Otherwise

There’s a little mental game I like to play when I find myself forming an opinion, making a big decision, or investing intellectually in a particular belief. I like to ask myself: “what would make me believe otherwise?”

If I can’t think of what would make me change my mind, then I back off from formalizing the decision. I’m not ready. I’m being emotional, irrational, and biased. It’s one thing to say, “I have this opinion because I believe it’s true,” but it’s quite another to say “here is the specific evidence I would need to believe the opposite.” Most of the time, we’re not prepared to do that.

Fair Thee Well

[I know it’s “fare thee well.” It’s a gimmicky pun.]

I’ve noticed that most people are way more concerned about being treated fairly than they are with being treated well – or with just having a good life in general.

Furthermore, this mentality often seems coupled with a dire short-sightedness. People who are extremely concerned with “fairness” tend to only look at the fairness in a single encounter or exchange, even if that means huge sacrifices in potential upside elsewhere.

For instance, imagine you’re a shopkeeper, and a semi-regular customer is a dollar short on his $21-dollar purchase. You’re within your rights, of course, to refuse the sale and/or demand the extra buck. But doing so, while focusing on fairness, may easily lead to a marked decrease in that customer’s loyalty or desire to do business with you. You could lose a customer entirely, plus maybe others who witnessed the exchange or hear about it later. Meanwhile, spotting that guy the dollar could be a cheap way to buy a lifetime customer (who may even just hand you back the extra dollar the next time he sees you, as often happens).

That doesn’t mean there aren’t a thousand possible exceptions or counter-reasons in the above scenario; as in most things, context matters here. But it’s a demonstration of how caring about getting a “fair deal” can actually mean you get a very bad deal.

The You That You Want to Be

Somewhere out there is a version of you that is just waiting for you to become it. That version is happier, more successful, more fulfilled, healthier.

Many people envision this, but they think that the pathway to that version of themselves is full of secret twists and turns, and if they just discover what they are, they’ll be able to become this happier, successful, fulfilled and healthier version of themselves.

The pathway is more obvious. In order to get to that person, you have to become happier, more successful, more fulfilled, and healthier. When you’ve done that enough, you’ll be them.

And that person has still another version of themselves that they want to be.

You live and die every day. There are no moments you get to keep, no plateaus to conquer and hold. This is one of those truths where you can either fight it and be miserable your whole life, or you can embrace it and already be halfway to the version you want to be. But you can’t change it. Life only stops exactly once.

Worry Not

Lots of people worry about stuff. It’s a pretty natural part of the human condition. Yet often we carry worry around like a weight, stressing us out and hurting us, and yet we don’t change a thing about our behavior. It’s just pointless stress.

Often when I hear about someone’s worries, I’ll ask them this question: “Imagine you found out that the thing you were worried might happen was instead guaranteed to happen in 3 months. What would you do differently in those three months?”

And people usually tell me a whole host of things they’d do. Things that they, of course, are not doing right now.

So if they were certain of something, they’d act in preparation. But only being worried it might happen causes a bunch of stress but no behavioral changes.

And here’s the real kicker – usually the changes described by the person in the hypothetical scenario are all upside. In other words, there’s no reason not to do those things just because the potential event might not manifest. Worried you might lose your job, so you save money and look for a better one. Turns out you don’t lose your job? Oh no, you saved money and improved your industry knowledge for nothing!

In fact, not only does the guaranteed negative event cause people to plan better, in most cases it actually causes them to stress less!

Think about that. A negative event that might happen causes a bunch of stress and no action. A negative event that definitely will happen causes only a small amount of stress and a bunch of positive actions taken to mitigate (or even take advantage of!) the event.

This is like a superpower. As soon as you find yourself going around in the worry circle about something, just shift gears. Say it absolutely will happen, plan accordingly, and live your life. Don’t let the spikes that happen steal months from you.

Fallout

When you topple a really, really big tower – even if the tower was full of bad people – it can fall on good people who had nothing to do with it.

The taller the tower, in fact, the farther away the rubble can fall. People who didn’t even know the tower was there could be hurt.

I’m not saying that you should never attempt to eliminate bad things. We should tear down bad towers, for sure. But lots of people get very, very zealous about what they perceive to be the bad towers (and of course, they’re not always right), to the point where they don’t even consider that there could be people standing in the fallout zone.

If you seek to help good people more than you hurt bad ones, you’ll generally be more likely to make the world a better place. “Bad people” are only bad if they’re hurting folks, so if you’re focused 100% on hurting bad people and never even thinking about the good people you want to help as a result, then you’re no longer acting from a place of justice. Just hatred.

Lean Machine

How much of your personal environment is truly necessary to your functioning and happiness?

In the pure survival sense of the word, you don’t need a car, or a phone, or a computer. In a really strict and not terribly helpful definition of the word, they’re luxuries. But even though they can be used for leisure-related things, they sure don’t feel like luxuries. They feel like the cost of entry into the modern society that surrounds us.

I’ve always accepted that… sort of begrudgingly. Phone, car, computer – I don’t like being squeezed or forced, so if I have to buy those things in order to unlock the tremendous benefits around me, I’ll do it with the barest investment I can make. I have always bought extremely inexpensive, stripped-down versions of those items. I’ve never bought a new car in my life (for all sorts of reasons they’re terrible investments), and my phones and computers are always whatever version has the fewest bells and whistles.

Those are obvious examples, but I think in general we build this machine around us to navigate modern life, but then we often overdo it and build on more features than are necessary. Everything you have an account for, every subscription service, every organization where you’re a member. Some of these are the end goal – you may have a season ticket to your favorite team’s events because you like to go. But others are means – everything from your metro pass to your subscription to a video call service is part of your Modern Machine.

Not only can there be a lot of bloat if you let this get away from you, but the more you build it, the more it can look like a cage. You build all these tools and frameworks around you and suddenly they’re funneling you into a very specific kind of place, or job, or activity, or lifestyle. You outsource your freedom to things that are supposed to give you more of it.

The modern world has a lot of advantages. I’m no proponent of isolationism (except in reasonable, cleansing bursts, anyway) or completely disconnecting from society. But I am a proponent of being deliberate about your choices, and only taking exactly as much as you need, without yielding anything you don’t want to lose.

If You Get Lost

If you ever get lost in the woods, build a house. Now you’re not lost anymore – you’re home.

My life is, in many ways, is radically different than it was just a handful of years ago. Sometimes I look around and I don’t recognize it. I’ve gained a lot! I’ve lost a lot. Things have changed.

Plant a flag. Grow some roots. Build a house. Whatever it takes to make the place you are into the place you should be.

I am not at all good at this. I’m a fixer, not a settler. If I had lived during the frontier days of America, I think I would have had a major problem – the allure of what was over the next hill would always have been more attractive than whatever land I was supposed to build a farm on.

Exploration is good. Ambition, drive, adventure – all good. But there’s a balance; the other side of the scale. A place to return to. Even if we’re not talking about a physical one.

It Would Have Bit You

My father used to say that if I found something I was looking for in what should have been an obvious place: “If it was a snake it would’ve bit you.”

Assume the obvious, at least as a starting point. Sometimes we come up against a problem and we assume that just because no one has solved it yet, that the solution must be complex or difficult. But maybe not!

Start with the obvious place. The easy solution. It might not work – but it rarely takes long to check the obvious, so you’re not out much effort. But if you skip that step, you could spin your wheels for a long time before you realize to come back to it.

Don’t get bit.

Incentives Change Behavior

Shockingly little of our behavior stems from deeply-held moral convictions. And that’s a good thing! We shouldn’t have deeply-held moral convictions about most things, because it’s exhausting and alienating and inconsequential in most cases.

That leaves most of our behavior to be driven by the sequence of incentives that surround us. Have you ever picked one place to eat over another because it was closer? Worn a shirt you find slightly less comfortable because you receive more compliments when you do?

Of course. Everyone has incentives, they’re all competing, you’re creating them for other people, they’re creating them for you, and we’re navigating them all the time. But this effect is subtle, in the sense that water is subtle if you’re a fish. Because this is everywhere, you don’t really acknowledge it.

Still, there’s no excuse for being ignorant of it. People will change their behavior if the incentives change. It boggles my mind when people act like it doesn’t.

A few years ago, Philadelphia imposed this really high tax on sugary drinks sold in stores. It was absurd on the face of it, because the two stated goals of the program were entirely mutually exclusive: on the one hand, they said “this many sugary drinks get bought in Philly each year, so if we impose a 50-cent tax on each one, we’ll make X money in tax revenue for the city.” On the other hand, they said, “we want to discourage the consumption of sugary drinks, and this tax will help do that.”

See the problem? You can’t assume (with the first goal) that behavior will remain exactly the same while assuming (with the second goal) that it will change.

The two rules here are:

  1. People will always change their behavior, in aggregate, when the incentives change. This is true even if you wouldn’t change your personal behavior, because you are not ‘the aggregate.’
  2. Changing incentives changes behaviors, but it doesn’t necessarily change desires. People’s new behaviors will be whichever get them to their original desires most efficiently under the new incentive structure.

Here’s what actually happened in Philly, by the way – BOTH goals failed. The city didn’t gain much tax revenue (way less than the projections) AND the residents didn’t drink fewer sugary drinks. Instead, people just bought the same number of sugary drinks from stores just outside the city limits, and thus with markedly lower price points.

So, you want to understand and maybe predict human behavior? Okay, here’s the pattern. First, take a look at the action that a group of people are taking (all this stuff works way better with groups where you can average out the weird idiosyncrasies, but this method isn’t worthless when used on individuals – just be careful in your evaluations and put error bars on your predictions). Figure out first what desire they’re trying to meet. The desire is almost never the action. People aren’t buying sugary drinks because they’re below a certain price point. They’re buying sugary drinks because they want them. They’re incentivized to buy them from city bodegas because that was the most efficient method. So if you were smart, you’d look for the “path of least resistance” between the people and the desire that you’ve identified. That will be the new thing they do.

In sales organizations, sometimes leadership makes the silly decision to cap commissions. So at a certain point in the month, quarter or year, you can keep making sales but you won’t get paid for them anymore. In those organizations, you may be shocked to discover, the good salespeople tend to not work very hard in the last stretch of the commission period. They delay. They talk to their clients and prospects, sure, but they drag their feet getting contracts and closing deals. In sales they call this “sandbagging,” because they’re basically trying to delay commissionable deals until the start of the new commission period.

That’s a lot of wasted effort from the company’s perspective. But what else can you expect? Incentives change behavior. Salespeople don’t make sales because that’s what they want. They make sales because they want money. They’ll do whatever is the most efficient thing that gets them money. If you change what that thing is with rules, you’ll create a new “most efficient thing” – and people will do that.

Back when the British Empire ruled India, there was a time when cobras were a real menace. They were responsible for a lot of injuries and deaths in the cities (often of kids) and so the ruling Brits tried to solve the problem by putting out a bounty, paying a certain amount of money for every dead cobra people turned in. What actually happened was that people started secretly breeding cobras because it was a great way to make money. When the Brits caught on, they halted the bounty – and everyone dumped their cobras, which resulted in the population being higher than it was before.

And so here we add rule #3:

3. There is always more than one incentive.

See, the people really did dislike cobras. The reason they weren’t just killing them already (even without the bounty) is that cobras are dangerous! You can get really hurt trying to kill one, and it often might be better to just try to shoo it out of your house with a broom… where it can plague your neighbor. So creating an incentive to face that danger wasn’t, by itself, a bad decision. People really did desire to lead cobra-free lives. But they had an even stronger desire, which was to lead a wealthy life. That created conflicting incentives, and the stronger one won out. And when the bounty was ceased, people had all these cobras in boxes and stuff. They could have killed them instead of letting them go, but… remember that thing about cobras being dangerous and tricky to kill? It’s easier to tip over a box and run.

People will spend a lot of time “gaming the system” as long as they perceive that there are gains for doing so. This creates a lot of wasted effort. For example, Americans spend collectively 6 billion hours doing their taxes every year. As much as possible, most people are trying to game the system. That doesn’t mean they’re cheating or anything! It just means they’re following incentives… in fact, they’re doing what the tax code wants them to do!

Remember, every tax (or tax break) is ostensibly designed to create or change a behavior in the first place. The government wants revenue, but ultimately all sorts of social engineering motivations come into play. Cigarettes get taxed because politicians hope that somehow revenue will be raised and people will smoke less. They’re probably dishonest about one of those hopes, but even still, if you smoked less because of the tax, people could hardly claim that you were cheating on your taxes just because you ultimate paid less to the state coffers.

So when people spend 6 billion hours figuring out what they can claim, remember that it’s because the rules (at least claim to) encourage them to do certain things or not do other things. That’s the incentive.

But of course, oh those unintended consequences. 6 billion wasted hours. More cobras than ever. Extra driving – and extra pollution & congestion – to get that Coke. Always a side effect. Always something you didn’t see.

Choice architecture is hard. Designing incentive structures is hard. Predicting how people will react to them is hard – but predicting that people will react to them, in one way or another, is dead simple.

They will.