piste here and build on what Richard
said because two nights ago I went out
to dinner with a bunch of geneticists
and 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
said I think you ought to lie I said if
you actually tell people that start 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 you
may derive some pleasure from reading
your bank account but when you go 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 is 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
once you define wealth in that way
things 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
mathema Kannamma ‘kz 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
maximizing actors making decisions in
standalone economic transactions in an
atmosphere of perfect information of
perfect trust now
just to be clear out 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 there are there
barefaced lies none of that is true
first of all there are 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 evil is true him
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 now 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
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 I think 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 may be the
only real direct measure of innovation
is change in human behavior 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 behavior and
the reason for that as I said is the
distinction between the economic idea of
how we make decisions and an
evolutionary psychologists idea one of
the things that’s deeply embedded in us
for reasons for perfectly healthy
evolutionary reasons is that
and large we’re not trying to maximize
anything we’re trying to avoid
catastrophe as an evolutionary biologist
explained to me there are far more ways
of dying than there are surviving and so
our brain is calibrated slightly I just
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
ignore Sat Navs when I go to an airport
what the Sat Nav 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 Sat Nav and take a
roads why because my brain also factors
in I did this instinctively before I
realized what the maths was um the a
road will always be 20 minutes slower
but unlike the motorway where if a lorry
jackknives that clackett lane and
basically they’re 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
Rooney on the motorway I’m effectively
trapped okay unless you’ve got a 4×4
vehicle and you’re prepared to drive
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 behaviors 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
Portugal which doubles as a clown school
don’t ask okay
it was actually a very good meal now I
personally think every restaurant meal
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 and the veal sorry she wants
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 ala 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 maps 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 chef’s apparently go crazy
because they know which main courses
complement which starter but then they
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 six or whatever
okay you tend to go Mendelssohn probably
knows his about music so we’ll
allow him will allow him to actually set
the set the agenda here but with
restaurants 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 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
and something that Daniel Kahneman’s
remarked on it’s very rare for people
when you present them with the choice to
say before I can make this decision I
need more information
let me give you an example driving back
from deal towards Seven Oaks and
Brighton is actually an incredibly
germane audience to give you this
example you come as you drive along the
m20 towards the m25 you come to this
sign now to start with the sign is
because it relies on you knowing London
is sign posted in both lanes Dartford
Crossing which of course mentally as to
the right is obviously the left-hand
Lane even people in swanly 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 I didn’t
really understand that sign at all now
just because anybody in the audience
ever missed the turn for the m25 coming
back from Dover I’ve got about 810 fit
no more okay you all done it right now
if you think you’re weird this is
Brighton and there’s large number P 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 grab from Google Street View I
mean okay so you get to this time you go
I don’t understand this what where the
hell’s swanly what’s going on swanly is
cheaply chiefly famous for a road rage
killing rather than as a place on the
m25 um don’t worry because hit on the
horizon I can see another gantry you can
just see that on the just on the horizon
I will wait for the next signpost and I
will use it to inform my choice and so
you get not to worry let’s wait for the
next signpost and as you approach it
before you can read what it says
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 paid instead of London inertia
you might as well paint ha ha you’ve
missed the turning you dick right and
you know the strange thing was and this
is what automatic I think something
about the evolved brain it was only
after I’ve made the mistake repeatedly
and I suddenly realized holding you on
the habit of missing motorway exits
everywhere you go what’s so special
about this one that I finally discovered
how unbelievably mind-blowing Lee
actually not only stupid but dangerous
that is but in a certain percentage of
people um 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 but a
lot of choice architecture I’m gonna be
myself unpopular you may be myself
unpopular twice in this talk once at the
end when I suggest that baking programs
should be banned for two years because
they’re stupid I do okay right okay
sorry
there is minority support for that
anyway um and the second one when I
suggest that wine as a drink is
overrated whoo okay 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 they said
oh that’s the 2016 cornflake we had
I would not go marvelous kellogg’s let
me try and notice some of the exciting
new taste features I’d go sort your
act out Helens okay I want the
third bloody box to taste like the first
but with wine then Adela it’s perfectly
acceptable to have absolutely no quality
control whatsoever okay now when you go
into a restaurant what happens you are
effectively manipulated to buy 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 a drinks this 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 of various
price points and then a small laminated
page at the back for the deviants and
perverts who want to drink an alcoholic
drink from a country that’s actually
mastered the technology required for
brewing or distillation and then what
happens even clever a 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
you’ve basically been bullied in 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 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 tickets
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 ask
that 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 architectures
bad so by improving choice architecture
we can increase human wealth without
increasing human consumption this is a
beautiful example by the way the Accardo
green van which gets people to choose
are mentally friendly thing without
offering them a financial incentive it
just makes the van green our son Ricardo
how well does it work he said I’m not
allowed to tell you I said go on give me
a clue 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 in
for three days time what they actually
do is they go they walk out they walk
past boots on the way back to the car
they might as well cash this in now they
paid eight quid for the antibiotics so
sunk cost bias are paid for these
buggers so I might as well take them
that reduces but 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 what most of you haven’t
if you’ve used the ginger line or the
overground a fairly significant group
actually what you may not know is that
ninety five percent of that line already
existed when I moved to London it was
called silver link Metro 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 station’s
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 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
guessable 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 Seven
Oaks 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 6 o’clock something like 10,000
people with muddy disgorged themselves
into Seven Oaks 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
rights to park at the diagonal but by
and large you need someone to paint
lines in the car park so in the United
States 40% of people took no vacation at
all
in 2014 the reason is if you ask people
most Americans would prefer to have less
salary and more vacation if you think
about you could double American vacation
allowance from two weeks to four with
just a four percent 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 game theoretic answer that
which is a bit harder than the bugger
next year 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 none existed before stock 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
at weekend
there can be intensive advertising of
financial products and you will create
conversation around pensions the rest of
the air 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 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 was table
they’re more places at further education
the problem was is now you put a badge
over someone who didn’t go to university
when it was twenty percent 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 twenty percent 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 well 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 they set the bar too high 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 percent as enjoyable as if
you start
some three-tier insane creation with
homemade profiteroles okay 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 so deliberate
Slaven ization 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]