Transcriber: Amanda Zhu
Reviewer: Peter Van de Ven I'm actually going to go
slightly off-piste here and build on what Richard said. Because two nights ago, I went out to dinner
with a bunch of geneticists. As an advertising man, I said to them, 'Look, I think you're probably right about IQ. It is this single monolithic measure, and it correlates
with lots of different things.' But I said, 'As an advertising
and marketing man, can I make a suggestion? I think you ought to lie.' (Laughter) And I said, 'If you actually
tell people that stark fact that there is this single measure
and it's monolithic and it correlates
with goodness knows what else,' I said, 'the problem is
it's fundamentally unpalatable, and no one will be able
to form policy on it.' What I said is, 'What you ought to do is say there are
different kinds of intelligence and they're complementary.' The one story is unpalatable because it essentially implies you should rank human value
on a linear scale, which says that X is more valuable than Y. I said, 'If you could just create
multiple forms of intelligence, you can tell a completely different story, which is, "This kind of person is highly
complementary to that kind of person, and we've actually all got different
strengths and comparative advantages, and great organizations can draw on them all
in a complementary and different way."' What it now appears is
that you don't need to lie to do this. This is in fact neuroscientific truth. So I'm extraordinarily grateful
for that last talk. What I'm also going to do is build quite a lot
on what Professor Pine - who would make an excellent,
I think, new participant in a new gender-neutral form of Cluedo,
by the way, as a name - I think I'd like to build
on what Professor Pine has to say about the question
of breaking out of choice, breaking away from what you might call
the standard script. Now, no sensible definition of wealth will simply be financial. At some level, any healthy definition of wealth
is that to be wealthy, you are in a position
where you can make a large number of reasonably well-informed,
successful choices. To be financially wealthy
but to live in a highly impoverished area is not really wealth, because you may have
a large amount of money and derive some pleasure
from reading your bank account, but when you are out of the house, because everybody else is poor, there are no restaurants,
there are no bars, there's virtually nothing worthwhile
for you to do with your money. So the idea of wealth
as purely an individualistic thing strikes me as dangerous, but I think there's a really
important question here, which is that we tend to assume - and this comes from some of the precepts
and axioms of neoclassical economics - that in order to make society wealthy
and individuals more wealthy, the only way to do it
is essentially to create more stuff. I would argue that since wealth really lies in the number
of rewarding choices you can make, you can create wealth in a much more interesting
and more environmentally friendly manner by just generating the possibility
for people to make new and better choices. Once you define wealth in that way, the whole tenor of debate
becomes different. The problem, I think, here lies in the central axioms
of neoclassical economics, one of which is
that we all make decisions. And the reason they make this assumption is simply to make economics
look like it's a science. In order to make economics
look like it's a science, where the maths is reasonably tractable and the things that are important
are expressible in numerical form, you make a whole series of assumptions. And the assumptions are that we all are a series
of utility maximising actors making decisions in standalone economic transactions in an atmosphere of
perfect information and perfect trust. Now, just to be clear about this, I completely accept the idea that scientists have to make assumptions
in order to develop models. I would argue these aren't actually assumptions. They are barefaced lies. None of that is true. First of all, almost never on Earth do you find the conditions
of perfect information and perfect trust. Secondly, even if you could create
those conditions, our brains did not evolve
to make decisions under such conditions. Most of our evolutionary inheritance took place in cases
where we had to make decisions using deeply imperfect
and incomplete information. We probably had to make
those decisions in limited time and in an environment where it was
never entirely clear who you could trust. So even if you could create a world
that was ideal for Homo economicus, Homo sapiens would find it deeply strange. Part of the problem of that assumption, which is that people have
perfect information and perfect trust, is you assume that people already are making
the best choices they possibly can and the only possible way
of creating economic value is to add more choices. What it's completely blind to is the idea that by designing
choices differently, we can make people richer - wealthier perhaps, if I'm to be precise with my distinctions
in my use of language - we can make people wealthier
without using any more resources at all. We can just help people
choose more widely. Here's an example, which I think is one of the most important quotations
to come from the dot-com world, which comes up
with some pretty stupid stuff, but this is really important: 'The best, maybe the only
real direct measure of innovation is change in human behaviour.' This comes from Stewart Butterfield, who's the inventor of Slack
and before that, the inventor of Flickr. What's really valuable in life is when you allow people
to do different things, things they otherwise
wouldn't have contemplated, things they lack the confidence
to do previously, or things that simply
didn't occur to them. I would argue that marketing
plays just as great a role in innovation, by the way, as technology does, for the simple reason that it's one thing
to come up with a technology, it's a separate, in some cases,
more difficult challenge to get people comfortably
to adopt a new behaviour. And the reason for that,
as I said, is the distinction between the economic idea
of how we make decisions and an evolutionary psychologist's idea. One of the things
that's deeply embedded in us for perfectly healthy evolutionary reasons is that by and large, we're not trying to maximise anything, we're trying to avoid catastrophe. As an evolutionary biologist
explained to me, there are far more ways of dying
than there are of surviving. And so our brain is calibrated
slightly like a smoke detector: we want something that's pretty good, but we definitely, definitely
don't want it to be terrible. When you're making decisions
under uncertainty, it isn't just the average
outcome that matters, it's the variance. That's why I ignore satnavs
when I go to an airport. What the satnav is telling me
is the fastest route on average. On the way home, that's pretty good; on the way to the airport,
I ignore the satnav and take A-roads. Why? Because my brain also factors in - I did this instinctively
before I realised what the math was - the A-road will always be
20-minute slower, but unlike the motorway - where if a lorry jackknives
at Clacket Lane, I'm basically there all morning - the A-road will never be
so significantly slower that I miss my plane. The motorway has a higher average
but a far more extreme variance. The A-road also has higher optionality: I can turn off it if there's a problem, and try route C or route D or route E. On the motorway,
I'm effectively trapped, okay, unless you have a four-by-four vehicle
and are prepared to drive through a fence. There's really no escape. (Laughter) It's an interesting question,
by the way, in motorway design why nobody spotted this problem. A proper motorway, really,
is designed for optimal conditions. What they forgot to include
is little emergency exits if things go badly wrong. But if we define wealth as actually the range of possible
rewarding behaviours we can adopt, everything becomes different. And one of the most important disciplines
once you define wealth this way is how well you design choice. Now, this is a menu in a format
I've only come across once in my life. It was in a restaurant in Portugal,
which doubles as a clown school - don't ask, okay? (Laughter) It was actually a very good meal. Now, I personally think every restaurant menu
should take this format. As you can see, this was taken in the era before mobile phones
had very good cameras. And as you can also see
by the appalling focus, I think it was taken after lunch. I think I asked him to bring a menu back. This is how it works: you choose the menu Branco,
the menu Amarelo - sorry, too much Dora the Explorer there - then there's the orange one,
the red one, or the green one. Each one is a set menu, but you can substitute laterally
any way you like. So it offers you exactly
the same amount of freedom as an à la carte menu. One, it makes deciding a bit easier
because you can split into two stages: Which of those do I like the most? Is there any one thing
on the, say, orange menu which I really don't like
the sound of much? In which case, I'll substitute. But there's an extra layer
of information in there, which is what the chef thinks
works as a cohesive menu. Chefs would apparently go crazy because they know which main courses
complement which starter. But then they'd have to put it
on a menu format, which allows people to ride roughshod
over that knowledge. If you think about it, you don't go to a classical music concert
and go, 'Actually, I think today we'll have the first movement
of Schubert's Unfinished Symphony and the second movement
of Mendelssohn's Sixth' or whatever, okay? You'd tend to go, 'Mendelssohn
probably knows his shit about music, (Laughter) so we'll allow him
to actually set the agenda here.' But with restaurants, no, no, no, we ignore
the chef's recommendations completely, and we just pick things at random. You're still free
to pick things at random, if you want to be perverse here, but you have an extra layer
of information, which is not freedom reducing
in the slightest, but, I would argue,
it's welfare enhancing. Now, why aren't all menus
designed like this? There is a very strange facet
of the human brain, which is that when the choices
we're presented with are bad, we don't notice. We seem to have evolved
to make decisions instantaneously using whatever information is to hand, something that Daniel
Kahneman's remarked on. It's very rare for people,
when you present them with a choice, to say, 'Before I can make this decision,
I need more information.' Let me give you an example. Driving back from Deal towards Sevenoaks - and Brighton is actually
an incredibly germane audience to give you this example - as you drive along the M20
towards the M25, you come to this sign. Now to start with, the sign is shit because it relies on you knowing
London is sign posted in both lanes. Dartford Crossing, which of course
mentally, is to the right, is obviously the left-hand Lane. Even people in Swanley don't know
whether it's south or north of the M20. There is no primary route destination. It should say Brighton or Gatwick or something we can actually
get our head around. So you get to that thing - you're probably tooling along
at about 75 at that point - and you go, 'Shit, I didn't really understand
that sign at all.' (Laughter) Now, has anybody in the audience
ever missed the turn for the M25 coming back from Dover? I've got about 8,10 - oh, more, okay. You've all done it, right? Now, if you think you're weird,
this is Brighton. I got one person raising their hand
when I asked the question in Johannesburg. This is a widespread problem. And after I'd made this mistake
for the fourth time, I finally asked the question,
'Maybe it's not you. It's them.' So I went on Google Street View. As you can see, this is a screen graph
from Google Street View. So you get to this sign,
you go, 'I don't understand this. Where the hell is Swanley?
What's going on?' Swanley is chiefly famous
for a road-rage killing rather than as a place on the M25. (Laughter) Don't worry, because hid on the horizon,
I can see another gantry. You can just see that just on the horizon. I will wait for the next signpost,
and I will use it to inform my choice. And so you go, 'Not to worry.
Let's wait for the next signpost.' And as you approach it,
before you can read what it says … (Laughter) So it wasn't you; it's them. And I've complained
to the Highways Agency about this and said, 'Look, by the time you can read that sign, it's too late to act
on the information it contains.' Frankly, for all the value of that sign,
you might as well just paint, instead of London and Lewisham, you might as well paint: 'Haha! You've missed the turning,
you dickhead', right? (Laughter) And you know the strange thing was - and this is what's odd about it, I think it's something
about the evolved brain. It was only after I made
the mistake repeatedly and I suddenly realised, 'Hold on, You're not in the habit
of missing exits everywhere you go. What's so special about this one?' that I finally discovered how unbelievably mind-blowingly, actually,
not only stupid but dangerous that is. Because a certain percentage of people then swerve across the stripy bit
into the path of oncoming traffic. But we didn't notice
that there was something wrong; we just made a bad decision. And I think that's true
about a lot of choice architecture. I'm going to make myself unpopular
twice in this talk: once at the end when I suggest that baking programs
should be banned for two years (Laughter) because they're stupid - okay, right, okay, sorry! There is minority support
for that anyway - and the second one when I suggest
that wine as a drink is overrated. Whoo … Okay. (Applause) Basically, there is never a situation where white wine
is nicer than a gin and tonic. We're just pretending, okay? - just pretentious middle-class toss. You know, it's like
The Princess and the Pea. You claim you care about
these totally irrelevant distinctions. It's also massively inconsistent - wine -
when you think about it. If I opened a bottle of cornflakes
and they were all soggy and black, I rang up the Kellogg's company and they said, 'Ah,
that's the 2016 cornflake. We had slightly late rainfall.' (Laughter) I would not go, 'Marvellous, Kellogg's. Let me try and notice
some of the exciting new taste features'; I'd go, 'Sort your fucking act out, Kellogg's!'
(Laughter) Okay? I want the third bloody box
to taste like the first. But with wine, no, no, no, no, it's perfectly acceptable to have absolutely
no quality control whatsoever. (Laughter) Okay. Now, when you go
into a restaurant, what happens? You are effectively manipulated by wine. First of all, there are
wine glasses on the table. We found that if you remove these,
wine consumption goes down. Secondly, you're handed a drinks list,
which is not called the drinks list. It's called the ... wine list, right? Now, that contains in choice architecture about four pages of totally
unnecessary variety of red and white wine in various price points, and then a small laminated page
at the back for the deviants and perverts (Laughter) who want to drink an alcoholic drink from a country that's actually
mastered the technology required for brewing or distillation. (Laughter) And then what happens? Even cleverer still, they then pass the wine list
to one person. Now, there's only one alcoholic drink you can share among
a whole table of people, so the second that guy says red or white, it's game over for the gin drinkers. (Laughter) You've basically been bullied
into the position, but you never object. The choice architecture
of ordering wine in a restaurant is basically the same
as that you find on the M20. (Laughter) We don't notice when our choices
are presented in a choice-limiting way. This is an airline website. Notice it asks you
what class of ticket do you want before you know the price difference. It's a totally stupid point
to ask that question. Patently, if it's 20 quid more
to go in premium economy, I'm on; if it's 2,000, I'm not. You cannot answer that question
at that point on the website; nonetheless, they ask it,
and we make our best stab at it. Okay? We don't notice when
choice architecture is bad. So by improving choice architecture, we can increase human wealth
without increasing human consumption. This is a beautiful example, by the way - the Ocado green van, which gets people to choose
an environmentally friendly thing without offering them
a financial incentive. It just makes the van green. I asked someone at Ocado,
How well does it work? He said, I'm not allowed to tell you. He said, 'Let me just say this:
you wouldn't believe it.' Changes to choice
can solve massive problems. The delayed prescription reduces unnecessary prescriptions
of antibiotics by a significant factor. The patient leaves the doctor
perfectly happy because they've got
a bit of paper in their hand. It's post-dated to Friday. Most of them never go and cash it in,
because they're feeling better by then. And basically, once we're feeling better,
we're over any need for medicine, once we start on the up, okay? If you give people a prescription and say,
'Don't take it for three days' time', what they actually do is they walk past boots
on the way back to the car, they go, 'I might as well
cash this in now. They paid eight quid for the antibiotics, so sunk-cost bias
are paying for these buggers. So I might as well take them.' That reduces by, I think,
about a factor of three the level of unnecessary
consumption of antibiotics. If you want a big economic one
rather than a health benefit one: that is the old Tube map
when I moved to London; this is the new Tube map, and it includes what young people
call the 'Ginger line', which is the Overground. Now, how many of you've used
the Ginger line or the Overground? A fairly significant group, actually. What you may not know is that 95% of that line already existed
when I moved to London. It was called Silverlink Metro. It was operated by rail companies. When they took it over, yes, they made the trains
a bit nicer and more frequent; yes, they lit the stations better. The most important thing they did
was they added it to the map. I would argue by adding it
to the Tube map, they created something like six to eight
billion of infrastructure value at a cost of some ink. (Laughter) How do I know that? Because although these trains
had been running for years, when it appeared on the Tube map, usage of those lines
went up by 400% in one month alone. The reason people
weren't using the infrastructure wasn't because it didn't exist; it's because it wasn't
mentally accessible - it wasn't an accessible choice. Creating choice creates wealth. You don't need to build a damn thing. And so, here's my kind of idea
at the end of all this, which I call the libertarian intervention. Now, this is, I think, a beautiful example
from Public Health England of a libertarian intervention. It's difficult to stop smoking
because doing it on your own is hard. If you can just encourage
large groups of people to do the same thing simultaneously, a choice which was difficult
becomes significantly easier. You are five times more likely
to quit for good if you do it in that October period,
when you've got quite a lot of support from other people
who are trying the same thing, where there's a limited target. It's just really well-designed choice. So my question is what else can we do? Let's look. For hundreds, it's easy, it's inexpensive,
and it can be fantastic. I'll go back today
to a town called Sevenoaks, where you get off the train, and basically it's a commuter town. And yet all the shops, which complain massively that everybody
is always going to out-of-town shops, they close at 5:30. Around six o'clock, something like 10,000 people with money
disgorge themselves into Sevenoaks to find all the shops closed. Why do they not stay open later and open later? It's because it's one
of those coordination problems. If you're the only shop to do it,
it makes no difference to you. It's something which can either be done
simultaneously or not at all. And that's where libertarianism
falls down, in fact. It falls down on coordination issues. If you're a hardcore libertarian,
I guess you'd say, 'I disapprove of painted lines
in the car park because it interferes with my right
to park at the diagonal.' But by and large, you need someone
to paint lines in the car park. So, in the United States, forty percent of people took
no vacation at all in 2014. And the reason is, if you ask people, most Americans would prefer
to have less salary and more vacation. If you think about it, you could double
American vacation allowance from two weeks to four
with just a 4% pay cut. So people want vacation. Why do they not do it? Well, in economic theory, they just choose the perfect balance
between leisure and money. In reality, how hard should you work
if you're in an office? And there's only one
[inaudible] answer to that, which is 'A bit harder
than the bugger next to you.' So it creates an arms race. I've tried to do this at Ogilvy.
I haven't succeeded yet. Every time we offer someone a pay rise, we should be mandated to say,
'You can either take this all as money, or you can take it
as half money, half holiday' to create a choice, where practically,
for reasons of social norming, non existed before. Stop Tober - let's steal from that idea. Doing your finances
is really boring, okay? Let's create an extra bank holiday and call it National
Sort Your Financial Shit Out weekend. (Laughter) There can be intensive advertising
of financial products, and you will create conversation
around pensions. The rest of the year,
if you mentioned pensions, people will quite rightly shun you
as the most boring person in the room. On that one weekend, it's kind of 'Start Tober'. It's like on that one weekend,
it's okay to discuss those things. We create a little coordinated burst. When higher education expanded,
I would argue we sort of reduced choice. Everybody would say there are more places
of further education. The problem is now you put a badge
over someone who didn't go to university. When it was 20% of people
who went to university, not going to university
didn't have much significance. Now you're one of the people
who hasn't got a degree. If you reserve 20% of places
for people over 30, it becomes a perfectly acceptable decision
to make, socially, to say, 'I've decided to defer it. I'd rather get a job first and go and do something
when I'm a bit older.' Anything that creates, makes
a choice socially possible is, I would argue, wealth creating. And if we look at wealth that way,
we'll do things differently, and we'll also ban bakery programs. Let me explain why. (Laughter) They set the bar too high. (Laughter) If you go home this evening and you order a pizza
from Pizza Hut or Domino's and a six-pack of beer, you will have a time
which is 95% as enjoyable as if you start creating
some three-tier insane creation with homemade profiteroles, okay? (Laughter) But because the competitive bar
is set unrealistically high, what actually happens is people have dinner parties
too infrequently because the price of failure
is just too high. (Laughter) So deliberate Slavenisation of the country
in terms of its eating habits would actually be a social boom. Again, it's a libertarian invention. Go and invent some of your own. Thank you very much indeed. (Applause) (Cheers)
