TIM HARFORD ALPHACHATTERBOX TRANSCRIPT

CARDIFF Hey everyone. Welcome to Alphachatterbox, the long-form economics and business podcast of the Financial Times. I’m Cardiff Garcia and our guest today is Tim Harford, an economist and an FT columnist. Tim has a new book out called Messy: The Power of Disorder to Change Our Lives. Tim, thanks for coming on the show.

TIM It’s a great pleasure. Thank you, Cardiff.

CARDIFF I want to start this chat in a horribly obnoxious and pretentious fashion. I want to paraphrase a famous quote from Gustave Flaubert, the French novelist from the 19 th century. He said something…

TIM You realise at this point you could just say anything, and I would pretend that I knew what he Flaubert quote was. Okay, go for it.

CARDIFF [Laughter] So, because I thought of this quote before I’d started reading your book. The quote is something to the effect that we should be orderly in our private lives so that we can be violent and original in our work, in our minds.

So my first question is, when did you start questioning the wisdom of this idea that orderliness and tidiness are always and everywhere necessarily good things? Was it something that happened to you or was it something you just came across in your work?

TIM There was no sudden moment. I was actually thinking of writing a book which is actually quite close to the book that Gillian Tett, our colleague, has ended up writing about silos. I wanted to write a book about why is it so hard for people from different disciplines or people with different viewpoints to work together in a constructive way.

And slowly but surely, that, in a suitably messy way, just morphed into this whole idea that chaos is underrated, that ambiguity is underrated, that improvisation is underrated, and all of these other things – quantifying things, having clear organisations charts, having script – all of those things have their disadvantages which we tend to gloss over.

CARDIFF People do seem to have an instinctive preference for neatness, for beautiful, smooth, clean lines in things they design and things like that.

1 TIM You are sitting in front of a Mac as we speak and it’s…

CARDIFF Exactly.

TIM Is that a Mac Air or [overtalking]?

CARDIFF It is a MacBook Air.

TIM It’s beautiful.

CARDIFF Designed by Steve Jobs. It’s gorgeous and that’s one of its appeals. But one of the themes in your book is that because of this preference, people sometimes miss the very real benefits of messiness, right, because those benefits tend to be hidden. Whereas our instinctive preference for neatness is something that’s very obvious. Superficial, in many cases, but obvious. It’s there in front of us.

TIM Perhaps the most obvious example of that which I think you and I share an interest in is the way that certain companies have clear desk policies or really seem to value the particular way that the office looks and the way everybody dresses, and it’s all about superficial appearances.

And they don’t ask the question, what is the cost of bossing people around and telling them what they should wear and what should be on their desk and how everything should be organised because people don’t see the resentment and the discomfort; they just see that the office looks really nice and neat.

And so I think it’s a classic mistake that bosses tend to make. There’s a wonderful study I describe in the book where two psychologists got people to work in various office environments, one of which was super neat, and people didn’t like working in that. Another of which just had pot plants, nice artwork on the walls – just a more enriched, chilled-out environment. People preferred that. But that wasn’t the real discovery.

They had a third experimental condition where they asked people to just put the pot plant wherever they liked, put the pictures wherever they liked, organise your own office – and people absolutely loved that. Some of them made it look really neat; some people didn’t; some people kept the pot plants; some people got rid of the pot plants. But that’s what they really liked.

And there was a fourth condition which is where the psychologists got people to organise the office exactly the way they wanted it and then the psychologists came in and said, oh, actually, this won’t do for the experimental condition, rearranged everything, left the office still looking nice but completely disempowering the worker. And that was the office that got the worst performance.

People didn’t get stuff done, they felt physically uncomfortable, they hated the experiments, they hated the company where the office was. It was completely counterproductive.

2 And then you actually realise, well hang on, this is basically the way all companies work. They tell people what to do and what they’re allowed on their desk and what goes on the wall. And we hate it. We really hate it.

CARDIFF And you describe one scenario where I think your exact words were that the humiliation was palpable when a boss went and told his employee exactly how to organise the desk and had him open the drawers to see if actually inside the drawers everything was as neat as it was outside. There’s a real problem with that. People hate it.

TIM It’s a parent-child relationship.

CARDIFF Yes.

00:05:20

TIM Suddenly you’re being frisked to see if you’ve got cigarettes or dirty magazines under your bed or something. And it’s just crazy.

But this was the leakage of lean management principles from the production line where you might well need something to be very, very slick and well organised and well-ordered and there to be a very clear process, into a more creative office-based environment where there’s absolutely no point in everything being straightened and sorted. It doesn’t help anybody.

CARDIFF Right. There’s this great passage in the book about the dangers of over- quantifying things that you can measure just because you can measure them. I’m going to drop one more name and then I promise I’m done with that, okay. And then we’ll get into the specifics of the book.

But it made me think of this article written by Umberto Eco, the Italian novelist and lover of enigmas, who wrote that the reason we all like lists – right, the reason we like listing things – is because it gives us the illusion that we can control this vast infinity of stuff that’s out there in the world.

And by stuff, I don’t mean just material objects; I mean that there are way more ideas that I’ll never know, there are many people that I’ll never befriend, places I’ll never go to, experiences I’ll never have – it’s just too much.

And putting things down in a list makes us feel like we can actually understand something of the world, even though we probably can’t. I didn’t even have a question at the end of that. It sparked the memory of that article.

TIM Well, if we’re going to talk about vaguely Latinate philosophers and novelists, I should throw back Borges. In the book, there’s this wonderful piece by Borges where he writes about this completely fictional Chinese encyclopaedia which categorises every animal in the emperor’s kingdom.

And it says, well, there are animals that are suckling pigs, there are animals that, from a long way away, look like flies, there are animals that have just knocked over the

3 flower vase, there are animals that belong to the emperor, there are animals that are innumerable – and he starts listing all of these categories.

And you go, well hang on, these categories don’t make any sense; this is just crazy. How can you categorise the animal kingdom like this? But of course Borges always has a serious point behind his jokes. And actually, all of those categorisations make perfect sense in a certain context. Sometimes you want to be able to categorise things according to whether someone is guilty or innocent. Sometimes you want to categorise things according to whether something is owned by somebody or not or whether you can eat them or not. Actually all of these categories make sense but Borges has made them seem ridiculous by throwing them all in.

But now think about how you’re going to organise your email or file documents. Actually, sometimes you need to organise things depending on whether it comes from your boss, sometimes because it’s a particular project, sometimes because there’s a date involved, sometimes it’s a customer complaint – and you realise, actually, there is no system of filing that will actually do justice to everything you need to do. And in fact, there are much messier approaches to filing that are perhaps a lot more effective.

So I look at various studies of how people behave in the office. But one observation – that if you just dump a pile of paper on your desk and every time you sort through a pile of paper, you put it back on the top of the pile, it seems like that’s an unsorted pile of paper, right? That’s just a pile of paper, that’s just junk.

But it’s not junk. It’s actually very carefully sorted according to recency. The more recently you’ve seen something, the closer it is to the top of the pile of paper. And actually, that turns out to be a very effective algorithm for sorting paper.

And when studies have been done of people who sort their paper like this versus people who file in a very careful way, turns out the people who file in a careful way file far too much stuff because they file prematurely. They want to get it off their desk and it turns out you’re filing a whole bunch of stuff you’ll never, ever need again. Whereas, if you keep it in a big pile of paper on your desk and it slowly sifts its way through, eventually you just throw away the bottom half.

And actually, people have a much leaner and more effective office organisation. But it is superficially very messy. It looks messy but it’s actually better organised.

CARDIFF If I were looking at your pile, I might think, god, Tim is just a complete wreck these days; look at his desk.

TIM Yes.

CARDIFF But actually, there’s an underlying sense to it.

TIM Not only is there an underlying sense to it, but that underlying sense is customised to me. And if you come in, the worst thing you could possibly do is try to tidy up my pile, because it’s perfect for me.

4 But of course if you had to work with it, it’d be completely disorienting because you don’t know what the last thing was that I touched. So yes, partly this is just about live and let live.

CARDIFF Yes. This actually seems to be a current that runs through all of your books that aren’t purely about economics, right. The theme of The Logic of Life was that that actually, people are more rational than we recognise, right; Adapt about progress through failure; and now this. You seem attracted to counterintuitive explanations of things that have more sense to them than most people understand.

TIM Yes. Well, you’re always looking for a surprise as a writer and as a thinker. What is it that’s not obvious? What is it that is under the surface of things? And of course I’m always interested in a good story as well. We love stories. So the book is full of stories of people who, in one messy way or another, triumphed when you might not have expected them to – anything from the jazz pianist, Keith Jarrett to Donald Trump.

CARDIFF We’ll get to those in a minute. I want to bring up one of the key benefits of messiness or of disorder which is that it introduced diversity into something that otherwise might be exceedingly routinized but you don’t realise it because it’s your routine and it seems to work.

And it strikes me that it’s also great for people like me who tend to have what you might call completest inclinations where, if I start reading something by an author, pretty soon I think, well, now I have to read everything by that author; and if there are books about that author, maybe I need to read those. So even starting that first book becomes this really intimidating project.

But actually, it seems from what you’re saying in the book, if I can extrapolate a little bit, that, well, maybe you don’t need to read all 36 of Shakespeare’s plays. If you read ten of them but then you read something else from another author and then you read something that has nothing to do with literature at all but might actually give you insight into what you’re reading, even though it has to do with sports or music or something like that, that actually you can cultivate your own personal set of preferences, your own personal set of things you love to do.

And that might help you in your work or just conversationally or whatever, that it’s okay, you don’t have to feel guilty about not getting to everything.

TIM Yes. Gosh, and now you mention it, I’m trying to remember the last book that I actually finished. If the book’s really good, I’ll usually get most of the way through it.

CARDIFF Do you put away books mostly after having started them?

TIM Yes. My house is just full of unfinished books and with the dog ears marking where I’d got to and things to go back to and so on. But you mention the benefits of diversity and not necessarily finishing everything and casting your net widely. I think that’s absolutely right.

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There’s the well-known idea that if you have a team which is diverse, you have a lot of different perspectives, maybe different nationalities, different training, different ages, different genders, all of that, those teams tend to not necessarily be particularly stable – there’s tension there, there’s friction there – but they’re better at solving problems. They’ve got so many more perspectives, so many different ways in which you can get unstuck. So there’s that.

But there’s also the idea that just a random shock to your own routine, even if it doesn’t come from another person, can help you solve a problem. And we could talk about computational algorithms and all of that, but there’s a wonderful, everyday example from London a couple years ago.

There was a tube strike so basically the London underground closed half its stations for 48 hours. And here in London, everybody who commutes has their little smartcard that just records their travel, not only on the underground but on the trains that run aboveground, on the boats, on the buses, everything.

CARDIFF Gives you a nice data set to work with.

TIM We’ve got a great data set. And so three economists looked at this data set and they found thousands and thousands of people who had taken exactly the same route every morning and then the reverse route every night, every day, for two weeks.

And then, when the tube strike came, they changed their routine for 48 hours. Of course, right. Because they couldn’t go to their old underground station, they had to go somewhere else, they had to take a different route. But there were other routes available because there were other lines open or they could take the bus.

So the economists looked at these people and they said, right, all these people did the same thing every day and then they changed. And then what happened at the end of the 48 hours. And the answer is, 95% of them went back to the old routine, of course; but 5% of them stuck to the new system.

And you would think if anybody has perfectly honed his or her routine to just the optimal time-saving, effort-saving approach – it’s a commuter, right – surely commuters know exactly the best way to get to work.

And yet what they discovered is, no, 5% of people discovered a better way. Whether it was cheaper or more pleasant or quicker is not clear. But for whatever reason, they actually preferred their alternative route that the tube strike had forced them into. And this is a classic in all kinds of optimisation problems.

You knock something with a random shock, give it a little nudge sideways and suddenly you realise you didn’t like the nudge but you’re in a better place which you never tried, you never realised.

6 CARDIFF Yes. You said something a second ago that also made me start thinking about all the different teams I’ve been on – professionally, I mean – throughout my life.

And your point was that loose ties are more useful than close friendships, right. In other words, you can be friendly with your colleagues, you can get along well, but ultimately you can’t let the goal of the project be superseded by the goal of maintaining the friendship. Friendships don’t make for good professional teams.

TIM Yes. So actually it’s a bit more subtle than just that loose ties are good. So loose ties are good for conveying information. So this is this classic study by David Granovetter, an American sociologist, where he basically said, you’re looking for a job – where do the tip-offs come from for a new job?

They don’t come from your friends because your friends know exactly what you know. They come from more distant acquaintances. People who live in a different place or work in a different industry – they hear the things you don’t hear. So these loose ties, they’re great for conveying information.

But when we’re actually saying, okay, we want to solve a problem, so not just find a new job but we need to build some new thing – new project, new marketing campaign, new software – then it gets really tricky because then you want diversity of perspectives to help you spot new ways of doing things and solve problems; but at the same time, you’ve actually got to work hard together as well. So there’s a real tension there between diversity and casting your net widely, and team cohesion.

00:17:26

There’s a wonderful, detailed study of basically every computer game that’s ever been made and rated. Tens of thousands of computer games over the last 40 years, analysed by three mathematical sociologists.

And they were able to track all of the people who worked on all of the computer games, over 100,000 people, and figure out what the optimal kind of team was for making a great computer game based on what sort of projects they’d worked on before.

And what they found was it wasn’t loose ties and neither was it a tightknit team – it was this weird amalgam. It was basically a set of different tightknit teams, each of which had worked on different kinds of projects who were now thrown together and had to work on some new project. And that’s really tricky, right, because you’re in a tightknit team and suddenly you’re being told to work with another tightknit team.

You don’t know these guys, you don’t trust these guys, they think differently to you – they’re the enemy, you’ve got your friends. And somehow you have to make it work. And yet those were the team dynamics that produced the most successful computer games in history.

CARDIFF Wasn’t there also a point in the book about how teams that do better don’t necessarily feel like they’re doing better, right.

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TIM Absolutely.

CARDIFF We don’t always actually recognise the stuff that works even though, in fact, it is working.

TIM Yes. An amazing, simple study by Katherine Phillips and a couple of other psychologists at Northwestern University where they got teams of students to solve murder mystery problems. So it’s a bit like you get to play Sarah Koenig on Serial, right. So you’ve got, somebody’s been murdered and here’s the murder weapon and here are the witness statements and here’s the evidence and here are the alibis – you’ve got everything and three possible people who did it.

And you ask teams of four students to try and figure out who did it. And turns out it’s quite hard and only about 50% of people get this right in a team of four friends. But if you put people in a team of three friends and a stranger, the success rate goes from 50% to 75%. So 50% is not impressive in multiple choice of three. 75% is impressive because it’s a big improvement.

Despite the fact the stranger didn’t have any new information, right – this is just a different dynamic. The stranger just had exactly the same pack of information that the friends did. But there’s a new dynamic; people feel they have to conduct themselves in a different way, justify their thinking, be more explicit, be less lazy – they solved the problem much better. But they hated the experience. And they didn’t think they’d actually succeeded.

So you asked them, do you think you got the right guy? They’re like, no, we don’t think so.

So I think that was a really powerful study where you have a diverse team, is more successful, feels less successful and feels less comfortable. So people are systematically sorting themselves into tidier team environments in the mistaken belief that they’re actually getting better at solving problems. But they’re getting worse.

CARDIFF Yes. That’s fascinating. Here’s what I want to do now. Rather than going chronologically through some of the ideas in the book as they’re presented, how about if I just start naming some of the characters and some of the other elements in the book and then you tell us what we can learn from them?

TIM Sure.

CARDIFF Building 20 at MIT.

TIM This is the most beloved structure at MIT. It was built during the war. It was designed in an afternoon. It was really cheap. It was called the Plywood Palace. Dusty, a fire trap, no air-con, a confusing mess. And they were supposed to knock it down at the end of the war but they didn’t because the GIs came home and suddenly they all enrolled in university so suddenly you needed a place to put them. So Building 20 stayed up.

8 And it was the most amazing dynamic, creative hub. So it housed Rad Lab during the war which basically won World War Two with superior radar designs. The famous high speed photography images of bullets going through apples were shot in Building 20. The hackers of the MIT model railway company started in Building 20.

The first graphic arcade game was designed in Building 20. Noam Chomsky and Morris Hall revolutionised linguistics in Building 20. The Bose Corporation started in Building 20. The first atomic clock was built in Building 20 where they, by the way, had to knock out two floors to create a three-storey space. And this is part of what was going on which was this was a totally hackable mess of a space. You could do anything you wanted, nobody cared. And even the President of MIT during the 1970s had an office in Building 20 because he said, because nobody cares if you nail something to a door. It was that freedom.

It was partly that and it was partly the diversity of the fact that all the low status projects got thrown into Building 20. So anybody with no power, no influence was put in what was basically a very large garden shed, and they all started working together.

So there was this incredibly messy space that lasted for over 50 years. They eventually knocked it down, replaced it with some Frank Gehry building. But it was almost intrinsic to the fact that it was cheap and ugly and messy, low status, nobody cared – that made it such a great creative space.

CARDIFF The nobody cared part of that was, I think, the most intriguing to me because this really seemed like a kind of organic process. Throw a bunch of people in there, nobody’s paying attention, and then holy hell, look what they come up with.

00:23:04

TIM Yes. And funnily enough, there’s all this fashion for Google offices with slides and Ping-Pong tables and sweet dispensers and all this fun stuff. And that’s all fine, I’m sure. But Google, when it was actually Google, when it was doing the things that created the modern company, when it was developing search – well, first, it was a couple of guys in a university department; then it was a garage; then it was a bigger garage; and then it was a space where the engineers would just knock down the walls and then rebuild them.

Actually, the definitive times for the company were actually in incredibly cheap, messy spaces. And I think that’s often the case.

CARDIFF I really wonder if a modern-day architect were to go back and look at that building maybe in its first ten years of existence when all this stuff was happening, and if he or she weren’t aware of all the amazing collaborations going on, if they would look at that building and think, god, this place is a complete wreck; nobody can get any work done in this place.

Look at how the floors are designed – they’re so flat. Look at how the pipe runs through the middle of the thing and everybody’s redirecting it to go wherever they

9 want it to so they can put a… They’d probably say, how does anybody ever get any work done there?

TIM Yes. I think some architects, I’m sure, are quite sensitive to these considerations. But actually this idea came from Stewart Brand, the granddaddy of the internet – Stewart Brand who is a mentor to Jeff Bezos at Amazon and all these people. And I interviewed Stewart for the book. It was amazing to meet him. But one of his big ideas was all buildings are designed by architects as forecasts. They are a forecast of how the building will be used. And, of course, all forecasts are wrong.

So the real advantage of any building is, can it adapt? Can you change it? Can it adapt to circumstances? And there are, of course, different ways in which a building can adapt. Westminster Abbey has adapted; the Houses of Parliament have adapted; Congress has adapted.

But the easiest way to be adaptable is actually to be a wreck in the first place, and then your users can just tear down whatever wall they like and rewire anything they want to. And that’s a very, very effective way to be a space in which people actually get things done.

CARDIFF Jane Jacobs, I think, appears in several of your books. I think you’ve been a fan of the author for a very long time. In this book, you write about diversity within cities. And the message there, by the way, is one that goes against the grain a little bit of, I guess, Economics 101, optimisation, the idea that cities should specialise in something. Actually, those cities don’t do as well as the ones that do everything, right?

TIM Yes. There were two things going on. There is diversity of industrial structure. And there was this big debate in economics as to whether a city should specialise; whether if everybody in the city is making pins, they all get really, really good at making pins, there’s something to be said for that, or whether the pin makers learn from the bra makers who learn from the tyre manufacturers who learn from the software engineers and so on.

And Jane Jacobs said no, the real creative stuff happens with fertilisation across different industries, not within industries. And the evidence seems to bear that out. So just a mess of a place like Birmingham which never gets any respect – actually, Birmingham’s been doing just fine for centuries and it will continue to do just fine. Whereas the specialised cities like the Detroits of the world do brilliantly but then they fade.

But there’s something else going on which is at the neighbourhood level. And this is an idea that’s actually started to catch on finally, after over 50 years of Jane Jacobs and her acolytes pushing it.

A neighbourhood that has a school, some residential, some light industry, some shops, some cultural stuff, just a whole mishmash of stuff that we would regard as getting in each other’s way – oh gosh, well, if people are driving to the shops then they might run over the kids who are going to school and if there’s light industry, well that is

10 noisy and there’s pollution and we don’t want that near the houses and so it doesn’t seem like a good idea – but in fact it works really well.

And one of the reasons it works really well is because the streets are always bustling, they’re always interesting. Any time of the day or night, there’s always somebody using them for some purpose which just makes them safe and interesting and places you might want to hang out. And that’s what makes this little neighbourhood work. If you have a very specialised industrial quarter or a very specialised neighbourhood quarter, a residential quarter, on the map, it seems perfectly logical, it makes perfect sense. But if you go there at the wrong time of day, it’s dead.

And, of course, the moment it’s dead, it is at best economically inactive, and at worst it’s actually a dangerous place, people don’t want to hang out there.

CARDIFF Okay. Let’s switch to music. And you give a couple of examples here. One is and Oblique Strategies and the cards; the other is Miles Davis and jazz improvisation. What can we learn about the life enhancing benefits of messiness from these two?

TIM Well, I was possibly even more excited about interviewing Brian Eno than I was about interviewing Stewart Brand. They’re both wonderful people. So I talked to Eno about the use of randomness in creative processes. And Eno, of course, worked with on the great Berlin albums and worked with and has worked with Paul Simon and has worked with Twyla Tharp and just everybody. He’s amazing, and in his own right, he’s a great musician.

And what he says is, if you disrupt people’s rhythms, they get to a new kind of place where they can deploy their skill in a way that isn’t clichéd. So you get better and better and better at something but you’re just repeating your own clichés – unless there’s some kind of interruption, some kind of disruption. And Eno regards that as partly his role. That’s why he gets hired. The record company wants a band to produce exactly the same as their previous hit. They can’t help themselves.

The band maybe kind of want to do that as well, they’re a bit scared. And Brian Eno doesn’t care, because he’ll be on to another band in a month’s time. So Brian Eno messes everything up. And of course, it doesn’t always work.

But you sometimes get the most amazing results because you’re in a new place, you might discover something new; you’re also paying attention. He says the enemy of creative work is boredom and the friend of creative work is attention. And you pay attention if you’re uncomfortable.

CARDIFF So something new.

TIM Yes. Somebody new or someplace new, some new challenge. It’s like being a tourist – the right kind of tourist – in a new place; you notice everything. It’s fascinating. And so he’s trying to get bands to be tourists inside their own music and discover new things.

11 CARDIFF Yes. Another example also of where doing something that works isn’t always the most fun, right? You mentioned a second ago that it puts you in a place that’s uncomfortable, to have your routine messed up. And you know that Phil Collins at one point started throwing beer bottles or something at Eno…

TIM Yes.

CARDIFF …because he was tired of having his routine disrupted like that.

TIM He hated it, yes. Phil Collins was drumming on , which by the way is the album that Prince said was the biggest influence on him – it was a great album. , a great jazz guitarist, also hated working with Brian Eno at the time because he said, look, this experiment sounds like crap, you know, I don’t like it, it’s stupid. And then…

CARDIFF Can you describe the working process, by the way, because this is interesting.

TIM Yes. So fundamentally what’s going on is that Brian Eno has this box of cards called the Oblique Strategies. And the Oblique Strategies have odd instructions. For example, everybody – change instruments. So you’ve got one of the greatest guitarists on the planet. You take his Stratocaster away from him and you make him sit at the drums. That sort of thing.

Or Brian Eno has written a bunch of random cords on a blackboard and is arbitrarily – and Brian’s not actually a musician himself – he’s arbitrarily pointing to the cords. And the musicians, of course, can play any of these cords; they’re great musicians.

But it’s just this utterly random noise and they really, really hate it. But of course what happens is, at a certain point you hit on a cord sequence that really works and then suddenly that’s on the Heroes album.

And Carlos later on – much later on – said, you know, those cards, they took me to a place that was total new and, to be honest, I didn’t like it but when I came back, I was fresh. So they did do something. And he now uses those cards with his own students. So 20, 30, 40 years later, finally it’s like, actually, that was a great idea.

CARDIFF One of my sit on the couch and have a whisky and shut my eyes albums is Miles Davis’ Kind of Blue. I learnt something about this in your book. How did that come about? And what can we learn from the way Miles Davis approached jazz?

TIM Oh, there’s so much to say about Kind of Blue. One of the things was that it was almost all first takes, which is not common. I know jazz is famous for its improvisation but normally you’d have a lot of takes, you’d splice them together.

The discarded takes of Kind of Blue are things like the producer cuts in and says, oh, I can hear the snare drum vibrating in tune with the double bass. And Miles goes, that goes with it. And they’d start again. Or you could hear a bit of paper rustling or something. They never stopped because somebody hit a bum note.

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And there’s this particular moment, the first track on Kind of Blue, So What – very famous intro, very unusual intro with the double bass leading the tune. And then Jimmy Cobb, the drummer hits the drum and it’s just too hard – he’s swapped his brushes for sticks. He hits the drum, it’s too hard; and just as he does it, Miles Davis launches into this solo. And Jimmy Cobb is convinced that Miles is about to stop the take, but actually it’s this electrifying moment. It seemed like a mistake at the time but Miles was just determined to keep going. And they kept all those takes.

But the really amazing thing about Kind of Blue is that afterwards, Miles Davis said, I missed. That wasn’t what I wanted. That wasn’t the sound I wanted. Everyone had said, oh, you’ve got to be kidding – it’s a great album. He’s like, I’m not saying it’s not a great album; I’m just saying it wasn’t what I wanted.

And it was that willingness to let go of control enough that you don’t actually achieve the sound you’re looking to achieve, but just to keep going and then afterwards to go, well, it turns out it was a great album.

David Bowie, by the way, apparently had the same thing. So Brian Eno said David had this incredible ability in the studio, when something was nearly perfect and it was going great and then there’d be an accident, David would just drop the perfect thing and say, well, we can come back to that; but what just happened, that mistake, is much more interesting – we’ve got to work on the mistake.

And you were talking about your love of completing things; sometimes we need to just be able to leave something unfinished because something interesting just happened that needs to be chased up.

CARDIFF It seems like maybe there’s a relationship also between accepting this kind of disorder and setting aside one’s ego. Right? That if you’re too caught up in what something particular says about you… Like with the completest thing, right? Well, I have to know everything about Shakespeare. Which is this silly thing to think anyway – nobody knows everything about Shakespeare, right? Set aside your ego in pursuit of something better, in pursuit of something more personal, more individual to you – that seems to be what Miles Davis was doing.

TIM Yes, perhaps. Although a lot of the people that I talk about in the book do have tremendous egos. [Laughter, cross-talk] They just have a certain amount of comfort with chaos. I talk about the German Panzer Commander, Rommel, for example. That was a guy with a very big ego but he was comfortable in situations that other people would’ve just felt were too chaotic.

CARDIFF Yes, let’s talk about Rommel. The lesson from Rommel seems to be that when you’re in a competition and you’re in a pinch, do the thing that nobody expects.

TIM It’s partly just the advantage of surprise. But it’s also that you need to be aware that you could do something that would be bad for you; if it’s worse for the

13 other guy and it’s a two-way fight, then that’s fine. And the Rommel stories are woven together with discussion of Jeff Bezos at Amazon and Donald Trump.

CARDIFF Yes.

TIM And a couple of other people in competitive situations, like Magnus Carlsen, the world chess champion. And there are obviously a lot of differences between these people but what you see is situations where they are willing to make moves that are hasty or hurried or chaotic, incoherent, that if you only looked at them, you would say, this doesn’t make any sense. This looks like a disaster.

It’s only when you pull back and you see what those moves are doing to the other side, the confusion they’re causing, the panic they’re causing, you realise that maybe things are going quite well. So the classic example, Rommel’s campaign in North Africa during the Second World War.

He was fighting the British army and he decided to send his forces across the middle of just a terrible desert in Libya. Soft, soft sand. He was running out of petrol, it was just chaos, nobody knew where anybody was. Rommel nearly landed in the middle of the British army by mistake.

The German high command were beside themselves. They said, Rommel has sent us no information – we fear things are in a mess. If you had just been with Rommel, you would’ve said, this is an absolute catastrophe.

But what Rommel realised was the British army was in a worse situation because they were trying to scramble around the coast on a narrow road which was blocked. They were in full retreat. Their supplies were also in chaos. And so there was a week of completely shambolic manoeuvring at the end of which Rommel had complete victory.

Which also reminded me a little bit of Bezos dealing with his various corporate rivals where he would, in the early days of Amazon, push his staff to do various things that were basically impossible. Like, we have carving knives sliding down the chutes in Amazon warehouses and their sorting machine is saying, is this carving knife a hardback or a paperback. Just disastrous.

Except that he realised he had to move that quickly because if he did, he would overtake his rivals who were being very careful, very tidy-minded, didn’t want to damage their brand – and so they were just moving too slowly. And in the end, he overtook them all.

CARDIFF He sacrificed a certain amount of preparation for that kind of speed. And sometimes it’s to your advantage.

TIM Yes. Of course, in the end, Rommel lost.

CARDIFF Yes. Eventually he ran out of luck, yes.

TIM Yes.

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CARDIFF There’s also the story in there – I think it might’ve been the same chapter – about the Phantom Major in the British Army.

TIM David Stirling.

CARDIFF David Stirling, a saboteur who didn’t do as much reconnaissance as other people wanted him to do because he thought that that would give away his advantage. He just jumped in behind enemy lines and started causing trouble.

TIM Yes, it’s amazing – this is a real Boys’ Own story. This is the foundation of the SAS.

CARDIFF That’s right.

TIM Which is our equivalent of the Navy Seals. And yes, Stirling wasn’t the first person to think of the idea of special forces and sabotage and getting behind enemy lines. But what he emphasised was we need an incredibly small team and the more time you spend on reconnaissance, the more risk there is of being discovered.

If you just go in there, somewhere where you know there’s going to be some kind of target and then figure it out when you’re there, you will be in chaos, you won’t know exactly what’s going to happen or what you’re going to hit, but your enemy will be utterly unprepared.

And other special forces units who were much more about, well, let’s scope out all the territory. It’s like Mission Impossible, we know where everything fits and all the moving parts. Actually, it works great in the movies or in the TV series, but actually, in real life, what that does is alert the enemy that something’s going on. They weren’t nearly as successful as this absolute seat-of-the-pants SAS commander.

CARDIFF Yes, that was fantastic. I’ve got time for a couple more. Andy Haldane and rules of thumb.

00:40:21

TIM Okay. So I looked at this famous speech by Andy Haldane, who is Chief Economist of the Bank of England, given a few years ago to the convocation of central bankers at Jackson Hole. And the speech was called The Dog and the Frisbee.

And what Haldane looked at was, in retrospect, can we predict which banks would’ve run into trouble during the crisis using our highly sophisticated Basel capital requirement risk weightings? And the answer was no.

Those risk weightings which are supposed to indicate how much capital banks should have… And capital, of course, is your safety cushion. Alphachat listeners will know this but banks with more capital are safer if they get hit by economic shocks.

15 But capital gets risk weighted, depending on the kind of risks that banks are taking. If you’re taking lots and lots of risks, you need more capital. If you’re taking fewer risks, you need less capital. It’s all very, very complex, risk weighting.

And Andy Haldane said, well, I’ve looked at it and none of that helps; you’re better off adopting a really simple rule of thumb which is, just tell me how much capital there is – don’t tell me about the risk weighting, just tell me how much capital there is. That is a far better predictor of which banks end up getting into trouble.

Now of course the story doesn’t stop there. You can’t just switch to that rule because that rule would be gamed. But I talk about the idea of different sorts of quite simple rules of thumb and how quite simple rules of thumb, in banking and in many other fields, often outperform apparently sophisticated decision-making rules.

Because it turns out the apparently sophisticated decision-making rules are over-fitted or they’re based on data that you don’t actually have, whereas the rule of thumb is much more robust.

At the end of our interview, Andy Haldane said what he really wanted wasn’t an army of regulators – he wanted a SWAT team. He just wanted to be able to go into a bank and start asking deep questions, surprising questions with no notice and I want answers within a couple of hours.

And if you do that to enough banks, then you really start to understand, do the banks really understand the risks they’re running, do they have a proper risk management system. But he said he felt that the regulatory environment was moving in the other direction. Many more boxes, much more risk – sort of box-ticking.

CARDIFF Right. Because what you want is for the banks to act better. You want them to not be taking as much risky behaviour. You don’t want them just to pass a test.

And if they know what the test is going to ask in advance, they’re going to find a way to pass it without necessarily embracing the kind of behaviour that you want them to embrace.

TIM We had this extraordinary parallel between the Federal Reserve stress tests and VW’s cheating on emissions where effectively what banks were doing is purchasing insurance for specific events specified in the stress test. So you’ve got this very, very specific kind of product that basically makes you look good on the test. It’s not really making you any safer in any other scenario.

Very similar to what VW were doing where they designed their engines to run in a very fuel efficient way – or not a fuel efficient way – a very low emission way – during the test and a high emission mode when the test wasn’t being conducted. But the only difference is what VW did was illegal but apparently what the banks were doing was perfectly legal.

16 CARDIFF And finally, you close your book with a wonderful chapter about kids – how we can teach kids to embrace messiness in their lives, that we don’t always have to be ever so tenderly monitoring them, that actually you can put them in environments that look dangerous but that when they’re left to their own devices, actually they act in such a way as to make it less dangerous for them.

TIM Yes. Hanna Rosin has been writing about this for The Atlantic and writing about these chaotic playgrounds where kids just play with saws and hammers and nails and light fires and just cower in the darkness under sheets of corrugated metal and have very low injury rates.

And when you look at a full review of the safety literature which I have to say is thin, so there’s not that much to look at, but what little we know basically indicates that all kinds of apparently dangerous play, anything from sharp objects to heights to possible abduction from strangers, getting lost – all of this sort of stuff – doesn’t actually seem to result in injuries to children.

And that’s presumably because children adjust their behaviour. If they know it’s a risky situation, they will be more careful. But dealing with those risky situations, more naturalistic situations, is a much better preparation for life and much more fun.

The observation that an informal game of football, soccer, is much better than an organised sports match. Because in an organised sports match basically the winners can crush the losers and the adults force the losers to keep going and they have a miserable time. Whereas in an informal kick-about, you’ve just got a couple shirts on the floor – they serve as goalposts – and the teams keep swapping around.

Actually, you have to negotiate in a much more sophisticated way. You have to make sure everybody in the game is happy because otherwise they leave. So you have to keep everyone happy, you have to balance the sides, you’re all playing the game together, the sides aren’t fixed, they tend to be fluid. Not such a great game of soccer but possibly a much better preparation for life. And, of course, a complete mess.

CARDIFF Tim Harford has been our guest. The book is Messy: The Power of Disorder to Transform Our Lives – warmly recommended. Thanks for being on the show, Tim.

TIM Thank you.

CARDIFF And that’s all for today’s show. Please rate and review us on iTunes. It really does help other people find our show. You can also call us at 9175515012. That’s country code +1 in the US for those of our overseas listeners. Or you can email us at [email protected]. Finally, I’m on Twitter @CardiffGarcia if you want to hit me up there directly. Thanks, as always, to the amazing Aimee Keane, our producer and editor. And thanks to our listeners. We’ll see you here again soon for another episode of Alphachatterbox.

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