Alchemy, by Rory Sutherland

The stated thesis of this book is that rationalism and logic are over-rated (especially in business), and that "psycho-logic" (a kind of... amorphous human-psychology-aware approach to everything?) is better. I don't think this is the actual thesis, though.

I'm basically using this bookthought as a springboard for a rant about a weird habit I keep noticing in certain successful people: they have good observations but a vague, randomly-applied theory that they claim explains their observation but actually doesn't.

I'm maybe 80% sure that this is the issue with Sutherland. (Later in this bookthought I'm going to have a stab at what the coherent theory that emerges from this book might be, but either Sutherland doesn't know it or it's obscured by his language). But yes, I genuinely found his observations interesting: for example, why specifically is standing on trains bad/unpleasant? I agree with him that we generally take it for granted that it is bad, but that there could be lots of reasons for that, some psychological and some physical and some fairness-related, and that there are potential solutions which are not expensive but which require thinking about a problem that most people take for granted. Sure! This is all good stuff (to me, at least), and he has a lot of it, and I would probably read a book of bullet-points of Observations And Questions Rory Sutherland Found Interesting.

The problem is that Sutherland wants to frame all these facts with the argument that Logic and Rationality are over-valued in business and politics, and that we should rebel against it. I'm actually sympathetic to this claim, I think it might often be true, but I think Sutherland is basically shoehorning a random bunch of examples into this thesis in ways that don't make any sense and which couldn't be applied by anyone or evaluated by anyone. The real lesson of the book is "Rory Sutherland has good judgement, and if you have good judgement you will also make good decisions".

An example of this in action: Sutherland goes off against GoogleMaps, saying that it's very good at one narrow thing (telling you the route with the fasted expected value) but that when you're going to the airport you don't really care what the fasted expected value is, you also care about variance and avoiding worst-case outcomes, and that you'd rather take a route that's 15 mins slower on average but also has a much smaller risk of making you 2 hours late for your flight. Um... yes, I agree? But in what way is that a vindication of his theory that logic is overrated?

Look, I know on some level all linguistic arguments are dumb, and if you can accept for the purposes of this book that "Economic Rationality" means optimising a single variable under very narrow constraints then, yes, minimised-average-time routes on GoogleMaps are Rational and any more complicated formula is Alchemical, but.... sorry, this is just not what these words mean? Sutherland wants GoogleMaps to include more variables in their calculations, and I'm happy to join him on that, and I suspect that the GoogleMaps team would also be happy to join him on that. But this isn't a rejection of rationality, it's just an attempt to include more relevant variables to make a better model: this is the epitome of technocratic Rationalist activity! Many segments of this book are slightly infuriating to listen to because they just involve Sutherland claiming that a given model could be improved by including more variables BUT THE MAN DOESN'T LIKE THAT BECAUSE IT'S NOT 'LOGICAL', IT IS PSYCHO-LOGICAL.

I just don't really know what to do with that; I'd like to think I hate The Man as much as anyone, I think that everything is complicated and that narrowly-optimal solutions are often bad (though also often they are responses to constraints and tradeoffs that outsiders aren't aware of!), and I liked most of the solutions Sutherland proposed to things. I just don't think his theory has any explanatory power at all; I think he just has good observations and good discretion in those things, and then acting as if anyone could have arrived at these solutions if they'd just use Psycho-logic in place of Logic.

Another rash of his examples are just things that work for reasons we don't yet understand, which, again, I mean, fine? That doesn't make them irrational or illogical, it just means we have limited information. Again I feel the words "logical" and "illogical" are being used.... illogically, here.

Another rash of his examples just miss the point of why something succeeded. Supposedly, everyone Logical would have told you that the Dyson vacuum cleaner would fail because there was no proof of demand for "a cool looking more expensive vacuum". But... the whole point of the Dyson was that it was a better vacuum cleaner? It used new technology to clean better (or at least claimed to, I never verified this). It also looked weird, but their selling point was "diligent inventor invents better cleaning technology," and if you'd asked people if they wanted that I assume many would have said "yes".

Similarly, he claims that Google succeeded because Yahoo's homepage was full of cruft and Google rejected the Logical Idea that More Stuff Is Good and therefore succeed with a cruft-free homepage. But... Google was also a much, much better search engine qua search engine?

I know that as someone who writes similar pop-non-fiction there's a significant risk that if I looked honestly at my own books I would see they are also full of this kind of fly-by use of examples I don't understand because I want to make a particular point, but it's kind of horrifying to read.

The weirdest version of this was where he praises the Boeing 787 as "finally being a plane made by designers instead of accountants", psycho-logical instead of logical, etc etc etc, because it has improved humidity and cabin pressure than older planes did, which matters a lot to customers but isn't Narrowly Rational. But... doesn't the 787 has better humidity and pressure because of engineering advances (composite materials)? It wasn't that nobody thought it was good before, it was that we didn't know how to do it before. And this is particularly egregious because 2019 is a bizarre time to say that Boeing is making better long-term decisions by ignoring its accountants and the clamour for short-term profits!

Alright: a while ago I promised to give a theory that I think might underlie Sutherland's examples, but it also might not, and he mixes terms so often that it's impossible for me to tell if this is what he thinks he means: I sometimes thought Sutherland's real thesis was that evolutionary processes are under-rated, and arguments from first principles are over-rated. This certainly explains some of his cases, and he sometimes talks about evolutionary processes explicitly and sometimes about things like Chesterton's Fence ("don't let a man pull up a fence if he says there's no reason it should be there; once he can explain why it was there you might then be willing to let him pull up the fence"). It also ties in with some themes he keeps alluding to but never quite wants to spell out about how people's real reason to do things is often not their stated reason, and their real reason is to impress potential sexual partners. (It also fits with some of his weirder "saying a thing everyone agrees about but as if it's rebellious" claims, e.g. “I have a Darwinian idea of markets. Reasons don’t matter, whichever is fittest survived”, which he seems to think is a rebuttal to classic economics but is... literally the cornerstone of free market thinking?). Anyway, I think it's possible that if you went back through the book the thesis "evolutionary processes are under-rated, first-principles reasoning is over-rated" would more accurately tie together his various anecdotes and observations than "logic is over-rated, psycho-logic is under-rated" does. But frankly I'm not going to go back and check that, and maybe it doesn't.

In conclusion, I basically think this book doesn't understand itself. I think it makes these grand claims about logic being over-used and psycho-logic being under-used, but it never bothers to check how often psycho-logical solutions would be right or wrong, or realise that "don't always be logical" is not in itself a decision mechanism, or that in order to make the technique work you have to have really good discretion about what to follow through on and what not to. Judgement is difficult! Experimentations perilous! Increasingly that is my view about most people's theories, that they're post-hoc rationalisations and misunderstandings where the only real truth is "having good judgement and discretion is good."

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Unrelated to everything, a few fun facts and claims from the book (that I ought to fact-check, but Fun If True):- Cecil Bertie Blatch, local Conservative Party Chairman, “lost” a couple of votes in his pocket for another candidate and gave Margaret Thatcher her first winnable seat. Is this widely known? Seems mad if true. What % of successful politicians had at least one stolen election in their past?- Steve Jobs had a fear of buttons
- for many years US Gov did not acknowledge Wright Brothers, said a government project had achieved heavier than air flight first, and hence the Wright Brothers plane was kept in London instead of US
- E-cigs were invented by a Chinese businessman, which infuriated Health Establishment who had spent their lives and status on making smoking shameful
- A flower is a weed with an advertising budget  
- some men refused to order cocktails only because there was some small risk that it would come to the table served in a pineapple; that's why cocktail bars started showing the kind of glass for each cocktail on the menu- "If you treat all the dishes in your house as dishwasher proof then after a year they will be — the ones that weren’t will be deatroyed. If all problems in the world have been attached by logic and science, the ones that are now left are the ones not tractable by science"  
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MORE, UNSTRUCTURED NOTES FROM ALCHEMY
Business is the largest social science experiment in the world.
Advertising is the last business holdout for weirdos.
“Cognitive psychology is social psychology with all the interesting variables set to zero”. -- Robert Zajon
If you treat all the dishes in your house as dishwasher proof then after a year they will be — the ones that weren’t will be deatroyed. If all problems in the world have been attached by logic and science, the ones that are now left are the ones not tractable by science. (RS claims logic is now too plentiful — ???)
Big data always comes from one place: the past.
Richard Thaler: “The US government is run by lawyers who occasionally take advice from economists”
“Privileging the hypothesis” — classic Less Wrong term. Rationalists and post-rationalists.
Would miso soup exist if it wasn’t popular? [book thoughts says: yes]
Adam Smith on watches, and buying high-end ones
Rory on Dysons: “a cool looking more expensive vacuum”. No proof of demand for that. ----> But... whole point was it was better and vacuuming, no?
overall: classic book for the trickiness of listening to someone talk with no interlocuter. He can say whatever he wants and nobody cuts him off

biggest problem: if not rationality then what? Agree that (narrowly) “rational” solutions are often wrong but what’s his decision making method to replace it with? Rory gives no reason to believe his method (which is just... anything?) will work better in general.

Rory against GPS: it’s too logical, only cares about distance and time. But... wtf? 1) You can just ignore it when you want to? He seems to think he’s hacking the system, but he’s using it as intended, and 2) he wants GPS to include variance. Fine! That is an objective function. This is not anti-logical
meta: perhaps in the class of people with good ideas but bad theories. Discretion and judgement are everything! “Why is standing on trains bad?”  is an interesting question, and Rory has interesting answers, but his theory doesn’t really lead to them
Pleasant nonsense books: less hefty, short pieces, perfect for audio
US Gov did not acknowledge Wright Brothers for a long time, said a government project had done heavier than air flight first
E-cigs invented by Chinese businessman, which infuriated Health Establishment who had spent their lives and status on making smoking shameful
Harrison clockmaker medical chronometer

High court judge driving home from a club after 6 gin and tonics, got breathlysed and came up fine, went back to club and had the Barman fired
Predictability is key to wait frustration. Trains, planes, Uber’s. Customers of a plumber complain of “having to take the whole day off” are largely ameliorated if the plumber texts 30 mins ahead to say they’re on their way. <surgeries at the hospital, similar>
Kieran Thomas, son of Dylan, became a copywriter (said you buy a drill because you want one and then go around your house looking for things to drill)
Brits are afraid of Spiders even though there are no poisonous spiders here because “Just in case”, says Rory, and there’s little benefit to not being afraid. But... that’s not how evolution works? Who are we descended from who encountered poisonous spiders?
R: Who cares why people do good things (brush teeth etc) so long as they do them? U: Well.... because some things that people think are good might not be good at all! Moreover, people like R always seem to see themselves as the nudger and not the nudged
Part 1 1:16:32 “a few chapters back” about something that was just said a minute ago. Was a bunch of text cut out for the audiobook?

If 10 people hire 1 person each they might be more risk averse than someone hiring 10 people at once, where they might hire more for diversity and complementarity
Cecil Bertie Blatch “lost” a couple of votes for another candidate that then gave Margaret Thatcher her first winnable seat
Find one or two things your boss is rubbish at and get quite good at them
Capability Brown
Rory claims his flats market value is 650k, in London — where does he live?!?!?
Steve Jobs had a fear of buttons
Discovery and explanation have different sources — discovery kind of random, then you can later explain it logically
r: if you decide that a hotel doorman’s role is opening a door then you replace him with an automatic door-opener, with catastrophic results. —-> But... who exactly thinks a doorman’s only role is to open the door, not to confer status? And hence high end hotels still have doormen and other buildings don’t. We seem to have done quite well here!
R: “I have a Darwinian idea of markets. Reasons don’t matter, whichever is fittest survived”. That’s... literally the theory of economics?
R: “no one has ever been fired for pretending economics works”. Umm.... many people have followed conventional economic logic and been fired?
Rs train idea is to allow people to board an earlier train to save 40 mins on journey. This is nice reframing. But.... price discrimination, this gives less incentive to buy more expensive flex ticket. R seems like an outsider glibly telling people what to do. You know, like an economist
R: google is magic? But doesn’t say how
Prussian queen swapped gold jewelry for iron and a stamp that said “gold for oil”
Potato: Frederick of Prussia story
(Getting government protection helps! Yes but... doesn’t mean what you think)
Harvey Mudd intervention to get women to do CS: not really a small nudge, is it? (Bed wetting story from HWFAIP)
R thinks difference between yahoo and google is that google was yahoo without the cruft. No! Google was a much better search engine.
R: Upfront expenses as commitment mechanism. Eg The Knowledge. This is classic economics though!
R: poetry is more valued than prose because it is harder. But... we don’t actually value all difficult-to-do things! There are less-difficult things that we value more than difficult things.
A flower is a weed with an advertising budget
A flowers smell or look is the brand identity. (Orchids are rare because they’re often cheaters?)
Charles Darwin said the site of a feather in a peacocks tail made him physically sick, because it seemed like a refutation of natural selection, and sat more easily with a divine creator.
Darwin: Why are caterpillars brightly coloured when they don’t need to be sexually attractive (till they turn into butterflies)? Wallace said: to show that they’re poisonous to birds, to avoid being eaten. But also risky because if you’re not poisonous and just mimicking you’re going to stand out more
Secret Purposes of products. Dishwasher: a place to hide dirty dishes so you don’t have to see them. Garden swimming pool: allows you to be naked outside without shame. Megayacht: allows you to keep your friends captive
R: McDonald’s is low variance. This is not actually true! Huge variance internationally. I had a still-frozen salad, stale fries etc
Claim about tennis: that you can’t fall as far behind even if you lose a lot of points. [bookthoughts]: check this out, with some fixed and non-fixed probabilities of winning given points.
Men wouldn’t order cocktails if there was any risk it came in a pineapple. Hence the illustrations of small glasses.
R: JFK vs EWR: Newark is better but JFK is more default-y, so you’ll never get fired for choosing JFK. But, I mean, really? EWR is... a very normal, very famous airport?
Boeing 787: improved humidity and lighting. R says this is a triumph of design team finally winning over accountants: “historically airliners were designed with the accountants not the passengers in mind”. But if I’m not mistaken, humdity and pressure improvement in 787 is thanks to new materials that make it possible — they would have done that years ago if they could. It’s funny because this is a bizarre time to praise Boeing for being pro-customer, anti-accountant! Classic case of roping in random events with little knowledge to support a theory.
(I once had a dream of picking some anecdote that gets used in lots of business books and showing all the contradictory things that anecdote has been used to assert)
R: TVs cheat your brain, yellow and purple don’t exist. Um... I’m not sure that’s how colour works?
All of Rs arguments are one-sided. He talks about the issues that Mechanism X has thrown up, but never shows that Mechanism Y is better overall. Often “non-rational” decision mechanisms lead to bad outcomes too!
Eg example of Nokia not thinking smart phones would sell because people said they wouldn’t spend more than X on a phone
Photographing your food as a modern version of grace
“Mistake wind rustling the grass for a lion, no harm done. Mistake a lion for wind and you’re taken out of the gene pool”
Home baking cake: making it slightly more effort increased value (Betty Crocker). Ditto IKEA — assembling it yourself increased perceived value. At Ogilvy (advertising agency), they were told they would be fired if they tried to make things easier
Rationality is like playing golf with only one club
Actually a lot of people have been fired for being logical? Maybe not directly, but still. If creativity is so great at improving outcomes it would help you even if you got less credit for it
R: Procter and Gamble reduces digital (facebook) advertising spend by 150mil and saw no drop in sales. R quoted this as proof that digital ad spending is useless. But.... he’s just spent a whole book railing against the thinking that says if you can’t see a negative consequence the thing is fine! He literally just quoted Chestertons fence! This is just extreme selective evidence
Part of Rs thesis is really just “sexual selection matters”, but he can’t QUITE come out and say that as the core (he does say it peripherally). Another way to understand his book is “be rational, but include sex and status as outcome variables”