Rory Sutherland

It took a spate of air disasters in the late 1970s, in particular the Portland crash of United Airlines Flight 173, for aviation experts to pay attention to something called Crew Resource Management. This is a set of procedures first conceived by Nasa with the aim of minimising human error in flight. UA173 — where the pilots had spent so long fixated with a dodgy landing wheel that they failed to notice they’d run out of fuel — was one of a growing number of incidents in which disaster arose from failures in crew interaction. As with the Tenerife airport disaster and the Air Florida crash in 1982, there was no shortage of experience on the flight deck. The root cause lay not in the behaviour of the individuals but in the interplay between them.

I hate to tell you this, but every time you watch television you are being duped. In fact there are only three accurate things you will ever see on television. These are the colours red, green and blue. Each pixel on a screen can transmit three colours only. If blue alone is illuminated, the screen is blue. And it really is blue. But TV yellow is a big fat lie. It looks yellow. But it isn’t really yellow. It’s a mixture of red and green light which hacks our optical perception so we think we are seeing yellow. That’s because humans, indeed all higher apes, are mostly trichromats. We have three different types of cones in the retina, each sensitive to a different part of the colour spectrum.

I love anything open late at night. Never mind ‘the sigh of midnight trains in empty stations’; even mundane activities like filling up with petrol become enjoyably Edward Hopperish after midnight. Often the places are so quiet you wonder why they bother opening at all. But it is a strange psychological fact that opening a shop 24 hours a day often pays, even if nobody ever buys anything between 1 a.m. and 6 a.m. Somehow the knowledge that the shop never closes means people are far more likely to shop there at conventional times. This quirk also explains why the most successful coach firm between Oxford and London runs services all night: not because people really want to travel between 2 a.m. and 5 a.m., but because they like to know that they can.

I expect you’ve already noticed it, but in case you’ve been living in a cave or an economics faculty for the past ten years, I’ll repeat it. Goods are not like people. Goods only move wherever they are needed. They don’t come laden with an attachment to a homeland or a social network. Your Bosch dishwasher doesn’t pine for its washing-machine mates back in Stuttgart. Your Ikea sofa doesn’t claim benefits. If you buy a Mercedes, you don’t suddenly find two Audis and a Volkswagen turning up on your drive claiming to be close relatives and demanding to live in your garage. So, looked at dispassionately, the principle that the free movement of goods is somehow linked with the free movement of people is quite an odd idea.

I expect you’ve already noticed it, but in case you’ve been living in a cave or an economics faculty for the past ten years, I’ll repeat it. Goods are not like people. Goods only move wherever they are needed. They don’t come laden with an attachment to a homeland or a social network. Your Bosch dishwasher doesn’t pine for its washing-machine mates back in Stuttgart. Your Ikea sofa doesn’t claim benefits. If you buy a Mercedes, you don’t suddenly find two Audis and a Volkswagen turning up on your drive claiming to be close relatives and demanding to live in your garage. So, looked at dispassionately, the principle that the free movement of goods is somehow linked with the free movement of people is quite an odd idea.

In its hasty dismissal of James Damore, Google showed a worrying disregard for one of the most important freedoms within a company — the freedom to ask: ‘What if we’re wrong?’ A business culture that can attract and accommodate people with complementary talents benefits everybody. So even if you don’t believe Damore’s theories (in which case you probably shouldn’t hire any systems geneticists), he’s surely right to speak up if he believes the complex question of diversity has been hijacked by wishful dogma. It should be the province of first-rate scientific inquiry, not second-rate social theory. If the diversity agenda is pursued badly, the cure may well be worse than the disease.

Imagine for a moment a parallel universe in which shops had mostly not yet been invented, and that all commerce took place online. This may seem like a fantastical notion, but it more or less describes rural America 100 years ago. In 1919 the catalogues produced by Sears, Roebuck & Company and Montgomery Ward were, for the 52 per cent of Americans who then lived in rural areas, the principal means of buying anything remotely exotic. In that year, Americans spent over $500 million dollars on mail order purchases, half through the two Chicago companies. Yet in 1925, Sears opened its first bricks and mortar shop. By 1929, the pair had opened a further 800. So Amazon’s purchase of Whole Foods Market may be history repeating itself.

Thanks to meteoric advances in computational power, it is now possible to take abundant data from a wide range of sources, and use statistical modelling to prove… um, whatever bullshit conclusion you hoped to prove in the first place. For all the excitement of the information age, we must remember that self-serving delusions like nothing better than large quantities of information. The internet was a gift to conspiracy theorists, for instance. But confirmation bias is also more pronounced among the educated. (No one measures the negative consequences of higher education, but a naïve faith in universals has to be one of them.) Back in the analogue age, people couldn’t avoid exposure to shades of opinion.

Of the 375,000 listed buildings in England only 2.5 per cent are Grade I. Half are churches; many are otherwise uninhabitable, such as Nelson’s Column or the Royal Opera House. There are perhaps only 2,500 Grade I listed buildings in England in which you can feasibly live: these include Buckingham Palace and the Sutherland gaff. Eighteen years ago, when we had twins and decided to move out of London, my wife discovered a four-bedroom apartment in the roof of a Robert Adam house a mile outside the M25. To our astonishment, it was barely more expensive than ordinary housing of similar size nearby. I recently asked my neighbour, an economist, what premium we pay for the house’s architectural quality. ‘Between 0 and 5 per cent,’ he estimated. What’s going on?

Although it is commonly assumed that faster-than-sound passenger travel died with Concorde, this isn’t quite true: it overlooks the Caledonian Sleeper. With a few whiskies inside you, this is as close as you can get to teleportation. Yes, according to the timetable it takes about eight-and-a-half hours between Perth and London, but as you are asleep for eight of them, this makes for a supersonic speed of 900 miles per conscious hour. Quite simply, if you are asleep, or otherwise productively or pleasurably engaged, travel time isn’t that important. And if you accept this principle, it becomes clear that Google and Tesla’s Elon Musk have missed an opportunity to really innovate with their ideas for self-driving cars.

In every respect bar one, those bloody Corbyn-supporting students have a much tougher time of it than I did, what with my full grant and my tuition fees paid. But by God, learning stuff is easy nowadays. The young of today just cannot conceive what a chore it was to eke out enough material for an essay in 1984. To find out anything took hours of mostly wasted effort in a library. If you imagine a world where every page of Wikipedia took half an hour to load, it should give you some idea of what it took to educate yourself back then. That’s why we were all drunk and on drugs: we needed to recover from a tiring week finding out the significant dates of the Delian Confederacy. So why, pray, do university courses still last three years? Can people not learn any faster now?

A few years ago, someone asked me how to fix social care costs for the elderly. One eventual idea of ours was that, at age 65, people could pledge to pay a higher level of inheritance tax as a form of insurance against social care costs. If, say, you pledged £20,000 of the value of your estate, you would receive an annuity worth perhaps £150,000 should you develop dementia or need long-term care. This, we thought, would be appealing enough to be made voluntary. The idea was designed to align with a known property of human psychology called Prospect Theory, which  shows that people much prefer a small, certain loss to a small chance of a larger loss. Put simply, people prefer a definite 80 per cent of something to risking a 7 per cent chance of getting nothing.

When you get into a taxi, there’s usually a framed sheet of paper describing what you pay for your trip: the cost of every mile travelled at different times of day, and the price of waiting time. As digital screens become ever cheaper, it won’t be long before someone suggests that there is no need to have these things any more. Instead a button will appear on the taxi’s new seatback touchscreen which will reveal the tariff when pressed. All very sensible, you may think. Except for this. The nature of a promise displayed on paper is subtly different to a promise displayed on a screen. Anything writ in liquid crystal should always be viewed with a little added suspicion. There is a reason why we use phrases such as ‘tablets of stone’ to refer to promises.

I rang a company’s call centre the other day, and the experience was exemplary: helpful, knowledgeable, charming. The firm was a client of ours, so I asked what they did to make their telephone operators so unbelievably good. ‘Um, to be perfectly honest, we probably overpay them.’ Their call centre was 20 miles from a large city. Staff didn’t have to travel for an hour each day to find reasonably paid work, so they stayed for decades and became highly proficient. Training and recruitment costs were negligible. And it wasn’t just me they impressed: customer satisfaction was astoundingly high. The staff weren’t really a ‘cost’ — they were a significant reason for the company’s success.

Crowdfunding is a promising idea, and has created useful products. The Canary home-security system I wrote about recently was funded in this way. One big problem remains, though: how do you reward your early backers if you become too successful? Many of the 9,522 people who provided $2.5 million to fund development of the Oculus Rift headset on Kickstarter were understandably miffed when the company was sold to Facebook for more than $2 billion, of which they received precisely nothing. (I know how this feels — when I was 17, I inherited £200 from a distant relative, the remains of some money his father had made selling the patent for the caterpillar track to a small Californian tractor company in 1907. The firm is now called Caterpillar.

From October last year, it was compulsory for all London black cabs to accept payment by card. London cabbies aren’t always sunnily disposed towards Transport for London, but those I have spoken to since the move seem to welcome the ruling, and acknowledge that business has picked up since. There are, of course, plenty of reasons why taxi drivers preferred cash. It’s quick and does not require equipment or entail the surcharges credit card payments do; it might also be a little more, ahem, tax-efficient. Never-theless, the case for cabs accepting card payments was compelling. Uber, for fair reasons and foul, was eating into their business. From New York, there was clear evidence that passengers tipped more when paying by card. And people carry less cash than they once did.

After landing at Gatwick, the plane taxied for five minutes or so and then came to a halt in the middle of an outlying patch of tarmac. I heard the engines wind down. ‘Oh shit!’ I thought to myself. ‘It’s going to be a bus.’ Until then, I had always felt short-changed and mildly resentful when forced to take a bus to the terminal rather than being offered a proper air bridge. Then the pilot made an announcement so psychologically astute that I wanted to offer him a job. ‘I’ve got some bad news and some good news,’ he said. ‘The bad news is that another aircraft is blocking our arrival gate, so it’ll have to be a bus.

I was exchanging emails with someone the other day and signed off with the sentence ‘let me know when you are next in London’ or words to that effect. It then occurred to me that I had absolutely no idea where in the world my correspondent lived. This interested me. Because it occurred to me that I could write the sentence ‘next time you are in London’ to more or less anyone in the world without it sounding ridiculous. Of how many other cities is that true? New York, certainly. But then it gets difficult. Paris or Singapore? Well, at a pinch. It wouldn’t work for Perpignan, say, or Bourton-on-the-Water.