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

So talking about lockdown, how effective do you think companies will be at dragging people back into the office? It's interesting, actually, because in the UK, for whatever reason, there are exceptions. If you go to tech companies, there's tumbleweed.
Companies which are very strongly kind of tech engineering driven still seem to be very empty. What I know best is the ad industry.
And actually, they're generally a fairly gregarious bunch. And I think it's returned to a pretty acceptable kind of equilibrium.
And by the way, I don't want, well, personally, I don't want to see people in the office five days a week, because everybody who's engaged in some sort of part of the knowledge economy, 20 to 40% of your working week is going to be stuff where you just need to truckle down, choose your own environment, and get on with it. And you're much more likely to be more productive if you have some degree of discretion over where and when you work for those tasks that you perform on your own.
But there is this value of what you might call serendipity, coaching, for example, co-creation, collaboration, which I think still requires some degree of co-location. It helps to have people in the same place at the same time for all kinds of reasons.
However, what's weird is that the level of absenteeism, if you want, I don't want to call it that,

but you know what I mean, okay, is much, much higher in the US and Canada than it is in

the UK.

Now, I'd always see-

Was sick leave?

Well, some of it's probably geographical in the simple sense that there are people who've

moved.

In other words, it's difficult in the UK to move so far away from the office that you

can't come in for one or two days

of the week. You have to choose an island somewhere, you know, or go to Scotland, I guess.
In the US, there does seem to have been a sort of widespread dispersion of people to a distance away from their place of work where it's a flight away, not a train ride away. But it's not, what I would have predicted.
Because if anything, the US had a very strong culture of presenteeism, of people effectively getting in early, staying late, being absolutely desperate to show their face. And the office occupancy rates are much, much lower in the US and Canada than they are in Europe or the UK.
One of our mutual friends has a team that works remotely around the world. So they speak to each other on Slack, but they don't see each other in the office.
And as part of a team building exercise, I think every so often they bring people together. And he thought this would be brilliant.
Everyone's going to get to know each other. They're going to become friends.
It's going to bond a team together so much. The week after they had this in-person meetup separately, three people asked for a pay rise because they all got together and had a beer and were like, so what do you want? Hang on a second.
I was told such a, because you don't have that kind of non-critical conversation if you're just dealing with people on Slack, right? First off, there's a digital record of it. Maybe someone's able to check.
I don't know. Can the admin check Slack? Maybe they can.
I don't know. And secondly, it's like, we're just here to do the job.
This isn't sort of play around time outside of work. And do you really text the other marketing guy or whatever after work about stuff to do with that? Probably not.
So there is, from a totally Machiavellian totalitarian state organization point of view, there is an argument to be made. Divide and rule.
Silo off. Yeah, compartmentalize the staff and then they never know if one of them's managed to negotiate a pay rise and the rest of them haven't.
That reminds me of an agency back in the 1990s who sent their staff on assertiveness training, and they all came back and half of them resigned. Oh, God.
Be careful the skills that you give to the staff. No, no, no.
Be careful what you wish for. It is interesting, by the way, because one thing that's disappointed me is there seems I expected to see much, much greater levels of investment in really interesting

remote working hardware. And by which I mean, you know, really, really good tech at home.
There is a project apparently in the works called Google Starline, which is a kind of 3D video conferencing, which there's a team at Google probably still working on. I hope so.
um you have, I mean, don't forget, you have a problem now in that offices have mostly shrunk their footprint. They still aren't kitted out for the frequency of video calls.
In other words, the number of private pods in an office is too few. The number of meeting rooms is probably too many.
So there's a whole architectural problem to be addressed in terms of how, because if I had a day with mostly video calls, I'd want to do it at home because it's easier to do that than it is to try and find the right conditions in an office. The other point I make is that there are a lot of things where it's very difficult to sell people on the new behavior, but once they've experienced the new behavior, the old behavior seems ridiculous.
An example I always gave of that is nobody minded buying CDs when it was the only way you could listen to music. Okay.
You just accept it. Okay.
I don't really want to buy a whole album. I just want to buy a track but you know um it's just what you do if you buy music then you had downloads of course the music industry resisted this furiously the whole idea of downloading uh even even to the point of not making it possible for people to download things legally and the problem there is once you'd experienced downloads the the CD seemed suddenly ridiculous.
And to some extent, we didn't mind commuting in the same way when we just thought this is just a necessary part of work is the place you go to. It's just work is the place you go to.
It's Wednesday. It's Friday.
So I go into the office. That's the deal.
The time you spend on the train, the time you spent cleaning your teeth and getting up early and doing your ablutions didn't feel like a waste of time okay because it was just what you had to do the second you've experienced the alternative which is get out of bed put a cardigan over your pajamas and click join meeting all of that kind of palaver suddenly seems twice as painful and i've got one of those fantastic quicker taps that produces boiling water on demand and it was difficult to persuade my wife to get one um but once you have one of those things waiting for a kettle to boil feels somehow weirdly victorian and so technology often works that way that actually um interesting with electric for example, the latest data seems to suggest that although there's a huge amount of resistance to electric cars, the people who make the move generally don't go back. Once you've actually, once you've kind of gone over that first initial hurdle of adoption, you don't revert.
What does that suggest from a sort of consumer behavior standpoint, then, that there kind of price that needs to be paid up front kind of make it kind of makes me think that the first movers within that industry don't necessarily have the best advantage because they presumably need to pay the most money in terms of marketing exactly to break not only somebody into their brand but break them into an entire new ecosystem of tap, of vehicle. Quite often, early technology is probably driven by status-seeking rather than utility.
So if you think about early adopters of cars, which were unreliable and expensive, the motivation was either novelty or showing off rather than utility. Apple Vision Pro as the 2024 example.
Apple Vision Pro would be exactly the point. I would argue that, yeah, you want to be the one person in your street who has that thing.
And actually, those early adopters do, in a weird way, pay a price. But I mean, there's an argument, by the way, which is that this also

happens in nature, which is the argument that birds, dinosaurs, conceivably, evolved plumage

and wings for sexual display purposes, not as a mode of transportation. So in other words,

they did this thing as it was a peacock's tail, but it was on the sides rather than on the on the back okay and you could display your feathers as a proof of your health and magnificence and then so this effectively evolved as a status signaling mechanism and then was parlayed into a mode of transportation because the wings became big enough to enable them to be used oh it's a mass it's a massive phallic appendage in one form or another that they can then fly with. So you might argue that that's true of things, you know, I mean, I've always wondered about technologies like the typewriter, where I can't really see, okay, there's an advantage in legibility over handwriting.
But for a period of about 40 or 50 years, people would write a note. This is how it worked in business.
I'm not making this up, okay? In the 70s in Ogilvy, there was a typing pool, which was a lot of people who you would hand them a handwritten note, and they'd type it up so that you could then send it on to your client. And then, typically, there was always a mistake.
So, you then had to send it it back and have it typed them. No word processors then.
So the whole thing had to start all over again from scratch. And the question you've got to ask there is, was that simply because you weren't a serious business unless you sent typewritten communication? Signaling.
In other words, you couldn't as a solicitor's, you know, Unilever or whatever, you couldn't send handwritten notes because it simply looked unprofessional. So everything had to be typed.
Now, there may have been something to do with carbon paper and copying, which had some particular role, which made typing desirable. But it's an interesting question because there's not a, no one could really consider that typing added to productivity, quite the opposite.
It meant that every communication producing anything was painful. The only benefit it may have had is it kept the volume of communication low.
Because it's so effortful. Because it was so effortful.
Whereas email, the cost of actually sending an email to 100 people is far too low. Because then the burden of both filtering and prioritizing falls on the recipient not on the sender yeah it's a terrible i mean it's very it does amuse me this which is there's this hostility to flexible working which is partly driven by the suspicion that people might be enjoying it now okay so it's not really to do with productivity but there are people i mean someone someone in my company i won't name was driven practically insane by the fact that the netflix ceo revealed that there was a spike in netflix viewing between 12 and 1 in many countries lunchtime now first of all it's lunchtime okay you know it's accepted that people have a break if they want to chill out by having a sandwich in front of netflix rather than wandering around to pret it doesn't bother me personally but also i would argue that a lot of people would be much more productive in work if they started work early took a three-hour break in the middle of the day and then worked later now commuting makes that impossible to do but i would argue that your energy levels would be much better managed if you did take a break in the middle of the day and then worked later.
Now, commuting makes that impossible to do, but I would argue that your energy levels would be much better managed if you did take a break in the middle of the day with the additional bonus that you'd actually get a bit of sunlight. Yeah, you can maybe pick the kids up at the end of that.
If you're a Scandi, okay, in the winter, you go to work in the dark, you come home in the dark. So effectively, your exposure to natural light is Saturday and Sunday for three or four hours.
So that doesn't bother me, the fact that people are actually choosing. If you look at writers, you know, the people who are professional writers, journalists, novelists, they're very different, by the way, but all of them have sort of conditions under which they can and can't write.
And they vary. Some people demand complete silence.

Some people go to a cafe because they want some background noise. But what these people clearly know is that they can optimize their productivity by controlling the conditions in which they write.
And it strikes me as pretty plausible that's true for other forms of knowledge work, where some people can't work if there's any background noise or chatter. Other people can't work in complete silence because it spooks them out.
I've known writers who, you know, if there's someone operating an electric drill seven houses down, they're incapable of producing anything. There are other people who are spectacularly disciplined.
Now, it does strike me that you will make people more productive if you allow them some degree of autonomy to control the environment in which they produce their work. Now, I'm not suggesting that's five days a week, but I'm suggesting it seems to be implausible that giving people some degree of autonomy won't have benefits.
But the interesting thing is, if you look at business,

we've imposed loads of things on people, open plan offices, email, Slack, Teams, etc., without any real investigation of the effect it has on productivity. But we don't really care because the staff don't really enjoy that, so we don't have to worry about it.
But the second you have an experiment where the workforce seem to welcome it suddenly everybody oh my god they've gone to sainsbury's on thursday lunchtime well they're gonna have to go to sainsbury's at some time anyway okay um yes okay they're doing it during daylight when the store's quiet well if they're working at nine till ten which they can do because they don't have to get up at seven o'clock in the morning, who cares? Okay. What do you mean when you say that we're too impatient to be intelligent? Oh, that's simply a question which is, I think it's a wider question.
So, I mean, email, which I mentioned earlier, is an interesting case in point in that it was assumed that there could be no finer form of communication other than immediate and free. And we automatically assume that faster is better.
And one of the questions I raised, which I still think is a serious question, by the way, is do we need slow AI? Do we need slow Tinder? Do we need slow right move? Let me explain just what I mean by

this, which is that in most processes of search, if you look at consumers, what they do is they refine their preferences according to what they find out there. So they go into the property market, the dating market, the holiday market, and they have a set list of preferences to begin with.
If you talk to any real estate agent, most people who deal with a human real estate agent end up buying or renting a property which meets remarkably few, if any, of their initial criteria. That's probably true of the people people marry as well, I would guess.
That if you ask someone effectively to write down,

put it very simply, we think we know what we want, but we don't, is probably the simplest way in

which. And the way we discover what we want is by a kind of exploratory process of discovery,

where we explore the market and what's available and what they cost and what we experience when having a look at a particular house or person then refines our preferences. And so this, what you might call the right move approach to decision making, which is define what you like, we give it to you, you buy one of those, okay, looks to us as if it's a perfectly sensible and efficient way of choosing a house.
But actually, we don't see what we don't see. Actually, I was talking to someone this morning, I better not give away who they are, who discovered that right move, there are areas of London which are holes.
In other words, they don't fall into any predefined area on right move. And property prices in those areas are disproportionately low because you can't search for any property that's in that area.
Now, it might be if you're looking for a much bigger area. But in other words, they're not in Kensington.
They're not in Notting Hill. In other words, they're these weird little islands of undefined location where you can actually have disproportionately cheap property because right move is kind of blind to their existence.
Wow. You also have the problem, which is you can't sell a property apparently now for £850,000.
Your estate agent or anybody else will tell you, no, no, you've got to make it say 810 or 990. Okay, that's fine.
And the reason is that people search for property either 900,000 and down or 800,000 and up. And two things happen.
One, they're less likely to find you at all because you're further away

from their searching point. Secondly, if they do find you, the people who are searching 900 and down are a bit disquieted because they think you're too cheap.
And the people who are searching 800 and up think you're a bit too expensive. So the extent to which what seems like a completely irrational filtration process in online searching activity or decision making may be deeply flawed because it doesn't reflect the way in which we make decisions in the real world, which is we recalibrate what we want according to what we find.
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And it's a joke. It's an old advertising joke told me by someone who is literally from the Mad Men era, which is you have a copywriter, an art director, and an account man, OK, who are boarding a plane to present work to a client.
And they open the overhead locker and somewhat implausibly a genie gets out and says, I've been trapped in that overhead locker for years. To thank you all for releasing me, I'll give you each a wish.
So you can choose anything you want. And they go to the art director who says, I'd like Picasso's life.
You know, I don't mind my life, but I want Picasso's life. The locations, the eye, the artistry, you know, probably the women folk, the romantic life.
That's what I really want. And whoosh, the art director disappears.
And then the genie turns to the copywriter who goes, it's got to be Hemingway. You know, he enumerates a whole load of reasons why he'd like to be able to write and live like Hemingway, and whoosh disappears.

And then the genie turns to the account man and says, what about your wish?

He says, I want those two guys back.

I've got an important meeting in two and a half hours.

Okay.

And there is that element where, and by the way, we could refer to this in everything from things like the shareholder value movement to business quarterly reporting, to the extent which in advertising too much money is spent on short-term performance advertising and too little is spent on long-term brand building and that's not because it's necessarily more valuable it's because it delivers measurable results faster so i'll give you i'll give you a fundamental problem um the ft wrote a very, very good article specifically about the UK, but I think it applies more widely, which is, how did customer service get so bad? Now, the point is, I felt like writing an article to the FT saying, well, if you occasionally acknowledged there was something interesting about business other than their quarterly financial forecasts, maybe the problem wouldn't have happened. If you actually discussed marketing occasionally or customer experience or the value of repeat business, if you looked at business from the point of view of what you might call a competition for customers rather than the competition for operational efficiencies and cost cutting, maybe we wouldn't have gone into this total shitstorm, okay? But parking that rant for a moment, what seems obvious, okay, if you spend some money on acquiring customers, you can see whether it's working very quickly.
And you can say very confidently, we spend X and the value of the acquired customers was Y. Let's say you want to make a corresponding investment in customer loyalty or customer experience.
In other words, ensuring your existing customers have a great experience and so they come back or dealing with problems very well so that your customers don't leave. Generally, you could perfectly well prove that that was cost effective.
And and indeed my hunch would be that money spent there would be more cost effective in many cases than money spent on acquisition however it might take you five years to prove the efficacy of what you do because it's slower there are businesses which are fast there are businesses which are slow they're fast feedback businesses which you learn very quickly an example by the way a very fast feedback business is comedy you have an instant feedback mechanism from the audience which basically tells you whether or not a joke is any good and whether you've landed it and so apparently if you go to small comedy clubs you'll occasionally be surprised because you're sitting there and there are only sort of 20 tables and Chris Rock will come in. And effectively, it's all a bit weird, but he's trying out his new material for the next run.
Before you go to bigger theatres, you try your material out on a small scale. And that's a fast feedback business.
Amazon's a pretty fast feedback business, I would argue, because it has a very high degree of frequency of interaction with customers. Something like banking or insurance is unbelievably slow.
I mean, if you're a bank and you piss off a customer, they don't even leave, by the way. They just go inert.
It's not like people go, I'm going to close my current account and I'm going going to walk off they just open another current account somewhere else your current account they don't buy anything any other products from you but it's not the same as uh as something like comedy where you know within seconds how whether you've landed something or not and then there are also things which which bother me which is there are also things where i was talking to the guy who founded AO and they have this lovely little system where when they deliver a washing machine or a dishwasher or whatever, if there are children in the house, because they deliver things themselves, they give the children a little branded bear. OK, now, as he said, perfectly right, you know, someone in finance is going to say, OK, what's the cost-benefit analysis? Okay, on that.
And his point is, it's impossible. You just have to make a judgment, subjective judgment, that the cost of the bear is trivial and the long-term effect is likely to be quite high.
What's that thing about the Bezos has got when anecdotes disagree with data most of the time? The anecdote is usually right. Yeah, yeah, yeah.
I mean, the interesting thing with Bezos is he's going to, I mean, this is true of all those people. I mean, you know, the sort of also very true of Elon Musk.
They have a very unusual, sometimes highly seemingly irrational thinking style. Speaking to someone who is very senior early on at Amazon, everybody except Bezos hated the idea of Amazon Prime.
They hated the idea of Prime Video. They didn't like the idea of Amazon Web Services.
Now, Jeff has an interesting notion, which is what he calls a two-way door. If you talk to people, by the way, at Amazon, it's a very, very interesting, I'm not sure I could cope with it, to be absolutely honest, but it is a very, very interesting culture in terms of its approach to everything from meetings to decision-making.
What a two-way door is, is something where you can walk through the door, and if you don't like what you see, you can walk back. So a one-way door would be deciding to build a sort of two million square foot distribution center north of Memphis, OK? Once you've built that, it's difficult, not impossible, but it's difficult to reverse the decision.
There, you actually depend on a large degree of decision-making, rigor, and rationality, you know, and you need a really rigorous case. But in other cases, Jeff would say, it's a two-way door.
Try it. If it works, whoop-de-doo, that's great.
If it doesn't work, we simply stop doing it. And to be honest, the trial possibly costs less than we would have spent just arguing about it if we were adopting a kind of purist approach.
And I think it is important because why I think this is becoming vitally important is most

business is probabilistic, but everybody in business wants to prove and pretend that it's

deterministic.

So every spreadsheet is in some ways an act of pretense because it's past information,

which you pretend has wonderful predictive value, as if it's kind of Laplace's demon,

but it really doesn't, okay, because weird shit happens out of nowhere all the time. And you have this fundamental problem, I think, where I think what distinguishes someone like Jeff is they're probabilistic thinkers.
They just go, well, look, it probably won't work, but if it does, it will be spectacular. And they are in a position where they can take those decisions.
In their defense, most people, I think, first of all, most people are promoted within business for their aptitude in solving reductionist deterministic problems. How do you optimize this particular? There's a number in the far right-hand column of a spreadsheet somewhere next to a person's name that says, that was green this year.
They made the number go up. Yeah, absolutely right.
Yeah. And actually, by the way, they probably, in most cases in business, you capture remarkably few of the gains from a bold decision, whereas you capture 100% of the blame if it goes wrong.
Correct. Yeah.
So certain decisions, decisions which are what you might call low chance of success, huge return, that's when people leave a business and become an entrepreneur because they realize that there's no point in actually doing those kind of things within a business because if things do well, you get a pat on the back and a bonus. If things go badly, you lose your job.
Speaking of things going badly, Jaguars rebrand. What do you reckon? I'm in a small minority of people who would argue that before you criticize what someone does, you've got to understand what they're trying to do.
And they have been completely forthright about the fact they expect to lose all but 15% of their customers. All but 15% of their customers.
Exactly, of their customers by moving to a much more upmarket expensive car on an electric platform. And the argument I might make is that normally what they did is anathema to anybody who loves what you might call brand maintenance and brand management.
But by the way, they didn't change their name. Okay, they didn't call the car Zog.
They still call it Jaguar. They still, contrary to rumors, have kept the leaping cat motif, etc.
but what they've done is a very very bold kind of okay in a sense it's look bet the farm here okay either we do this we either succeed in which case great or if we fail to be honest we were heading for disaster anyway because you've got to be slightly careful this is where uh you know uh Okay, when Dylan went electronic, okay, someone shouted Judas, the crowd in the Manchester Free Trade Hall absolutely hated it. Jaguar purists are going to hate anything.
By the way, I've had six Jags, by the way. So I'm, you know, I'm a loyal Jag enthusiast.
I love the brand. And in many ways, I love a lot of the heritage about that brand.
But equally, I love red telephone boxes, but I don't think it should be the BT logo. Okay, I love, you know, Giles Gilbert Scott's design for red telephone boxes, but I'm also cognizant of the fact that I don't make many calls from payphones anymore.
And I like Burberry Max, but I'm also cognizant of the fact that because of various things like, you know, central heating and Uber, not many people wear Macintoshes anymore, you know, apart from Americans and Flashers, in my experience. I was saying this the other day.
Now, there are occasions where you might argue that Electrification completely reshapes the competitive landscape for any car brand or any car manufacturer. And that what you have to do is a fairly dramatic pivot.
I'm going to join you in there. Get that in you, Rory.
Yeah, absolutely. Not enough stimulants in us today.
Exactly. me um the there are cases kid a for example where bands produce an album that kind of alienates their existing fan base okay you might argue that for jaguar this was a kind of sergeant pepper moment okay where we've got you know fundamentally we've got to do am i right that there was a sort of pet sound sergeant pepper interplay going on which was who was first were they on some trajectory toward slow motion irrelevance was that where they were going the problem with jaguar is lots of people love the brand but the people who love the brand didn't necessarily buy jaguars from new in particular right and the new car buyer is a pretty niche audience to begin with.
I thought the ad was deeply weird. It wasn't produced by an ad agency, by the way.
It was, as someone said, it was less a branding exercise than a de-branding exercise. You might make the contrary position, which is that it got millions and millions of people all over the world talking about Jaguar, which hadn't happened for years.

Now, I'm not one of those people, any publicity is good publicity.

That emphatically is not true.

However, it did signal the fact, and by the way, it's not as if Jaguar hasn't done this before okay that a big change was afoot and that something remarkable was going to emerge and the new car by the way which we've only just seen this morning just for people listening i haven't seen it what is it um it's high it's highly polarizing it's an extraordinarily bold design i personally like it it seems to come in two colors miami pink and london blue okay and the idea of a pink jaguar is um transgressive heretical exactly yeah uh i don't know whether you saw their twitter was replying to people that were criticizing the campaign whoever it is in the marketing department they're being very um non-apologetic about what they were doing we don't care about what it was before this is a new era etc etc you know really no uh as or graces about trying to bring along the heritage or bear in mind they have got an advantage now if you look at it from the mindset of a game theorist okay if you're a volume car maker electrification is god i'm terrifying it's Clay christensen and the innovators dilemma because you've got this huge sunk cost in both expertise and plant in producing internal combustion engine cars you have this incredible engineering heritage which you know don't get me wrong i love that stuff i love steam trains okay i love telephone boxes. I love driving gloves, E-types, you know, girls from Lucy Clayton being taught how to get in and out of an E-type without showing your pants, okay, which apparently was something that finishing schools taught in the 1960s.
All of that heritage is wonderful. But when technology comes in, I mean, okay, BlackBerry purists, okay, this is a kind of rim moment where electrification fundamentally changes what it means to be a great car.
Because probably reliability, assuming the software doesn't go wonky, is going to be pretty damn good. Okay, now, I recently had a bit of an issue where somebody said electric cars are expensive and i kind of went well kind of depends doesn't it because an electric skoda will be more expensive currently than a petrol skoda but in performance and quietness and you know and what you might call driving dynamics and efficiency.
And the electric Skoda is probably

more akin to a petrol Audi than it is to a petrol Skoda. And the guy I met who's the kind of electric car guru at Wired magazine was asking this very same question, which is, okay, you've got a bunch of engineers, you've got a bunch of, you know, if you think about it, the people who hated Dylan going electronic

were folk people.

I'd rather like

folk music, but it doesn't really exist anymore does it okay i mean you know you get the odd little so he saw the writing on the wall but got shouted at for having been ahead of the curve dylan had seen the writing on the wall and decided okay and someone shouts judas at him i don't believe you play it fucking loud as he replies

right now um you might argue that jaguars had a bit of a dylan moment which is look the things that made us great at le mans or in the age of mike hawthorne fundamentally what the hell is a car in 2030, 2040, when pretty much any car can deliver all the performance and indeed the quietness that a normal driver would hope for okay um and the wired guy asked the question is it going to be all about interiors is it going to be all about design is it going because okay how do you can very simple tough question for jaguar land rover is we've got chinese competition we're never going to kind of undercut them given labor costs all the other costs that apply how on earth do we carve out a niche for ourselves in this new future now for a small car manufacturer and a small volume manufacturer jaguar is making making about 60,000 a year, okay? They do have one advantage, which is they can completely pivot and start all over again. Whereas a large volume car maker has to manage this incredibly painful transition.
Complex supply chain, et cetera, et cetera. You know, there's a whole German, we're going to, Wittlestad, you know, which supplies, you know there's a whole german we're gonna rittlestad you know

which supplies you know fan belts and weird bits all of that goes because i mean this is one thing by the way which i think we ought to say about electric cars which i think is missed by a lot of people which is that if you look at a petrol engine which is you know it's a cathedral it's a magnificent achievement a really advanced you know petrol engine all of those things that move and rattle and bump and filter things and need to be replaced and and the gearbox and all that stuff all of those things exist for only one reason which is to rotate a shaft to provide form forward. Now, I'm team Faraday here because the way an electric motor works is you put electricity in, it rotates, which explains why, with the possible exception of your lawnmower, every single rotating, moving thing in your house uses electricity as the motive power, not petrol.
Okay. You know, there is a wonderful advertisement, by the way, which was done, I think, for, I think it was either Renault.
I think it was the Renault, the first electric Renault, which is equivalent to the Nissan Leaf, where they simply showed someone getting up in the morning and what would have been their electric toothbrush was actually powered by a little gasoline engine. They shaved and there were sort of fumes coming out of their razor.
That's very good. Okay.
And it made that very simple point that nearly everything else in your life has gone electric. It was only a matter of time before battery technology, driven actually probably by the mobile phone industry, made this possible for the car.
I mean, by the way, Henry Ford and Edison worked together on an electric car. It's interesting the resistance that people have, especially around vehicles.
You know, I guess second to a house, a car is a type of identifier in a way. It's a status symbol.
It's probably, in terms of purchasing, it's going to be second largest in terms of your capital expenditure. Do you notice, by the way, when you go back up north, that northerners have nicer cars than southerners do.
Why do you think that is? Their houses are less expensive. Right.
But the price is the same of a Jaguar in Newcastle as a Jaguar in... You get this extraordinary phenomenon in London, which really depresses me, and I've known people like this who literally have a £1.2 million house and a £1 car fiat cinquecento or something it pains the i mean come on you know i mean the car is a much greater thing than the house is looked as a piece of technology okay you know um you are you a car fan or are you one of these weird people who just like young people ubers around the place so i have single-handedly kept uber liquid in austin texas um but, I have a, I think I said to you last year, I was threatening to get a Camaro and sure enough, I did at the start of this year.
Yeah. The only way that I can non-ironically buy an American muscle car is when I live in Texas with an American driving license.
You just need it to fit in. Correct.
Well, yeah. I mean, it's par for the course.
You know, if somebody drives, somebody drives an American pickup truck, a Ford Raptor or whatever the the equivalent, a Ranger, I think they call it over here. If somebody drives that over here, you feel like they're cosplaying.
If somebody drives it in America, you think, oh, that's cute compared to the Tundra next to you and the six bed, whatever. There's a Ford F350.
I think it might be a 450, isn't there, as well? It goes all the way up. Dude, in Texas, there's ones where some guy will happily throw his kids in the back and

take them to the park on a saturday morning or pull what appears to be an articulated lorry behind him on a monday morning he's very versatile in that way one of the things motorhome yet that would that be one of my temptations if i moved to texas an rv would be would be quite nice um one other thing that i've been thinking about since i've been staying here, I'm at the Royal Garden Hotel in Kensington. And on the front door, there's maybe two or three doormen.
And it's not so much of a, at least the places that I tend to stay in America, it doesn't seem to be so much of a trait. Yet over here, it could be replaced.
I've heard you talk about this before. It could be replaced replaced with an opening door it could be replaced with a series of sensors and buttons and switches but it's not necessarily about that it's about the experience of the doorman being outside what you're doing there is the old consulting trick of you define the doorman in terms that make him most amenable to automation so you basically go function of doorman opening door replace the doorman with uh an infrared automatic door mechanism lay claim to the savings um but an awful lot of consulting activity do you know management consulting firms engage in this thing which is called um gain sharing now i cannot believe that anyone in a company would sign up to this agreement, because it's appalling, where they effectively say, we will effectively define the costs we have saved you, and we want you to pay us a proportion of the cost savings which we identify.
But as Roger L. Martin says, any idiot can cut costs.
The real skill comes in cutting costs without actually losing long-term revenue as a consequence. And so short-term cost cutting is dangerously easy.
This is where I come back to that point of we're too impatient to be intelligent, that intelligence and wisdom is slow, whereas seeming logic is fast. You can seemingly logically replace the doorman with an automatic door opening device.
What you're failing to notice is the other tacit and subtle human functions, which might be recognition, hailing taxis. Also, security, okay? You know, basically, you don't want drunkards sleeping in your entrance to your hotel um and and simply maintaining the status of the hotel that arriving at a hotel which is notionally a five-star hotel and kind of you know just being met with an automatic door even if it's very fancy automatic door americans have come to a lot americans want a london hotel okay if you take American or or for that matter, Asian tourists, they want London to be a bit London-y with a guy in a top hat, okay? A friend of mine booked some friends from Los Angeles in the Hempel Hotel, which was, I don't think it exists anymore, it was in Bayswater, but it was kind of like an LA hotel, which was in London W2.
And they were gutted, these Los Angelenos. I mean, they were very cool people, right? But they said, if I come to London, I want horse brasses.
I want hunting prints. And so there are all these nuances, which I think are very, very easy to lose because costs are quantifiable and instantaneous.
And opportunity costs, lost opportunities, lost revenue revenue that's slow and it's generally hard to actually quantify a lovely story about this which i i wrote about actually in the spectator but people won't mind hearing it once more i hope um i'm i'm driving along this dual carriageway in the welsh borders and we wanted to buy some milk and the motorway service station appeared to be closed all the lights were off the kind of you know the petrol fuel logo was off the fuel prices were off it looked you know like as i said like the bates motel it was completely kind of unlit my wife said oh bugger it's closed we you know we needed to buy her bloody lacto-free milk because she's convinced she has lactose intolerance. But I said, no, hold on a second.
I remember going there on Christmas Day. I'm sure that a place that opens on Christmas Day wouldn't close at seven o'clock in the evening.
Let's just go in anyway. And sure enough, we find a fully functioning 24-hour store with, I think, you know, might have been a Starbucks or something something as well or a burger king and we're the only customers it's hardly surprising we're the only customers because everybody else on the road it looks like the place is closed so i go up to the guy behind the till i'm a marketing person you're pissing away revenue here this is insane there are you know every every 10 minutes there are three cars driving past going oh shit you're closed so i go to the guy behind the chair i go to why are the lights off on the on the road he goes oh yeah i think the guy on the last shift like forgot to turn them on there was no urgency now it occurred to me when i left the lights were still off when i left, if that guy had nicked a lion bar at 2 o'clock in the morning and been picked up on CCTV, there would have been a kind of inquiry.
He might have lost his job. There would be extreme disciplinary action.
The cost of the lion bar is about £1 in lost revenue. The cost of leaving the lights off is probably, certainly in revenue terms, £200 yeah could be more okay but sins of omission are much less dogs that don't bark in the night are much much less easy to identify than sins of commission and we correspondingly get much less upset by them and so what you often end up doing is there are a lot of things like giving a soft toy to someone when you deliver their tumble dryer it's i mean nobody nobody would can you imagine a world i'd love this world but i can't really imagine it where someone goes what you mean you deliver you deliver things to people with kids and you don't give them some branded merch okay are you serious what what a fucking idiot the anchoring and set point that we have behind that but no if you if if for some reason you know there was a cost attached to something as opposed so opportunity costs finance people basically pretend opportunities aren't there because they're too nebulous as far as they're concerned to pay any attention to but then you wonder why companies aren't growing And the reason is because they're fixated on the efficient performance of what they're already doing and completely uninterested in what they're missing out on.
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That's L-I-V-E-M-O-M-E-N-T-O-U-S.com slash modernwisdom and modernwisdom at checkout. Talk to me about this problem with seeking solutions through addition rather than subtraction thing that you've been on recently.
That's an interesting observation, which is that we have an automatic default when we want to solve a problem that we add things rather than removing them. There is actually a very good point.
I think Nassim made this point when Elon was appointed the director of government efficiency, where he said quite rightly, you should be the director of government efficiency, where he said, quite rightly,

you should be the director of government effectiveness, because it's perfectly impossible to do things very efficiently, which you shouldn't be doing at all. And that's a Peter Drucker quote, which is, I think it's nothing, nothing's more wasteful or stupid than to see something done efficiently that shouldn't be done at all.
And undoubtedly, I think there are, particularly among things which are ostensibly well-intentioned, okay, we never ask the question, would we be better off if we just got rid of this entirely? And so there's a great quote from Cybernetics, a guy called Stafford Beers, where the quote is, the purpose of the system is what it does. Which is quite a lot of systems, quite a lot of bureaucracy has this ostensible purpose, which is entirely praiseworthy and worthwhile.
And so we actually attach much less scrutiny to that kind of thing than we do to something that's actually selfish. I mean, you know, one thing about being a commercial company is people go, what's in it for them? Okay.
What do they get out of this? I'm suspicious. This is too good to be true.
I'm not really comfortable with this. You know, we deploy, quite rightly, you know, high degrees of skepticism towards the private sector because we want to know what they're up to.
Now, to some extent, if you're working in, for example, something that's altruistic or charitable, we suspend that level of scepticism. We go, oh, so well-intentioned, isn't it? Brilliant.
Okay. Okay.
Oh, they're working for so-and-so. Isn't that great? Now, it's nonetheless perfectly possible that the

ultimate consequences of that well-intentioned action, first of all, it's possible that the motivation isn't nearly as wholesome as we may like to think. But secondly, it's also possible that just because something is well-intentioned doesn't mean the consequences are necessarily positive or benign.
And so, I mean, there is undoubtedly a really interesting question of what should we stop doing? I mean, I'm very interested. One of the reasons I'm very interested in flexible work is it occurs to me that companies looked at in one way are actually very inefficient.
I tried to get, I did actually get our finance department. I said, forget about the usual method of financial reporting, okay? How much does a client have to pay us in fee income in order for my younger colleague, and by the way, the fact that they're younger is relevant because they're not kind of vested in the property market as someone my age is in order for my younger colleague to go out and have a curry and what you look at is the client pays us then there are various overheads and costs and there's hr and finance and there's office space and there's all that other expense okay then finally the money trickles down to the salary of the person actually doing the work once the kind of landlord has taken their cut and the shareholders have taken their cut and everything else trickles down to my colleague then from that incremental amount of money 40 will probably go in tax okay then of the remainder 40 maybe 50 will go in housing costs and transportation costs commuting costs so it works out that in order to buy my colleague you know you know a trip to the uh co-in-all okay a client has to give us about 250 quid now my argument is if you could get rid of all that shit and just do the work on zoom okay in other words in other words the people this seems to be an extraordinary extent to which you know in large organizations the people who are who are creating the value the people who are doing the real work i mean it's amazing that capitalism functions at all when you look at the extent to which you know money goes in and then incidental costs particularly property i'm georgist okay particularly you know property costs chip chip chip chip chip aware all of that and so the actual incentive for the person to perform valuable work and the reward they receive for it has mostly disappeared you were talking about feedback loops earlier on the feedback loop is so slow and it's so molested from what what goes in to what actually comes out the amount of time you're on 30 days you're on 60 days you're on 60 days from the end of the month you got it it's the big problem uh on the back end for instance with um podcasting platforms so youtube has gamified not only for the audience but also for the creators you have this little number that's one of 10 so it compares where this video is now since publish in terms of the duration of time 30 minutes an hour two hours however long with other videos and it tells you where it ranks first of 10 wow this is better than your last 10 videos at the same amount of time at the same period after exactly obviously some things are slow burn and some things some things pick up afterward but generally it's a pretty good indication so it's pretty good indicator is it yeah you do get the sort of shawshank redemption phenomenon don't you where it kicks in it kicks in but you don't have that you don't have that on uh spotify you don't have that on instagram you don't have that on most other platforms because they're not quite as creator focused and uh yeah the power of feedback loops is is fucking unbelievable speaking of the you mentioned there um some inefficiencies within the system and some changes to do with britain obviously two million people just signed a petition to we are disgruntled with mr starmer sir starmer uh we want to make some changes there we've seen a lot of sort of turmoil and stuff across this, generally 2024 in the UK.
What do you make of the state of sort of British culture, the milieu that we're in at the moment? I did make the joke that voting Labour and having a chancellor who's come from the Bank of England is a bit like going on a Club 1830 holiday and taking your parents along, which it kind of defeats the object of the exercise a bit, in that one of the things I think we would like to see as voters, and I'm perfectly happy to give this government a, you know, I think you have to give the people the benefit of a few years before you get pissy about it. I mean, that is actually, I'd be interested to know who's signing that petition.
it people on the left who are just disappointed is it reform voters is it conservatives i don't know um who is it who feels most kind of cheated um i mean you've got to remember that there are an awful lot of people who didn't vote for them if you consider the size of their majority okay they've got a've got a massive majority, but the share of the popular vote is fairly... Yeah, I'm not sure if you can be disgruntled with somebody that you didn't vote for.
Well, it's interesting who's demanding a kind of, you know, run again. Some of the things interest me because we kind of, I think a lot of people know that there's fundamental iniquity, intergenerational iniquity, which is because salaries are taxed very highly and wealth, particularly capital gains from your main property, are barely taxed at all.
And that leads to, I think, a kind of absurdity, which is that one piece written about this is it's not actually intergenerational inequality that's the problem. It's going to be intra-generational inequality when people start inheriting houses or not inheriting houses, because you can literally have the situation where you can work incredibly hard for 30 years and reach a position of some eminence in a business or in an institution.
And because your parents happen to live in an area of low house prices or didn't own a house at all, you're still living somewhere crap. Whereas your underlings, you know, whose parents lived in Surbiton or Kensington or whatever it may be, okay, are basically swanning around in palaces going on cruises all the time.
And that does strike me as a fundamental flaw, that we've created this system where unearned income, which is not really particularly meritocratic or inherited income, is treated incredibly generously. Whereas earned income, I think the top, if I'm right, is it the top 5% of taxpayers pay 50% or 60% of all income tax? I think so in America, it may be the same here too.
Probably the same here. I mean, that's, by the way, it's a kind of statistical artifact you generally you you usually find those power law effects so it's not quite as weird as it sounds but nonetheless that is quite weird when you think about it now one thing i thought was extraordinarily interesting as an idea is you you know that chap who who was it who wrote the trading game uh gary stevenson.
Gary Stevenson. He makes a very valid point, okay?

Whatever else you think,

which is that nearly all economic models

use single representative agents

to populate the models,

which is they assume that the person

whom they're trying to optimize for

is an average of everybody.

And as a consequence,

inequality doesn't feature in those models

because you're simply dealing with an average. And so if Bill Gates walks into a football stadium, everybody in the football stadium is actually a millionaire suddenly on average.
Okay. It's not, it's simply not a reliable thing to do.
And one of the things that strikes me as genuinely horrific is the extent to which I think the tax system is kind of garantophilic. You know, there are huge, huge concessions in terms of pensions that are given out, huge concessions in terms of inherited property, huge concessions in terms of capital gains and existing property.
you also get this utter absurdity, which fascinates me, which is that there are five-bedroom, four-bedroom houses which have one or two pensioners knocking around in them. Nothing wrong with that, you might argue, except those pensioners are often skint.
Now, it's a weird kind of way of being a millionaire that you live in a massive house that you don't entirely need. Now, if you simply saved a hell of a lot of money and you just like living in a big fuck off house, well, you can argue that's kind of, you know, you're entitled to that, but you literally get people living in these extraordinary houses who are, you know, going to little and worried about the price of lemons.
Okay. Pretty weird.
If someone told you and your kid, you're going to be a millionaire one day, but you're going to be really worried about where you buy lemons. You'd think this is a pretty weird world.
Well, what's that? I mean, one great idea, Roger L. Martin's idea is that you should, at the moment, you get your first 10,000 or whatever it is of your annual salary is tax-free every year.
Roger L. Martin, a Canadian, proposed that that should be a lifetime tax allowance.
So the first $250,000 Canadian dollars you earn in your life is tax-free, after which the tax system kicks in. Now, that would be extraordinarily beneficial to younger people who need the money more and who could build up some...
Actually, you don't need that much in the way of savings to i mean one of the interesting things about the benefits to wealth um is that there are inflection points you know that first house deposit well actually having five thousand pounds you can call on in a crisis is a really really i mean you know it's a really really big. It fundamentally changes what people can do.
I mean, very interesting thing. When I first went to America, I was, I think I was 29, roughly.
And I remember thinking, I'm glad I never came here when I was skid. Okay.
It's a bad, it's a bad country to be pouring. It's a terrible country in which not to have $10,000 sitting there.
Correct. You know, one bad thing goes wrong and suddenly you're in Leavenworth doing a nine stretch.
You know, right? And so, you know, so there are these inflection points where you can take people, you know, one of them I always think is that when you start earning a bit above median income, you notice that actually it's quite nice because things are priced for people who are a bit poorer than you, you know. Televisions, for example, flat screen TVs.
Let's be honest, okay, let's imagine that flat screen TVs cost five grand, okay. We both would have bought one by now, but we don't have to pay five grand because they're priced for sale to people who earn a lot less than we do

and so you know there are i think there are these interesting inflection points in earnings now what's really interesting by the way and this fascinates me is the extent to which pre-2020, the only real point of negotiation with your employer was how much they paid you. Because it was assumed that you worked a five-day week.
It was assumed that you came into an office or some other place of work for five days and that you had hours and you had a place. Those were non-variables and the only variable was your salary now to what extent will people start to practice lifestyle arbitrage which is to say well i could work for goldman sachs in london for 200 and something whatever but actually 120 000 in lisbon okay and a pretty good broadband connection earning in pounds and spending in pesos spending and the number of people who might simply i mean by the way that applies within the uk you know there are a lot of people you live in newcastle and get a 10 times the house for the same thing actually my daughter went to newcastle university adores the city quite rightly i've been up there it's fantastic you you know that i do okay it a glorious place which gets the balance.
I think it gets a lot of things absolutely right in terms of the kind of yin and yang of a city. It's manageable in size, but it's not boring, remotely boring.
It has beautiful architecture, but it also has utility and it's got a coast. My daughter, she said, the tragedy is in a way I didn't really want to move to london which is bloody expensive if i could have persuaded six of my university friends to stay in newcastle we all would have tragedy of the commons you haven't the tragedy of the commons which is that you're forced to go along with this kind of majority consensus you also can be on the winner takes all effect you can be on the receiving end of that too though you can benefit from that which i have been in austin why does any scene appear anywhere any scene appears anywhere because people go no one's really too sure why and because people go more people go and then before you know it you've got the the hottest new place i suppose it was rogan in austin was it he made he made one of the big ones but before him was uh lex friedman i think before lex was michael malice before him was aubrey Marcus.
You know, you've got to track it back to wherever you want.

And now everybody has a fucking second holiday home. From Jason Calacanis coming over from, you know, Investor Bay, West Coast bullshit world to come and now live on a ranch, wear a cowboy hat.
So, yeah, it's a... Is it, you know, can I be really mischievous here? Get it in.
Okay. And I always thought this is why Brits like living in LA, which is that secretly everybody

over the age of 35 wants to live in the suburbia. Okay.
Correct. But in London, it's just not cool.
Okay. I mean, if I took my younger colleagues, I couldn't get them to move to Bromley if I put a gun to their head.
Secretly, I suspect they want a little bit of, you know, a bit of lawn and a bit of a place to park a car yes oh so you've got it you've got a blend of la it's totally cool to live in a suburban house isn't it same that's where everybody same same in austin uh honestly the the suburbs the olden style suburbs so what's up north which is the domain is kind of a soulless hellscape that was created for people that work at tech companies to not have to go far to go to the office uh but when you're few things it was also built after the invention of the car yeah so the distance from the center matters a lot less um by the way it should have i'm i'm i don't normally criticize the u.s um but you could you should create high-speed rail to someone like san antonio shouldn't you you could link a couple of places i think the the rumor is that austin and san antonio are growing at such a clip that they're going to merge into one huge megacity eventually you know it's only without traffic i think it's only 50 minutes ish from sort of the edge of one to the edge of another and when you think about we've got this land we might as well expand it um oh you've got another advantage in austin which is interesting because you saw in the property crash of 2008 you saw very dramatic property crashes in vegas phoenix austin and the reason is uh they're unusual in that they're not on a lake and they're not on a coast and so they can expand in four directions which i know that sounds san francisco can't okay if you're on a kind of peninsula how does that impact the price because simply there's four times as much land actually more than that because area expands at the square of distance yes so you've only got to go a mile from the a mile further out and you get uh you know, what is it? The square of the distance.

A fuck ton more land.

Okay.

So there isn't really much scarcity.

Combine that with the fact

that they were designed for the car.

So you, I mean,

I love Phoenix.

It's fantastic

because they actually synchronize

all the,

they probably do this in Austin,

they synchronize the traffic lights.

So when you drive in at night,

you can ride the green wave.

Have you done this?

Well, I certainly know

the way that traffic flows work that if you hit a red light, you're more likely to hit subsequent red lights. That's it.
Right. Okay.
I thought that was... There's something called riding the green wave, where if you obey the speed limit, you can basically keep going through...
That's only if you hit the first green, though. If you hit the first red, you think, I'm fucked here for every one that I'm going to hit.
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Just going back to the UK for a second, let's say that Starmer brought you in or whoever it is that does tourism brought you in to improve UK culture, sort of tourist destination type thing. Have you got any sort of branding or psychological interventions, which would maybe be low cost that could make the UK more attractive across the board? For tourists? tourists or for people to stay we've got the you know second in the world the uk second in the world for millionaire exits in 2024 china fucking literal communist dictatorship authoritarian hellscape was first with about between what you've got to watch the super rich because the super rich don't give a shit about democracy okay because they can capture power using money yeah rather than using rights and the super rich i mean if you look at dubai which has done a fantastic job of effectively saying um we're just going to make this place unbelievably attractive for wealthy people to live here in terms of low taxes okay uh very low low crime rate, okay? You have cheap labor, which rich people really love.
You know, most of us aren't, you know. In other words, you get lots of people doing stuff for you.
So the service industries are fantastic. And to be honest, very rich people aren't that bothered about being able to vote because they only get one vote, which is the same as the teacher down the street.
Why would I want something I can't have more of than somebody else? So it doesn't surprise me, by the way, that actually very rich people are often quite drawn to authoritarian spaces because they don't suffer the downside. But they gain, in some respects, they can profit from the upside.
China lost about 13 to 15,000 this year. The UK lost 10,000-ish millionaires leaving.
But we have 3% of the population of China. We have about 5% of the population of India and more millionaires left the UK.
Second in the world in millionaire exits, we have the same number of universities in the top 10 as America do, but only 20% of the number of startup founders

and entrepreneurs. So why? What is it that's going on? One thing you could do, and the Portuguese are playing this game.
I mean, a lot of people have – I mean, I had an interesting conversation, okay, which is that where people spend wealth is increasingly, I think slightly undesirably, okay, being detached from where people earn it. Now, I grew up in the Welsh Valleys.
My Scottish ancestors moved down to South Wales because it was the Dubai of the late 19th century. It was coal money.
It was actually, you know, it was actually, you know, booming. I mean, my great-grandfather, I think, moved to edinburgh intending to join from a croft intending to join the police force and uh was told um don't bother here south wales is where you need to go to make money but the people including the coal owners lived somewhere within they didn't live in the next of the mine but they lived somewhere within the proximity of that thing.
I remember my grandmother, who's not remotely left wing, okay, quite the opposite, standing on Cardiff Station looking around. And by the way, Cardiff was a lot grimmer than back then.
This was in the 70s than it is now. It's rather nice now.
Lovely. Okay.
And saying, just think of the money that's been made here and spent in more exotic places. I always remember that.
It was a strangely kind of socialistic sentiment from a pretty right-wing grandmother. And what you see, I remember having this conversation with people who are responsible for investing in Kent.
And I said, to be honest, it doesn't really matter whether you attract businesses to Kent. If you can get people who earn money in London to come and live in Kent, and their families all spend their money here, okay, that's good enough.
And so when you have this detachment of where people make money and where people spend it, one thing the Portuguese are doing, they're proposing lower tax rates for people under 30. They're proposing these nomad visas.
Lisbon, very cool, very attractive city. Likewise, Porto, you know, attracts people who like kite surfing and other excitement.
Italy's got this new flat tax, you pay 100 grand and that's all the tax that you pay for the entire year. That's a new one from them.
So, I mean, we don't seem... Now, the other thing you can do is just make the place one hell of an entertaining place.
Now, I've always argued, I can't get anybody to disagree with this i don't think pubs cafes and restaurants should be should pay rates or taxes because they're actually a social space when you spend money this this is interesting which is that economics holds it as kind of this is an this is my gary steve's yeah which is as well as these kind of single representative agent models which don't understand inequality and you know by the by the way really bad inequality is bad for everybody it's bad for the very rich okay you want people the ideal place in which you live is one in which you're surrounded by a few people who are richer than you and quite a few people who are a bit poorer than you but not so so poor. Not so much that they cause a ton of havoc.
Well, it's not just a havoc. You want actually social spaces to be roughly commensurate with where you are.
And if you live in a place where you have 10 rich people, okay, and everybody else is massively poor, the 10 rich people got nowhere to go to eat. There's a fascinating study that came out of Australia.
Candice Blake did this. They correlated wealth inequality with self objectification as measured by sexy selfies online.
And wealth inequality is positively correlated. The level of inequality within a local ecology is positively correlated with sexy selfies.
By men or women or both? Just women yeah so self-objectification self-beautification sexy selfies online is positively correlated with inequality what's their explanation for that proposed mechanism is that in a high wealth inequality uh environment women can see not only how high they can climb but how low they could fall with a potential partner so the effort you have to make in terms of Botox and all the rest of it. There's a very interesting theory about that, which is why, um, why Neiman Marcus, there's an academic paper, why Neiman Marcus started in Texas, not in Boston.
And there are two explanations where you get, uh, more males than females. Uh, the luxury goods thing is important, but also where you get a high degree of anonymity.
So in other words, you had a lot of people moving in who can effectively reinvent themselves as high-status individuals. Now, just to give an example, luxury goods only work really when you have an audience of strangers.
Had I gone into the i gone into the pub in monmouth where i grew up which is a market town with sunglasses with machino written across them okay on inch high letters i would have been the subject of complete ridicule everybody knew where i lived what i did what my parents did what i earned etc and this would have been regarded as an utterly ridiculous thing to do the signal can signal can be stress tested. But if I go to Miami, I don't know, that probably, I don't, you know.
So you're undoubtedly right in that a lot of these kind of display and signaling behaviors are contextually determined by the setting. There's another one that I'll give you.
It's called the environmental security hypothesis. So this is human behavioral ecology, which is kind of twinned with evolutionary psychology.
It's a little bit more concerned with how we react to the local environment around us, how we sort of interact and so on. There is some pretty good evidence to suggest that men prefer bigger women when the economy is bad.
So men under resource stress seem to prefer bigger women, and this can be tracked in a bunch of different ways. There's a strange hemline index as well, isn't there, which is that in the 20s, you had very thin androgynous women with short skirts.
And then when you have a depression, the whole thing slightly changes. Well, again, the proposed mechanism is that in a time of resource scarcity ancestrally, you would have wanted a woman that looks like she could survive a couple of months.
A bad winter. Yeah, exactly.
A couple of months without a good harvest. And that seems to have carried over now.
So two really interesting ones, kind of as you've said there, as the economy wavers up and down, it seems to be that the preferred body size overall, the sort of ideal body that women have also fluctuates. But they did a really great study on university students in the canteen hall.
And before and after they ate, they showed them different women's body shapes. And prior to eating, they preferred bigger women.
And after eating, they preferred thinner women, that there is something about even the sort of ambient hunger resource scarcity which impacts the environmental security hypothesis, as it's known. This is fascinating, because undoubtedly, I mean, by the way, I think, by the way, I'm a huge enthusiast for evolutionary psychology, but sometimes I think it jumps the shark a little bit in terms of i think these things are contributory but i don't think what sometimes happens in evolutionary psychology is that this is believed to be the only game in town so for example that data on women having affairs on one of your with one of your earlier guests which seem to validate one hypothesis rather than another.
And there is indeed a valid evolutionary explanation for what they claim that the data shows. But I would argue there were also five other possible explanations for that phenomenon.
Not least, more attractive men are likely to be out there playing the field more, simply because their opportunities are greater. And therefore, the fact that women tended to have affairs with people more attractive, but not necessarily richer than the people with whom they're in a long-term relationship with could be explained by multiple.
I knew that you'd come and do a quiz at the end. Talk to me about your assessment of Trump's marketing campaign.
I didn't think you need to do that because actually what he did was um fairly consistent uh with what he'd done before he had probably elon was a little bit of a um uh clever signal boost signal boost i think what you really have to analyze is the Democrats as a marketing entity and how spectacularly bad they are in that you end up the problem with living in a very tight urban bubble. I did talk with Rick Rubin for the Christmas edition of The Spectator.
He's great. Absolutely glorious man.
And he made the interesting point

that he had a kind of interestingly bipolar childhood

and that he spent weeks on Long Island,

which was effectively a blue-collar existence.

And then he spent his weekends in Manhattan

with an aunt who was a kind of creative services director

for Estee Lauder,

who was taken to concerts,

you know, the usual cultural events,

books, poetry, et cetera. And the interesting observation, he said, is there was a downside to that, which is that the cultural life in New York was entirely driven and hence constrained by what other people thought of your tastes.
Whereas people on Long Island, the blue-collar culture, basically you like things because you like things. It's similar to Rob's point that,

what is it? Whereas people on Long Island, the blue collar culture, basically you like things because you like things. It's similar to Rob's point that middle class food, posh people food looks better than it tastes and working class food tastes better than it looks.
okay um uh that's you know and and the constraints on you on your opinions on your tastes

on what you could enjoy because you had to defer your primary concern was what does this say about me to other people within my group now in a blue-collar environment you can like what you like there are certain musical forms which tend to be gospel i was mentioning this country where nobody really cares there's no particular okay there's no particular kudos to be gospel. I was mentioning this country where nobody really cares.
There's no particular kudos to be gained from liking country or liking gospel. And therefore, you're free basically to exercise honest, subjective taste without having to pretend to like things that you don't in order to fit into a particular milieu.
And there is a problem

when the Democrats become... I've got a skin in this.
I've got a dog in this fight. Actually, Woodrow Wilson was like my third cousin twice removed, weirdly.
Everybody's got a racist in the family. My misfortune is that my racist was the President of the United States.
But um his was born in England to Scottish parents. But the Democrats fundamentally, I think, are in this bizarre hall of mirrors, where effectively their own opinions and thoughts have now become subordinated to a kind of artificial worldview where you have to buy the entire album, as it were.
There's a Times journalist who talks about this, which is sort of album politics. In other words, it's not just that you have left-wing opinions.
You have to buy into every single opinion that is believed to be from the left, and you have to buy the whole package deal. And consequently, you end up with this very, very strange group of people thinking their norm.
And it's very similar to the phenomenon that Gillian Tett spotted. I don't know if you've read The Silo effect have you had jillian on the show no very

very interesting because she's an ft journalist but principally her training was an as an anthropologist and ending up as a business journalist she brought her anthropological skill set and i to what was going on in business and by happy coincidence what in a sense she ended up looking at what was effectively the um securitization of mortgages that whole business before the events of the big short before the crash and she immediately spotted that you had this group of people in a particular habitus or mindset who were incapable of understanding the world outside their own particular reference points and just an amusing detail about that which i which i thought was just hold on a second i remember thinking okay so there was a trump event at um that huge new york hall what the hell is it called madison square gardens okay where there was a comedian I think he's a Texan comedian, if I'm right. Tony Hinchcliffe.
And he told a little joke about Puerto Rico, okay? Which is, we won't repeat it here. And the immediate assumption, because in their worldview, all Latinos identify as Latinx and have a massive sense of solidarity towards all other Latinos, okay,

because that's their peculiar worldview, was that by countenancing this joke, Trump had lost the entire Latino vote. I was sitting there going, okay, that's a bit like saying that if the guy had told an anti-French joke, he would have lost the European vote, Okay.
The idea that Latinos are so kind of homogeneous as an ethnic group that they identify, you know, a band together with the Puerto Ricans. I mean, Cubans thought that joke was hysterically funny.
Okay. I would imagine that the other Latinos found that funnier, given that it's jibbing someone that's close enough to them.
I mean've watched narcos right i mean you know the colombian mexican tension is enormous i mean yes that you know there are points of shared commonality but you also have this thing between actually precisely because the countries are quite similar you get this kind of narcissism of small differences yeah uh and i always remember i remember looking at that and they're going he's lost the entire latino vote now it's going you clearly have a view of a community which is one which is based on you know probably you know some marxist ideology about race yeah which is in complete denial about nationality or nationhood and it just struck me as really interesting that you could misread that so badly um and something you know fundamentally the way they go about appointing people the way the whole thing appears to be kind of a coronation um it's it's very sad because you know this should be you know, you know, this could be a, you know, really wonderful, there are lots of aspects. I mean, yeah, by European standards, I'd lean politically right.
Okay. You know, I'll be honest about that by Euro standards, but there are aspects to the US which strike me as ridiculously right-wing.
Okay. Not least the appalling vocational allowance.
Yes. Okay.
Which is, that's a humanitarian crisis. I don't know.
Two weeks paid vacation, but also it's weirder than that because unless you're getting married and going on honeymoon, taking a whole week at a time is looked at as pretty dubious. Now, I don't know about you, it's not a holiday if you know which day of the week it is in my definition okay if you actually if you're conscious of the day of the week you're not properly on holiday look at maternity leave as well in america that that strikes me again as absolutely extraordinary it's fucking barbaric and so and yet it's a wonderful case of status quo bias by the way because if you think i have never you know i pop to spectator parties and i have a drink with nigel farage once or twice okay i've never met anybody in the uk so right-wing that they believe that um uh the that we'd be better off with fewer days of a roll back let's roll back this for eternity because we get another two percent of gdp if we just roll back vacation time i'm genuinely i've never that's a really that's a really great point if there's anybody sufficiently right-wing that thinks that the uk is too open and free with the way that we give away the other weird american instance i had was um uh that i met somebody who said they would happily pay $60,000 to a tax attorney or tax advisor to avoid paying $40,000 in tax.
They said this to me in absolute seriousness. Now, that is literally, you resent your tax dollars to such an extent that you would actually happily pay $60,000.

I think that at least from a business perspective, because people will have heard, I got my tax down to zero as an American thing,

which is basically that you can drive profit down to the level where the, whatever it is, 32%, 37%, depending on where you live, that the government would have taken. There is none for them to take because you've spent it all.
So you basically get a one-third discount on anything that you want to buy. But what that, it sounds sexy.
It's like, oh my God, he didn't pay any tax. It's like, yeah, but he did pay 60% of everything that was taxable that he had to drive down.
It's not like he got it for free. He just got quite a big discount on whatever it is that he's talking about.
But yeah, there is such an aversion to giving money to the government, to the stage where people will happily do this sort of seppuku, like harry-carry thing. Of actually almost harming themselves in order simply to spite.
Absolutely, yes. The hand will get chopped off in order to spite the finger.
Yeah, exactly. Spite the IRS on the end of your middle finger.
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That's shopify.com slash modern wisdom to upgrade your selling today. But you had this thing about people that pay lots of taxes needing additional privilege, or maybe an idea to offer them extra privileges.
Okay, I'm a big fan. I'm loving this part where you're slowly accumulating more flavors.
This accumulating this is great it's the it's a thought experiment which we're one of the things i think we're lacking in is that i would argue yes that my joke my joke suggestion was that people who pay higher rate tax should be allowed to drive in the bus lanes okay now just to be clear about this i didn't mean that entirely I didn't mean that it should be enacted. It was purely a thought experiment based on the observation that rich people are pretty happy paying for things if a small amount...
So, when you are poor, a large part of your disposable income is spent on what you might reasonably call utility. As you get richer, both attractively and unattractively as i said um what you might call relative status in other words the relative quality of something matters more than its absolute value and so if you look at car manufacturers the top of the range x probably costs 25 more to manufacture than the bottom of the range x but the sticker price might be doubled and that's simply because the people buying from the top of the range are more interested in status and more interested in you know leather seats and heads-up display and you know adaptive cruise control they're more interested in what you might call things you can show off about or things which are just novel whereas.
Whereas the poorer person is buying the car as a mode of transportation. It's closer to the economic idea of utility.
And consequently, it struck me that government should play the same trick that car manufacturers do, which is to say, yes, you pay a lot more tax, but in return, you get certain privileges. You get certain advantages.
Now, by the way, the evidence that something of the kind, which is that if it was simply reframed with a thank you. So there's an experiment from Singaporeapore which i think was adopted in the uk by a housing association which had trouble getting people to pay their rent on time and one of the most they tried a variety of behavioral economic invention interventions but one of the most successful was simply every time you paid your rent on time you got a text saying thank you And that massively reduced the incidence of late payment subsequently.
It's one of those weird things. And that's a total just, it's a tiny little reframing, which is, you did a good thing.
We're grateful to you. We noticed.
Yeah. Yeah.
I mean, I don't feel when I pay whatever vast amount I pay to the exchequer, if they just said, kind of, we noticed, thank you for doing the right thing. By the way, way just to be clear on this I do do the right thing because my wife does my finances she's a vicar in the church of England which is like having the shittest accountant in the world in terms of tax she'll say so Roy when you attended when you attended that conference they gave you a free pen I really think you ought to declare this you know I actually declared all the capital gains on my bloody Bitcoin.
Oh, wow. Oh, my God.
That would bankrupt most people, especially if you've got to pay it in fear. Now, what kind of pissed me off about that is had it been a house, of course, I wouldn't have had to pay a bloody thing.
No capital gains. But the interesting thing there is that, I mean, there was a guy who's the expert on this, a guy at Berkeley called George Acoff, who was a left-wing guy who pointed out that the right, to some extent, enjoyed some unfair advantages simply because of linguistics.
So the phrase tax relief, for example, suggests that tax is a burden from which you have to be relieved.

It's not paying your civic duties towards the maintenance of collective goods. And, you know, as a Brit, okay, as I said, a right of center Brit, I can't help noticing when I go to LA.
To be absolutely honest, I'm not sure I wouldn't rather have a slightly worse car and better roads, okay? because you know there is a correct ratio of expenditure of money which is spent uh at the individual level and money that's spent at the collective level and by the way one of the reasons i half jokingly suggest that pubs cafes and restaurants should be given a big tax break i genuinely mean that is because i think they're a social good. If you go to the pub, okay, you are maintaining a pub that I can go to the following day, and it actually benefits the whole community.
And you might argue that the rich people who go to the pub and buy the fancy spirits or the high-margin drinks are actually subsidizing the lower-margin drinks for people with less money. So in other words, there is an ecosystem within that kind of thing which is mutually beneficial.
There's such distaste, though, from anybody to the people that have got wealth, especially from the media, very much sort of demonized at the moment. It's very uncool and goof to talk about the level of wealth that you have, especially when we've got inequality, cost of living crisis, inflation, housing problems, et cetera.
So it doesn't surprise me that it's hard to get people to be on board with doing something. You already have enough benefits as it is.
Look at the wealth that you have. I had this idea with Scott Galloway where I suggested that presuming that some rich people are at least somewhat smart, given that they've managed to get themselves to the stage of being rich they're lucky too yes of course i mean there's a million knowledge that he's very honest about there's a million a million other reasons why but that some people in there will not be total idiots perhaps some of the people that are real power users when it comes to tax i think elon did this i've made a statement the other day that he's paid more money in tax than any human in history.
He recently paid 10 billion to the IRS. Probably Romans who'd take him up on that, I think.
Yeah, nations. When you're competing with entire empires, perhaps that might be something different.
My idea to Scott was, why don't people who pay some uber amount in tax, you know, the top 0.001 why don't they uh get to have some sort of consultant at the irs or the inland revenue and they can maybe uh talk about discriminating where their tax dollars are spent you can say i really like well education the military for example or whatever yeah i mean anything but your taxes. First off, it makes your tax money more accountable because I think people that have earned a lot of money understand efficiency, at least in one form or another, in that they've managed to accumulate the money.
And they look at government and think, I'm going to give you these tax dollars. And I think that you're just going to piss it up.
How many times has the Pentagon failed its fucking budget report here? So by... You had something a little bit similar in New Mexico.

There was a guy called Gary Johnson, I think I'm right, aren't I, saying who's the governor

of New Mexico, who was kind of libertarian.

And it was kind of Ron Swanson.

I don't know if you know Parks and Recreation, but you had a libertarian doing a government

job.

And he believed, quite interestingly, he interestingly he said basically i dislike all forms of government expenditure except roads and education he believed those things genuinely had to be collectively spent they were collective goods and that i think his phrase is if you want economic growth you need a four-lane highway and so he was almost a case in point where in other words he he very very narrowly decided what the focus of government within new mexico and was by all accounts actually a very he was a presidential candidate um for the libertarian party about 12 years ago or something um but he was a pretty good governor great have you been to new mexico It's your neighbouring. No, I haven't.
Not yet. It's glorious.
Go there. It's utterly fantastic.

The... or something um but he was a pretty good governor great have you been to new mexico it's the neighboring no i haven't glorious go there it's utterly fantastic um the um santa fe opera give that a go by the way i'm trying to start a little tradition that the guests on podcasts get to advertise something as well whatever you would like it always strikes me as very unfair santa fe opera the santa fe opera is my mid-roll podcast i was on jamie lang's podcast and started i think i was plugging a italian jamaican cafe in west room um probably giving it a greater level of indiscriminate fame i wonder how many people have bought air fryers and mustang mackeys off the back of you i do think it's had a market impact on the theang mackie i've got a new one for you uh only relevant for brits really although also possibly relevant for expat indians in the united states the frozen paratha i saw you tweet about this the other day i bought this from ocado i thought why the hell has this frozen paratha got 170 votes and is like a five literally five stars stars on a cardo I thought what's a cardo oh my goodness you don't know you see there are lots of things in the UK so it's grocery delivery home grocery delivery very innovative bunch of people who started you know effectively robotic picking so they have it's very very high tech mode of grocery delivery they used to have a partnership with Waitrose.
They've now got a partnership with Marcus & Spencer. It's actually probably better than anything you've got in the US, actually.
By the way, in Britain, we never really celebrate. So I would include Octopus Energy and Ocado and perhaps a Wise.
We occasionally do these things incredibly well. well and in the united states you'd be fated for doing this whereas in britain you're just treated with kind of mild suspicion okay um and there is there is i think there is that british problem which is there is an acceptable social ceiling to the amount of wealth you have yes that americans have observed even in what you would think of as pretty cutthroat businesses like investment banking that once they've got a flat in london you know a former rectory in the cotswolds you know a wife called polly you know a labrador two children at private school a range rover and an agar okay basically that's it you've hit your ceiling and anything more would be slightly dubious you know so there is that kind of weird kind of class-based ceiling to you know it's it's quite difficult to create a dyson in the uk okay but but what what's interesting in ocado is the frozen paratha is uh it was invented in what i call cinnamon valley which is this area around Wembley and London, which is where an enormous amount of innovation in Indian food preparation goes on, which is one of the great, I think one of the great reasons I still live in the UK is the quality of Indian food surpasses it.
It's very difficult to find in America. I imagine Austin, you must have a large enough expat community that it started to raise its'm yet to find a good indian meal in austin texas much to my dismay okay we'll go looking i'll crowdsource it maybe someone can comment below someone can comment but the frozen paratha is a remarkable thing it just sits in the freezer you can have an onion one you can have aloo paratha there's a garlic one but basically you take it out of the freezer where it's basically completely long life bang it in a pan with a little bit of oil about one and a half minutes either side turn it over you've had the kind of paratha which is literally you know if you went to a three-star michelin indian restaurant you would not be disappointed by the paratha it's the great i mean what the hell is sour what's this sourdough thing it's fine right sourdough has a place in my bread repertoire, but the extent to which it's come to dominate artisan bread, rather like IPA dominated artisan bread.
Salted caramel in the dessert world. You got it exactly.
Yeah. These things, these kind of, these winner-take-all effects in a globalized economy are actually problematic because they're like the gray squirrel you know they're they eliminate the indigenous alternative myopia in the bread world yeah yeah it is it is a problem you know i mean um and likewise you know the discussion of ai relative to discussion of the importance of zoom and remote working strikes me as off whack that actually over a longer time horizon um the importance of being able to have a conversation with anybody instantaneously on any continent in a group or individually strikes me as you know it's not far from teleportation and yet nobody's really talking about it nobody's developing hardware for it uh that strikes me as something slightly weird i've been thinking a lot about um we built the newtonic brand and we're building another one at the moment with a guy called mike isretel and um i a lot of the time what we're talking about is sort of coolness and credibility two things that we're trying to aim for now Now, with a millennial, Gen Z, degenerate, influencer-driven online TikTok, Instagram brand, perhaps that's easy.
Are companies in markets that aren't necessarily so customer-facing, that don't need to have an Instagram account, do you think companies get too concerned with trying to be cool, with trying to create sort of a- No, I think that the focus on the consumer is, there's a great passage. It's only a small passage in John Kay's book, The Corporation in the 21st Century, which is his attack, largely, the whole book is an attack on the idea of the shareholder value movement.
That the fundamental point is that the point of a corporation is not solely to generate shareholder value, but also the fact that the pursuit of a single metric is much less creative and much more likely to lead to value destruction, including for the shareholders, than the pursuit of multiple objectives, the triangulation of multiple objectives, which is looking after your employees, looking after your shareholders, looking after your customers, and looking after the wider society. Okay.
So a multidimensional objective from a company will probably lead to a greater variety of behaviors and a greater level of creativity than a single-minded kind of reductionist objective like short-term shareholder value maximization and one of k's points which he makes is that if you look at the companies that have been kicking around in the fortune 500 or the footsie or whatever for a long long time it's nestle it's unilever it's procter and gamble it's wreck it okay it's companies which have a large marketing function which keeps them rooted in the real but changing world of what customers really want okay and keeps them alert to effectively exploring new forms of value exchange which are ever-changing with technology, taste, fashion, etc. And those companies, interestingly, seem to have a much greater level of survival than companies that effectively develop some proxy measure of success other than the marketplace and seek to pursue that.
Now, pursuing success in the marketplace is more difficult, it's more painful, it involves you to deal in things that are highly probabilistic rather than deterministic, it's messy, but ultimately, in terms of resilience, it seems to keep companies on their game in a way that businesses that are basically focused on what you might call internal benchmarking metrics can find themselves actually massively detached. Could you give an example? Well, okay.
If you pursue efficiency at the delivery of something, you can end up very efficiently making something that people no longer want, or where you're completely depositioned because, effectively, what you're making. So, in some cases, for example, the rules of the game change.
Okay, so there will be a period where, for example, well, I'll give you a perfect example of this, okay, which is an example I love to give, which is when I was a kid, okay, there were a few rich kids at school who'd been to Skippel Airport, and they'd come back and go, it's incredible, like, there's shops and everything you can buy. I bought a Walkman for, like, so many guilders before the Euro, okay, oh, it's's amazing.
Yeah, we went there and we did this. And then you got, then it was Changi Airport in Singapore.
Oh, it's amazing. I bought this.
They've got this. They've got a fountain.
They've got that and the other, you see. And then eventually it moved to Dubai.
The crown moved to Dubai of kind of blinged up airports, okay. And that all goes on.
And then one day people come back and they go, if you need to London City city airport it's brilliant there are hardly any shops you get on the plane in about five minutes and you suddenly realize that everybody has been optimizing for turning an airport into a bloody shopping center yeah and then london city airport comes along completely the opposite yep okay and just changes the rules of the game so i mean the hotel industry is interesting i mean okay i think i'm allowed a plug for this i'm a weird fan have you've stayed in a moxie hotel yeah yeah yeah a few times what's your take because i think it's quite clear i think it's kind of mental hack which is actually quite smart which is everything is really basic it's good good tv good wi-fi comfortable room but not very big no room service no laundry, as far as I can remember. Okay.
You wouldn't want to stay there for two weeks, but two things, pretty good location. And secondly, the ground floor is basically a bit like a WeWork in that you can just hang out there, meet people.
There's actually a meeting room. Even after you've checked out, you can spend three hours doing your email at the moxie without feeling like a weirdo i think whereas if you do that at a conventional hotel once you've checked out you feel they want you to piss off yes because it's just a small reception area exactly a reception area where you'd look like a weirder yeah i uh i've spent a lot of time on the road over the last couple of years i've come to believe that the biggest determining factor about your enjoyment of a hotel is the quality of the pillows.
And it's not the bed. Bad bed, good pillows, totally fine night's sleep.
Good bed, bad pillows, fucked. So I, every time that I- You need a pillow sommelier, don't you? Well, look, so I'm trying to work on this at the moment.
I'm trying to find a Amazon Prime pillow, which i can get in most territories that i go to so most like us uk maybe a dubai or whatever that i can get next day delivery to any hotel that if i get there and on the first day when i when i check in i go oh fuck they know they've got one of the they've got one of those ones that makes the sound when you lie on it i'm like quickly get onto amazon order it and have it arrive you need uber sleeps to go alongside uber eats very good yeah very good so basically it will deliver i that's the that's the worst the worst part but i mean yeah interesting pivot at the moment it's an interesting idea because you would also have a market if you had uber sleeps you can have a service which if you if you basically missed the last train and ended up crashing at a hotel it would deliver sort of you know a shirt in your size for the following day or you know and toothpaste and a toothbrush yep and all the things you didn't think to pack because you weren't aware you're going to be staying at the hotel yeah that's brilliant there's a move at the moment in airports towards um

like health wellness and stuff there's meditation areas there's gyms there's napping rent by the hour napping rooms which i imagine are used for all manner of fundamentally by the way i mean the built environment in every respect has not caught up with technology and it's actually I think it's a total failure. It's largely probably because you can't measure.
But I always think, okay, there's nowhere at a station in a concourse. They've got all these walls around the edges, which are underused.
Now, just put a shelf there for people to put a laptop on, okay? There are trains with no tables no tables which drives me practically insane because apparently it's worth spending 120 billion to reduce the time spent on a train between london and manchester but actually putting a table on a train so the person can work for an hour rather than basically sitting there like a tyrannosaurus rex trying to type on some on their knees okay that's that's considered apparently an unworthy expense compared to time-saving on the actual journey itself. And offices will need to actually fundamentally adapt to the fact that patterns of work are different, that you probably need fewer meeting rooms and you need more pods.
But also, the open plan office was insufficiently variegated. So if you take people who are non-neurotypical, for example, you know, I mean, my argument is that to some extent, the perfect office is not an open plan space.
It's 50% library, 50% pub. In other words, half of it should be hyper social and a bit noisy for people.
I mean, I actually working in cafes i like background noise even if i don't know anybody present equally i'm conscious of the fact there are people who can't work unless you also don't want to be in that all the time necessarily if you if you have the final proofread of this particular piece of copy that absolutely needs to be right if you're writing a best man speech yes probably best to be in somewhere that's a little bit more chill. It's your final run through.
You're trying to remember a presentation. You're trying to do whatever.
Do you really want to be in the cafe? But yeah, I mean, you'll have seen this as well. To introverts, an open plan office is probably very tiring.
Well, I mean, I think on average, it seems like open plan offices really, really damage down productivity. The difference even between noise cancelling headphones and complete silence is marked.
A mutual friend of ours worked at a place, a social media management agency years ago, and they had this huge Harry Potter fan page thing. And as a part of that, they were doing a time-lapse of them world's biggest harry potter jigsaw puzzle

so they were going obsessed they had an entire room you know it's one of these many many many stories and there was open plan office and fucking astroturf on the walls and you know ping pong wednesdays or whatever and uh he just he couldn't work he couldn't think he couldn't focus so he had found that they'd kind of given up on this huge harry potter thing then maybe got stuck at some stage of the jigsaw so he uh there was a point where every morning for a couple of weeks he went up and sat in amongst disused harry potter jigsaw puzzle pieces on the floor because it was the only place he could get any fucking peace yes yeah yeah i mean you know we we have we have some weird sort of mysterious lavatories on the ground floor, which I notice the occupancy rate is surprisingly high, given that they're not signposted. Yes.
And I strongly suspect people are using them as a kind of escape pod. Need a little bit of chill time.
Yeah. Yeah.
And I, you know, the other thing I think is interesting is if you really want to bond people, one interesting thing is to reduce the amount of money you spend on rent. But I think you have to correspondingly ring fence a bit of that saving and spend it on what you might call staff jollies.
Now, I don't mean total self-indulgence, but I mean, you know, away days where maybe we should take some office space by the sea somewhere like Margate, Folkestone, Brighton, okay? Just because actually, if you want to bond people, I don't think an office is a particularly good place for bonding. I think if you take people on a trip together, you find people bond very, very tightly.
I mean, famously, you'll love this story from advertising, the Coke Hilltop ad, I'd like to teach the world to sing, was actually, it was conceived at, I think, Dublin Airport, because there was a massive flight delay. And effectively, there's a quote from Bob Dylan in Brownsville Girl, where he said, isn't it funny how people who've suffered together have more in common than those who are most content.
And these people had basically all been together, you know, and they were stuck at Dublin Airport like overnight. And he noticed that effectively people were all going to the Coke machine.
And because of the shared adversity, they were all bonding in ways that they never would have done had the flight been on time. It's one of the reasons that throughout history, armies have been encouraged to get drunk together a few nights before the first battle.
Not because, sure, the bonding thing, the fact that it's more difficult to lie, the fact that you're a better liar detector when you're drunk than when you're sober. Do you remember that Carlsberg campaign, you know who your mates are? No.
It only lasted. I think it interested me from an anthropological perspective, because there's a theory that the reason young men get drunk and do stupid things is to find out who your mates are.
In other words, the person who, at the first sign of a police siren, hoofs it around the corner is not your mate. And so it's a kind of loyalty testing thing, just as to some extent, you know, rude banter is a kind of proof of- Stress testing.
it's a kind of loyalty testing thing just as to some extent you know rude banter is a kind of proof of stress testing it's a stress test of a friendship if if we weren't really good friends i couldn't say this to you therefore the fact that i'm saying this to you is proof of our signal of friendship uh i wanted to show you this europeans according to a study by simple analytics europeans spend approximately 575 million hours per year clicking through cookie banners the prompts which appear on websites asking yes to accept one of the brexit dividends should have been that we got rid of that because it was an absolutely stupid piece of legislation which adds by the way it's also counterproductive because every now and then i go onto my google chrome and i get rid of effectively all the cookies right so you've had to restart it two weeks it's even worse than usual in that every goddamn page i go to i have to effectively give permission or deny it to see whatever this thing was that was a classic case of what i think is sometimes called you know the um what was the famous thing in in the in british india where they they created a bounty on cobra python yeah cobra snakes yeah and people started farming them to claim the bounty there was something to do with uh um trying to reduce the number of cars on the road. So they logged the registration plates in one form or another, and all of the rich people just bought second cars.
So they doubled the number of cars that were on the roads. That was Athens, yeah.
I think you could come into Athens with an odd number number plate or an even number number plate to reduce traffic. And so everybody lined up at the Greek equivalent of the DMV when they were handing out car license plates.
And basically, they said, oh, I really need an even number because my other car is not the other car. And so they'd all shuffle into order, effectively.
I'll swap you. Yeah, yeah, yeah.
In the queue. And no, I mean, I mean, if you think about it, there were extraordinarily intelligent.
If you'd given the job to some nudge theorists rather than to lawyers, you could have come up with a very simple solution, which I would have thought would be fairly amicable to everybody, which is you can set your browser to delete cookies more than X weeks old. Okay.
And that would be, you know you you might mandate that that's an automatic option that's made available to you but you know what the problem i have is that i you know i like to purge all these things you know i never quite know what clearing your cache actually means but i like to do it regularly because it feels you know cathartic okay but um but but you know i, I like to clear cookies every now and then because it occurs to me there's probably an unwholesome buildup of the things. But then every time I purge the damn things, um, it makes my browsing experience painfully bad.
We could have, we could have got rid of that within weeks of 2016, if we wish to. I have no idea why nobody's done it.
Meanwhile, we're still struggling with all of the problems everybody wanted to get rid of, and we've accumulated new ones, and some of them have got worse. And now Keir Starmer's done a massive U-turn on immigration.
That was surprising. If we acknowledge the fact that the bad thing about government isn't really that money spent through the government is necessarily bad, because there are things that probably are better paid for collectively rather than individually, defense being an obvious example.
Okay. I don't think it makes sense for everybody to employ a private army.
You know, it's pretty logical that we should actually pool our resources in the provision of defense. And by the way, I would also argue that the ratio of those things probably changes.
You know, there are periods where technologically we'd be better off spending money on collective goods, and there are periods where we're better off spending more money on individual goods. And, you know, there's a ratio of the two.
But you made the point that, first of all, if you allowed very high taxpayers some degree of control over where their tax was spent that's the first thing interestingly good luck with that because any it's called hypothecation dan arieli is a friend of mine behavioral scientist believes that you could get people paying tax much more happily if it were hypothecated um but the treasury absolutely hate the idea because it removes from them the finance person's privilege of shoveling money around at their at their whim so they absolutely hate it also creates a level of accountability i'll tell you a clever clever case of hypothecation by the way was john maynard canes had i think he had it, it might have been a million pounds to spend. He was the bursar of King's College, Cambridge.
And he had two things that were calls on his finances. There was the Arts Theatre in Cambridge, which was run and still is and owned, I think, by King's College, Cambridge, for whatever historical reason, and King's College Chapel, which is a famous, you know, glorious medieval building.
And Keynes immediately gave a million pounds to the Arts Theatre and nothing to the chapels. And his argument was very simple.
He said, raising money for the chapel is a piece of piss, okay? I can get Americans to give money for this world-famous chapel, whereas raising money for the Arts theater is going to be damn near impossible so with the money i've got at my disposal i'll give it to the things that can't raise money at the expense of things that can the treasury absolutely hate hypothecation i also think that uh for example um fundamentally i mean i've got an interesting idea which'll share with you, which I think is actually a usable idea, which is what I call charitable yield management. Okay, let me explain.
There are lots of things where you want to allocate resources according to willingness to pay. So I'll give you an example.
I'm at Athens airport. There's a massive queue for passport control.
There are people in front of me in the queue.

I'm paranoid.

I turn up at airports like three hours early.

I'm totally paranoid like that.

Other people, these people had left it a bit late.

Their flight was leaving in 40 minutes.

The queue was about 20 minutes long.

I was pretty sympathetic.

Now, what you could do is you could simply have,

in the end, someone spotted them and let them through.

It was quite intelligent. But you could have a system where you pay 20 quid, you jump the queue.
Most people find that repugnant, but also they see that as the airport effectively profiting from their own incompetence. Okay, which is you're probably deliberately creating a long queue so you can maximize revenue from queue jumping.

If you had certain things where you paid, but the money went to charity, that is an interesting thing because it still identifies willingness to pay.

In other words, you're clearly desperate to catch your flight.

It removes the incentive for fuckery.

And also the resentment of the people doing it because, yeah, they may be richer than you, but at least they're doing a good thing. So that could apply to parking.
In every car park, there should be five station car parks. There should be five spaces where it's 25 quid to Oxfam on top of the parking charge to park there.
The reason being that someone who is absolutely desperate to park will always be able to find a space. Whereas who's got 40 minutes to spare can drive off somewhere you've got maximizing area under the curve you're maximizing exactly that the area under the curve without creating resentment you can apply that to street parking one parking space in 10 and it's easy to do with ringo or pay by phone or what what you use in austin what's the parking app in aust Austin I had no idea it's just tap your card on tap you've got that so with those apps it's really really easy if you're in one of those charity spaces you have a different code and you just put in a different number and 20 quid goes to Oxfam on top of your cost of parking which means that the parking spaces go to the people who most desperately need them without anybody feeling rooked, and charities make a lot of money.
Now, that strikes me as quite an interesting... You could apply that to road pricing as well, by the way, interestingly.
How so? Well, if people felt that a component of... Let's say you had a high-speed lane.
If there's a traffic jam on the M25, you can pay 20 quid to use the, it's equivalent to the multi-occupancy lane you get in the US. There's a premium lane which lets you jump the queue a bit.
Now, I would use that if I were going to Heathrow, probably. If I've got a plane to catch, if I haven't got a plane to catch, I went, no.
The great thing thing is what would create a lot of resentment is if people just saw a load of bentley's and you know flash cars jumping the queue it creates fundamental resentment but actually if you made the thing charitable it would be less repugnant and you would still be allocating the road to the people who were most in need of the road. Well, we have fast lanes or whatever they're called, preferential lanes, all across America.
And that's basically the same. If you've got the text tag or whatever, then you can go through this one.
And by paying that, it's $1.86 or whatever in order to go through this particular lane. But that lane's got far fewer people on it.
And you can everybody you can everybody kind of i mean it's interesting road pricing is going to be very interesting from a psychological perspective because one of the things they did with u-les which is in london which is that if you had an older diesel diesel vehicle you had to pay was it 20 pounds to come into the u-les zone which was pretty extensive it went right It wasn't like the congestion zone, which is just

the middle of London. It was pretty much right to the edges of London.
There were Eulers cameras everywhere. And what was unfair about that was not only that we can debate the whole legitimacy of the charge, but let's say I had an older diesel vehicle.
I live in Sevenoaks, which is just outside the Ula'sLES zone to be honest I drive into the ULES zone six times a year maybe eight okay I could just about swallow the current charge okay okay if you travel in every day so a hundred people paying the ULES charge once don't really care whereas one person paying it a hundred times it's practically bankrupting them yeah and the fact that there was no recognition of that so if you were a nurse who lived outside london or indeed inside london and because of shift work needed to drive to work and because you hadn't got much money you had an older diesel car that was the fact that there was no equivalent of amazon prime which is okay pay once pay for a year yeah okay was fundamentally unfair and that that again is down to gary stevenson's observation actually that if you optimize for the average you don't distinguish between one person paying something a hundred times and a hundred people paying something but i always notice when you drive down the french motorway which is called the autoroute des anglais from calais down towards i think this one is towards a10 or something it's called can't remember the exact number and you always notice that for the first sort of 50 miles basically all the cars are english there's bloody road it's a bit odd don't the local french want to use their autoroute and then you realize of course if you're english you drive to france once a year you pay the french motorway tolls. If you drive a long way down to the south of France, it's going to come to a few hundred euros.
OK, but that's a lot less than you pay for a higher car if you flew. And it's just something you just you suck it up if you want to drive down to the south of France.
If you're French, OK, and you've got a stretch of motorway of 20 miles and it costs you five euros a goddamn day okay that's a thousand euros a year it's completely different completely different equation

and so one of the things we need to understand much better is to economists price is a number

but to consumers price is a feeling and fundamentally economists have this weird

idea of money that it kind of i mean one of one of the most important topics, I think, in economics is how to spend it. I mean, Scott Galloway did quite an interesting piece on this just a few days ago, which is, in other words, it's not just about investment.
It's not just about wealth optimization. the level of skill with which you translate available money into meaningful experiences, into happiness, well-being, flourishing, whatever you want to call it.
I mean, that's a skill in itself. And there are undoubtedly people who do it very, very badly.
By the way, not only people who are extravagant, but actually people who are too stingy. So there's a wonderful piece of research by George Lowenstein, which looks at the fact that we all acknowledge in economics that there are people who spend too much.
In other words, they get into debt, they're extravagant, they live for the moment. They kind of have short time horizons and optimize for the moment to a point where they neglect their long-term wealth but george lohenstein also made the point that correspondingly you would expect there to be people who are not spendthrifts he called them skin flints who actually find the act of spending money so painful just the act of parting with money is something you know the very transaction itself is so painful they spend far too little and i think he did a kind of survey on this and roughly speaking about 40 to 50 percent of the population get it roughly right and then you have a chunk of people at one end actually skinflints outnumber spendthrifts if i remember his data wow so there is i mean one of his points is that he you know he's a very big believer in buying experiences rather than stuff um but um and that's one of the reasons i think americans by the way should have more vacation time because americans have quite a large non-working, but it's all people at the beginning of life and at the end of life.
And the Americans massively over-index in terms of leisure or lack of economic participation in terms of students and in terms of retirees. But they're massively too busy in the middle of life.
and one of the things i would argue is that if americans spent more money on experiences leisure travel etc which tend to be quite labor intensive rather than say buying more goods which is what you do when you have very little spare time would they actually would the actual american economy benefit because you can't because you've got in other words it's better off having people working in a new orleans cafe yeah than it is importing a chinese um device that you know i don't know i don't know robotically cleans your cappuccino machine or something okay whatever it is that people are buying and that that's now having said that you've got to be very careful about dividing what is a good and what is an experience because if you buy a guitar and then spend a lot of time playing the guitar it's both it's both yeah so it's very dangerous to say oh no it's just it's just goods are solid things experiences are intangible because there's a combination of both rory sutherland ladies and gentlemen rory let I appreciate you. Eighth time, ninth time on the show.
I love it every time that you come on. Thank you.
Always a pleasure. It's a delight.
I just feel, to be honest, I just feel I'm a crap version of Eric Weinstein. Don't invite Eric.
Every time I watch him, I feel inadequate. I just feel like this rubbish version of Eric.
If Eric's made it to the end of this episode,

I forgot to text you and ask what brand of shirt you wear.

Yeah, he wears these incredibly plutocratic white shirts.

I'm just intrigued.

Okay, I'm going to find, I will remember.

And if not, I've just put it out on a YouTube channel.

By the way, his theory, which is ingenious,

that Jeffrey Epstein was basically an intelligence ploy

that couldn't survive into the internet age.

That was one of those eye-opening moments

Thank you. Jeffrey Epstein was basically an intelligence ploy that couldn't survive into the internet age.
That was one of those eye-opening moments where you go, surely not. Because if you think about it, okay, for a government, for a state actor, operating a billionaire looks expensive, right? But compared to an aircraft carrier, it's a rounding out.

Jeffrey Epstein was the deal of the century. Rory Sutherland said it here.
Rory, I appreciate you.