:00:02. > :00:12.Conservative Party Conference same wealthy people need to pay more tax
:00:12. > :00:14.
:00:14. > :00:19.Stop smoking, eat less, exercise more and pay your taxes on time. So
:00:19. > :00:21.many things governments want us to do; so hard to get us to do them.
:00:21. > :00:24.HARDtalk's Shaun Ley speaks to behavioural economist Richard
:00:24. > :00:27.Thaler who thinks he has the answer. It's called 'nudge' theory, but
:00:27. > :00:30.it's not just an academic idea. Britain's Prime Minister is so
:00:30. > :00:34.impressed, he's set up a whole 'nudge unit' in the heart of his
:00:34. > :00:38.government. If you live in Britain, you may unwittingly already be part
:00:38. > :00:41.of a nudge experiment. So is the nudge guru teaching those in power
:00:41. > :00:51.how to encourage us to live better; or helping politicians to control
:00:51. > :01:14.
:01:14. > :01:20.Welcome to HARDtalk. What is this theory? Bernard is some feature of
:01:20. > :01:25.the Environment that attracts attention and influences behaviour.
:01:25. > :01:34.How does this differ from the traditional approach that has been
:01:34. > :01:39.adopted to improve behaviour? think the basic idea of the 'nudge
:01:39. > :01:46.unit' is really just to take all we know about behavioural science and
:01:46. > :01:52.how people think and behave and make use of that to figure out how
:01:52. > :01:57.to implement government policy that is effective. A economists have
:01:57. > :02:03.traditionally thought of people as rational in choices they make but
:02:03. > :02:13.also rather selfish. Do you think that is being too narrow a view?
:02:13. > :02:20.
:02:20. > :02:26.think so, I don't like the word rational. We are human. Difficult
:02:26. > :02:32.problems we will trip up on sometimes. We don't always have the
:02:32. > :02:38.self-control to do what we think we should do. Many are obese, many
:02:38. > :02:44.smoke, if you ask most smokers they say they'd like to quit if they
:02:44. > :02:51.could figure out how. Economists view everyone doing precisely what
:02:51. > :02:57.is best for them at all times and that's just not accurate. He last
:02:57. > :03:00.some examples of how this is being used. I have seen a quote about
:03:00. > :03:08.something the British Government has done with letters sent out to
:03:08. > :03:12.people that are slow on paying taxes. There is a unit of the
:03:12. > :03:19.Treasury whose job is to collect from the people who have not paid
:03:19. > :03:26.tax. Most people who will are on a salary in Britain, the taxes are
:03:26. > :03:30.done automatically. They pay as they earn. If you have outside him
:03:30. > :03:36.comes from various sources, it's up to you to write out the cheque at
:03:36. > :03:41.the end of each year and some people forget or whatever and bears
:03:41. > :03:47.the division in the Treasury whose job it is to collect from those who
:03:47. > :03:57.owe money and have not paid. They write letters. They wonder whether
:03:57. > :03:57.
:03:57. > :04:02.the letter as are effective for pop? The thing we try to teach
:04:02. > :04:10.people in Whitehall is that nobody knows all these dances in advance.
:04:10. > :04:15.I don't know what the best plan is. Social science gives us a few hints.
:04:15. > :04:23.My first guess at what the letter at maybe may well work better than
:04:23. > :04:29.the current letter. Let's try 10 letters. We've been running very
:04:29. > :04:34.its random controlled trials. We send out one version of the letter
:04:34. > :04:41.and other people other versions. We see which works best. Or has been
:04:41. > :04:48.the most effective technique for getting people to pay up? There are
:04:48. > :04:51.two principles that seem to be most effective. One is reminding people
:04:51. > :05:00.truthfully that most of their fellow citizens pay the taxes on
:05:00. > :05:06.time. That's called the positive social norm. Most people behave and
:05:06. > :05:13.you should behave. The other one is making a personal, same things like
:05:13. > :05:19.most people pay their taxes on time and we say most people way you
:05:19. > :05:23.leave pay on time. That helps a bit more. It will mention some of the
:05:23. > :05:31.benefits that the town receives from the taxes that will help even
:05:31. > :05:37.more. That's the basic idea. We do continue to try to find out what
:05:37. > :05:41.the most effective one is. There is randomised trials, the essential
:05:41. > :05:46.element of what you persuade the British Government to do, the
:05:46. > :05:51.analogy is in medical research. You can take part in trials. They know
:05:51. > :05:57.they are taking part. In this approach, people are part of the
:05:57. > :06:03.experiment having no idea they are being experimented upon. That's
:06:03. > :06:11.true, but you know, that happens every day. You get a letter from
:06:11. > :06:17.the bank. They ask if you die to take a credit card. Thousands of
:06:17. > :06:21.versions of that letter exist. There's nothing really very new or
:06:21. > :06:29.sinister about this. The isn't this different because it's the
:06:29. > :06:33.Government doing this as opposed to a private entity? It's more likely
:06:33. > :06:36.that it's an attempt to do something that in society's best
:06:36. > :06:43.interest rather than in the interest of the company sending you
:06:43. > :06:51.the letter. I don't see it as sinister. We end as motivation
:06:51. > :07:01.persuading people to improve their behaviour, become manipulation?
:07:01. > :07:01.
:07:01. > :07:07.suppose manipulation is a pejorative word. I don't know if we
:07:07. > :07:12.can draw hard lines. One of my favourite nudges, one I make use of
:07:12. > :07:18.all the time when I spend time in London is the helpful signs that
:07:18. > :07:24.appear at intersections reminding us to look right, because as you
:07:24. > :07:31.know you drive on the wrong side of the road over here. Those big buses
:07:31. > :07:38.come from the wrong direction. I consider those signs helpful nudge.
:07:38. > :07:42.If you consider them manipulation, I'd say that's inaccurate. That's
:07:42. > :07:47.it is explicit. The interesting thing about the way the 'nudge'
:07:47. > :07:51.theory works is that these things are not explicit. You don't say
:07:52. > :07:56.it's an incentive to do something but you are encouraged to change of
:07:56. > :08:00.behaviour. Perhaps that explanation is not given in those letters. We
:08:00. > :08:07.don't tell you this because it's more likely to make you behave in
:08:07. > :08:12.another way. That right, but we are publishing the research about this.
:08:12. > :08:15.It's not a big secret. I don't think the letter would work
:08:15. > :08:24.particularly well equipped told people that we are trying to
:08:24. > :08:30.manipulate them. You are trying to motivate them? In society's
:08:30. > :08:33.interest for them to pay their taxes. If you look at the European
:08:33. > :08:39.governments that are in the most trouble right now, one of the
:08:39. > :08:43.biggest reasons, perhaps the biggest single reason, is that most
:08:43. > :08:47.people don't pay taxes. There is and that about the social norm?
:08:47. > :08:52.It's not a question about whether the Government thinks they sure
:08:52. > :08:56.that alright or wrong, what society thinks. One criticism I see about
:08:56. > :09:02.these theories on its own is that it does not work. It only works if
:09:02. > :09:12.it builds on an existing cultural social accepted form of behaviour.
:09:12. > :09:12.
:09:12. > :09:20.You cannot go against that. A don't think that's right. In the last few
:09:20. > :09:25.decades in the US at least, some people have taken to cleaning up
:09:25. > :09:30.after dead dog. I live across the road from a parked in Chicago. I
:09:30. > :09:35.see dog owners walking in the park having a little bag with them. I
:09:35. > :09:41.think there's a law. I've never heard of anyone being arrested for
:09:41. > :09:45.failing to follow the law. We have changed the social norm. The park
:09:45. > :09:50.is more pleasant to walk in. I think it would be possible to
:09:50. > :09:59.change the social norms in a country like Greece where people
:09:59. > :10:06.felt that they needed to pay taxes as opposed to now where they think
:10:06. > :10:10.only a fool will pay their tax. does this differ from where some
:10:10. > :10:13.places in Europe are called the nanny state where the Government
:10:13. > :10:21.and the machinery of government and the structure of how you should
:10:21. > :10:29.live your life. A whole idea behind the ball that we wrote, the title
:10:29. > :10:35.is Nige, we gave that the title of paternalism. It sounds like a
:10:35. > :10:44.contradiction. It does sound like an oxymoron. He is what we mean by
:10:44. > :10:51.that. We never forced anybody to do anything. Paternalism means simply
:10:51. > :10:56.helping people achieve their goals. If I'm lost, I usually am in London,
:10:56. > :11:00.and I ask somebody the way to Piccadilly? They point me in the
:11:00. > :11:09.correct direction and they are paternal by definition. They try to
:11:09. > :11:14.help me achieve my goal. I think the nanny state involves collection.
:11:14. > :11:23.If we banned cigarettes, that's fine to call at a nanny state. If
:11:23. > :11:28.we help people and make it easier for you to create somehow, then
:11:28. > :11:35.that creates as a nudge. The presumption is that all governments
:11:35. > :11:41.are doing things for the right reasons. I don't run any
:11:41. > :11:46.governments. You're being quite in falling short in one at the moment
:11:46. > :11:50.was mark set up in a heart Britain. Influencing the way government
:11:50. > :11:56.makes decision and say you save millions of pounds in taxpayers'
:11:56. > :12:06.money. You're an influential figure. That's right, but when people asked
:12:06. > :12:13.me to sign a copy of my book I signed it Nigel Goode, which is a
:12:13. > :12:22.hope Nanjing us every day taking our money and put it in their
:12:22. > :12:30.pockets. I think that those who live in democracies, we elect a
:12:30. > :12:36.government to help run society. If they know just for evil we should
:12:36. > :12:41.vote them out. The way it normally works traditionally is that the
:12:41. > :12:45.Government comes up with an idea putting it forward. They establish
:12:45. > :12:50.legislation and regulations because of the process. There's a debate
:12:50. > :12:54.and an argument. There is a vote and its upfront and visible. There
:12:54. > :12:59.is the potential risk that the Government is enthusiastic about
:12:59. > :13:05.this theory that much of this is done and very subtly in a way that
:13:05. > :13:12.people cannot necessarily see. That's when the ethical doubt is
:13:12. > :13:21.raised. I think that's a complete misconception. We'd been working
:13:21. > :13:26.Jobcentres. They are there to help people find a job. We had a few
:13:26. > :13:32.members of the team spend a few weeks in various Jobcentres
:13:32. > :13:38.watching what they do. The end result of that is that we will be
:13:38. > :13:47.running experiments to help the people who work in those places be
:13:47. > :13:54.more effective at finding people jobs. There are everybody there in
:13:54. > :13:58.government trying to do the job. Someone at the BBC has coached you
:13:58. > :14:04.on the best way to conduct this interview. You have not revealed
:14:04. > :14:10.that to me or the audience. You are manipulated me. You're manipulating
:14:10. > :14:18.the audience. I would not use that word. I'd say you're doing your job.
:14:18. > :14:25.You're trying to make this interview as useful as possible. I
:14:25. > :14:30.think manipulation is just a red herring. But no case of
:14:30. > :14:40.manipulation providing a motive? You say this is for the good? It
:14:40. > :14:52.
:14:52. > :15:02.He thought it was a kind of minor trickery into getting the people of
:15:02. > :15:06.
:15:06. > :15:14.Britain to adopt a state ordered lifestyle. There is no big brother.
:15:14. > :15:16.There is no secret plan. One of the most important things we are doing,
:15:16. > :15:26.this is in the process of working its way through Parliament right
:15:26. > :15:27.
:15:27. > :15:34.now. Getting consumers to have the right to see their own usage data
:15:35. > :15:40.from the suppliers. If you go to a supermarket and they have a
:15:40. > :15:50.shoppers club, they are collecting data on all the things you buy.
:15:50. > :15:57.They now achieved by changing the arrangement of things... -- nudge
:15:57. > :16:04.you. We want you to be able to have that data, say you are a kid with a
:16:04. > :16:11.peanut allergy, by allowing you access to that data someone will
:16:11. > :16:19.write an app, you'll be able to upload all of your purchases and
:16:19. > :16:26.get back a list of things you can stop buying. The nudge unit mantra
:16:26. > :16:34.is make it easy. We are trying to make life easier for the citizens
:16:34. > :16:39.of Britain. There are areas this has not been used in so far. It is
:16:39. > :16:46.not being used for foreign policy, macro-economic policy. Might it
:16:47. > :16:55.help with things like tax? In Britain they cut the highest rate
:16:55. > :17:00.of tax from 50p in the pound down to 45p in the pound. I do not know
:17:00. > :17:05.if your unit was used to provide evidence for that. Might there be a
:17:05. > :17:10.case to say that big policy decisions like that could be held
:17:10. > :17:15.fully influenced by using the sort of information you used to decide
:17:15. > :17:20.on what will nudge us to do the right thing? If we are more
:17:20. > :17:30.effective at getting people to pay the taxes they go, we can reduce
:17:30. > :17:32.
:17:32. > :17:36.the rates. The second thing is, Britain is about to launch a new
:17:36. > :17:41.pension scheme that has all kinds of behavioural principles delve
:17:41. > :17:46.into it. It has been in the works for several years, Lord Turner was
:17:46. > :17:56.involved in this. People will be automatically and rolled into the
:17:56. > :18:03.programme. That is not a nudge. It is compulsion. Precisely not. Not
:18:04. > :18:13.compulsion. They are and rolled and they are free to get out. --
:18:14. > :18:19.
:18:19. > :18:27.enrolled. If everyone pops out, it will be a useless programme. --
:18:27. > :18:33.opts out. Most people think they should be saving for retirement but
:18:33. > :18:41.navigate around to it. If we make it easy, our mantra, fell out all
:18:41. > :18:49.the Fonz, more people will join and fewer people will become wards of
:18:49. > :18:53.the state in their older age. -- fill out all of the forms. What
:18:53. > :18:57.does codger have won this theory. A behaviour scientist is doing
:18:58. > :19:07.similar work with the French government, he says the French do
:19:08. > :19:09.
:19:09. > :19:16.not comply easily with social norms. He says it will not be enough to
:19:16. > :19:23.get them to change their own behaviour. Their cultural limits?
:19:23. > :19:28.As a rule there is a vast literature on cross-cultural
:19:28. > :19:38.differences. A great simplification would be, they tend to be second
:19:38. > :19:40.
:19:40. > :19:45.order. The first order results that people are more sensitive to losses
:19:45. > :19:55.than gains is a fact about the human condition. Whether the
:19:55. > :20:01.Chinese are less loss averse than the Ethiopians, perhaps. As things
:20:01. > :20:06.spread out, one of the young guys in a unit is going off to do a year
:20:06. > :20:11.in Australia because they want to try some of these things over there.
:20:11. > :20:17.If the Australians are different to the Brits, maybe things will have
:20:17. > :20:22.to be done differently. That is why we test. A longer term question, if
:20:22. > :20:32.you change behaviour can be sustained the change in behaviour?
:20:32. > :20:33.
:20:33. > :20:39.My little dog walking example works. When I was a kid, you had to nudge
:20:39. > :20:45.people to buckle up their seatbelts. Now people do not think about it.
:20:45. > :20:54.Kids grow up buckling their seatbelts, now they do it. You can
:20:54. > :21:00.change cultural norms. In 2010, a columnist said it has become a case
:21:00. > :21:04.study in how big ideas get corrupted. Politicians who are
:21:04. > :21:10.looking for a short-term fix, cost- effective solution, take an idea
:21:10. > :21:15.like this and run with it. Actually, they take it away from what it was
:21:15. > :21:24.intended for. Some people may do that. I would say precisely the
:21:24. > :21:30.opposite is true of the behavioural insight team in Britain. Everything
:21:30. > :21:37.we do we test. There is no rush into anything. The first trip over
:21:37. > :21:44.here when I was taken around to see one minister after another, the
:21:44. > :21:48.phrase I kept saying, we cannot do evidence-based policy without
:21:48. > :21:55.evidence. Everything we try to do we try and test. The alternative to
:21:55. > :22:01.what we are doing is arrogance. It is arrogance to think that you know
:22:01. > :22:04.what the right way of doing things is. I do not think I know. I am
:22:04. > :22:10.pretty sure if you automatically n'roll people into a pension plan,
:22:10. > :22:17.most of them will join. We have millions of data points in America
:22:17. > :22:22.to support that because companies have adopted it. You know, not
:22:22. > :22:29.everyone of my ideas is right. That is why I insist that we test
:22:29. > :22:37.everything that we do. I am human. Everybody on the nudge unit is
:22:37. > :22:44.human. We are just trying to help British citizens go about their
:22:44. > :22:52.lives more successfully. One of the famous examples you have quoted is
:22:52. > :23:02.the one of putting a fly inside a urinal, a toilet, improving men's
:23:02. > :23:10.
:23:10. > :23:20.game. I have not seen any new data. But, you know, it is a fine example.
:23:20. > :23:20.
:23:20. > :23:28.It is one sentence in the book. I think it is an illustration of an
:23:28. > :23:32.intervention that was nearly costless and helpful, if you want
:23:33. > :23:41.to say we are manipulating men to aim were they should, then I plead
:23:41. > :23:48.guilty. There has been a breach inquiry into this, the hayfield
:23:48. > :23:55.change is a good thing, Nige is useful. But people need 20-25 years