In 2008, an economist and a law professor proposed a radical new approach to politics: Telling people not to do bad stuff.
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In 2008, an economist and a law professor proposed a radical new approach to politics: Telling people not to do bad stuff.
Support us on Patreon:
https://www.patreon.com/IfBooksPod
Where to find us:
Sources:
Thanks to Mindseye for our theme song!
Michael: Wait, do I say it first or do you say it first?
Peter: You say it first.
Michael: I was about to say Michael. Shit. [laughs]
Peter: Great start.
Michael: Peter.
Peter: Michael.
Michael: What do about a book called Nudge?
Peter: It about how whenever I see Cass Sunstein's name, I want to nudge myself off a cliff?
[If Books Could Kill theme music]
Michael: As were workshopping your zinger, I was surprised to learn that you don't know anything about this book, Peter.
Peter: Yeah, this one just sort of blurred together with all the other verb books. Remember that we had Blink and then there's Nudge. Every book for a few years was just a verb. It's like, Honk: How to let the guy in front of you know that you want him to go faster.
Michael: Yeah.
Peter: I don't understand what this era of books was. I was surprised that were getting so many requests for this book because I had only really vaguely heard of it. I don't know anything about it.
Michael: It's different from other books we've covered recently in that it wasn't a huge bestseller. I mean, it did sell a lot of copies, but nowhere on the order of the Secret or Rich Dad. But I would argue that this is one of the most influential books of the 2000s. It's part of the entire TED talkification of American intellectual life that happened around this time, where everything was a cute little rule. "You thought it was this, but it's actually this."
Peter: Yeah, yeah.
Michael: So, the full title of the book is Nudge: Improving Decisions About Health, Wealth, and Happiness. It's by Richard Thaler and Cass Sunstein, one of whom is a University of Chicago economist, and the other is a Harvard law professor. Almost immediately after this book, Cass Sunstein gets a very high-profile role in the Obama administration. Nine years after this book comes out, Richard Thaler wins the Nobel Prize for the kind of work that this book contains.
This whole kind of concept of nudging gets taken up by numerous actual countries. The UK famously had a nudge unit. America had a nudge unit that is headed by Cass Sunstein. According to some of the academic stuff that I've read, 51 countries set up nudge units within their governments to do this kind of policymaking.
Peter: I don't even know what it is yet, and I'm still upset. Nudge units.
Michael: [laughs] So, this episode is going to be a little bit different in that we're going to spend the first third to one-half talking about what is good about this idea. At the core of this, I think, is a true insight. We're going to start with basically laying out the basic idea of a nudge. So, I'm going to send you the first couple paragraphs of the book.
Peter: All right. “A friend of yours, Carolyn, is the director of food services for a large city school system. One evening, she and her friend, Adam, a statistically oriented management consultant who has worked with supermarket chains, hatched an interesting idea. Without changing any menus, they would run some experiments in her schools to determine whether the way the food is displayed and arranged might influence the choices kids make. In some schools, the desserts were placed first. In others last. In still others, in a separate line. In some schools, the French fries were at eye level. In others, the carrot sticks. Simply by rearranging the cafeteria, Carolyn was able to increase or decrease the consumption of many food items by as much as 25%.”
Michael: Boom. Nudged.
Peter: Only an economist and a law professor could think that this was a cool way to start a hot pop science book.
Michael: We're talking about the carrots. We're starting with carrots. So, this is essentially the core insight of the book, and I think this is fucking true.
Peter: Sure.
Michael: The way that things are presented to us and how our options are described changes the choices that we make. All of us think that we're free actors and we just choose, "I'm going to eat carrots," or, "I'm going to eat a cookie." But of course, those are profoundly affected by things like cost, visibility. We're nudged-- God, I just used the fucking word. We're nudged into various choices through these invisible structures all the fucking time.
Peter: It's one of those things where you might not know the precise mechanics of something. But you had the general sense that this thing was true, that the order in which information is presented to you affects how you process it, etc.
Michael: And there's a million other examples of this. One of the big ones is that road design sort of teaches you how fast you're supposed to go, the width of the lane, and how sharp the corners are. You're like, "This feels like a 25-mile-an-hour road versus this feels like a 50-mile-an-hour road."
Peter: That's true. That's why in 2005, when I was ticketed for going 51 in what I later found out was a 25, it had the vibes of a 45.
Michael: Those kids were asking for it. Those kids that you flattened.
Peter: I got nudged. I got nudged into that ticket, and no one's talking about it.
Michael: [laughs] So, they then delineate a little bit more about this example. So, once you realize that your choices of what foods to put next to the cash register have a profound impact on what people buy, the question then becomes, what do you do with that information? They talk about Carolyn's decision-making strategy, that she is going to pick a theory of how to arrange the food so she can arrange it to maximize profits for the cafeteria. She can arrange it to maximize nutrition for the kids. The main insight that they're trying to lead you to is that any theory that she uses to arrange the food is going to be a nudge. There is no non-manipulative way to present options to people, basically. So, I'm going to send you one more paragraph. This is the conclusion of this section. This is as good as the book gets, and then it's going to start to trail off into nonsense. So, I really want to dwell on the non-nonsense parts.
Peter: “Carolyn is what we will be calling a choice architect. A choice architect has the responsibility for organizing the context in which people make decisions. Although Carolyn is a figment of our imagination, many real people turn out to be choice architects, most without realizing it. If you design the ballot voters use to choose candidates, you are a choice architect. If you are a doctor and must describe the treatments available to a patient, you are a choice architect. If you design the form that new employees fill out to enroll in the company healthcare plan, you are a choice architect. If you are a salesperson, you are a choice architect. But you already knew that.”
Michael: There's a real lesson here, I think, for policymakers that it's become kind of a slur for policymakers to talk about something as ideological. But there's no nonideological way to design systems. If you design an intersection with traffic lights or with stop signs, those are both architectures that are going to produce predictable outcomes, but they're both equally ideological. All of this is fine. Ideology just means that we have values and morality that guide our decisions.
Peter: It does feel like a lot of this-- I think, for example, using the ballot example, this is post Bush v. Gore. Everyone knows that the way you structure a ballot is important. But I do think that there's a utility to just putting a vocabulary onto this stuff where it's like, you're a choice architect. And then, whoever is doing this stuff has a basic framework such that they can maybe see what they're doing a little more accurately.
Michael: The rest of the introduction they spend defining this. They don't call it an ideology, but basically their idea, and they define it as libertarian paternalism. They talk a lot about how if people were able to choose it for themselves, a lot of people kind of wouldn't smoke. Most people want to eat more fruits and vegetables. And so, what policymakers should be doing is designing environments to encourage the choice that people themselves would make.
They define a nudge as, “Any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives to count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”
Peter: In the micro, this is very correct and harmless to me, but I can already see the burgeoning technocratic monstrosity [Michael laughs] that is going to emerge based on this shit.
Michael: We're on page seven. [Peter laughs] The rest of the book is slowly building the monstrosity, basically. So, the first section of the book is basically laying out the structure of why this happens. We're not going to go super-duper into this because eventually we're going to talk about Daniel Kahneman's Thinking, Fast and Slow, which is essentially the same thing. The basic idea is that human beings are not rational benefit maximizers. The traditional economist understanding of behavior is that we're just looking around at all of our options and you're like, “That's going to give me the most utils.” That obviously is not how humans behave.
The second insight of the book is that we behave in predictably irrational ways. We know that people are going to grab a brownie if it's next to the cash register. We know that people aren't going to sign up for a retirement plan if it's hidden in their employment papers on like page 17. The basis of all of this is basically these two systems. Have you heard of this? This system one and system two thing?
Peter: No.
Michael: So, this is the Daniel Kahneman work about how you have one system of your brain that's reflexive. It's kind of your lizard brain just operating on instinct, even though lizard brains are fake. You can listen to Maintenance Phase about that. And then, there's the reflective system. It's like you have these little impulses and then you're like, “Wait a minute, I should think this through.” They illustrate this with a couple of math problems, which I am going to make you do.
Peter: Fuck.
Michael: [laughs] I know. I'm sending these to you because they're much easier to do if you can actually see the numbers in front of you.
Peter: Okay. Oh, God. This is--
Michael: Are you going to fuck it up?
Peter: This is going to be embarrassing.
Michael: Get your reflective system-- Get it ready.
Peter: I want to tell you, there was a time when I was good at math. I don't know what happened. But when I was in third grade, I was a wiz. They put me in a little mini group with the smart kids. One kid was valedictorian, the other went to Yale. And then, there was me, the guy who did the most shrooms before graduation. [Michael laughs] All right. A bat and ball cost $1.10 in total. The bat costs $1 more than the ball. How much does the ball cost?
Michael: What are your different systems?
Peter: Five cents. Is that right?
Michael: Yes, it is.
Peter: Yeah, that's right. There it was. I was channeling third grade, Peter.
Michael: Most people say it costs a dollar.
Peter: They just say a dollar because you're just doing neuron-- [crosstalk] There's like association. You see $1.10, you see a dollar, there's an extra 10 cents.
Michael: You basically subtract one number from the other. You're like, “Ah, that’s 10 cents.” That's your instinctive system. There's one more, Peter, let's see if you get this one. Let's see if you're still gifted.
Peter: Fuck, they're getting harder. If it takes five machines five minutes to make five widgets. How long would it take 100 machines to make 100 widgets? Five minutes?
Michael: Yes.
Peter: Because each one [crosstalk] This is why--
Michael: Well done.
Peter: I get to be a podcast host, the tippy top of the intelligentsia because I am unfazed by these things.
Michael: The little lizard inside of you just absolutely owned.
Peter: That's right. I don't actually need the reflective part of my brain, system two, not necessary.
Michael: [laughs] So, this is what most of the first third of the book is about, is delineating all of the ways in which we are predictably irrational. One of the things they mention is this concept of anchoring. This is why oftentimes on menus, the restaurant will have a $200 bottle of wine, which then kind of makes you think, like, “Oh, maybe the $75 bottle of wine isn't that much,” because it's not the most expensive. They also have one about framing. If you're about to get a surgical procedure and the doctor says, “Of 100 patients who have this operation, 90 are alive after five years.” That affects your choice much more than, "Of the 100 patients who have this procedure, 10 are dead after five years."
Peter: Sure.
Michael: This one I actually thought was pretty interesting. It says, “In one experiment, college students were asked two questions. 'How happy are you?' And, 'How often are you dating?' When the two questions were asked in this order, the correlation between the two questions was nonexistent. But when the question order was reversed, so the dating question was asked first, the correlation was much higher.”
Peter: Right because you're being reminded of something that you think should map onto your happiness. If you just get asked, “How happy are you?” You're like, “I'm pretty happy.” And then, they ask you, “How often you're dating,” and then you're like, “Oh, right, I'm not getting laid at all. I forgot about that.” But if you get asked that first, you are reminded that you're a big loser.
Michael: You're a fucking loser. I haven't been on a date in a week or whatever.
Peter: Yeah, and then it impacts your next response.
Michael: Exactly.
Peter: Yeah, sure.
Michael: Again, a very important insight. I think for public opinion surveys, the way they do political polling, we know that the way that you word a question, the order of the questions, is profoundly impactful on what people say their preferences are.
Peter: How do you feel about trans rights? How often are you dating?
Michael: Ands then, there's-- Are you familiar with this loss aversion thing?
Peter: I'm familiar with the concept of loss aversion, sure.
Michael: What is it?
Peter: It's aversion to loss.
Michael: [laughs] It's very sophisticated stuff, Peter. I don't know if you get it completely.
Peter: No, loss aversion. It means that-- I'm trying not to use the word 'aversion', but you're impacted by loss more than gain. Losing a dollar hurts more than gaining a dollar.
Michael: Exactly.
Peter: Feels good.
Michael: Again, not groundbreaking stuff, but one of the reasons I think these things don't feel so groundbreaking is because pop economics has become so widespread.
Peter: Yeah, that's fair.
Michael: But the reason these are kind of boring to us is because of books like Nudge.
Peter: I know that I can bend the universe to my will using my mind because of the Secret.
Michael: Einstein tells us the world emerged from thought. [Peter laughs] Before we get to kind of complicating this a little bit more, we get a couple of examples. The big one, this shows up in almost all of the articles about this is in the Schiphol Airport in the Netherlands, they added little flies to the urinal because that way the men had something to aim for.
Peter: Is that why some urinals have little fucking flies in them?
Michael: Yeah, this is why. Apparently, the guy that designed this was in the military before. In the military, they put a red dot in the toilets. He was like, “Oh, let's try this in the airport.” Apparently, it reduced spillage by 80% and reduced cleaning costs by 8%.
Peter: That's true. If you don't put something for me to aim for in a urinal, I barely aim. It's just flying all over the place.
Michael: I just spin around like I'm swing dancing. Just constantly just twirling.
Peter: I love this because it makes us look so stupid.
Michael: I know.
Peter: You're literally pissing in an airport. You're like, “Ooh, I can aim for that little fly," But no, it works.
Michael: In an interview with the airport guy, he also says you can put a brick of wood in there because men try to turn it around with their pee, if it's like a little wood chip.
Peter: Oh, that is incredible.
Michael: People try to do little tricks.
Peter: That makes sense though, because that's fun. That's just good fun.
Michael: You just want a little sense of accomplishment in your life.
Peter: You get out of the bathroom and your wife's like, “Hey, how was it?” And you're like, “Really good.”
Michael: Flipped a wood chip. Flipping wood chips today. So, there's other examples. People think that a door is pull rather than push, depending on the shape of the handle. ATMs have started doing this thing where they give your card back before your cash because they know that after you get your cash, you're like, “I'm done here.” And then, you leave your card in the machine. The biggest one that they use, and that comes up in every single TED Talk, PDF, whatever about nudges is organ donations. Are you familiar with this one?
Peter: No. Is it something about the default choice for organ donations?
Michael: Yes.
Peter: There's a whole kind of story that goes along with this, where people are looking at organ donor rates in various countries, and it's like some countries are 15%, and some countries are 80%. And they're like, “What could explain this? Is it culture? Are there better public information campaigns?” There's billboards in some countries. In the book, they note that in Germany, it's 12% of people are organ donors, and in Austria, it's 99%. And it turns out on the form at the DMV or whatever the equivalent is, some countries have, “If you would like to be an organ donor, tick the box.” Some countries have, “If you would like not to be an organ donor, tick the box.”
It turns out people just don't like ticking boxes. So, if you redesign these forms, you can get the number of organ donors, like triple, quadruple huge, profound effects. This is at the heart of the selling point of nudges. You can get around politics. You don't have to spend any more money. All you have to do is change the default on the form.
Peter: This feels a lot more meaningful than, "We will help reduce the piss splatter in airport bathrooms."
Michael: [laughs] As we get into sort of complicating all of this stuff, I think TED Talks and the way that these lessons get truncated and spread is a huge part of this because if you're given this in a little short, whatever, six-minute animated explainer video or something about the benefits of behavioral economics, you're like, “Wow, think of all the other things that this could help.” But then, if you actually sit down and think of the other things, organ donation actually differs from other political issues in very significant ways. What we're essentially talking about here with this organ donation example is filling out a form. We would like people to fill out a form differently. Most political issues don't involve filling out forms.
Peter: You can't nudge people into supporting gay rights in quite the same way.
Michael: Exactly. We're not ticking boxes for most political issues. And also, 97% of the population thinks that being an organ donor is good. It's not politicized at all. It's like asking people, “Do you like puppies?”
Peter: So, using this as the archetypal example is perhaps overstating the promise of the nudge.
Michael: Right. It's the same thing with the math problems I feel like where, yes, you look at the math problems, your reflective system is like, “Oh, this is the wrong answer.” And then, you think about it a little bit more. But is a word problem really a useful metaphor for solving much larger problems?
Peter: It's just your brain doing really quick associations. It's not really math.
Michael: One of my favorite things when I'm researching episodes is finding an academic who's on a crusade to debunk the book that I'm looking into. When I was researching this, I found a researcher named David Gal, who's spent years now basically trying to debunk this book and all of these underlying concepts. Things like sunk cost fallacy, framing effects, loss aversion, etc. I gave him a call and had him walk me through his work and kind of where the field is.
The first thing that he pointed out is basically that this whole idea of economists think we're all rational, but it turns out we're irrational. That's kind of a straw man. I'm not really in the business of defending the economics field very often, but as early as the 1970s, people were winning Nobel Prizes in economics for showing this.
Peter: Right. You're having this sort of battle in the mind of the public that took place in economics 40 years prior.
Michael: They're doing the same thing that the Freakonomics guys did, where it's like “We're maverick economists pushing back.” But again, this is a Harvard law professor and a University of Chicago professor. This behavioral economic stuff is very much part of the establishment at this point. David Gal also pointed out that what this really represents, this whole kind of behavioral economics, pop economics turn, is really a triumph of marketing. People in this field were able to define what are essentially psychological principles. This is the kind of thing that was in psych textbooks when I was majoring in that in college as economics principles, as something that takes on the same kind of legitimacy as GDP figures or the much more quantitative work that economists are traditionally doing.
So, David Gal has mostly looked into this loss aversion thing. In one of his papers, he says, “There's no general cognitive bias that leads people to avoid losses more vigorously than to pursue gains. Price increases do not impact consumer behavior more than price decreases. Messages that frame an appeal in terms of a loss are no more persuasive than messages that frame an appeal in terms of a gain. It is true that big financial losses can be more impactful than big financial gains. But this is not a cognitive bias that requires a loss aversion explanation. If losing $10,000 means giving up the roof over your head, whereas gaining $10,000 means going on an extra vacation, it is perfectly rational to be more concerned with the loss than the gain. Likewise, there are other situations where losses are more consequential than gains, but these require specific explanations, not blanket statements about a loss aversion bias.”
Peter: This is why pop science sucks, kind of. The appeal of pop science is this general sense that you are now one of the smart ones with the secret knowledge. It's like, “No, of course not.” You have to think about that for a second. Of course, you're not. You're just some guy who's reading a book. It's just a way in which these types of books are just ego padding for the formerly gifted children who are no longer remarkable.
Michael: What David Gal told me was all of these concepts which are just psych concepts, are just, they apply in some cases and do not apply in other cases. Everything fucking else, it's like sometimes loss aversion is an interesting rubric to use to understand human behavior. Sometimes, it's not. It's not always clear in advance whether it's going to be useful.
Peter: But it's the aesthetic of counterintuitiveness that people find so appealing in this shit.
Michael: This is a very good point, because what this book is pretending to be doing is, we're pushing back against the overconfident predictions of these fucking economists who think that we're all rational actors. But actually, we can make overconfident predictions about people behaving irrationally. They're reproducing the central error. They're just reproducing it in, "Follow our rules, not their rules."
Peter: Yeah, that's a really good point. I think that the-- God, I have a half-formed thought about this.
Michael: You could just say, "Mike, you're right, and very handsome. [Peter laughs] You're correct. Everyone likes you."
Peter: All right. Yeah, just why don't you record me saying that in various tones and then, we can just--?
Michael: Just have a soundboard. Yeah, it'll be like a little John soundboard.
Peter: Give it enough time, you won't need a podcast cohost.
Michael: That's what I'm working toward, goddamn it. Part two of the book, this is the middle third of the book is all about social influence. One of the main ways that we are predictably irrational is we're subject to all kinds of conformity bias. Are you familiar with a study where it was a bunch of people in a room, and there's an optical illusion where one line is very obviously longer than the other line, and you're in a room with six other people, and they're at the same length. They're the same length. By the time it gets to you, you're like, “Uh, they're the same length, even though you know that's not true.”
Peter: I'm not familiar with the study, but I would absolutely pretend to think they were the same length. [crosstalk] That's the way I understand it, yeah.
Michael: To illustrate this point, this goes through a couple of chapters, but the three main examples that he uses first is a grad student. There's a grad student in the same department as Richard Thaler, and he needs to finish his PhD. He knows he needs to finish his PhD. He's not a full professor until he finishes his PhD, but he just can't get the gumption to do it. He's missing out on retirement matching benefits, which is worth something like $10,000 a year. Really big monetary incentive for him to finish his PhD and yet he can't do it.
But then, Richard Thaler comes up with this innovative idea. He says, “Why don't you write me a bunch of checks and postdate them?” So, like March 1, April 1, May 1. “And if you don't give me a chapter of your PhD every month, I will cash the checks. You will be paying me." So, within six months, this grad student is able to finish his PhD.
Peter: Yeah, because he has a reverse job. The whole reason they went to grad school was to avoid having a job, and yet he's been tricked into sort of having one.
Michael: We then get a genuinely pretty interesting example of a tax compliance experiment in Minnesota, which I'm going to send to you.
Peter: Okay. “In the context of tax compliance, a real-world experiment conducted by officials in Minnesota produced big changes in behavior. Groups of taxpayers were given four kinds of information. Some were told that their taxes went to various good works including education, police protection, and fire protection.” I can already tell you that one didn't work. [Michael laughs] “Others were threatened with information about the risk of punishment for noncompliance. Others were given information about how they might get help if they were uncertain about how to fill out their tax forms. Still others were just told that more than 90% of Minnesotans already complied in full with their obligations under the tax law. Only one of these interventions had a significant effect on tax compliance, and it was the last. Apparently, some taxpayers are more likely to violate the law because of a misperception plausibly based on the availability of media or other accounts of cheaters that the level of compliance is pretty low.” Okay, okay.
Michael: This is the use of social conformity to get good outcomes. If you think other people comply with their taxes, you're like, “Oh, shit, I should comply with my taxes.” They're doing a little bit of ball hiding as usual with all of the anecdotes in this book. They say only one of the letters produced a significant effect. What they mean is statistically significant. The difference between the people who got this letter, and the control group was $12. They paid $12 more in taxes.
It turns out that with these four letters, when you split people into subgroups, different kinds of professions are much more likely to cheat on their taxes than others. Once you break out people who needed an adjustment the previous year, which might mean that they tried to cheat and got caught, the most effective letter was actually the one threatening them with an audit. That produced 700 extra dollars in tax payments. There is a subgroup for whom this social letter, whatever, produced a $275 increase. The actual lesson here is that when you split people up into groups, different messages work.
Peter: Right, you're not necessarily playing to some broad-based human tendencies. There are different impacts across different demographics and whatever.
Michael: So, again, the only real rule you can pull out of this is it depends. Different messages work for different people, okay. Then, the third example they give us, we're going to spend more time on this one. Are you familiar, Peter, with where the phrase, “Don't mess with Texas,” comes from?
Peter: I guess not.
Michael: This was anti-littering campaign in the 1980s.
Peter: I love that they turned that into just a really obnoxious declaration of loyalty to their state.
Michael: I know. Add some AR-15s and it just becomes general purpose. Basically, the story here is that the Texas Department of Transport was getting very frustrated in the 1970s and 1980s with the sheer amount of roadside littering. So, Nudge says, “Many of the litterers were men between the ages of 18 and 24 who were not exactly impressed by the idea that a bureaucratic elite wanted them to change their behavior. Public officials decided that they needed a tough talking slogan that would also address the unique spirit of Texas pride.
Explicitly targeting the unresponsive audience, the state enlisted popular Dallas Cowboys football players to participate in television ads in which they collected litter, smashed beer cans in their bare hands and growled, 'Don't mess with Texas.' Within the first year of the campaign, litter in the state had been reduced by a remarkable 29%. In its first six years, there was a 72% reduction in visible roadside litter. All this happened not through mandates, threats, or coercion, but through a creative nudge.”
Peter: Okay, I can't get over the fact that anti-littering campaign was turned into a vague threat of violence towards non-Texans. So American. It's just so essentially American.
Michael: Okay, we are going to watch together the first advertisement for the Don't Mess with Texas campaign. This is an ad that ran in 1986 during something called the Cotton Bowl.
Peter: [laughs] Something called the Cotton Bowl.
Michael: Some sort of sporting event.
Peter: I love that you'll talk to any expert about the details of behavioral economics, but you will not google the Cotton Bowl.
Michael: No, no.
Peter: You see those words and you're like, “No.”
Michael: This is not a coincidence, Peter. I refuse to learn anything about sports. This is a choice. This is my choice architecture. This is Stevie Ray Vaughan.
Audio clip: Each year, we spend over $20 million picking up trash along our Texas highways. Messing with Texas isn't just an insult to the Lone Star State, it's a crime.
Don't mess with Texas.
Michael: Do you feel threatened? Do you feel like you're never going to litter again?
Peter: It's actually, I guess they're trying to associate not littering with somehow being tough.
Michael: Yes.
Peter: This is the same basic play as just having the commercial be like flaming gay guys who are littering. [Michael laughs] It's the 1980s and you're watching it in home and you're like, “What the fuck? No.”
Michael: That would have gotten me to watch sports.
Peter: Littering is gay. That's the message that they are trying to send with this.
Michael: I mean, they're actually trying to send something very specific which the book does not acknowledge. I'm also now going to send you a photograph of the roadside signs that accompanied this massive years long public information campaign.
Peter: Okay. [laughs] It says, “Don't mess with Texas.” And then in slightly smaller font, “Up to $2,000 fine for littering.”
Michael: In this PSA, Stevie Ray Vaughn says, “It's not just bad to litter, it's a crime.” In Nudge, they say all this happened not through mandates, threats, or coercion, but through a creative nudge. Well, the Nudge was telling people about the coercion. “This is illegal behavior, and you pay money if you get caught doing it.” The signs didn't just say Don't mess with Texas because no one would know that was a fucking anti-lettering campaign.
Peter: Right. It appears that perhaps the threat of a massive fine, that works. I can see that working.
Michael: This is the other hiding of the ball that they're doing. The first clue that they're doing a little bit of skipping over important context is that they say, “In its first six years, there was a 72% reduction in visible roadside litter." If people stop littering tomorrow, that does not reduce the existing roadside litter. So, when you start looking into this, it turns out that Texas was the first state to have an Adopt a Highway program. This is something where the high school football team or the local health club adopts a mile of highway, some stretch of highway, and four times a year, hundreds of volunteers, go out and clean up litter. This is something that Texas basically came up with, that people will do this as a form of civic pride.
Peter: Because they're just privatizing government services in creative ways. They're just like, “Well, what if we inspired people to take care of a highway.”
Michael: Right. And also, it's also free advertising because you get to put up a sign that says, “This stretch of highway cleaned up by the local Arby's,” or whatever. Whatever you think about this, it's a fairly innovative program that Texas came up with. They did all kinds of public events. In 1987, they had something called the Great Texas Trash Off, where they get volunteers across the state to pick up roadside trash.
The weird thing about the way that they present this in the Nudge book is that there is actually an element of social behavior here. I spent two days reading about littering because I think it's genuinely fascinating behavior. When there is less trash on the road, people don't fucking litter because they think nobody else is littering. Basically, in Texas, it became this rolling snowball where it's like once you get the trash off the road, people are like, “Oh, they don't think about littering.” Whereas if you're driving around, there's fast food wrappers everywhere, you're like, “Oh, fuck it, I can just throw mine out the window too.” So, it did actually play on social conformity.
And one of the most effective anti-littering interventions is actually adding trash cans. This doesn't really work on roadsides, but in cities when you want to get rid of littering, that's actually a pretty fucking smart nudge. If you look around and there's a trash can 5 feet away, you'll throw away your cigarette pack. If there's no trash can within sight, you're like, “Oh, fuck it,” you throw it on the ground.
Peter: Well, isn't sort of everything a nudge? Because I'm trying to think of creative solutions to these types of problems. All of them, you're trying to solve a problem of human behavior, so nearly every solution becomes a nudge. This is just like a word that you can throw on to almost anything and be like, “See? Nudge. Nudge theory.”
Michael: Peter, I have led you to the river. You are saying exactly the thing that we were going to reach with this section. None of these examples are fucking nudges. The grad student who wrote checks for $100, if he didn't turn in his thesis, that's just a fine. He had to pay $100 for not finishing his thesis.
Peter: A fine is just a way of banning something, which they expressly said was not a nudge.
Michael: Exactly. This is just a normal thing that governments do. When they give you a fine for illegal parking, they're not nudging you to park better. The Minnesota tax example is even more baffling to me because first of all, sending people reminders to do something doesn't affect their choice architecture. Whether or not you pay your taxes, nothing about that has changed. The forms have not changed. All they've done is like, “Don't forget to do that.”
But then, the Minnesota tax people sent four letters. The authors of nudge explicitly say that only one of those letters is a nudge because telling people that, like, “Oh, 90% of people paid their taxes,” uses behavioral economics principles, but you could easily cast those ineffective letters as nudges. The one that says, “Oh, pay your taxes, because it goes to schools and libraries," that's framing. That's framing paying your taxes as a form of altruism.
The other two letters where they're like, “Pay your taxes or will bust you," and, "Pay your taxes and will help you,” those are like basically testing loss aversion. It's hard not to look at the Minnesota tax thing and be like, "Oh, they're saying this is the nudge letter because it worked and the other letters aren't nudges because they didn't work." It's totally arbitrary what they are and are not calling a nudge here.
Peter: So, you can either broaden the concept out such that anything that impacts human behavior in any way is a nudge, or you can keep it narrow and maybe more useful, but then it only applies to multiple choice checkboxes, which is so limiting that you couldn't possibly build a book around it.
Michael: Exactly. This is what's so weird about this concept and which comes up in a lot of the academic reviews of this, where it's like, “No one can really say what is and is not a nudge.” What we're talking about with these Don't Mess with Texas signs, they're basically billboards. You drive past a billboard that says, “Don't litter.” Well, does that mean that every single public information campaign is a fucking nudge, like I drive past a billboard that says, "Don't smoke, it causes cancer"? The government is constantly cajoling you into doing better behavior and these are the least effective forms of government interventions. Like, a billboard that says, “Don't smoke, it causes cancer,” does fucking nothing. We've had decades of these. We know that they don't work. What is fucking wild to me is the fact that these campaigns don't work is part of the premise of this book.
Consider the organ donation example. The whole fucking thing was about how, "We've tried cajoling people. We've tried telling people that they should be organ donors. The only thing that works is changing the default on the form." That's why we're here. That's the book. People are not rational actors who you can just tell stuff to and expect behavior change.
Peter: Yeah, it feels like they ran out of examples of choice architecture real quickly. It seems to me like what they're trying to go for is a public policy angle when what they really have is information on marketing.
Michael: They also note in passing that other states did exactly what Texas did. So, Oklahoma tried, and it was, “Don't lay that trash on Oklahoma.”
Peter: Good Lord, you've got to be kidding me.
Michael: I actually think that "Don't Mess with Texas" is a fucking great slogan. There does appear to be some secret sauce with this slogan. It's more powerful than other slogans.
Peter: Well, it's definitely better than "Don't lay that trash on Oklahoma."
Michael: What the fuck?
Peter: So bizarre.
Michael: "Don't Ramshackle our Panhandle." I don't know what it could have been, but ultimately we're just talking about marketing messages. They're talking about, like, “Oh, the Don't Mess with Texas thing was aimed at 18- to 34-year-old men,” which like, yeah, okay, but that's just smart marketing. Find a find a target audience and craft your message toward the target audience. I mean, they do this with breakfast cereals. Is this interesting for designing anti-smoking campaign? Sure, but that's not real policy change. You can't really solve big problems with this.
Peter: Not without getting more homophobic.
Michael: [laughs] Yeah, banning the sports.
Peter: Just a visual of one really limp wrist throwing a piece of trash out of a window. Then, get, Don't litter," on the screen. That's a winner.
Michael: But then, this is one of the weirdest things about this book that I am genuinely shocked that this didn't come up in more of the reviews that were published when it came out, is that the vast majority of examples in this book are not fucking nudges. A huge portion of this book is just them describing public information campaigns. They're like, “An anti-smoking campaign in Montana told teens most teens don't smoke.” Okay, but that's not meaningfully a nudge. There's been public information campaigns about smoking for decades. They have other things about sending text reminders to people to get vaccinated, which it's a nudge in the sense that you're nudging me to remember something. It's the literal definition of a nudge, but it's not a policy of a nudge. They talk about daylight savings time being a nudge.
Peter: How's that a nudge? They change the time.
Michael: They say, "The simple change of the labels on the hours of the day calling 6 o'clock by the name 7 o'clock nudges us all into waking up an hour early."
Peter: Oh, shut the fuck up. When you think about it, time isn't even real. [Michael laughs] I just got nudged into May by the calendar.
Michael: There's also a ton of examples in this book that are just huge policies. So, they have a section toward the end where they talk about this pilot program in North Carolina that paid teenage girls a dollar a day not to get pregnant.
Peter: [laughs] Come on.
Michael: It says, “Greensboro, North Carolina, has experimented with a dollar a day program by which teenage girls with a baby receive a dollar for each day in which they are not pregnant. Thus far, the results have been extremely promising. A dollar a day is a trivial cost to the city, so the plan's total cost is extremely low. But the small recurring payment is salient enough to encourage teenage mothers to take steps to avoid getting pregnant again.” This is actually a pilot program that targets teenagers that have already had a baby because 30% of teenagers who have kids end up having a second kid within two years.
But then, of fucking course, you go to the actual “study,” it's not meaningfully a study. There's no control group. It's basically just an anecdote. It's not that they're paying teenage girls, it's that they have a peer support group every Monday that they have to attend, and they get an actual envelope with seven 1-dollar bills in it when they attend. It's basically a conditional welfare program. You're paying people if they meet certain criteria. This is the same thing as you get food stamps if you apply for four jobs a week. This is just a fucking welfare program. And of course, if you look at actual studies of this of which there have been a decent number, they don't fucking work because $7 isn't that fucking much.
Peter: If I had to guess as to whether a dollar was enough money to make a teenager not want to have sex--
Michael: I know.
Peter: Let's try five bucks a day, something else.
Michael: So, that's the social part of the book. We now get to the money part of the book. Obviously, they have a whole section about how we're weird about money.
Peter: Let's go.
Michael: Remember, this book is written in 2007 and 2008, so there are some events which have not occurred in America.
Peter: To nudge Lehman Brothers out of bankruptcy.
Michael: Exactly. Just a couple of nudges. So, this is from a chapter of the book about nudges for the financial system. They have now published a book called Nudge: The Final Edition in 2020. They add a bunch of stuff about COVID, they updated the original text quite significantly. As you can imagine, this text is not in the updated version.
Peter: Yeah, okay.
Michael: This comes after a section where they talk about how complicated mortgages have become and how these complications end up harming the poorest people.
Peter: Okay. “These factors are exacerbated in the segment of the market that caters to the poorest and highest risk borrowers, the so-called subprime market. As is often the case, there are two extreme views about subprime loans. Some, particularly those left of center or in the news media-
Michael: The news media.
Peter: -label all such loans with the derogatory term 'predatory'.”
Michael: Derogatory.
Peter: [laughs] “This broad brush fails to recognize the obvious fact that higher risk loans will have to have higher interest rates to compensate the people who lend the money. Subprime loans also give people a valuable second chance. Subprime lenders provide funding for any large purchase. More often than not, these purchases help people achieve an American Dream, better home ownership.
Michael: See, people are out here smearing subprime loans.
Peter: I love that this behavioral economics pitch is like, "Everything you knew about the rational actor in economics is wrong." But then, when it comes down to it, they still are on the side of giant banks and their predatory loans. Nothing fundamentally changes in the way they view the world.
Michael: Right. You're getting to the conclusion of this little section. Their fix for this, they're like, “Well, some people want to ban these kinds of loans, but that wouldn't work. That's not libertarian paternalism." They do this a lot where they're like, “That's not even a nudge.”
Peter: I like how we immediately get to, "All policy solutions must be nudges."
Michael: Exactly. So, it was not a nudge.
Peter: Any intervention that's not just a little ticky-tack fucking thing is automatically suspect. Like, "Ooh, that's a lot. That's a lot of government intervention."
Michael: The way they want to solve subprime mortgages because obviously you don't want to ban them because they're good, as we all know, in 2023.
Peter: Of course, of course.
Michael: Their proposal is that banks would have to provide more information. So, you have to give them a report that gives them all of the terms in plain language. They say, “Lenders would have to provide a machine-readable detailed report that incorporates all the fees and interest rate provisions. This information would allow independent third parties to offer much better advice. Our strong hunch is that if this data were made available, third-party services would emerge to compare lenders. Care would need to be taken that the system did not foster collusion, but we think this would be easy enough to monitor and prevent. This data would also make it much easier to shop for mortgages online, which would make the mortgage market more competitive.”
Peter: [laughs] This is just a part of this behavioral economics book that's about how to make predatory subprime loans work for everyone.
Michael: Yeah, exactly because we don't want to deny it to them because it's better home ownership, Peter.
Peter: This is dark. How did this get so dark so far?
Michael: I know right. [laughs]
Peter: I thought we’re having fun. I feel like economists have this tick in their brain where a lot of people look at various elements and machinations of the financial system and they're like, “Wow, that looks predatory and unfair, right?” And economists are like, “Actually it's great.”
Michael: Also, as you alluded to earlier, they're describing this as a nudge. But what they're actually talking about is a legal requirement for companies.
Peter: It's just a regulation. It's just a bank reg. I don't really understand what-- we're obviously in a place where 'nudge' has lost all meaning and that happened right after the—
Michael: Texas.
Peter: Well, I thought the organ donation felt the last time I really understood what a nudge was. Now, I feel nudge is now its colloquial use is what we're doing, where anything that just is a little push on human behavior is a nudge now.
Michael: But then, what's so fascinating to me is they have a whole section earlier in the book about how oftentimes people think that giving people more choice is more freedom. You can have 41 different healthcare plans, but that doesn't work because most people just do the default and people get overloaded really quickly.
Peter: You need three.
Michael: But then, when we get to this section of the book, they're like, “Oh, we should give people all these choices so that they can make the right decision.” But the whole premise of behavioral economics is that people fucking hate doing this shit. We kind of know that the people who are being exploited by these mortgages are not people who have a lot of knowledge or time or interest in getting into the fucking details.
Peter: Imagine mortgages, but with more middlemen.
Michael: Exactly.
Peter: That's the pitch.
Michael: If you're going to do a fucking bank regulation that of course all the banks are going to hate, why wouldn't you just do something that forces them to actually offer people something good or like you can't do predatory shit?
Peter: No, that's not a nudge. That's not a nudge. Nudges only from now on.
Michael: The whole like next three chapters, they do the same thing for student loans. They're like, “Student loans have gotten out of control," and their solution, of course, is to make the forms easier and integrate it with your taxes.
Peter: That's the problem with student loans, is that the forms are a little too convoluted.
Michael: Need to make it easier. They then have a credit card thing. Credit card spending is out of control. Also, credit card companies have to issue you a yearly annual report that is "all the fees you paid this year."
Peter: I don't want to constantly be drilling down into what the fuck is a nudge even. [Michael chortles] This is just a disclosure regulation, which is not a nudge, because what they started off with was, "All right, we're not penalizing anyone." That's not a nudge. But what a disclosure regulation actually is, is a requirement that in this case, the banks make these disclosures or else they will be penalized.
Michael: It's experienced as choice architecture for consumers. But behind it is a vast bureaucracy of coming up with these laws and then presumably enforcing these laws too of disclosure requirements.
Peter: It seems like they're trying to include you having more information about your choices as a nudge.
Michael: Sure.
Peter: It might fit their strict definition, but it does seem like a very different concept than, “This food is at eye level when you're ordering.”
Michael: Totally. Nudges and wokeness, two things that people have strong opinions on, but no one can say what the fuck they are.
Peter: It just seems even if you want to grant that there is some conceivable utility here, you're still only talking about 1% of what the government even ostensibly does.
Michael: This gets us to-- you knew it was coming. The chapter on climate change.
Peter: Oh, fuck yeah. We're going to nudge our way to having ice caps again? Is that the point?
Michael: Yeah, we're closing holes in ozone layers. All right, so here's their little introduction to this chapter.
Peter: Finally, someone proposing small, incremental changes to address climate change.
Michael: It's time to do the small stuff.
Peter: Okay. “Most of the time, governments seeking to protect the environment and to control the harmful health effects of pollution have gone well beyond a nudge, and their steps have not been libertarian.”
Michael: Not libertarian.
Peter: “Typically, regulators have chosen some kind of command and control regulation by which they reject free choices-
Michael: Reject free choices.
Peter: -and markets entirely and allow people little flexibility in promoting environmental goals. In the United States, National Emissions Limitations imposed on major pollution sources have been the rule, not the exception. Such limitations have sometimes been effective. The air is much cleaner than it was in 1970. Philosophically, however, such limitations look uncomfortably similar to Soviet style five-year plans in which bureaucrats in Washington announced that millions of people have to change their conduct in the next five years.”
Michael: Where's the architecture in all this?
Peter: Okay, so I love, sure, the air is cleaner, but philosophically.
Michael: [laughs] I know. I know. This is my favorite shit. They're like, “This thing that isn't a nudge worked like gangbusters but what if it was a nudge?”
Peter: Also, most regulations are not targeted at causing the common person to change their behavior directly. Most regulations are just targeted at industry. That's how environmental regulations work. We have clean air because of emission standards.
Michael: Yeah, because of the Clean Air Act in 1970, and punishments, criminal punishments for people who pollute. Command and control shit, it whips.
Peter: This whole concept is like we really want to preserve the illusion of freedom. The whole choice architecture idea is built around the premise that the things that we perceive to be our choices are not really our choices. We're influenced by all this stuff that we can't quite detect. When you lead with that, the idea that it's philosophically, morally important to preserve your right to choice is less compelling because you've already admitted that choice is an illusion in many respects.
Michael: Exactly.
Peter: A lot of our political discourse now revolves around bullshit consumerist debates like gas stoves. These things that no one gave a shit about and you wouldn't even notice in a vacuum become the locus of these fights about “choice.” It's all just sort of a proxy fight about these abstract cultural values, and this is sort of making the same error. The idea that our choices about these things are of the utmost importance and we must protect the concept of choice in some way, it seems inherently silly to me and at odds with their basic thesis.
Michael: This is the fundamental contradiction at the heart of this mismatch between the problems they are trying to solve and the solutions they are proposing. The climate change chapter leads up to this solution. It says, “We can now sketch an initial low-cost nudge for the problem of climate change. The government should create a greenhouse gas inventory requiring disclosure by the most significant emitters. The greenhouse gas inventory would permit people to see the various sources of greenhouse gases in the United States and to track changes over time. Seeing that list, states and localities could respond by considering legislative measures. In all likelihood, interested groups, including members of the media, would draw attention to the largest emitters. To be sure, an inventory of this kind might not produce massive changes on its own. But such a nudge would not be costly and would almost certainly help.” I went into Rich Dad voice again.
Peter: I'm going to try to orchestrate my thoughts about that. First of all, not a nudge. It's just a disclosure regulation. It's just a disclosure.
Michael: It's a law for companies. It's not a nudge.
Peter: Should go without saying this is an inadequate response to climate change. We have a good sense of who the polluters are. Disclosures wouldn't give us a ton more information than we already have.
Michael: We don't know the specific amount they're polluting, Peter. If we knew the specific amounts--
Peter: Right. You think the average person looking at like, “Oh my God, that many metric tons?” No one fucking knows what that means.
Michael: Loss aversion, Peter. People don't want to lose their lungs. It's actually behavioral.
Peter: So, you-- Oh, man, hold on. What was my thought?
Michael: I love that you're melting down at how shitty this idea is.
Peter: Even if you orchestrated this such that there were disclosure requirements, and then people are like, “Okay, Exxon is polluting, which we only know because of this disclosure requirement-
Michael: We learned it.
Peter: -we are now going to implement regulations." Whatever regulation they implement would no longer be a nudge because it would have to be a fucking emission cap or something like that.
Michael: Exactly. So, why don't we just fucking regulate them then?
Peter: Exactly. All they're doing is saying, like, “If we gave people more information, then maybe we would implement the policy that we all know we need to implement.”
Michael: Yes, yes. It says seeing that list, states and localities could respond by considering legislative measures. What are the legislative measures? Is it to put a cap on how much you're allowed to pollute? Why don't we just do that federally? Why would we wait until West Virginia reads a fucking report and it's like, “Oh, it turns out there's pollution coming from the coalmine.” We're just kicking the fucking can down the road ultimately.
Peter: Yeah. They start off with this definition of nudge as something that is about choice architecture, and they move into using it colloquially to mean a little thing that might impact people's behavior. That sort reveals the project, which is, never do a large policy thing.
Michael: Exactly what you are saying, leads us back to organ donation. When I said earlier that the organ donor example is doing a ton of work for this concept and for this book, and is the paradigmatic example of a nudge, I meant that derogatorily. To review, there's countries that have opt-in systems where you have to tick a box to be an organ donor. There's countries that have opt-out systems where you tick a box if you don't want to be an organ donor. And they have very different rates of the number of people who are organ donors. What they don't have is differences in the number of actual organs that get donated. Organ donation systems have almost nothing to do with the percentage of the population that ticks a box on a fucking form.
The country with the highest rate of organ donations, like actual functioning system of organ donations is Spain. When you look at Spain, what you find is not one weird trick. You find decades of dedicated reforms. Spain changed from an opt-in to an opt-out system in the late 70s, but the number of actual donations didn't increase until the late 80s because there was basically no capacity. There were only surgeons in Madrid and Barcelona who could do these transplants. So, they had to do a bunch of training for doctors in regional hospitals. They created a national registry that had been done at the regional level before. They had to centralize everything.
They have this really well integrated into end-of-life care now. So, if you are diagnosed with a terminal illness, someone will come and visit you and be like, “Hey, have you thought about saving somebody's life after you're gone? Let's do scans to find out what organs are still functioning.” There's dedicated intensive care units, there's dedicated staff. And importantly, there's constant surveillance and improvement. Spain has gone through three waves of improvement. They look at, like, “Okay, what are the existing barriers in the system? How can we get this even higher?”
You have to look at a system. You have to dedicate funding to it. You have to take the specifics seriously. Maybe that's boring or something, but that's how you solve problems. I'm sorry, it requires money. It requires expertise. It requires not stripping them of context, but putting the context back in.
I read actually quite a bit about this. This is super fascinating. One of the best articles I read is called Assessing Global Organ Donation Policies: Opt-In vs Opt-Out by Harriet Rosanne Etheredge. At the end of her article, Harriet notes that America actually has a really high rate of people ticking the box to be organ donors. It's more than 60%, which is way higher than other opt-in countries. The barriers in America are not related to getting more people to sign up as organ donors. This is a healthcare systems project. There's a whole chain of events has to take place for organ donations to happen. There are problems with the other fucking links in the chain. Since this fucking book came out, a lot of countries have actually switched from one system to the other, and they have seen no improvements.
Peter: This reminds me of the climate example where these guys want to come up with this fucking clever little fake smart guy solution to a problem that at bottom needs resources.
Michael: The other reason I really wanted to talk about this, and I don't know if this counts as a twist, but as I said, they updated Nudge in 2020 with Nudge: The Final Edition responding to critiques updating the text. They kept the chapter on organ donation, but they've now made it this weird scolding chapter about how everybody misread the book in the first place. "We never said that America should switch from one system to the other." They say, “To our dismay, in the years since, several countries, including Wales, England and Germany, have considered or made the switch to presumed consent.” So, it's like, “You rubes, you children, you read our book and you pass this policy when we never even said that's what you should do.”
Peter: Right. They were nudging us in that direction, to use a colloquial term.
Michael: I am going to read the section of their book where they present the full context. To their credit, they did in fact mention in the original book that you can't only do the opt-out system. They added some caveats. This is the full paragraph where they talk about the caveats, the weaknesses of their plan.
“So far, presumed consent looks awfully good, but we must stress that this approach is hardly a panacea. A program that successfully gets organs from deceased donors to needy transplant recipients requires a complete infrastructure. Currently, Spain is the world leader in developing that infrastructure, achieving a donation rate of nearly 35 donors per million people, compared with a bit more than 20 donors per million in the United States. The default consent rule therefore is not the only thing that matters. Still, careful statistical analyses find that, holding everything else constant, switching from explicit consent to presumed consent increases the donation rate in a country by roughly 16%. Another analysis obtains a slightly smaller but similar effect. Whatever the precise figure, it is clear that the switch would save thousands of lives every year.”
We never said you should make the switch. We merely said that switching would save thousands of lives.
Peter: Right. This reminds me, there's a thing on investing social media, where people are like, “Buy this pump and dump stock,” and then at the very end of it's like, “This is not financial advice.”
Michael: Yeah. "Don't do the thing that I'm very obviously telling you to do."
Peter: "I'm telling you that this would rule, and it is absolutely the best thing to do. I'm not technically telling you to do."
Michael: This, to me, is also the fundamental intellectual project of the book, where if updating the organ donation system requires a complete overhaul, then why is there a chapter about it in your book about little technical tweaks?
Peter: Why is your book called Nudge?
Michael: Why is your fucking book called Nudge, dude? This ultimately is an example against your thesis. The entire selling point of the book is that we can achieve great, significant changes. They say this over and over again. You can achieve big changes without getting bogged down in politics, without spending a bunch of tax money. And then, you look at the specifics and they're like, “Oh, yeah, you have to get bogged down in the politics and spend a bunch of money to do this.” The metaphor that I keep coming back to is, remember how cereal ads used to have part of a complete breakfast if you eat a bowl of Lucky Charms with a glass of orange juice?
Peter: Right, with all of the other nutrients that you actually need.
Michael: Right. If you eat it with healthy stuff, then it's healthy, which is true of literally everything. It's like, “Oh, well, if you do this with huge structural, costly reforms, it'll work.” All you're doing ultimately is advocating for broad structural reforms and super, just bread and butter policy making. That's utterly banal, but it's like you've reached that conclusion between the lines of your book explicitly rejecting and arguing against that approach.
Peter: Yeah, there's a problem with these concepts where if you zoom out enough, they're correct, but not very useful. If you zoom in, you start seeing that they're not really correct in the micro. They're not explaining a lot. I see that here too where it's like, "We have this concept and it might be a useful way to process certain types of things," but it's really just a vocabulary. It's just a way of sort of simplifying how we talk about certain things. You can't spin that into something that can solve climate change.
Michael: Right. But this also speaks to what I find so frustrating about the “debate” over the book when it first came out. There's some weird conservative objections to the book where they're like, “Nudging is totalitarianism.”
Peter: I love this because it's such a conservative thing where some technocratic liberal is like, “What if we just did the smallest little intervention?” And conservatives are like, “You are Joseph Stalin.” This is why you should just propose holistic regulations or legislation or whatever the fuck. You can't compromise with these psychos. Don't bother with this technocratic bullshit.
Michael: But then, this is what frustrates me so much is because this was presented to the public as a left versus right, nudging versus nudging as totalitarianism debate, they sort of missed what I believe to be the much better critique. I don't have a philosophical problem with nudging. My problem is they don't fucking work and they can't solve the problems that we have. That critique of nudging didn't really appear in anywhere prominent for another 10 years. Basically, at this point now, there's been a number of meta-analyses of various nudge-- There's 51 countries have these nudge units. So, there's these huge meta-analyses of all the things that they've tried, and every single one of them finds tiny effects.
This is from an abstract one of them. It says, “Recent studies have found that providing households with information on their electricity usage compared to that of other households, a classic nudge, reduced electricity consumption by 2% or less.” There was a test where they sent text message reminders to high school students reminding them to apply for colleges. 68% of kids who got nudges applied for college and 65% of kids who didn't get nudges applied for college.
Peter: I'm impressed that it's 3%. I'm sorry, but to be like, “Oh, shit, right, I got the apply for college text.”
Michael: It's fascinating to me that they start the book with this thing of cafeteria nudges and where you place food, and "It can have an effect of up to 25%." No, dude, there's been a million of these fucking cafeteria nudges. Some of them do actually affect kids' behavior, but they affect the behavior of taking fruit and vegetables, not eating fruit and vegetables. That's the hard part, is getting kids to actually consume this stuff. Once you boil it down to what the kids are consuming, it's 0.1 of a unit more. It's a little slice of apple extra.
Peter: This is why this is so useful in a marketing framework and so useless in a governing framework because when you're doing marketing shit, getting 2% or 3% or more purchases is massive. You're driving revenue. But that's because you can't mandate behavior when you're selling someone something. When you're the government, you can just tell polluters to stop polluting. You can make it a crime. You have all kinds of tools at your disposal. You are not limited to marketing gimmicks.
Michael: Right, exactly. You could just take the chocolate milk out of schools.
Peter: No cookies. Bang.
Michael: Yeah. There's also a huge problem of inconsistent effects. A huge percentage of these nudge projects don't replicate. We've now had 15 years of studies on these, and at best, they have a 5% effect. And most of them are short term. There's no data on this because the original fly in the urinal study is basically fake. But the flies in the urinals, after a while, you just get used to them and you don't notice them anymore.
Peter: I'm going to go back to my 360 peeing strategy.
Michael: [laughs] The centrifugal pissing strategy, yes.
Peter: I guess that if you reduced the scale of the problems that the book implies it might be able to solve, then you can sort of view it as, "Here's a low-cost intervention that will produce small but possibly meaningful results in certain situations." But when you pitch it as, “All right, check out my climate change solution. What if you gave people of information and then maybe hopefully, they'll do something with it?", all of a sudden, you show how insufficient this framework is for dealing with the problems that we actually want to solve. Maybe this concept is part of an architecture of solutions in how to make kids eat slightly healthier or whatever. But it can't be like the thing that Barack Obama is using as his guiding light for eight years of being the President of the United States.
Michael: This is basically where we're going to stop for this episode. Next episode, Peter, we have not gotten to the bad parts of the book yet.
Peter: Hell yeah. I'm pumped.
Michael: Really shitty parts. They try to solve other problems. I'm going to end with a teaser quote, put yourself back in 2007, 2008 mindset, Peter.
Peter: I'm very dumb. My hair looks like shit, okay.
Michael: It says, “We recognize that many people, including members of many religious groups, strongly object to same-sex marriage. Religious organizations insist on their right to decide for themselves which unions they are willing to recognize with attention to gender, religion, age, and other factors. We also know that many members of same-sex couples want to make lasting commitments to one another. To respect the liberty of religious groups while protecting individual freedom in general, we propose that marriage as such should be completely privatized.”
Peter: Yeah, sure, whatever.
Michael: So next time, we're going to talk about the bad stuff.
Peter: Going to be irritated thinking about that. Fucking gay marriage discourse, it was such a bummer.
Michael: Oh my God, Jesus Christ.
Peter: It's harkening to this same problem. Like, as soon as you identify a problem where there is political will on both sides, this is useless.
Michael: You can't nudge. You can't trick people into going against what they believe to be their core religious beliefs.
Peter: Our strategy for nudging gay people back into the closet.
[laughter]
[If Books Could Kill theme music]
[Transcript provided by SpeechDocs Podcast Transcription]