If Books Could Kill - "Nudge" Part 2: Mr. Nudge Goes to Washington

Episode Date: May 19, 2023

The Nudgening.Support us on Patreon: https://www.patreon.com/IfBooksPodWhere to find us: TwitterPeter's other podcast, 5-4Mike's other podcast, Maintenance PhaseSources:David Gal's "Behavioral Winter"The i-frame and the s-frame: How focusing on individual-level solutions has led behavioral public policy astrayWhy Is Behavioral Economics So Popular?Applying Behavioral Insights To Intimate Partner ViolenceWhat Counts as a Nudge?The Power of Nudges, for Good and BadAllowing Patients to Waive the Right to Sue for Medical Malpractice: A Response to Thaler and SunsteinObama’s ObamaBehavioural Insights Applied to Policy - Country Overviews 2016The opioid crisis and nudge theoryOn the Supposed Evidence for Libertarian PaternalismThe effect of charter schools on charter students and public schoolsRe-election Strategy Is Tied to a Shift on SmogIs the White House delaying too many health and safety rules?Down the Regulatory Rabbit HoleWhy regulations are good — againCass Sunstein: The Obama Administration's Ambivalent Regulator Thanks to Mindseye for our theme song!

What are we doing for zingers for part two? Yeah, I was thinking Peter, I don't know that we can. I don't write it doesn't make a ton of sense. Michael, Peter, what do you know about the second half of the Nudge book? Thank you for a joke. Even the last session. I feel like we need something else, something else not the usual format. Something about getting nudged into a part two. Wait, do it, do it, do it, do something.

Do say dance for me. Yeah. Okay, have a look. Okay, Peter. Michael. How do you feel about coming back for part two of our Nudge episode? Yeah, I actually didn't want to do it initially, but then you manipulated me using choice architecture, and here we are. [♪ OUTRO MUSIC PLAYING [♪

So today we are talking about the rest of Nudge, improving decisions about health, wealth, and happiness by Richard Faler and Cass Sunstein. Peter, do you wanna give us a little previously on? Yeah, yeah. So in part one, we learned what a Nudge is. They initially described it as something that impacts the choice architecture. Like when you order things on a cafeteria menu,

a certain way it impacts a person's choices. And then they gave other examples, which became steadily, less and less like what they initially defined as a nudge to the point where I think we both lost track of what it actually means. And I think we sort of landed on the basic idea that what they're really trying to do is endorse like a framework for policy analysis where nothing large ever happens. Yes.

And instead, you are only ever doing tiny little incremental nudges here and there rather than for example regulating coal emissions. Yes, stuff. They don't want the government to do government stuff. Right. So this is our first two-part episode. There are a couple reasons why I wanted to do a deeper and more detailed dive into this book than other ones we've covered

that are maybe a little bit longer, like maybe more best-selling or whatever. The first reason is I'm doing this as a form of penance because when this book came out, I was super nudge-pilled. Oh, no. To the point where I gave a presentation at work on the nudge concept and like how

good it was. I was 26 years old. I was just starting at my first job in human rights and international development. And like I had a lot of confidence and not very much knowledge. And like I really thought that this stuff like a lot of people was going to be very useful for international development and human rights and like advocacy campaigns and like how to solve poverty. Like, I really thought this was going to be a very important tool. And then over the subsequent 10 years, especially as I spent more time in the developing world and like realized what the actual problems and challenges were, I became really radicalized against this concept. And this kind of like, oh, this, this technical tweak

can solve this like complicated social problem. That's another reason why I wanted to do this as a two part episode is because I wanna talk about what happened to this idea and the authors after the book came out. So one of the aspects of Nudge that we didn't cover last episode is throughout the book, they not only describe nudges as good policy,

they also describe them as good politics. Everyone is in their little ideological silos, and because nudges are technical and procedural, they offer a third way forward. The final chapter of the book is literally called a real third way. Right. So the best example of the kind of political analysis that they're doing in the second half of the book

is the chapter I alluded to at the end of last episode. This is the chapter where they take on the tricky debate over same sex marriage. Goddamn it, this is going to piss me off. So I am going to send you the first couple paragraphs of this chapter. We now turn to the very old institution of marriage and explore some of the questions that have recently been raised about marriage and same sex relationships. We begin by offering a proposal that is highly libertarian, that would protect freedom, including religious freedom,

and that should, in principle, prove acceptable to all sides. 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. Under our proposal, the word marriage would no longer appear in any laws and marriage licenses would no longer be offered or recognized by any level of government. The state would do its business while religious organizations would do theirs. We would eliminate the ambiguity created by the fact that the word marriage now refers both to an official legal status and to a religious one.

Fixing marriage. Okay, gay folks. I have a solution for you. What if we destroyed marriage altogether rather than allowing you in through our club? What if we burned the club to the ground so that no one could be here? Would that make you feel accepted by society? I fucking love this because, again, they're trying to do political analysis, right? We're taking the temperature down.

What are we going to do? We're going to destroy the institution of marriage. Something that first of all would piss off gay people because you'd rather destroy this institution than let us into it. And also would piss off religious people. Of course. Because they want to protect the institution of marriage

and they like the fact that their religious thing gets state recognition. Like this is the worst proposal. And in terms of like, oh, I have a solution that everyone would love. It's like, no, no, this is actually the opposite of that. This is genuinely something that everyone would hate. Just because you have like forced massive concessions

from both sides, does not mean that you have found a workable political solution. Exactly. This is the worst politics. So their actual plan is they want to protect all of the, you know, estate rights and inheritance and all those sort of legal stuff that comes along with marriage. Okay.

But they're going to shunt that into a new institution called like Civil Unions or Domestic Partnerships or whatever. You remember a couple of states did this? They then bring in some sort of liberal bonafides, right? So they say most people who enter into marriage contracts don't investigate the divorce laws of their state, right? Because like I'm not gonna get divorced. And it turns out that a lot of divorce laws

in a lot of states are actually like really exploitative, especially to women, right? So a lot of women get fucked over in divorces. So this institution that they are creating from scratch, the new marriage is also essentially going to include a pernuptual agreement as part of the marriage contract. I love how they're like, we're solving the gay marriage debate. And then what they propose is just like

five separate terrible policies. It's also darkly funny to me because it's like they're proposing this not as ideology, but as politics, right? But it's like, okay, we're gonna destroy the institution and we're also going to empower women and make it basically easier for women to get decent benefits in divorces. Is the religious right gonna love this?

Right, that's what's so telling is like if you just proposed the Let's Reform Divorce laws because they're unfavorable to women in isolation, that would get shot down by the right. And that's like step three of this convoluted plan that they think is the apolitical solution to gay marriage. Exactly. They're like, let's all sit around the table and be adults about this guys. It just goes to show how little they understand conservatism that they're like, and let's throw in reforms that benefit women. Right. Like why not? This to me illustrates the the limits of this entire behavioral economics approach, right?

Because they pepper this entire chapter with behavioral economics, quote unquote, insights, right? They're like, people choose the default option, right? And people have these biases, these ways that they're predictably irrational, where no one thinks they're gonna get divorced. So they don't look up the divorce laws, right? And that's kind of a problem for society,

because all of a sudden people are in these legal contracts that they haven't really investigated in advance, right? So it sort of seems academic and savvy. Yeah, yeah. But then much more traditional aspects of human psychology, they're totally uninterested in, such as bias. People are biased against gay people. They might say that they want to protect the institution of marriage, but they don't actually want that. They want gay people to continue to be excluded

from establishment institutions of American life. And as well as completely ignoring ordinary psychological principles, they also ignore history. Conservatives were against abolishing slavery. They were against giving women the vote. They were against women joining the workforce. They were against allowing interracial marriage, conservatives object to social progress. Also, that is like the definition of conservatory. Right, this is, they're very proud of this. Right, this isn't some ancillary thing that you can work around.

Like what sincere opponents of gay marriage actually wanted was the maintenance of a second class status for gay people. You cannot wiggle your way out of that. And also what's so frustrating about this approach too is, you know, as we talked about last episode, a lot of these like little behavioral principles that they cast as gospel are actually quite conditional, right? They apply in some cases and not in others.

Like, that is co-abeyous loss, aversion, all these things. What this amounts to is boiling all of human psychology down to like seven or eight psychological principles, right? They always kind of refer to the same things. It's like a really shallow approach. And it's a shallow approach that pretends to be empirical. So speaking of which, the other argument that they make

for why nudges are good politics is that they're non-ideological. Sure. Right, things like changing a form at the DMV or moving the desserts at the cafeteria, these don't have obvious left versus right valence. So one of the things they say in the intro is they say, Democrats want bigger government and Republicans want smaller government and we want better government. So all we're trying to do is identify places in America where we can apply these technical fixes

without getting bogged down into like a big political fight, right? So after we have solved same-sex marriage, we then turn to the US healthcare system. Put yourself in a 2007-2008 mind-space peter. The US healthcare system, pre-Obama care. Think of all of the problems with the US healthcare system, all the challenges we face in trying to fix it. Now, entirely within the past. Now that everything is perfect, this is the first couple paragraphs

where they lay out the problems with the healthcare system, and then they propose a counterintuitive solution to fix them. Okay. Every election cycle, presidential contenders unveil plans to make healthcare coverage available to the tens of millions of Americans who lack health insurance. The candidates decry our government's failure thus far to implement an effective plan. Whatever happens in the long run, such plans are hard to design for a simple reason.

Healthcare is really expensive. It is expensive in part because Americans want access to all the best services, doctors, hospitals, prescription drugs, medical devices, and nursing homes to name a few. Of course, we can try to keep healthcare affordable on our own by maintaining healthy lifestyles and by buying only the healthcare products and services that we need. We can save money by visiting the doctor no more often than necessary, and if we purchase insurance, we can choose a plan that covers only catastrophic illnesses instead of coverage with low deductibles. We have choices.

But there is something that every health care customer in America is forced to buy, whether she wants it or not. The right to sue the doctor for negligence. God dammit. God dammit. Oh my God, that caught me off guard. I was going to skip this chapter, but there was like, wait a minute, my co-host is a lawyer, and I wanna make Peter Meltdown.

What? What are your ideas for this? I forgot that 15, 20 years ago, one of the main right wing talking points was that malpractice suits are driving the cost of health care. This is this whole chapter is laying out the fact that we are forced to buy the right to sue our doctors. So they say the principal claim here is that patients and doctors should be free to make their own agreements about the right to sue doctors. If patients want to waive the right to sue, they should be allowed to do exactly that.

This increase in freedom is likely to help doctors and patients alike, and to make a valuable, even if modest, contribution to the healthcare problem. All right, there's like so much packed into this that my brain is just sort of loses control. I wish that I could like cleanly articulate the feelings that it makes me feel, but I get overwhelmed. It's so frustrating to hear people talk about liability from like a cost

perspective. Oh, God, I know. Because like, yes, it's an imperfect thing to be like, well, you can sue them if they hurt you. But the alternative is always like, well, you can't. The idea that that is just like, well, can't we all agree? Like that bad? No, no, fuck no. They then compare this, they make an analogy to haircuts. They say, suppose for example,

that people had the right to sue their hairdressers if a haircut went badly wrong and that the cost of this insurance raised the price of haircuts by $50. After someone who had received a particularly gruesome haircut when a $17 million judgment, would you be interested in saving $50 per haircut to give up the right to sue if you got a bad one?

Okay. Would you be angry if you were prevented from doing so? Okay. Okay. I think it's telling when you have to create an analogy that A is like facially absurd. Like when your hair cut is bad, it grows out. Yeah.

And then you're talking about malpractice where it's like walking is harder forever because the doctor fucked up, right? Like it's an awful comparison. But even if you eliminated that critique, the analogy they use is a $50 increase in haircuts. So basically doubling or tripling the price of a haircut. This is funny because for most women's haircuts, this is actually negligible,

but for men's haircuts, you're tripling it. There's a place down stairs that does it for like 17 bucks. So for me, I'm like, there's like a 400% increase. You know, there's also a $20 haircut place in my building, and I've always just been like, no, I don't know what goes on in there, but it can't be good. I'm gonna go spend 40. Oh, my haircuts are unbelievably bad, Peter.

My head is tilted like a golden retriever at all times. That's not even. So to make this case, they have three arguments. The first argument is that all of the malpractice lawsuits in the United States healthcare system are spiking healthcare costs. So they say, these lawsuits cost a lot of money. Estimates range from $11 billion to $29 billion per year.

Exposure to medical malpractice liability has been estimated to account for five to 9% of hospital expenditures. Of course, these particular figures are controversial and may be exaggerated, but no one doubts that many billions of dollars must be paid each year to buy insurance and to fend off liability. Ugh.

This is also this weird thing where they're like, this is how big the problem is, it might not be that big. But anyway. Also, like healthcare spending is like, in the trillions of dollars. Yeah, it's four trillion a year. Yeah, in like a vacuum 10, 20 billion

might seem like a chunky number, but nope, it's not. And I am generally speaking, a defender of malpractice suits, but if they truly doubled the cost of health insurance, then I think we could have a conversation, sure. So this leads to their second argument against medical malpractice liability.

They say that the system is flooded with frivolous losses. We all know it's too easy to sue each other in America because that lady sued McDonald's. That's right. We all know it's too easy to sue each other in America because that lady sued McDonald's. That's right. We all know that there's no details that have emerged about that case since then to make it slightly more complicated.

So they're talking about how the argument for medical malpractice liability is that it deters doctors for making mistakes. Yes. And they say the deterrence argument is undermined by the stunningly poor fit between malpractice claims and injuries caused by medical negligence. To put it bluntly, most patients don't sue even if their doctor has been negligent,

and many of those who do sue and end up with favorable settlements don't deserve the money. What? What are they basing that on? Don't deserve the money? They're the word they're just speaking words into the world, just speaking just great words on paper. And then the third argument is basically what happens throughout the entire medical system when everybody's afraid of getting sued. They say, many doctors practice defensive medicine, ordering expensive but unnecessary treatments for patients

or refusing to provide risky but beneficial treatments simply in order to avoid liability. So first of all, I just, maybe this is a little too in the weeds, but if you allow for waivers of liability, then every doctor would refuse to give care unless you signed a complete waiver of liability. This is literally just magical thinking, right? There's absolutely nothing other than some loosely correlated numbers and concepts

floating around in the void. And they're like, well, what if this worked really well? So this chapter is so bad that there's an entire academic article responding to it. So I'm talking about it's called allowing patients to wave the right to sue for medical malpractice, a response to Thaler and Sunstein. It's by Tom Baker and Timothy Litten. So this is a fascinating article and the reason I wanted to talk about this was not just a dunk on this terrible chapter of their book, but also to talk about medical malpractice and the fact that a lot of these myths are still around now.

So the first thing the authors of this paper note is that like, of course, there are costs to the medical malpractice system. There's also benefits. Right. Hospitals dedicate significant resources to understanding why mistakes happen and trying to avoid them in the future. Medical journals have thousands of articles on like how to improve surgical procedures. This is like a major activity of the medical system.

Yeah. Do we wish that that was improving only for patient care and like altruism and not to avoid lawsuits? Sure. But we also know that when people are punished for bad behavior, they will act to avoid the bad behavior. So it's weird to just talk about this. It's like we should remove this form of accountability.

Well, that's why they use that quick line about person getting a reward that they don't deserve. Because if you hand wave away the utility of this stuff, then you don't have to worry about the consequences of removing liability for doctors, right? Well, another thing that really bugs me about the hair salon example is that it smooths over the fact that like you're going to get a $17 million payout for a bad haircut. You know, juries and judges are looking at these cases, right?

And you have to assume that thousands of people are looking at like, oh, like I stubbed my toe at the doctor's office and I get $10 million. It's like this just isn't human behavior in any meaningful sense. And what they point out in this article is that if you actually look at the specifics of medical malpractice lawsuits, the median payout is $150,000, which is not terribly much, less than 4% of payouts are $1 million or greater. And the vast, vast, vast majority of those large payouts are like permanent grave damage, right? These are people who are paralyzed, these are people who cannot see,

these are people who like have the wrong limb amputated, like these are grievous harms. And so the idea of just like, oh, people don't deserve it, like that's not based on anything. Right. There's a reason that the tort reformers, including in the MedMal context.

Ooh, MedMal. Ooh, yes, warrior. Focus on these outlier big payouts, right? Because you will just as often find people who win, but don't get any money, or don't win due to some technicality, or, you know, there was some doubt as to the doctors negligence, etc., etc. People get screwed over all the time and it's just not a serious perspective and it's provably driven by industry interests in almost every case, right? The people who are

aggressively pushing to limit med mal liability, guess what? It's not interested academics, right? This industry players who would directly financially benefit. There's also the broader systemic effect. So this thing about defensive medicine and doctors ordering a bunch of scans because I'm afraid of getting sued

is basically an urban legend. It's something that doctors will often say. They're like, oh, I have to order these scans because I'm getting it sued otherwise. But the main reason that doctors order extra scans in the United States is because they get paid. We have a fee for service model. That's the thing is I've had a doctor that, like, no matter what small problem you went in with, like, you would get a battery of tests.

It's so obvious that that's the primary driver of doctors like that, assuming that there are some decent population of doctors who are sort of overemphasizing tests. The literature on this is actually really interesting because it is clear that the US does way more scans and way more screening and way more stuff of this nature than other healthcare systems.

But we also actually have better cancer survival rates than other countries. And we're more likely to catch rare cancers. And there's quite a bit of, I think, good faith debate about whether we do too much screening and treatment in the US versus other places maybe doing too little. That's fine. But it's not even clear at the most basic level that we do practice defensive medicine. This is like a big outgrowth of Econ 101 sort of thought, which is, these guys will identify a theoretical problem that economics might predict, and then just proceed as if it is a real

material problem that they have actually identified in the real world. There's also a legal standard thing here where all this stuff about defensive medicine is actually totally separate from the medical malpractice thing because you can't sue a doctor for like ordering an MRI when you didn't need one or doing a blood test that comes back negative. Well, no, but they're saying the opposite, right? They're saying that the doctor is concerned about

being called negligent because they didn't order the MRI. That's just nuts, though. Like you can't say that doctors are ordering extra scans because they're afraid of getting sued and also they refuse to order scans. Like that doesn't make sense. And the legal standard for negligence is somebody didn't do a test

that was required by like the main professional body in his field. So if you come in and you say like, oh, I have a lump in my breast and your doctor is like, oh, don't worry about it, go home. That's just a straightforward case of medical negligence. That's why we have these laws. Yeah, I didn't realize that that was the heart

of their argument and that is very stupid. It's very stupid. Yeah. And then the other thing that they, and that is very stupid. It's very stupid. Yeah. And then the other thing that they note is that like, there's no evidence that this would actually reduce healthcare costs, because we don't pay for fucking healthcare. It's not like you're looking at like, oh, my knee replacement could be at this hospital for $8,000,

and this other hospital for $9,000, and if I waive medical liability, they'll knock a thousand bucks off of it. Right. That's not how it works. You don't shop for health care. Like this is somewhere where the nudge framework just completely breaks down because you know, it's all about choice architecture. But like our choices in terms of medical care are not remotely free because no one has any fucking information

on which to base their medical decisions. Like I once asked at the doctor's office, how much is this appointment going to cost me, they acted as if I like spoke to them in like Esparanto or something. They're like, what do you mean? How? I was like, I'm about to receive a service.

How much is this service going to cost? They were like, we couldn't possibly give you a ballpark. No, no. My favorite thing is when you're like, hey, do I have to pay? And they're like, no, absolutely not. And then you just get a bill later. Yeah, like four months later. And they're like, hey, do I have to pay? And they're like, no, absolutely not. And then you just get a bill later. Yeah, like four months later. And they're like, they're mad at you in a letter about it.

Like, I was in the office. I offered to pay. There's also a principled thing here where we wouldn't accept signing away your legal rights to get a discount in other areas. Right, you get a $500 discount on a car, but you wave your right to join a class action in case it like catches fire or like you get a $50 discount on your rent. If you like wave the right to sue your landlord, this should not be how rights work. Right.

We know that at a systems wide level, if it is cheaper to not have legal rights, people, especially poor people, will sign away their legal rights. And the reason that those rights exist is because we had that system before. Yes. And it did not work. It was exploitative, et cetera. Really takes a creative mind to make the US healthcare system worse. So at the end of this chapter, they basically say, like, look, we're not monsters, right?

Of course, there's bad doctors out there, and of course, there's like really significant harms. So, they say patients will still be permitted to sue for intentional or reckless wrongdoing, just not for mere negligence. Okay. Negligence is normally defined as the failure to meet what is called the ordinary standard of care. A vague concept that tends to make lawyers fight and judges scratch their heads.

Intentional or reckless wrongdoing is a harder standard for plaintiffs to meet. I like how they're casting doubt on the concept of legal negligence, which by the way is like the entire backbone of our toward system. And like, without it, there's sort of a level of chaos that I don't think our society would tolerate. But like, it's right that it's a grayish concept, but the purpose of having a grayish standard there is to allow for juries to interpret dynamic situations and figure out what is reasonable and what is not.

It's like, what are you proposing? We're just gonna do this on like a case-by-case basis. to interpret dynamic situations and figure out what is reasonable and what is not. It's like, what are you proposing? We're just gonna do this on like a case-by-case basis. It's like, well, kind of, yeah, that's kind of illegal system. Of course, these things are really nebulous and difficult to define. But the recklessness standard is also hard to define. It's just harder to meet. So in the end, they haven't actually solved the problem that they started out with.

Right, doctors are still gonna have medical malpractice insurance. Patients are still gonna sue their doctors. It's just gonna be harder to win. No question. And again, this is claiming to be non-ideological. This is a huge part of the argument for nudges. They're technical, they're small, they're procedural.

Who could disagree? We're bringing everybody to the table. Right. And then you zoom out and you look at this idea as a whole, this is a deeply ideological policy change, right? What you're essentially doing is trading away rights to save money on health care. That is the definition of ideology. How come 99% of the time someone is like, we're gonna do a political engineering to solve this political problem. They're just doing right wing shit. Yeah, oh yeah.

You can't say that this is like post-politics or something. Peter, I have led you to the river again. This is like where we were going with this chapter. So reading the second half of this book, what I kept thinking of was like a lot of the diet books that me and Aubrey read for maintenance phase, where in the intro, they're like, you never have to be hungry again. It's easy to follow. It's a lifestyle for the rest of your life, right?

And then you keep reading and once you get into the actual like meat, like the specifics of the life, right? And then you keep reading, and once you get into the actual like meat, like the specifics of the diet, it's like, so you'll be meticulously weighing all of your meals. You can never eat out at a restaurant. If you go to any family gathering, you have to like bring your own carrot sticks. Like the way that they describe the diet in general does not remotely match the specifics, right?

And they're doing the same thing with nudges, right? Where in the intro, they're like, oh, these are technocratic tweaks, they're non-ideological, they're gonna bring all the parties to the table, right? But then you get to the second half of the book, and like, not only are they not nudges, they're just libertarian policy ideas.

Right. One of the examples that they want the US to implement is motorcycle helmets. This is like, if you read Reason Magazine, there's like 200 articles about this, that they're like against, you know, seat belt and helmet laws and stuff. So they wanna have like, you basically get an extra license

if you wanna not wear a helmet on your motorcycle. So like there's an extra testing requirement and you sign away some of your legal rights or whatever. And it's like, okay, now you don't have to wear a helmet on your motorcycle. So like there's an extra testing requirement and you sign away some of your legal rights or whatever and it's like, okay, now you don't have to wear a helmet on your motorcycle. Right, to contextualize this, my understanding of this is that like motorcycle helmets are important because the fatality rate in motorcycle accidents

without them like skyrockets, right? Yeah, it's like, it's worse than like hang gliding. Right, right. They also have this thing that apparently some states have already implemented where if you have a gambling addiction, you can voluntarily put yourself on a like do not allow list at casinos. So if you're trying to quit, you can like call the gaming commission and they just like, if they see your face, they won't let you in.

Yeah, okay. I just seems honestly fine to me, but also like it's very clearly just an excuse not to regulate gambling. Right, it's interesting because the concept of nudging is all over casinos. They're constantly nudging you towards slot machines. Yes, that might be the one of the most interesting places

to study choice architecture. They also have a bunch of weird libertarian programs to like take people's money and give it back to them. So this is an excerpt from the second to last chapter, which is like a lightning round of like little nudges. They're like, these are promising nudges. It's the idea section. Yeah, exactly. It's just like bang them out, right? Cares, committed action to reduce and end smoking, is a savings program offered by the green bank of Kharagha in the Philippines.

A would-be non-smoker opens an account with a minimum balance of $1. For six months, she deposits the amount of money she would otherwise spend on cigarettes into the account. After six months, she takes a urine test to confirm that she has not smoked recently. If she passes the test, she gets her money back. If she fails the test, the account is closed and the money is donated to a charity. Why? Why? It's insane. What? It's insane. What the fuck is this? I fucking, there's, there's a World Bank report on this.

This is like a World Bank funded project. And like, they literally walk up to people with flyers in a poor country. And they're like, okay, we are going to take your own money from you. And then in six months, we are going to piss test you. And then if you pass the piss test, you get your own money back.

So we're going to like introduce a system where if they fail, they lose money. Poor people are taking poor people's money and giving it away. With no benefit, with no like, and we'll give you 20%. Exactly. More.

Nothing. So like there is a pilot where they tested this where they handed out these flyers to 800 people. They got 83 people to sign up, which is incredible to me that anybody signed up for this. And around 10% of people quit smoking, which in the study they describe as like a triumph that like in the control group, only 8% of people quit smoking.

Bang, 2% gains, and all it took was robbing the other 90% of their money. Basically in any given year, roughly 90% of their money. Basically, in any given year, roughly 10% of smokers quit, because most smokers want to quit and are trying to quit. So the fact that this program got 11% of 10% of people who got the flyer basically represents nothing. Like this is not scalable, right?

If you gave this to 20,000 people, you'd get 2,000 people who sign up and then 200 people who actually quit smoking, most of whom end up starting again. If I was in this program and lost my will a little bit and had a cigarette and then they stole my money, I would spite smoke for the rest of my life. But this is the whole weird libertarian thing, right? Where they don't want to have any governmental anything.

It's just like, oh, we should get people the frameworks to do what's best for them. Right, right. It sucks. Is this even like choice architecture? No. You're just like you're trapping someone's money. They also have a chapter about school choice. God damn it.

So they say, Carolyn Hock's be a leading economist who has analyzed both voucher and charger school programs finds that when facing competition, public schools produce higher student achievement per dollar spent. Test score improvements can range from 1% to 7% a year depending on the school and students, and improvement is usually greatest among younger students, low-income students, and minority group members. So, we solved it. School choice is good. When exposed to competition, public schools,

do better because they have to compete in the marketplace for the children. The study that they're referring to is from 2001, it's of a privatization project in Michigan in the 1990s. There are numerous other studies with this same data. And so, if you look at actual meta-analyses, what they find is that in Michigan, what actually happened was a bunch of charter schools opened and the charter schools tended to take the lowest performing kids, kids that needed more attention. So once you pull all of the troubled kids out of public schools, like, yeah, the test scores at the public schools go up. But that's not because they were exposed to more competition. The composition of the classes has changed.

There's more like high achieving kids in the classes. So like, yeah, they're gonna have high achieving test scores. And then they very deliberately right around the effect of the charter schools on the kids who went to charter schools, which were almost universally negative. So the kids that went to charter schools were already low performers.

After they went to charter schools, they were lower performers. And I don't want to make this whole thing rest on like, what happened in Michigan in the 1990s. Yeah, yeah. But like, this is a fucking field of academia, right? School choice. What is effective teaching?

What is effective testing? Like, people have been thinking and writing about this for decades, right? And these guys who are presenting themselves as academics, right, like, we're smart. We've looked at all the data We're like policy wonks. They stumble into this. They cite one fucking study and then the whole rest of the chapter is about like How to help parents choose the right school. Yeah, this is a classic

Academic in over their head sort of thing where they spent a lot of their life being smarter than the people around them. So the idea that you are inadequately informed to tackle a subject does not compute. Well, this is what's actually so chicken shit, I think, about this book, is that in most of these chapters, they very openly propose these as like solutions to problems, right? Like the organ donation thing, like change the form, right? And then at the end of the chapter, they're like, well, we're not scientists, you should change the form.

Yeah. Obviously changing the form isn't going to do anything, right? So they're trying to have it both ways. They're trying to keep their academic credibility by not stating openly that they want these policies to pass. It's like, obviously, it's complicated. But they're also not doing the work to actually understand these issues.

Yeah. Policy makers on some level are relying on academics and like, they shouldn't be, but they are relying on books like this. Yeah. To determine what the right policy is because they assume you have done your fucking homework. Yeah. They assume if you're telling me to change the donation wording on a form, you have looked into this, you have consulted with actual experts in this field

and you are qualified to make that recommendation, right? But what these guys keep doing is they're obviously Prioritizing like things that are cute. Look at this project in the Philippines where they took people's money and gave it back Yeah, yeah, they're not doing the basic work that you would expect from a fucking Harvard and University of Chicago academic Behind the scenes to be like hey, we've actually stressed tested these ideas. We've thought about it. We've talked to people who are way more knowledgeable in the specifics of these issues than we are.

They're not doing that. And at the end of the chapter, they're like, hey, don't make this the defining framework for your presidential administrations policy analysis. Thank God this doesn't take over the entire like liberal elite institutional apparatus for next two decades. God, this is like truly the mindset that like held our policy and politics on the left back for like at least a decade. Yeah. Because coming out of the Bush era, there was this belief that we could move past that

and re-center ourselves. And I think the idea that you could create policy from a place of sort of a political technocratic meddling, rather than these great ideological projects, right? Took hold in places like the Obama administration in like, you know, the major liberal think tanks. Yeah. That's why they got fucking blindsided by Trump and the modern Republican party because

they did not understand the contours of the political debate that was happening. Right. This book is right in that tradition, that sort of like, yeah, embarrassing, totally missed the point tradition of liberal politics in the late 2000s. I love it when you transition, Osprey. This is the perfect little ramp up to the next thing I want to talk about, which is what happened to the authors after this book came out and what happened to this idea after the book came out. So as I mentioned last episode, Cass Sunstein, one of the co-authors of Nudge, a year after this book is published, is appointed by Obama as the director of something called the Office of Information and

Regulatory Affairs, the office of Information doesn't sound like a real office. You can tell that this was created by Reagan as like a fake thing to throttle government regulation by how it has like the world's most boring name. So it was invented under the Office of Management and Budget with a mandate to apply a cost-benefit analysis to every single regulation that is passed by the US government, right? So it's like, we're gonna create this little bottleneck

of a bunch of people, none of whom are subject matter experts in the kinds of things that the EPA is doing or clean air particulates. These people don't have any expertise in that, right? They're all accountants and economists, and what we want them to do is apply a cost-benefit analysis to every single thing to make sure that they're not like wasteful government regulation, right?

Of course, of course. And of course, rather than seeing right through this thing and just fucking destroying it when they come into office, Democrats basically reify this. So like Clinton didn't really do anything with it. He just like staffed it with his own people. If then gets more power and becomes like even more of like a central just like, let's kill everything. Right. Graveyard under George W. Bush.

And then when Obama comes in, he appoints Cass Sunstein to run this weird little bottle neck department of the government. Just got just like mission statement destroy the country. If you think about the actual concept of the book, and what we talked about last episode as like the core insight of the book, right? That like our decisions are profoundly affected by choice architecture, right?

By the options that are presented to us, the way that they're described, the thing that is easy versus the thing that is hard, right? If you think about government regulations, this is like where a lot of that like choice architecting happens. This is where you can actually have a huge impact on the world, right?

If you believe the core concept of your book. And you mentioned last episode that you were kind of vaguely aware of Cass Sunstein. I always thought it was just kind of was just a standard issue center left guy, like, okay, some good, some bad, whatever. But after spending the last week reading up on his record and his work, I am truly convinced that he is the Antichrist. No one who looks into this man comes away with anything,

but utter, unmitigated contempt. You have to, I'm sorry, but you have to be cool and charismatic to be the anti-Christ. I feel like you're giving him a lot of credit. So the primary thing that he did with all of this huge power was just delay and water down necessary regulations. Shocking. The best example of this is silica dust,

which is basically these tiny little particulates that come off when you're like cutting concrete, you breathe it and it causes silicosis and lung cancer. It's like really nasty stuff. And in 2011, the EPA proposed a rule to make companies provide protective equipment to give free medical checkups to their employees to ban certain kinds of activities that kick up a lot of silica dust. They send it to Cass Sunstein's department in 2011. His agency is legally required to make determinations on laws after 90 days. He then sits on it for two years.

Jesus. With no explanation. There's then a whole kind of lobbying effort that has to take place. There's actual sitting senators put out all these open letters of being like, Cass, we need you to move on this. Right.

Finally, he returns with his answer, and he basically says, oh, we don't disagree, but we'd like the agency to do one more round of public consultation on this. Oh my God. So it's like, okay. Just red tape, but I, so Reagan creates this little agency

to what I, I imagine he conceptualized it as like eliminating the dead weight loss of bureaucracy or whatever. Job killing regulations. And then you have the actual output of it, which is the creation of red tape on behalf of industry. Exactly. And then this talking law doesn't even end up coming into place until 2016 under Trump's EPA, which then, of course, waters it down even of course, of course. And there's numerous think tank reports

published about all of the regulations that Cassonstein's little nudge unit delayed and watered down for no reason. So there's at least 38 rules that were delayed by more than a year Oh my god of the regulations that were actually past during the Obama administration three quarters of them were changed by Cassonstein's nudge unit and almost all of them were like watered down and made less stringent. Yeah, I do think it's sort of the Senate's fault for just sending them letters when they could have started a PR campaign like don't mess with our rags, you know. Don't lay that trash on oh, Ira. Although it's better than the Oklahoma one. Yeah, that's not bad.

The worst example of this during Cassandre's Teen's Time in the White House is there's a process where the EPA is trying to regulate ozone, smog. The Bush administration in 2008 said that the limit should be 75 parts per billion, even though the EPA wanted it to be 65 parts per billion. Finally, Obama gets in, the EPA looks at it again and is like, okay, let's reduce this to 65 ozone smog. It's just straightforwardly bad. They say that this change would save 7200 lives and 38,000 cases of asthma every year.

Oh, that doesn't, that doesn't really sound like a nudge. That's more like a push, you know. Yeah, it's really command and control. We need to be really careful. So they start the process of passing this. And then again, it gets blocked by Cass Sunstein's Oh, I read department. The reason that he gives for blocking this

is that the EPA is obligated to revisit these regulations every five years. It's on a five year cycle, right? So he's like, okay, they passed this in 2008. So the review is in 2013. And right now it's 2011. So there's kind of no reason for us to look at this now, right? We're just going to have to look at it again in two years. But people, you know, people who work at the EPA and who know this stuff point out that that's not how it works. It's a five year cycle from when you pass the regulation. And at no point does he ever actually argue with like the the lives that it will save or the case of asthma, he just I just don't think this is the right plan for us right now. And

the regulation gets killed. Oh my god. Like this is kind of his MO in government. It's like he will he will insert himself as a block for all of these regulations that are just like straightforwardly good. He will result in them getting delayed by years or killed. And then when people are like, hey dude, why did you kill this regulation? He's like, I didn't kill it. I don't understand why you would say

that I have this kind of power. All I'm doing is bringing all stakeholders to the table and having a conversation. Yeah, I mean, God damn it. It's wild to me that we have not accepted as a society that men like this are functionally murderers. Yes. Sociopaths. You have to be.

You have to be. It's very hard to look at what he did with power and not conclude that this was always the project of Nudge as well. Yeah. The book is very openly just a manifesto power and not conclude that this was always the project of Nudge as well. The book is very openly, just a manifesto for the government to do less. It's interesting because the book is not a particularly good idea. You can look at it on its own and be like, this is libertarianism dressed up, right? And yet, Cass Sunstein is actually even worse than that,

right? He didn't even have the sort of loose sympathies with progressive ideals that he alludes to in the book. It's kind of remarkable. Every time I think I'm like being too hard on this guy, I'm like reading more about what he actually did. Power's power than like nope. Gotta go harder, man. Yeah, I mean, it seems like they want to present themselves in the book as solutions guys. But the role they end up serving appears to be

problem identifiers, right? Not that they are coming up with anything productive on their own. They are just making sure that existing policies follow the bullshit guidelines that they think should dictate what makes a good policy or a bad policy. This is actually super palpable

when you read descriptions of other Nudge units. There's now been a number of surveys published of what various countries are doing with Nudge's. There's now been a number of surveys published of, you know, what various countries are doing with nudges, right? 51 countries set up Nudge units. One of the most interesting documents that I read was from the EU Nudge Unit. And it was just like an alphabetical list of like all of the Nudge units and like all of the nudges. I only made it to L, I only made it to the Midden Stein because like after a while they were really samey. Well then you're missing out on when Russia Nudge

didn't to Crimea a few years ago. But if you look at the actual Nudges, right, what improvements in society has this outlook produced? It's basically just a bunch of marketing efforts. It's like public information campaigns and fucking text message reminders. Like it's not regulating the kinds of things that companies are allowed to offer

or like meaningfully changing the choice architecture in any way. It's all kind of like quasi libertarian austerity adjacent efforts to just like tell people to behave differently. A huge number of them are like trying to crack down on welfare sheets. The infamous UK Nudge Unit, one of the first things they did was getting people to more accurately report their income after you report your income every two weeks, if you're on welfare in the UK, and it's like, here's a text message reminder

for people to send in their income. No matter what era it comes from, all economic concepts eventually will just be used to crack down on welfare. A lot of them are also, like, I don't know how else to put this, but like, they're trying to be cute. Yeah, of course.

Like, by far, the largest category of nudges is weight loss efforts. Right. Trying to get people to like eat different and move more. And a lot of them seem like they're auditioning to be like the opening anecdote of a fucking magazine article. Okay. So I'm going to send you an example from the UK Nudge Unit on this. Okay. If you can get through it. The Nudge Unit extends the idea of encouraging exercise by reshaping the choice architecture such that more active daily routines are enjoyable in the moment.

An example of this concept is Piano Stairs. I.E. embedding sensors in stairs to encourage people to avoid elevators and make music with their feet. Okay. Great work, everyone. Great work. Sick idea.

I'm a fucking adult involuntarily doing that scene from big every single time I walk up the stairs to my office. I don't think we need to deep dive into the piano stairs concept, but I'm going to, regardless, you're presumably hearing the same little melody or a similar set of melodies every single time you walk down the stairs, which not only makes me want to not walk down the stairs, but would probably just drive me to the verge of actual insanity. Absolutely murder happening in those stairwells.

The other option is that there is not a pre-programmed melody, and in fact, you're just making awful noise as you walk down in the stairs. And if like two or three people are using the stairs at once, it's just like, it's just hell. This is one of the worst ideas I've ever heard. It's so stupid. Unbelievable. That's the worst ideas I've ever heard. It's so stupid.

Unbelievable. That's on par with the office space jump to conclusions, Matt. The UK one is really an outlier with the sheer insipidness of many of the interventions. Another one they have is dedicated, yellow areas in shopping carts where you're supposed to put fruits and vegetables. Okay.

Like, all right. And all of these just feel like there's a fucking board meeting to produce like a .2% change in behavior that could have very readily been produced through more reasonable means. It's so fucking stupid. It's such fake smart guy bullshit. Another thing that I did not realize

until I talked to David Gaul, this economist, he's like, oh, on a crusade to debunk this fucking book, is that when you have these little nudges about things like, you know, reducing food waste or reducing your climate impact through having like a glowing or the glow's red when you use too much energy of these, these little ticky tack nudges. There's some evidence that this actually reduces the ability to solve these things on a

more structural level. I mean, to the extent that political capital or political will is sort of a deteriorating thing, people would be less inclined to take larger steps because they feel like the problem's been addressed at least to some degree. Right. I've seen this anecdotally with people I know they're like, I'm really into like fair trade clothing, right? Like I'm opting out of the sweatshop system. So like I don't know that we need these policies for like, you know, trade imports to regulate the working conditions of people.

Right. The evidence on this is not great. A lot of it is like these kind of lab experiments on fucking sophomores that are like a lot of the evidence for the nudges in the first place. So I don't wanna say that this is like a proven concept, but it's at least plausible that these nudges as well as not producing any kind of structural change actually operate as a substitute for structural change and make it harder. Right, and I do think that that feels

like part of the objective of the authors, right, is that rather than dive into these big ideological debates about the shape of our institutions, et cetera, why not do these little technocratic things that can make marginal improvements that we can all agree to and put the politics behind us, right? It's not supplementary. This is something that is meant to indicate that they think that this is how politics should be done. There's also an aspect of like

the times have changed around these guys. Like the times have changed since 2008 and like they have not changed with the times at all. So the other author of Nudge, Richard Thaler, he has a really telling New York Times op-ed. This is like 10 years after the book comes out. It's called The Power of Nudges for Good and Bad and he's sort of reflecting on this idea and the legacy of this idea, right?

So he apparently got radicalized on this when he saw a review of his own book in the Times of London and he clicked on the website. And of course, he got like the paywall pop up. And he's like about to sign up for the seven day free trials and we can read this review. And then he looks at the fine print. And it turns out that when you sign up for the free trial you have to give them your credit card information. You'll

automatically be enrolled as a subscriber and to cancel you have to call the times of London at like business hours London time and basically like talk someone into letting you out of this contract. to letting you out of this contract. Right. Right. Well, he's like, this is, this is a nudge for evil. The primary way that we experience nudges in our lives is like through scammy bullshit like this, right? You receive a fucking newsletter

for the rest of your natural life because you ordered a tank top once. Right. He also mentions this thing where airlines are constantly trying to upsell you on this like trip insurance thing. I turn that down. I turn that down. I'm a master of economics.

I know same. Skip. Are you sure your flight is dangerously unprotected? But then so he basically lays out like what is what is plainly true right that like we're constantly being nudged a lot of these nudges are just like total bullshit right. And then the final paragraph of his op-ed, he says, as customers, we can help one another by resisting these comments. The more we turn down questionable offers like trip insurance and scrutinize one-month trials, the less incentive companies will have to use such schemes. Conversely, if customers reward firms that act in our best interests,

more such outlets will survive and flourish, and the options available to us will improve. He's just so close to getting it. It's like this fucking scammy behavior by companies is all around us, and it sucks shit. And his solution to it is like, well, don't sign up for the trial. Nudge's are bad, and everyone hates them. God, I think that there's a real problem with these pop science authors that we sometimes see when you circle back a decade later or so. And like, it's that when your career gets tied to this type of concept, the admission that it sucks

and is useless is like, it's impossible, right? You can no longer bring yourself to be like, oh, yeah, that was a bad idea that we put into that book, right? Because your entire career is now an outgrowth of it. You can no longer bring yourself to be like, oh, yeah, that was a bad idea that we put into that book. Right, because your entire career is now an outgrowth of it. Right, and also it's back to the dog shit political analysis. These kinds of like consumer protections are fucking wildly popular.

Hey, if you sign up for something online, you have to be able to cancel with one click online. People love this shit, getting rid of scam phone calls, regulating fucking nutritional supplements, like use car dealerships, like the extent to which you are surrounded in the United States by fucking scams does not become clear to you until you live a broad. How are all of our politics about like trans swimmers? Meanwhile, I get three phone calls a day from someone who was actively trying to rob me.

I want to end with a quote from a very good Harper's essay by Robert Cutner about Cass Nstein and the legacy of this book. He says, at a moment when capitalism needed a major overhaul and the citizenry needed an inspiring leader, libertarian paternalism and visionary minimalism proved woefully inadequate as theory, policy, and politics. And that's really, I think the main legacy of this book and like this era. We had this promise of non-ideological technocratic policy making, right? And as a theory, it's all over the place, you and me can't even fucking agree on what a nudge is. As policy, it hasn't produced anything all that useful in the end, right?

We have like shopping carts that are cordoned off, right? Right. And then as politics, it's also dog shit. People don't like this stuff. Right. It doesn't address the problem. Exactly. And on a personal note, I don't know another way to put it.

But like, I felt really betrayed looking into this book because I honestly, when I started looking into it, I thought the organ donation thing held up. Yeah. I thought it was going to be like, okay, this works for organ donation, but a lot of problems don't have the same kind of structure as organ donation. Right. Just a matter of scale, right?

Yeah. This is a scalable solution to various problems. But then when I was talking to David Gaul, this behavioral economist who's written a lot about this book, we were talking about the importance of being fair in an episode like this. And I was like, yeah, you know, it's really important to me to mention,

like, oh, it works for the organization stuff. And he's like, oh, do you not know that that's fake? Like, do you not know that that doesn't look? And then he sent me a bunch of articles which is like how I went down the rabbit hole that we ended last episode with. But what is so frustrating and like hurtful to me is that like I was really into this stuff, right? I watched all of the animated explainer videos. I read all of these fucking books and like the spin-off books. I watched talks by the authors. At no point did anyone really say to me, this organ donation thing, the central example

of the success of this book, doesn't fucking work. I'm sure that it was in there somewhere as like a folded-in little footnote, or like to be sure, but like this total indifference to outcomes and this prioritizing of cute solutions over effective solutions is like one of the most corrosive impacts of this brand of airport book.

Now there's a lesson here I think, which is that if you simply don't read books, you are not at risk of accidentally buying in into some bullshit like Nudge, right? And that's why I am so successful in this role. Dude, a friend of mine who's a literal librarian, she was telling me about how she was like trying to pick the next book to read. And she was like, Mike's just going to debunk these on his show eventually anyway. I was like, fuck, did we ruin reading for you? That's right. This is not what I wanted to do with this show. Do not humiliate yourself by reading a book.

Ha ha ha. Ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha.

Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha ha. Ha ha ha. you