Speaker 2 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.

Speaker 1 Yes. It says, seeing that list, states and localities could respond by considering legislative measures.
What are the legislative measures?

Speaker 1 Is it like to put a cap on how much you're allowed to pollute? Why don't we just do that federally?

Speaker 1 Why would we wait until like West Virginia reads a fucking report and is like, oh, it turns out there's pollution coming from the coal mine.

Speaker 1 We're just kicking the fucking can down the road ultimately.

Speaker 2 Yeah.

Speaker 2 They start off with this definition of nudge as something that is about choice architecture. And

Speaker 2 they move into using it colloquially to mean like a little thing that might impact people's behavior. And that sort of reveals the project, which is like, never do a large policy thing.
Right.

Speaker 1 So So exactly what you are saying leads us back to organ donation.

Speaker 1 When I said earlier that the organ donor example is doing a ton of work for this concept and for this book, and is the paradigmatic example of a nudge, I meant that derogatorily to review, right?

Speaker 1 There's countries that have opt-in systems where like you have to tick a box to be an organ donor.

Speaker 1 There's countries that have opt-out systems where you tick a box if you don't want to be an organ donor. And they have very different rates of of the number of people who are organ donors, right?

Speaker 1 What they don't have is differences in the number of actual organs that get donated.

Speaker 1 Organ donation systems have almost nothing to do with the percentage of the population that ticks a box on a fucking form.

Speaker 1 So the country with the highest rate of organ donations, like actual, like a functioning system of organ donations, is Spain. When you look at Spain, what you find is not like one weird trick, right?

Speaker 1 You find decades of dedicated reforms.

Speaker 1 So Spain changed from an opt-in to an opt-out system in the late 70s, but the number of actual donations didn't increase until the late 80s because there was basically no capacity.

Speaker 1 There were only surgeons in Madrid and Barcelona who could do these transplants, right? So they had to do a bunch of training for doctors in regional hospitals.

Speaker 1 They created a national registry that had been done at the regional level before. They had to centralize everything.
They have this really well integrated into end-of-life care now.

Speaker 1 So if you are diagnosed with like a terminal illness, someone will come and visit you and be like, hey, you know, have you thought about saving somebody's life after you're gone?

Speaker 1 Let's do scans to find out what organs are still functioning. There's dedicated intensive care units.
There's dedicated staff. And importantly, there's constant surveillance and improvement.

Speaker 1 So Spain has gone through like three waves. of improvement.
They look at like, okay, what are the existing barriers in the system? How can we get this even higher? You have to look at a system.

Speaker 1 You have to dedicate funding to it.

Speaker 1 You have to take the specifics seriously.

Speaker 1 Maybe that's boring or something, but it's like, that's how you solve problems. I'm sorry.
It requires money. It requires expertise.

Speaker 1 It requires not stripping them of context, but putting the context back in.

Speaker 2 Right. Right.

Speaker 1 I read actually quite a bit about this. This is super fascinating.

Speaker 1 One of the best articles I read is called Assessing Global Organ Donation Policies, Opt-In versus Opt-Out by Harriet Roseanne Etheridge.

Speaker 1 So at the end of her article, Harriet notes that America actually has a really high rate of people ticking the box to be organ donors.

Speaker 1 It's like more than 60%, which is way higher than other like opt-in countries. The barriers in America are not related to getting more people to sign up as organ donors.

Speaker 1 This is a healthcare systems project.

Speaker 1 There's a whole chain of events has to take place for organ donations to happen. And there are problems with the other fucking links in the chain.

Speaker 1 And since this fucking book came out, a lot of countries have actually switched from one system to the other, and they have seen no improvements.

Speaker 2 This reminds me of the climate example, where these guys want to come up with this like fucking clever, like little fake smart guy solution to a problem that at bottom needs resources.

Speaker 1 The other reason I really wanted to talk about this, and I don't know if this counts as a twist, but as I said, they updated Nudge in 2020 with like Nudge, the final edition, responding to critiques, updating the text, right?

Speaker 1 And they kept the chapter on organ donation. But they've now made it this like weird scolding chapter about how everybody misread the book in the first place.

Speaker 1 We never said that America should switch from one system to the other.

Speaker 1 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.

Speaker 1 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. Right.

Speaker 2 They were nudging us in that direction, to use a colloquial term.

Speaker 1 So I am going to read the section of their book where they present the full context.

Speaker 1 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? They added some caveats.

Speaker 1 So this is the full paragraph where they talk about the caveats, the weaknesses of their plan, right?

Speaker 1 So far, presumed consent looks awfully good, but we must stress that this approach is hardly a panacea.

Speaker 1 A program that successfully gets organs from deceased donors to needy transplant recipients requires a complete infrastructure.

Speaker 1 Currently, Spain is the world's leader in developing that infrastructure, achieving a donation rate of nearly 35 donors per million people, compared with a bit more than 20 donors per million in the United States.

Speaker 1 The default consent rule, therefore, is not the only thing that matters.

Speaker 1 Still, careful statistical analyses find that holding everything else constant, switching from explicit consent to presumed consent, increases the donation rate in a country by roughly 16%.

Speaker 1 Another analysis obtains a slightly smaller but similar effect. Whatever the precise figure, it is clear that the switch would save thousands of lives every year.

Speaker 1 So we never said you should make the switch. We merely said that switching would save thousands of lives.
Right.

Speaker 2 This reminds me of

Speaker 2 there's a thing on like investing social media where people are like, buy this pump and dump stock. And then at the very end of it, it's like, this is not financial advice.

Speaker 1 Yeah, don't do the things I'm very obviously telling you to do.

Speaker 2 I'm telling you that this would rule. And it is absolutely the best thing to do.
I'm not technically telling you to do.

Speaker 1 This to me is also like the fundamental intellectual project of the book, right?

Speaker 1 Where if updating the organ donation system requires a complete overhaul, then why is there a chapter about it in your book about like little technical tweaks?

Speaker 2 Why is your book called nudge?

Speaker 1 Why is your fucking book called nudge, dude? This ultimately is an example against your thesis.

Speaker 1 The entire selling point of the book is that we can achieve great, significant changes. They say this over and over again.

Speaker 1 You can achieve big changes without getting bogged down in politics, without spending a bunch of tax money. And then you look at the specifics.

Speaker 1 And they're like, oh yeah, you know, you have to get bogged down in politics and spend a bunch of money for this.

Speaker 1 The metaphor that I keep coming back to is, remember how cereal ads used to have like part of a complete breakfast?

Speaker 1 If you eat a bowl of lucky charms with like a glass of orange juice.

Speaker 2 Right. With all of the other nutrients that you actually need.
Right.

Speaker 1 If you eat it with healthy stuff, then it's healthy, which is true of literally everything. It's like, oh, well, if you do this with huge structural costly reforms, it'll work.

Speaker 2 Yeah. But

Speaker 1 like all you're doing ultimately is advocating for broad structural reforms and like super just like bread and butter policymaking. Right.

Speaker 1 That's utterly banal, but it's like you've, you've reached that conclusion between the lines of your book explicitly rejecting and arguing against that approach.

Speaker 2 Yeah. There's a problem with these concepts where like, if you zoom out enough, they're correct, but not very useful.
Right.

Speaker 2 And if you zoom in, you start seeing that they're not really correct in the micro, right? They're not explaining a lot. Right.

Speaker 2 And I see that here too, where it's like, we have this concept and like it might be a useful way to process certain types of things, but it's really just like a vocabulary.

Speaker 2 It's just a way of sort of simplifying how we talk about certain things.

Speaker 2 You can't spin that into something that can solve climate change. Right.
You know.

Speaker 1 But this also speaks to what I find so frustrating about the quote-unquote debate over the book when it first came out.

Speaker 1 There's some weird, like, conservative objections to the book where they're like, nudging is totalitarianism.

Speaker 2 I love this because it's such a conservative thing where some technocratic liberal is like, what if we just did the smallest little intervention and conservatives are like,

Speaker 2 you are Joseph Stalin. Right.
It's like, this is why you should just propose holistic regulations or legislation or whatever the fuck. You can't compromise with these psychos.

Speaker 2 Don't bother with this technocratic bullshit.

Speaker 1 But then then this is what frustrates me so much is because this was presented to the public as a left versus right, you know, nudging versus nudging as totalitarianism debate, they sort of missed what I believe to be the much better critique.

Speaker 1 I don't have a philosophical problem with nudging, right?

Speaker 2 Yeah.

Speaker 1 My problem is they don't fucking work. Yeah.
And they can't solve the problems that we have. But like that.
Critique of nudging didn't really appear in anywhere prominent for like another 10 years.

Speaker 1 Basically, at this point now, there's been a number of meta-analyses of like various nudge units. You know, there's 51 countries have these nudge units, right?

Speaker 1 And so there's these huge meta-analyses of like all the things that they've tried. And every single one of them finds tiny effects.
This is from an abstract to one of them.

Speaker 1 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.

Speaker 1 There was a test where they sent text message reminders to high school students reminding them to apply for colleges.

Speaker 1 68% of kids who got nudges applied for college and 65% of kids who didn't get nudges applied for college.

Speaker 2 I'm impressed that it's 3%.

Speaker 2 I'm sorry, but to be like, oh shit, right. I got the apply for college text.

Speaker 1 And then it's fascinating to me that they start the book with this thing of, you know, cafeteria nudges and where you place food, and it can have an effect of up to 25%.

Speaker 1 No, dude, there's been a million of these fucking cafeterian nudges.

Speaker 1 Some of them do actually affect kids' behavior, but they affect the behavior of taking fruit and vegetables, not eating fruit and vegetables.

Speaker 1 That's the hard part is getting kids to actually consume this stuff. And once you boil it down to what the kids are consuming, it's like 0.1 of a unit more.
It's like a little slice of apple extra.

Speaker 2 This is why this is so useful in like a marketing framework and so useless in a governing framework, because when you're doing marketing shit, getting two or three percent or more purchases is massive.

Speaker 2 You're driving revenue, but that's because you can't mandate behavior when you're selling someone something. Right.
Right. When you're the government, you can just tell polluters to stop polluting.

Speaker 2 You can make it a crime. You have all kinds of tools at your disposal.
You are not limited to marketing gimmicks.

Speaker 1 Right, exactly. You could just take like the chocolate milk out of schools.
No cookies, bang.

Speaker 2 Yeah.

Speaker 1 There's also a huge problem of inconsistent effects. So a huge percentage of these nudge projects don't replicate.

Speaker 1 We've now had like 15 years of studies on these and like at best, they have like a 5% effect.

Speaker 1 And most of them are short-term, right? Like the, I, I, there's no data on this because the, the original fly and the urinal study is basically fake.

Speaker 1 But the flies and the urinals, after a while, you just get used to them and you don't notice them anymore.

Speaker 2 I'm going to go back to my 360 peeing strategy.

Speaker 1 The centrifugal pissing strategy.

Speaker 2 Yes. I guess that there's like a,

Speaker 2 if you reduced the scale of the problems that the book implies it might be able to solve, then you can sort of view it as like, here's a low-cost intervention

Speaker 2 that will produce small but possibly meaningful results in certain situations, right? But when you pitch it as like, all right, check out my climate change solution.

Speaker 2 What if you gave people a little bit of information and then maybe hopefully they'll do something with it?

Speaker 2 All of a sudden, you show how insufficient this framework is for dealing with the problems that we actually want to solve, right?

Speaker 2 Maybe this concept is part of an architecture of solutions in how to make kids eat slightly healthier or whatever. Right.

Speaker 2 But it can't be like the thing that Barack Obama is using as his like guiding light

Speaker 2 for eight years of being the president of the United States.

Speaker 1 This is basically where we're going to stop for this episode. Next episode, Peter, we have not gotten to like the bad parts of the book yet.
Hell yeah.

Speaker 2 Gotta pumped. Gotta get like the really shitty parts.

Speaker 1 They get, they try to solve other problems.

Speaker 2 Okay.

Speaker 1 I'm gonna end with like a teaser quote. We have to put ourselves, put yourself back in like 2007, 2008 mindset, Peter.

Speaker 2 I'm very dumb. My hair looks like shit.
Okay.

Speaker 1 It says, we recognize that many people, including members of many religious groups, strongly object to same-sex marriage.

Speaker 1 Religious organizations insist on their right to decide for themselves which unions they are willing to recognize with attention to gender, religion, age, and other factors.

Speaker 1 We also know that many members of same-sex couples want to make lasting commitments to one another.

Speaker 1 To respect the liberty of religious groups while protecting individual freedom in general, we propose that marriage, as such, should be completely privatized.

Speaker 2 Yeah, sure. So

Speaker 1 next time we talk about the bad stuff.

Speaker 2 I'm going to be irritated thinking about that. God, fucking gay marriage discourse was such a bummer.

Speaker 1 Oh my God, Jesus Christ.

Speaker 2 It's hearkening to this same problem. Like, as soon as you identify a problem where there is political will on both sides, this is useless.

Speaker 1 You can't nudge. You can't trick people into going against what they believe to be their core religious beliefs.

Speaker 2 Our strategy for nudging gay people back into the closet.