Six women faced the corporate giant at the Supreme Court.
Supreme Court Case: Sex Discrimination at Wal-Mart
Biggest discrimination suit of its kind heads to the Supreme Court.
Tuesday, March 29, 2011
Small Town Fears Health May be Threatened by Waste Dump
Jim Sciutto traveled to Bokoshe, Okla., to investigate
Sunday, March 27, 2011
Corporate tax havens
GE, or General Electric, the largest corporation in America, doesn't pay income tax. New York Times reports 5.1 billion dollars in profits from business done within the US last year but paid zero income tax, and claimed a tax benefit of 3.2 billion dollars. It joins the ranks of Bank of America and Exxon Mobile. US Uncut Duncan Meisel explains.
American companies are finding new overseas tax havens to legally protect some of their profits from the U.S. tax rate of 35 percent, among the highest in the world. Lesley Stahl reports.
American companies are finding new overseas tax havens to legally protect some of their profits from the U.S. tax rate of 35 percent, among the highest in the world. Lesley Stahl reports.
http://www.cbsnews.com/stories/2011/03/25/60minutes/main20046867.shtml?tag=contentMain;cbsCarousel
Extra: How to shift profits
Economist Martin Sullivan explains to Lesley Stahl how American multi-national companies shift their profits overseas.
Extra: Benefits of bringing back cash
U.S. companies are holding $1.2 trillion overseas for tax reasons. Cisco CEO John Chambers is lobbying for a one-time tax break to encourage companies to bring that money back to America.
Extra: How to shift profits
Economist Martin Sullivan explains to Lesley Stahl how American multi-national companies shift their profits overseas.
Extra: Benefits of bringing back cash
U.S. companies are holding $1.2 trillion overseas for tax reasons. Cisco CEO John Chambers is lobbying for a one-time tax break to encourage companies to bring that money back to America.
Wednesday, March 23, 2011
Economic 'He-covery' and the Race for Jobs
Sharyn Alfonsi reports on how men are getting more jobs than women.
Coffee or Health Insurance?
We all have those friends who are cheap when it comes to some things, and spend a lot on other things. Dan Ariely explains the root of their problem.
Transcript:
Topic: The “drop in the bucket” problem
Dan Ariely: So, part of the problem is the "drop in the bucket" problem. Right? So if I don't have money for health insurance, which is $5,000, what will $5.00 today be. And that's a problem of procrastination. Its $5.00 today and today and today and today, and the problem is, we can't envision to ourselves how this money would accumulate. We have to see where it's coming from. And I think we need visualizing tools. I think actually the banks role is to help us think about money better, and sadly, nobody is doing it because everybody wants us to spend more and more.
I was actually getting a little bit optimistic when the recession hit because banks were becoming interested in getting people to be more responsible. But sadly, I don't see this happening these days. There are a couple of startups, there are a couple of ideas kind of forming around, and I hope there will be some progress, but if you think about a person who is facing this dilemma, it's not humanly possible for him to think about the compound interest and the long term ramification of a latte a day, we need help in that and I hope that software will provide this help.
I also think that the iPhone is a wonderful idea for that. If you think about it, we all have good intentions. Even you friend who is spending the $5.00 on the lattes, they have good intensions for the long term, only in the short term, it's very hard to act on these good intentions. And I find this interesting because it can be with us when we have long term plans and when we have short term failing. And if you think about the phone as a time machine in this case, I think it could help you.
Topic: Taking the outside perspective
Dan Ariely: I'll tell you one more application. This is the first app we're going to have out, we'll have it up, I hope in two weeks if Apple approves. And you go on the iPhone and you pick four people that you admire, that you respect and you pick them from your address book. And then when you're tempted with something, you say what you are tempted with and then you pick one of those people and you say, what will they have told me to do? Now, what's the idea here? The idea is that when we are in a situation, it's very hard for us to take the outside perspective. But if you say, what would your mother tell you to do? And then you click, "I'm tempted to buy coffee; I'm picking my mother -- what would my mother tell me. I think my mother would tell me "No." And then it also sends it to your mother to verify. Now, you don't have to wait for your mother to verify to figure it out, the idea is to give people the outside perspective, to get them to think a little bit about, as advisors to themselves.
What we find, not in this app, but in general in experiments, is when people take the role of advisors, they become more rational. They see the long term more than the short term, they are less committed to the emotion of the moment, and they can do better.
Now, will w have one solution? No, I don't think so. I think we will have lots of solutions, but I think we are at the start of developing some software, some pre-commitment devices, some more awareness, and I'm actually optimistic that we will become better and better at this.
Topic: The problem with loans
Dan Ariely: There is another question about how people decide what loans to pay first. So, we're assuming right now in this discussion that people have money and it's a question of saving versus spending, what happens to people who have lots of loans?
So we recently did this study that asks the question of how do people decide what loans to pay first? And sadly what we found out was that people paid the small loans fore they paid the big loans. So, imagine you have six loans, small to huge. People want to close loans and because of that, they try to pay off the small loans, but that's not the right strategy. The right strategy, of course, is to pay the loan with the highest interest rate. People make this mistake and it costs them lots and lots of money, it's a very expensive mistake because interest rates accumulate and become very, very expensive very quickly.
We also find in our experiments that too many people these days, when they have cash, they keep too much cash in reserve. And it actually looks like a two stage process. People decide how much cash to keep, for a rainy day, and then the rest they allocate between loans, and over time, they learn a little bit about how to allocate the loans so that they pay first the high interest rate, they don't learn perfectly, but a little bit. But they still keep too much in cash and interestingly these two mistakes are connected. The people who keep more cash also tend to be more mistaken in how they allocate loans. And this, I think is a couple of really big mistakes. First of all, people should figure out very quickly how to pay loans fast and they should do it well because it's so expensive to have loans.
The second thing is I think at this time in history, when we are so uncertain about everything and everybody gives us advice about keep six month’s salary in cash. This is good advice to some people, but it's not good advice to people who have loans. Because, if you have loans, the first thing you want to do is say, "Okay, look I have a credit card, if I really need to borrow, I have this emergency money that I can get, but for now there is no reason for me to keep cash at zero percent interest rate and at the same time, pay all of this money out. So, I think people need to figure out quickly how to pay loans and how much cash they should really keep.
Transcript:
Topic: The “drop in the bucket” problem
Dan Ariely: So, part of the problem is the "drop in the bucket" problem. Right? So if I don't have money for health insurance, which is $5,000, what will $5.00 today be. And that's a problem of procrastination. Its $5.00 today and today and today and today, and the problem is, we can't envision to ourselves how this money would accumulate. We have to see where it's coming from. And I think we need visualizing tools. I think actually the banks role is to help us think about money better, and sadly, nobody is doing it because everybody wants us to spend more and more.
I was actually getting a little bit optimistic when the recession hit because banks were becoming interested in getting people to be more responsible. But sadly, I don't see this happening these days. There are a couple of startups, there are a couple of ideas kind of forming around, and I hope there will be some progress, but if you think about a person who is facing this dilemma, it's not humanly possible for him to think about the compound interest and the long term ramification of a latte a day, we need help in that and I hope that software will provide this help.
I also think that the iPhone is a wonderful idea for that. If you think about it, we all have good intentions. Even you friend who is spending the $5.00 on the lattes, they have good intensions for the long term, only in the short term, it's very hard to act on these good intentions. And I find this interesting because it can be with us when we have long term plans and when we have short term failing. And if you think about the phone as a time machine in this case, I think it could help you.
Topic: Taking the outside perspective
Dan Ariely: I'll tell you one more application. This is the first app we're going to have out, we'll have it up, I hope in two weeks if Apple approves. And you go on the iPhone and you pick four people that you admire, that you respect and you pick them from your address book. And then when you're tempted with something, you say what you are tempted with and then you pick one of those people and you say, what will they have told me to do? Now, what's the idea here? The idea is that when we are in a situation, it's very hard for us to take the outside perspective. But if you say, what would your mother tell you to do? And then you click, "I'm tempted to buy coffee; I'm picking my mother -- what would my mother tell me. I think my mother would tell me "No." And then it also sends it to your mother to verify. Now, you don't have to wait for your mother to verify to figure it out, the idea is to give people the outside perspective, to get them to think a little bit about, as advisors to themselves.
What we find, not in this app, but in general in experiments, is when people take the role of advisors, they become more rational. They see the long term more than the short term, they are less committed to the emotion of the moment, and they can do better.
Now, will w have one solution? No, I don't think so. I think we will have lots of solutions, but I think we are at the start of developing some software, some pre-commitment devices, some more awareness, and I'm actually optimistic that we will become better and better at this.
Topic: The problem with loans
Dan Ariely: There is another question about how people decide what loans to pay first. So, we're assuming right now in this discussion that people have money and it's a question of saving versus spending, what happens to people who have lots of loans?
So we recently did this study that asks the question of how do people decide what loans to pay first? And sadly what we found out was that people paid the small loans fore they paid the big loans. So, imagine you have six loans, small to huge. People want to close loans and because of that, they try to pay off the small loans, but that's not the right strategy. The right strategy, of course, is to pay the loan with the highest interest rate. People make this mistake and it costs them lots and lots of money, it's a very expensive mistake because interest rates accumulate and become very, very expensive very quickly.
We also find in our experiments that too many people these days, when they have cash, they keep too much cash in reserve. And it actually looks like a two stage process. People decide how much cash to keep, for a rainy day, and then the rest they allocate between loans, and over time, they learn a little bit about how to allocate the loans so that they pay first the high interest rate, they don't learn perfectly, but a little bit. But they still keep too much in cash and interestingly these two mistakes are connected. The people who keep more cash also tend to be more mistaken in how they allocate loans. And this, I think is a couple of really big mistakes. First of all, people should figure out very quickly how to pay loans fast and they should do it well because it's so expensive to have loans.
The second thing is I think at this time in history, when we are so uncertain about everything and everybody gives us advice about keep six month’s salary in cash. This is good advice to some people, but it's not good advice to people who have loans. Because, if you have loans, the first thing you want to do is say, "Okay, look I have a credit card, if I really need to borrow, I have this emergency money that I can get, but for now there is no reason for me to keep cash at zero percent interest rate and at the same time, pay all of this money out. So, I think people need to figure out quickly how to pay loans and how much cash they should really keep.
Sunday, March 20, 2011
Cars - specialisation across the ages
Two great video resources below which could be used for a number of topics from economies of scale and factor substitiution to specialisation and division of labour. It’s amazing to see how much labour has become less and less a part of the car-making process!
Watch a video all about the Ford Model T.
Mercedes-Benz Factory - A class assembly
Watch a video all about the Ford Model T.
Mercedes-Benz Factory - A class assembly
Yen Intervention
What a Manipulated Joke the Markets Are!: Of course, that’s why we love them, right?
http://www.marketoracle.co.uk/Article27035.html
http://www.marketoracle.co.uk/Article27035.html
Federal Reserve Debt Monetization Explained
An excellent article can be found in The Martenson Report from August 2, 2009, entitled “The Shell Game“.
Sign up for our free newsletter at http://inflation.us/
Fed Looks to Spur Growth by Buying Government Debt
U.S. Is Bankrupt and We Don’t Even Know It: Laurence Kotlikoff
Deficit in July
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Fed Looks to Spur Growth by Buying Government Debt
Saturday, March 19, 2011
G7 cenbanks in rare currency action after yen surge
A coordinated move by central banks of rich nations to stabilize the yen appeared to be working on Friday, tamping its value down after Japan's devastating earthquake and nuclear crisis triggered a yen surge and raised fears about the global economy
Japan Disaster's Global Impact
Japan Quake Causes Economic Ripples
Beyond the human toll of the tragedy in Japan, some are growing more concerned about its impact on the global economy, with James Rickards, Tangent Capital Partners, and Byron Wien, Blackstone Advisory Partners.
Beyond the human toll of the tragedy in Japan, some are growing more concerned about its impact on the global economy, with James Rickards, Tangent Capital Partners, and Byron Wien, Blackstone Advisory Partners.
Wednesday, March 16, 2011
Tuesday, March 15, 2011
Buying a 99¢ taco with 1 ounce gold coin (worth $1400)
Mark frequently stirs up controversy from his commentaries, protests, and boycotts, and has repeatedly been featured in major media outlets around the world.
Several of Mark's YouTube videos have went viral, earning him a mention on ABC's The View, Fox News' O'Reilly Factor, TMZ.com, and other mainstream media outlets. Mark has also been featured in (or attacked in) the New York Post's Page Six, Rolling Stone Magazine, USA Today, The New York Daily News, and in major papers in Pakistan and Iran.
Mark Dice appears in several documentary films including Invisible Empire, and The 9/11 Chronicles, and was featured on the History Channel's Decoded.
He enjoys enlightening zombies, as he calls them, (ignorant people) about the mass media's effect on our culture, pointing out Big Brother's prying eyes, and exposing elite secret societies along with scumbag politicians and their corrupt political agendas.
He also habitually calls into several top-rated talk shows, including the Sean Hannity Show, Glenn Beck, and Michael Savage, and verbally battles with the hosts on various issues since he has never been asked to be a guest on them as of yet. Audio of some of these calls are then posted online.
The term "fighting the New World Order" is used by Mark to describe some of his activities, and refers to his and others' resistance and opposition (The Resistance) to the overall system of political corruption, illegal wars, elite secret societies, mainstream media, Big Brother and privacy issues; as well as various economic and social issues.
Dice and his supporters sometimes refer to being "awake" or "enlightened" and see their knowledge of these topics as part of their own personal Resistance to the corrupt New World Order. This Resistance involves self-improvement, self-sufficiency, personal responsibility and spiritual growth.
Mark Dice is the author of several books on current events, secret societies and conspiracies, including his newest book, Big Brother: The Orwellian Nightmare Come True. (Available only at Infowars.com) He lives in San Diego, California.
All of Mark's books are in stock on Amazon.com and are also available on the Kindle reader. You may be able to order the books into a store where it can be sent in a few days. If not, then Amazon.com is your best bet.
BIG BROTHER: THE ORWELLIAN NIGHTMARE COME TRUE - Mark Dice details actual high-tech spy gadgets, mind-reading machines, emerging artificial intelligence systems, and government projects that seem as if they came right out of George Orwell's novel Nineteen Eighty-Four.
Sunday, March 13, 2011
Case Shiller Rollercoaster #2 1890-2010
This is a terrific visualisation of what has happened to US house prices since the late nineteenth century - we ride the rollercoaster based on data from the Case Shiller index.
Friday, March 11, 2011
Banking
Introduction to how banks make money and the value they (potentially) add to society
Introduction to the income statement of a bank (and to income statements in general).
Fractional reserve banking and the multiplier effect. Introduction to the money supply.
How "money" is created in a fractional reserve banking system. M0 and M1 definitions of the money suppy. The multiplier effect.
Introduction to bank notes (which you are more familiar with than you realize).
More on how bank notes and checks can be used.
How banks can give out loans without ever giving out gold.
How reserve requirements limit how much lending a bank can do.
Introduction to the income statement of a bank (and to income statements in general).
Fractional reserve banking and the multiplier effect. Introduction to the money supply.
How "money" is created in a fractional reserve banking system. M0 and M1 definitions of the money suppy. The multiplier effect.
Introduction to bank notes (which you are more familiar with than you realize).
More on how bank notes and checks can be used.
How banks can give out loans without ever giving out gold.
How reserve requirements limit how much lending a bank can do.
Steve Brodner on the jobs crisis
Why are big corporations raking in big profits, even as joblessness grips the country?
Use "Weird Rules" To Boost Your Creativity
http://the99percent.com/tips/6998/Use-Weird-Rules-To-Boost-Your-Creativity
1. Find some happy people and get them to fight. As a manager, one tactic might be to allow an employee to state his case for a project or innovation – then invite team members to dissect it. Getting smart people to vigorously debate their ideas, Sutton contends, is one the quickest methods of exposing technical flaws, and paves the way for innovation.
2. Reward success and failure; punish inaction. As Sutton puts it, "Creativity is a function of the quantity of work produced." This is a version of Seth Godin's "just ship" philosophy. Sutton suggests measuring activity level as an indicator of performance – whether someone is doing something or doing nothing – and evaluating accordingly.
3. Ignore people who have solved the exact problem you face. The managerial tendency is to give familiar assignments to those who have been successful on similar assignments in the past. Resist this! Assuming you have a capable and talented team, present work to an unlikely team member, and you may hit on a new way of looking at a problem.
4. Hire “slow learners” (of organizational code). It’s conventional practice to hire socially adept employees who quickly learn to do things “the right way” and slot comfortably into any team. Consider hiring “low self-monitors”, confident people who don’t feel or respond to pressures to follow the herd. You’ll increase the spectrum of what is possible just by cultivating the misfit element.
5. Seek out ways to avoid, distract, and bore customers. I like this one because it's confrontational, but once you get past the initial shock of the idea, possibility opens up. Investigating what it would look like to, say, bore your own customers, is a contrarian method of brainstorming that may help you to get clear and find holes in your reasoning so you can then pursue the opposite approach.
In the end, Sutton's “Weird Rules” are a reminder that one of the best strategies for inciting creativity is to upend the status quo. What accepted business practice can you turn on its head today?
--
How Do You Get Weird?
What are your weird rules for sparking creativity?
2. Reward success and failure; punish inaction. As Sutton puts it, "Creativity is a function of the quantity of work produced." This is a version of Seth Godin's "just ship" philosophy. Sutton suggests measuring activity level as an indicator of performance – whether someone is doing something or doing nothing – and evaluating accordingly.
3. Ignore people who have solved the exact problem you face. The managerial tendency is to give familiar assignments to those who have been successful on similar assignments in the past. Resist this! Assuming you have a capable and talented team, present work to an unlikely team member, and you may hit on a new way of looking at a problem.
4. Hire “slow learners” (of organizational code). It’s conventional practice to hire socially adept employees who quickly learn to do things “the right way” and slot comfortably into any team. Consider hiring “low self-monitors”, confident people who don’t feel or respond to pressures to follow the herd. You’ll increase the spectrum of what is possible just by cultivating the misfit element.
5. Seek out ways to avoid, distract, and bore customers. I like this one because it's confrontational, but once you get past the initial shock of the idea, possibility opens up. Investigating what it would look like to, say, bore your own customers, is a contrarian method of brainstorming that may help you to get clear and find holes in your reasoning so you can then pursue the opposite approach.
In the end, Sutton's “Weird Rules” are a reminder that one of the best strategies for inciting creativity is to upend the status quo. What accepted business practice can you turn on its head today?
--
How Do You Get Weird?
What are your weird rules for sparking creativity?
Thursday, March 10, 2011
Spousonomics: How Economics Can Save a Marriage
New Book Gives Tips on Best Ways to Keep Marriage Strong
How should a couple split up the chores?
How can they keep from fighting?
How can they have more sex?
2010's American Family Defined
The ever-changing "American family" has researchers crafting a new definition.
Managing a Blended Family
Money Couple on how to merge families and expenses and keep everyone happy.
If Your Friends Get Divorced, Will You Too?
A new study finds couples with divorced friends are more likely to divorce.
The Price of Divorce
Go inside "Divorce Court" to learn the true costs of divorce.
Inside the Drama of 'Divorce Court'
Amid Below-Brow Details of Relationships and Crowd-Pleasing Zingers,
Top 10 Outrageous Allegations in Dennis Hopper Divorce
Dennis Hopper and Wife Victoria Accuse Each Other of Abuse, Theft and More
Dennis Hopper Claims He's Broke in Divorce Battle
'Easy Rider' Star Claims He's Too ill, Broke to Pay Wife Victoria Duffy-Hopper
Ultra Modern Family
The inside story of two dads, one egg donor, a surrogate and baby triplets.
Labor of Love: Surrogate Pregnancy
A look at what actually happens when you have a baby via surrogate.
Divorce Classes Ease Marital Splits
Co-parenting experts help couples stay amicable.
How should a couple split up the chores?
How can they keep from fighting?
How can they have more sex?
The ever-changing "American family" has researchers crafting a new definition.
Managing a Blended Family
Money Couple on how to merge families and expenses and keep everyone happy.
If Your Friends Get Divorced, Will You Too?
A new study finds couples with divorced friends are more likely to divorce.
The Price of Divorce
Go inside "Divorce Court" to learn the true costs of divorce.
Inside the Drama of 'Divorce Court'
Amid Below-Brow Details of Relationships and Crowd-Pleasing Zingers,
Some Couples Find Emotional Resolution
http://abcnews.go.com/Nightline/divorce-court-wife-husband-square-off-drama-filled/story?id=10273017
Dennis Hopper and Wife Victoria Accuse Each Other of Abuse, Theft and More
'Easy Rider' Star Claims He's Too ill, Broke to Pay Wife Victoria Duffy-Hopper
The inside story of two dads, one egg donor, a surrogate and baby triplets.
Labor of Love: Surrogate Pregnancy
A look at what actually happens when you have a baby via surrogate.
Divorce Classes Ease Marital Splits
Co-parenting experts help couples stay amicable.
Tuesday, March 8, 2011
Oil Shock
On Monday, Atlanta Fed boss Dennis Lockhart said that if oil prices continue to climb the Fed will make a new round of asset purchases, in other words it will kick off QE3.
Lockhart “echoed widespread concerns that surging oil prices would put the brakes on a recovery that only just seems to be taking hold,” reports the Wall Street Journal.
Trust is Necessary for a Stable Economy
Top Economists: Trust is Necessary for a Stable Economy ... But Trust Won't Be Restored Until We Prosecute Wall Street Fraud
Monday, March 7, 2011
Sunday, March 6, 2011
Faster job growth on the horizon?
Anthony Mason spoke with economist Lakshman Achuthan of the Economic Cycle Research Institute on the United States' unemployment rate and the chances of a faster economic recovery.
The effect of high gas prices on the economy
Anthony Mason spoke with economist Lakshman Achuthan of the Economic Cycle Research Institute on the rising price of gasoline and its effect on the economy
To Save Or Not To Save?
Nancy Giles' sound advice on saving money
Saving money is no easy task for anybody - even for "Sunday Morning" contributor Nancy Giles.
Saving money is no easy task for anybody - even for "Sunday Morning" contributor Nancy Giles.
Is the U.S. a waning economic super power?
Anthony Mason spoke with economist Lakshman Achuthan of the Economic Cycle Research Institute on the position of the United States in the world economy.
Hard times generation: homeless kids
For some children, socializing and learning are being cruelly complicated by homelessness, as Scott Pelley reports from Florida, where school buses now stop at motels for children who've lost their homes
Saturday, March 5, 2011
Wonderful Life: The Bank Run scene
A clip from A Wonderful Life when teaching the causes of a bank run, inter-mixed with a news report on the demise of Northern Rock and the collapse of Lehman Bros
Bank run http://en.wikipedia.org/wiki/Bank_run
What Causes Bank Runs http://honsing.com/BankRuns.htm
Bank run http://en.wikipedia.org/wiki/Bank_run
What Causes Bank Runs http://honsing.com/BankRuns.htm
Movie Clip teaching happiness and welfare
Monty Python - Four Yorkshiremen
Idle, Chapman, Palin and Jones are on top form as they descend into ever-greater exaggerations about the deprivations they suffered as children..... “Cardboard Box ... you were lucky”.
Idle, Chapman, Palin and Jones are on top form as they descend into ever-greater exaggerations about the deprivations they suffered as children..... “Cardboard Box ... you were lucky”.
Movie: Margin Call
Margin Call is a movie connected to the global financial crisis premieres at the Sundance Film Festival
Margin Call Movie : Teaser Trailer
Starring Kevin Spacey, Paul Bettany, Jeremy Irons and Demi Moore, Margin Call is presented as a thriller that revolves around the key people at a investment bank over a 24-hour period during the early stages of the financial crisis.
350 Years of Economic Theory in 50 Minutes | Mark Thornton
Featuring author and scholar Dr. Mark Thornton, this lecture was presented to a group of home school parents and students.
Mark Thornton http://en.wikipedia.org/wiki/Mark_Thornton
Mark Thornton http://en.wikipedia.org/wiki/Mark_Thornton
Ferris Bueller Day Off: Tariffs and Laffer Curves
The title itself suggests a good discussion about the work-leisure trade-off! This clip is an amusing introduction to tariffs and Laffer Curves and also to a different style of economics teaching!
Laffer curve http://en.wikipedia.org/wiki/Laffer_curve
Laffer curve http://en.wikipedia.org/wiki/Laffer_curve
Chinese and Indian Railways
Importance of Infrastructure
Two videos show the stark contrast between rail networks between China and India! Good for understanding a little more about the importance of rail network investment (high speed and conventional) as a platform for economic growth and development.
China’s booming rail network good for business
India’s railway network to get back on track
Two videos show the stark contrast between rail networks between China and India! Good for understanding a little more about the importance of rail network investment (high speed and conventional) as a platform for economic growth and development.
China’s booming rail network good for business
India’s railway network to get back on track
Friday, March 4, 2011
Build it, and they will come...
The fallacy of ...
Terence Mann (James Earl Jones) gives his famous speech
Ray Kinsella (Kevin Costner) is a novice farmer who lives in rural Iowa with his wife, Annie (Amy Madigan), and their young daughter Karin (Gaby Hoffmann).
While walking through his cornfield, Ray hears a voice whisper, "If you build it, he will come" (often misquoted as "If you build it, they will come"), and sees a vision of a baseball field. Believing he is somehow being asked to build it, and fearing he is in danger of "turning into" his father—whom he resented for his lack of spontaneity—Ray strongly wishes to do so. Although skeptical, Annie is supportive. Watched by disbelieving neighbors, Ray plows under his corn and builds the field. A year passes without incident.
Terence Mann (James Earl Jones) gives his famous speech
Ray Kinsella (Kevin Costner) is a novice farmer who lives in rural Iowa with his wife, Annie (Amy Madigan), and their young daughter Karin (Gaby Hoffmann).
While walking through his cornfield, Ray hears a voice whisper, "If you build it, he will come" (often misquoted as "If you build it, they will come"), and sees a vision of a baseball field. Believing he is somehow being asked to build it, and fearing he is in danger of "turning into" his father—whom he resented for his lack of spontaneity—Ray strongly wishes to do so. Although skeptical, Annie is supportive. Watched by disbelieving neighbors, Ray plows under his corn and builds the field. A year passes without incident.
Build It and They Will Come? Think Again
When it comes to economic development in American cities, the trusted old theory "If you build it, they will come" may not work, a Michigan State University sociologist argues in a new study.
Deflation…or perhaps just a misunderstanding?
An amusing little interchange here which makes for a good lesson starter. Can discuss supply and demand, general vs individual price decreases, demerit goods - the list just goes on!
America at the Crossroads
Immigration laws blocking economic potential
Women helping to fuel economic comeback
Women are now the backbone of the workforce, and that change is poised to transform not just the makeup of offices, but the entire economy.
The history-making moments of women's history
From gaining the right to vote, to the first female secretary of state, a look back
We know 'what's going to motivate people'
Visit msnbc.com for breaking news, world news, and news about the economy
Women helping to fuel economic comeback
Women are now the backbone of the workforce, and that change is poised to transform not just the makeup of offices, but the entire economy.
Visit msnbc.com for breaking news, world news, and news about the economy
The history-making moments of women's history
From gaining the right to vote, to the first female secretary of state, a look back
Visit msnbc.com for breaking news, world news, and news about the economy
Trade Unions
The union comes a cropper
A clip relevant to discussions about the changing roles and impact of trade unions in the British economy.
This is one of the most inspirational moments from the 1996 film Brassed Off.
Laura Barton and Felix Clay travel to Orgreave in Yorkshire, site of a pitched battle between striking mineworkers and police in 1984. This clip provides memorable images from the Battle of Orgreave, one of the defining moments in the year-long miners strike of 1983-84 - beyond the memory of students these days.
A clip relevant to discussions about the changing roles and impact of trade unions in the British economy.
This is one of the most inspirational moments from the 1996 film Brassed Off.
Laura Barton and Felix Clay travel to Orgreave in Yorkshire, site of a pitched battle between striking mineworkers and police in 1984. This clip provides memorable images from the Battle of Orgreave, one of the defining moments in the year-long miners strike of 1983-84 - beyond the memory of students these days.
Rory Sutherland: Life lessons from an ad man
Advertising adds value to a product by changing our perception, rather than the product itself. Rory Sutherland makes the daring assertion that a change in perceived value can be just as satisfying as what we consider “real” value -- and his conclusion has interesting consequences for how we look at life
Rory Sutherland stands at the center of an advertising revolution in brand identities, designing cutting-edge, interactive campaigns that blur the line between ad and entertainment. Full bio and more links
Transcript:
This is my first time at TED. Normally, as an advertising man, I actually speak at TED Evil, which is TED's secret sister organization -- the one that pays all the bills. It's held every two years in Burma. And I particularly remember a really good speech by Kim Jong Il on how to get teens smoking again. (Laughter)
But, actually, it's suddenly come to me after years working in the business, that what we create in advertising, which is intangible value -- you might call it perceived value, you might call it badge value, subjective value, intangible value of some kind -- gets rather a bad rap. If you think about it, if you want to live in a world in the future where there are fewer material goods, you basically have two choices. You can either live in a world which is poorer, which people in general don't like. Or you can live in a world where actually intangible value constitutes a greater part of overall value, that actually intangible value, in many ways is a very, very fine substitute for using up labor or limited resources in the creation of things.
Here is one example. This is a train which goes from London to Paris. The question was given to a bunch of engineers, about 15 years ago, "How do we make the journey to Paris better?" And they came up with a very good engineering solution, which was to spend six billion pounds building completely new tracks from London to the coast, and knocking about 40 minutes off a three-and-half-hour journey time. Now, call me Mister Picky. I'm just an ad man ... ... but it strikes me as a slightly unimaginative way of improving a train journey merely to make it shorter. Now what is the hedonic opportunity cost on spending six billion pounds on those railway tracks?
Here is my naive advertising man's suggestion. What you should in fact do is employ all of the world's top male and female supermodels, pay them to walk the length of the train, handing out free Chateau Petrus for the entire duration of the journey. (Laughter) (Applause) Now, you'll still have about three billion pounds left in change, and people will ask for the trains to be slowed down. (Laughter)
Now, here is another naive advertising man's question again. And this shows that engineers, medical people, scientific people, have an obsession with solving the problems of reality, when actually most problems, once you reach a basic level of wealth in society, most problems are actually problems of perception. So I'll ask you another question. What on earth is wrong with placebos? The seem fantastic to me. They cost very little to develop. They work extraordinarily well. They have no side effects, or if they do, they're imaginary, so you can safely ignore them. (Laughter)
So I was discussing this. And I actually went to the Marginal Revolution blog by Tyler Cowen. I don't know if anybody knows it. Someone was actually suggesting that you can take this concept further, and actually produce placebo education. The point is that education doesn't actually work by teaching you things. It actually works by giving you the impression that you've had a very good education, which gives you an insane sense of unwarranted self confidence, which then makes you very, very successful in later life. So, welcome to Oxford, ladies and gentlemen. (Laughter) (Applause)
But, actually, the point of placebo education is interesting. How many problems of life can be solved actually by tinkering with perception, rather than that tedious, hardworking and messy business of actually trying to change reality? Here's a great example from history. I've heard this attributed to several other kings, but doing a bit of historical research it seems to be Fredrick the Great. Fredrick the Great of Prussia was very very keen for the Germans to adopt the potato, and to eat it. Because he realized that if you had two sources of carbohydrate, wheat and potatoes, you get less price volatility in bread. And you get a far lower risk of famine, because you actually had two crops to fall back on, not one.
The only problem is: potatoes, if you think about it, look pretty disgusting. And also, 18th century Prussians ate very, very few vegetables -- rather like contemporary Scottish people. (Laughter) So, actually, he tried making it compulsory. The Prussian peasantry said, "We can't even get the dogs to eat these damn things. They are absolutely disgusting and they're good for nothing." There are even records of people being executed for refusing to grow potatoes.
So he tried plan B. He tried the marketing solution, which is he declared the potato as a royal vegetable. And none but the royal family could consume it. And he planted it in a royal potato patch, with guards who had instructions to guard over it, night and day, but with secret instructions not to guard it very well. (Laughter) Now 18th century peasants know that there is one pretty safe rule in life, which is if something is worth guarding, it's worth stealing. Before long, there was a massive underground potato-growing operation in Germany. What he'd effectively done is he'd re-branded the potato. It was an absolute masterpiece.
I told this story and a gentleman from Turkey came up to me and said, "Very, very good marketer, Fredrick the Great. But not a patch on Ataturk." Ataturk, rather like Nicolas Sarkozy, was very keen to discourage the wearing of a veil, in Turkey, to modernize it. Now, boring people would have just simply banned the veil. But that would have ended up with a lot of awful kickback and a hell of a lot of resistance. Ataturk was a lateral thinker. He made it compulsory for prostitutes to wear the veil. (Laughter) (Applause)
I can't verify that fully. But it does not matter. There is your environmental problem solved, by the way, guys: All convicted child molesters have to drive a Porsche Cayenne. (Laughter) What Ataturk realized actually is two very fundamental things. Which is that, actually, first one, all value is actually relative. All value is perceived value.
For those of you who don't speak Spanish, jugo de naranja -- it's actually the Spanish for "orange juice." Because actually it's not the dollar. It's actually the peso in Buenos Aires. Very clever Buenos Aires street vendors decided to practice price discrimination to the detriment to any passing gringo tourists. As an advertising man, I have to admire that.
But the first thing this all shows is that all value is subjective. Second point is that persuasion is often better than compulsion. These funny signs that flash your speed at you, some of the new ones, on the bottom right, now actually show a smiley face or a frowny face, to act as an emotional trigger. What's fascinating about these signs is they cost about 10 percent of the running cost of a conventional speed camera. But they prevent twice as many accidents. So, the bizarre thing which is baffling to conventional, classically trained economists, is that a weird little smiley face has a better effect on changing your behavior than the threat of a £60 fine and three penalty points.
Tiny little behavioral economics detail: in Italy, penalty points go backwards. You start with 12 and they take them away. Because the found that loss aversion is a more powerful influence on people's behavior. In Britain we tend to feel, "Whoa! Got another three!" Not so in Italy.
Another fantastic case of creating intangible value to replace actual or material value, which remember, is what, after all, the environmental movement needs to be about: This, again, is from Prussia, from, I think, about 1812, 1813. The wealthy Prussians, to help in war against the French, were encouraged to give in all their jewelry. And it was replaced with replica jewelry made of cast iron. Here's one: "Gold gab ich für Eisen, 1813." The interesting thing is that for 50 years hence, the highest status jewelry you could wear in Prussia wasn't made of gold or diamonds. It was made of cast iron. Because actually, never mind the actual intrinsic value of having gold jewelry. This actually had symbolic value, badge value. It said that your family had made a great sacrifice in the past.
So, the modern equivalent would of course be this. (Laughter) But, actually, there is a thing, just as there are Veblen goods, where the value of the good depends on it being expensive and rare -- there are opposite kind of things where actually the value in them depends on them being ubiquitous, classless and minimalistic.
If you think about it, Shakerism was a proto-environmental movement. Adam Smith talks about 18th century America where the prohibition against visible displays of wealth was so great, it was almost a block in the economy in New England, because even wealthy farmers could find nothing to spend their money on, without incurring the displeasure of their neighbors. It's perfectly possible to create these social pressures which lead to more egalitarian societies.
What's also interesting, if you look at products that have a high component of what you might call messaging value, a high component of intangible value, versus their intrinsic value: They are often quite egalitarian. In terms of dress, denim is perhaps the perfect example of something which replaces material value with symbolic value. Coca-Cola. A bunch of you may be a load of pinkos, and you may not like the Coca-Cola company. But it's worth remembering Andy Warhol's point about Coke. What Warhol said about Coke is, he said, "What I really like about Coca-Cola is the president of the United States can't get a better Coke than the bum on the corner of the street." Now, that is, actually, when you think about it, we take it for granted -- it's actually a remarkable achievement, to produce something that's so democratic.
Now, we basically have to change our views slightly. There is a basic view that real value involves making things, involves labor. It involves engineering. It involves limited raw materials. And that what we add on top is kind of false. It's a fake version. And there is a reason for some suspicion and uncertainly about it. It patently veers toward propaganda. However, what we do have now is a much more variegated media ecosystem in which to kind of create this kind of value. And it's much fairer.
When I grew up, this was basically the media environment of my childhood as translated into food. You had a monopoly supplier. On the left, you have Rupert Murdoch, or the BBC. (Laughter) And on your right you have a dependent public which is pathetically grateful for anything you give it. (Laughter)
Nowadays, the user is actually involved. This is actually what's called, in the digital world, "user-generated content." Although it's called agriculture, in the world of food. (Laughter) This is actually called a mash-up, where you take content that someone else has produced and you do something new with it. In the world of food we call it cooking. This is food 2.0, which is food you produce for the purpose of sharing it with other people. This is mobile food. British are very good at that. Fish and chips in newspaper, the Cornish Pastie, the pie, the sandwich. We invented the whole lot of them. We're not very good at food in general. Italians do great food, but it's not very portable, generally. (Laughter)
I only learned this the other day. The Earl of Sandwich didn't invent the sandwich. He actually invented the toasty. But then, the Earl of Toasty would be a ridiculous name. (Laughter)
Finally, we have contextual communication. Now, the reason I show you Pernod -- it's only one example. Every country has a contextual alcoholic drink. In France it's Pernod. It tastes great within the borders of that country. But absolute shite if you take it anywhere else. (Laughter) Unicum in Hungary, for example. The Greeks have actually managed to produce something called Retsina, which even tastes shite when you're in Greece. (Laughter)
But so much communication now is contextual that the capacity for actually nudging people, for giving them better information -- B.J. Fogg, at the University of Stanford, makes the point that actually the mobile phone is -- He's invented the phrase, "persuasive technologies." He believes the mobile phone, by being location-specific, contextual, timely and immediate, is simply the greatest persuasive technology device ever invented.
Now, if we have all these tools at our disposal, we simply have to ask the question, and Thaler and Sunstein have, of how we can use these more intelligently. I'll give you one example. If you had a large red button of this kind, on the wall of your home, and every time you pressed it it saved 50 dollars for you, put 50 dollars into your pension, you would save a lot more. The reason is that the interface fundamentally determines the behavior. Okay?
Now, marketing has done a very very good job of creating opportunities for impulse buying. Yet we've never created the opportunity for impulse saving. If you did this, more people would save more. It's simply a question of changing the interface by which people make decisions. And the very nature of the decisions changes. Obviously, I don't want people to do this, because as an advertising man I tend to regard saving as just consumerism needlessly postponed. (Laughter) But if anybody did want to do that, that's the kind of thing we need to be thinking about, actually: fundamental opportunities to change human behavior.
Now, I've got an example here from Canada. There was a young intern at Ogilvy Canada called Hunter Somerville, who was working in improv in Toronto, and got a part-time job in advertising, and was given the job of advertising Shreddies. Now this is the most perfect case of creating intangible added value, without changing the product in the slightest. Shreddies is a strange, square, whole-grain cereal, only available in New Zealand, Canada and Britain. It's Kraft's peculiar way of rewarding loyalty to the crown. (Laughter) In working out how you could relaunch Shreddies, he came up with this.
Video: (Buzzer) Man: Shreddies is supposed to be square. (Laughter)
Woman: Have any of these diamond shapes gone out? (Laughter)
Voiceover: New Diamond Shreddies cereal. Same 100 percent whole-grain wheat in a delicious diamond shape. (Applause)
Rory Sutherland: I'm not sure this isn't the most perfect example of intangible value creation. All it requires is photons, neurons, and a great idea to create this thing. I would say it's a work of genius. But, naturally, you can't do this kind of thing without a little bit of market research.
Man: So, Shreddies is actually producing a new product, which is something very exciting for them. So they are introducing new Diamond Shreddies. (Laughter) So I just want to get your first impressions when you see that, when you see the Diamond Shreddies box there. (Laughter)
Woman: Weren't they square?
Woman #2: I'm a little bit confused. Woman #3: They look like the squares to me.
Man: They -- Yeah, it's all in the appearance. But it's kind of like flipping a six or a nine like a six. If you flip it over it looks like a nine. But a six is very different from a nine.
Woman # 3: Or an "M" and a "W". Man: An "M" and a "W", exactly.
Man #2: [unclear] You just looked like you turned it on its end. But when you see it like that it's more interesting looking.
Man: Just try both of them. Take a square one there, first. (Laughter) Man: Which one did you prefer? Man #2: The first one.
Man: The first one? (Laughter)
Rory Sutherland: Now, naturally, a debate raged. There were conservative elements in Canada, unsurprisingly, who actually resented this intrusion. So, eventually, the manufacturers actually arrived at a compromise, which was the combo pack. (Laughter) (Applause) (Laughter)
If you think it's funny, bear in mind there is an organization called the American Institute of Wine Economics, which actually does extensive research into perception of things, and discovers that except for among perhaps five or ten percent of the most knowledgeable people, there is no correlation between quality and enjoyment in wine, except when you tell the people how expensive it is, in which case they tend to enjoy the more expensive stuff more. So drink your wine blind in the future.
But this is both hysterically funny -- but I think an important philosophical point, which is, going forward, we need more of this kind of value. We need to spend more time appreciating what already exists, and less time agonizing over what else we can do.
Two quotations to more or less end with. One of them is, "Poetry is when you make new things familiar and familiar things new." Which isn't a bad definition of what our job is, to help people appreciate what is unfamiliar, but also to gain a greater appreciation, and place a far higher value on those things which are already existing. There is some evidence, by the way, that things like social networking help do that. Because they help people share news. They give badge value to everyday little trivial activities. So they actually reduce the need for actually spending great money on display, and increase the kind of third-party enjoyment you can get from the smallest, simplest things in life. Which is magic.
The second one is the second G.K. Chesterton quote of this session, which is, "We are perishing for want of wonder, not for want of wonders," which I think for anybody involved in technology, is perfectly true. And a final thing: When you place a value on things like health, love, sex and other things, and learn to place a material value on what you've previously discounted for being merely intangible, a thing not seen, you realize you're much much wealthier than you ever imagined. Thank you very much indeed.
Rory Sutherland stands at the center of an advertising revolution in brand identities, designing cutting-edge, interactive campaigns that blur the line between ad and entertainment. Full bio and more links
Transcript:
This is my first time at TED. Normally, as an advertising man, I actually speak at TED Evil, which is TED's secret sister organization -- the one that pays all the bills. It's held every two years in Burma. And I particularly remember a really good speech by Kim Jong Il on how to get teens smoking again. (Laughter)
But, actually, it's suddenly come to me after years working in the business, that what we create in advertising, which is intangible value -- you might call it perceived value, you might call it badge value, subjective value, intangible value of some kind -- gets rather a bad rap. If you think about it, if you want to live in a world in the future where there are fewer material goods, you basically have two choices. You can either live in a world which is poorer, which people in general don't like. Or you can live in a world where actually intangible value constitutes a greater part of overall value, that actually intangible value, in many ways is a very, very fine substitute for using up labor or limited resources in the creation of things.
Here is one example. This is a train which goes from London to Paris. The question was given to a bunch of engineers, about 15 years ago, "How do we make the journey to Paris better?" And they came up with a very good engineering solution, which was to spend six billion pounds building completely new tracks from London to the coast, and knocking about 40 minutes off a three-and-half-hour journey time. Now, call me Mister Picky. I'm just an ad man ... ... but it strikes me as a slightly unimaginative way of improving a train journey merely to make it shorter. Now what is the hedonic opportunity cost on spending six billion pounds on those railway tracks?
Here is my naive advertising man's suggestion. What you should in fact do is employ all of the world's top male and female supermodels, pay them to walk the length of the train, handing out free Chateau Petrus for the entire duration of the journey. (Laughter) (Applause) Now, you'll still have about three billion pounds left in change, and people will ask for the trains to be slowed down. (Laughter)
Now, here is another naive advertising man's question again. And this shows that engineers, medical people, scientific people, have an obsession with solving the problems of reality, when actually most problems, once you reach a basic level of wealth in society, most problems are actually problems of perception. So I'll ask you another question. What on earth is wrong with placebos? The seem fantastic to me. They cost very little to develop. They work extraordinarily well. They have no side effects, or if they do, they're imaginary, so you can safely ignore them. (Laughter)
So I was discussing this. And I actually went to the Marginal Revolution blog by Tyler Cowen. I don't know if anybody knows it. Someone was actually suggesting that you can take this concept further, and actually produce placebo education. The point is that education doesn't actually work by teaching you things. It actually works by giving you the impression that you've had a very good education, which gives you an insane sense of unwarranted self confidence, which then makes you very, very successful in later life. So, welcome to Oxford, ladies and gentlemen. (Laughter) (Applause)
But, actually, the point of placebo education is interesting. How many problems of life can be solved actually by tinkering with perception, rather than that tedious, hardworking and messy business of actually trying to change reality? Here's a great example from history. I've heard this attributed to several other kings, but doing a bit of historical research it seems to be Fredrick the Great. Fredrick the Great of Prussia was very very keen for the Germans to adopt the potato, and to eat it. Because he realized that if you had two sources of carbohydrate, wheat and potatoes, you get less price volatility in bread. And you get a far lower risk of famine, because you actually had two crops to fall back on, not one.
The only problem is: potatoes, if you think about it, look pretty disgusting. And also, 18th century Prussians ate very, very few vegetables -- rather like contemporary Scottish people. (Laughter) So, actually, he tried making it compulsory. The Prussian peasantry said, "We can't even get the dogs to eat these damn things. They are absolutely disgusting and they're good for nothing." There are even records of people being executed for refusing to grow potatoes.
So he tried plan B. He tried the marketing solution, which is he declared the potato as a royal vegetable. And none but the royal family could consume it. And he planted it in a royal potato patch, with guards who had instructions to guard over it, night and day, but with secret instructions not to guard it very well. (Laughter) Now 18th century peasants know that there is one pretty safe rule in life, which is if something is worth guarding, it's worth stealing. Before long, there was a massive underground potato-growing operation in Germany. What he'd effectively done is he'd re-branded the potato. It was an absolute masterpiece.
I told this story and a gentleman from Turkey came up to me and said, "Very, very good marketer, Fredrick the Great. But not a patch on Ataturk." Ataturk, rather like Nicolas Sarkozy, was very keen to discourage the wearing of a veil, in Turkey, to modernize it. Now, boring people would have just simply banned the veil. But that would have ended up with a lot of awful kickback and a hell of a lot of resistance. Ataturk was a lateral thinker. He made it compulsory for prostitutes to wear the veil. (Laughter) (Applause)
I can't verify that fully. But it does not matter. There is your environmental problem solved, by the way, guys: All convicted child molesters have to drive a Porsche Cayenne. (Laughter) What Ataturk realized actually is two very fundamental things. Which is that, actually, first one, all value is actually relative. All value is perceived value.
For those of you who don't speak Spanish, jugo de naranja -- it's actually the Spanish for "orange juice." Because actually it's not the dollar. It's actually the peso in Buenos Aires. Very clever Buenos Aires street vendors decided to practice price discrimination to the detriment to any passing gringo tourists. As an advertising man, I have to admire that.
But the first thing this all shows is that all value is subjective. Second point is that persuasion is often better than compulsion. These funny signs that flash your speed at you, some of the new ones, on the bottom right, now actually show a smiley face or a frowny face, to act as an emotional trigger. What's fascinating about these signs is they cost about 10 percent of the running cost of a conventional speed camera. But they prevent twice as many accidents. So, the bizarre thing which is baffling to conventional, classically trained economists, is that a weird little smiley face has a better effect on changing your behavior than the threat of a £60 fine and three penalty points.
Tiny little behavioral economics detail: in Italy, penalty points go backwards. You start with 12 and they take them away. Because the found that loss aversion is a more powerful influence on people's behavior. In Britain we tend to feel, "Whoa! Got another three!" Not so in Italy.
Another fantastic case of creating intangible value to replace actual or material value, which remember, is what, after all, the environmental movement needs to be about: This, again, is from Prussia, from, I think, about 1812, 1813. The wealthy Prussians, to help in war against the French, were encouraged to give in all their jewelry. And it was replaced with replica jewelry made of cast iron. Here's one: "Gold gab ich für Eisen, 1813." The interesting thing is that for 50 years hence, the highest status jewelry you could wear in Prussia wasn't made of gold or diamonds. It was made of cast iron. Because actually, never mind the actual intrinsic value of having gold jewelry. This actually had symbolic value, badge value. It said that your family had made a great sacrifice in the past.
So, the modern equivalent would of course be this. (Laughter) But, actually, there is a thing, just as there are Veblen goods, where the value of the good depends on it being expensive and rare -- there are opposite kind of things where actually the value in them depends on them being ubiquitous, classless and minimalistic.
If you think about it, Shakerism was a proto-environmental movement. Adam Smith talks about 18th century America where the prohibition against visible displays of wealth was so great, it was almost a block in the economy in New England, because even wealthy farmers could find nothing to spend their money on, without incurring the displeasure of their neighbors. It's perfectly possible to create these social pressures which lead to more egalitarian societies.
What's also interesting, if you look at products that have a high component of what you might call messaging value, a high component of intangible value, versus their intrinsic value: They are often quite egalitarian. In terms of dress, denim is perhaps the perfect example of something which replaces material value with symbolic value. Coca-Cola. A bunch of you may be a load of pinkos, and you may not like the Coca-Cola company. But it's worth remembering Andy Warhol's point about Coke. What Warhol said about Coke is, he said, "What I really like about Coca-Cola is the president of the United States can't get a better Coke than the bum on the corner of the street." Now, that is, actually, when you think about it, we take it for granted -- it's actually a remarkable achievement, to produce something that's so democratic.
Now, we basically have to change our views slightly. There is a basic view that real value involves making things, involves labor. It involves engineering. It involves limited raw materials. And that what we add on top is kind of false. It's a fake version. And there is a reason for some suspicion and uncertainly about it. It patently veers toward propaganda. However, what we do have now is a much more variegated media ecosystem in which to kind of create this kind of value. And it's much fairer.
When I grew up, this was basically the media environment of my childhood as translated into food. You had a monopoly supplier. On the left, you have Rupert Murdoch, or the BBC. (Laughter) And on your right you have a dependent public which is pathetically grateful for anything you give it. (Laughter)
Nowadays, the user is actually involved. This is actually what's called, in the digital world, "user-generated content." Although it's called agriculture, in the world of food. (Laughter) This is actually called a mash-up, where you take content that someone else has produced and you do something new with it. In the world of food we call it cooking. This is food 2.0, which is food you produce for the purpose of sharing it with other people. This is mobile food. British are very good at that. Fish and chips in newspaper, the Cornish Pastie, the pie, the sandwich. We invented the whole lot of them. We're not very good at food in general. Italians do great food, but it's not very portable, generally. (Laughter)
I only learned this the other day. The Earl of Sandwich didn't invent the sandwich. He actually invented the toasty. But then, the Earl of Toasty would be a ridiculous name. (Laughter)
Finally, we have contextual communication. Now, the reason I show you Pernod -- it's only one example. Every country has a contextual alcoholic drink. In France it's Pernod. It tastes great within the borders of that country. But absolute shite if you take it anywhere else. (Laughter) Unicum in Hungary, for example. The Greeks have actually managed to produce something called Retsina, which even tastes shite when you're in Greece. (Laughter)
But so much communication now is contextual that the capacity for actually nudging people, for giving them better information -- B.J. Fogg, at the University of Stanford, makes the point that actually the mobile phone is -- He's invented the phrase, "persuasive technologies." He believes the mobile phone, by being location-specific, contextual, timely and immediate, is simply the greatest persuasive technology device ever invented.
Now, if we have all these tools at our disposal, we simply have to ask the question, and Thaler and Sunstein have, of how we can use these more intelligently. I'll give you one example. If you had a large red button of this kind, on the wall of your home, and every time you pressed it it saved 50 dollars for you, put 50 dollars into your pension, you would save a lot more. The reason is that the interface fundamentally determines the behavior. Okay?
Now, marketing has done a very very good job of creating opportunities for impulse buying. Yet we've never created the opportunity for impulse saving. If you did this, more people would save more. It's simply a question of changing the interface by which people make decisions. And the very nature of the decisions changes. Obviously, I don't want people to do this, because as an advertising man I tend to regard saving as just consumerism needlessly postponed. (Laughter) But if anybody did want to do that, that's the kind of thing we need to be thinking about, actually: fundamental opportunities to change human behavior.
Now, I've got an example here from Canada. There was a young intern at Ogilvy Canada called Hunter Somerville, who was working in improv in Toronto, and got a part-time job in advertising, and was given the job of advertising Shreddies. Now this is the most perfect case of creating intangible added value, without changing the product in the slightest. Shreddies is a strange, square, whole-grain cereal, only available in New Zealand, Canada and Britain. It's Kraft's peculiar way of rewarding loyalty to the crown. (Laughter) In working out how you could relaunch Shreddies, he came up with this.
Video: (Buzzer) Man: Shreddies is supposed to be square. (Laughter)
Woman: Have any of these diamond shapes gone out? (Laughter)
Voiceover: New Diamond Shreddies cereal. Same 100 percent whole-grain wheat in a delicious diamond shape. (Applause)
Rory Sutherland: I'm not sure this isn't the most perfect example of intangible value creation. All it requires is photons, neurons, and a great idea to create this thing. I would say it's a work of genius. But, naturally, you can't do this kind of thing without a little bit of market research.
Man: So, Shreddies is actually producing a new product, which is something very exciting for them. So they are introducing new Diamond Shreddies. (Laughter) So I just want to get your first impressions when you see that, when you see the Diamond Shreddies box there. (Laughter)
Woman: Weren't they square?
Woman #2: I'm a little bit confused. Woman #3: They look like the squares to me.
Man: They -- Yeah, it's all in the appearance. But it's kind of like flipping a six or a nine like a six. If you flip it over it looks like a nine. But a six is very different from a nine.
Woman # 3: Or an "M" and a "W". Man: An "M" and a "W", exactly.
Man #2: [unclear] You just looked like you turned it on its end. But when you see it like that it's more interesting looking.
Man: Just try both of them. Take a square one there, first. (Laughter) Man: Which one did you prefer? Man #2: The first one.
Man: The first one? (Laughter)
Rory Sutherland: Now, naturally, a debate raged. There were conservative elements in Canada, unsurprisingly, who actually resented this intrusion. So, eventually, the manufacturers actually arrived at a compromise, which was the combo pack. (Laughter) (Applause) (Laughter)
If you think it's funny, bear in mind there is an organization called the American Institute of Wine Economics, which actually does extensive research into perception of things, and discovers that except for among perhaps five or ten percent of the most knowledgeable people, there is no correlation between quality and enjoyment in wine, except when you tell the people how expensive it is, in which case they tend to enjoy the more expensive stuff more. So drink your wine blind in the future.
But this is both hysterically funny -- but I think an important philosophical point, which is, going forward, we need more of this kind of value. We need to spend more time appreciating what already exists, and less time agonizing over what else we can do.
Two quotations to more or less end with. One of them is, "Poetry is when you make new things familiar and familiar things new." Which isn't a bad definition of what our job is, to help people appreciate what is unfamiliar, but also to gain a greater appreciation, and place a far higher value on those things which are already existing. There is some evidence, by the way, that things like social networking help do that. Because they help people share news. They give badge value to everyday little trivial activities. So they actually reduce the need for actually spending great money on display, and increase the kind of third-party enjoyment you can get from the smallest, simplest things in life. Which is magic.
The second one is the second G.K. Chesterton quote of this session, which is, "We are perishing for want of wonder, not for want of wonders," which I think for anybody involved in technology, is perfectly true. And a final thing: When you place a value on things like health, love, sex and other things, and learn to place a material value on what you've previously discounted for being merely intangible, a thing not seen, you realize you're much much wealthier than you ever imagined. Thank you very much indeed.
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