However, Tony Hsieh's book is clearly about something more than business.  I recently saw him speak at the Miliken Institute in Los Angeles and the last 10 minutes of his talk could have been from a class we teach at USC, the Science of Happiness.  In fact, I think the introduction to that series of slides was entitled the Science of Happiness and Delivering Happiness has a healthy dose of psychological research on happiness in it.  His basic thesis is that if he makes his employees happy, they will in turn be able to authentically make customers happy, which will allow Zappos' brand, which is all about "WOW"-ing consumers (and suppliers actually).  For example, Zappos surprise upgrades shipping for customers and tries to pay for dinner when dining with suppliers, who normally have to woo their clients.  Zappos actively seeks to hire and fire employees based on their 10 core values, in order to maintain a happy harmonious workforce that can deliver happiness.

Hsieh gives a very succinct view of happiness/positive psychology research in his talks in a far more interesting manner than most psychologists, but there is one bit of new research that I bet he would be interested in.  Specifically, more and more research is showing that people who buy experiences are happier than people who buy objects.  In the book itself, Hsieh explicitly talks about his preference for experiences over objects.

From p.76 & p.106 respectively -

"ever since selling linkexchange, I'd committed to living by the philosophy that experiences were much more important to me than material things.  Most people assumed that I would have gone out and bought a fancy and expensive car, but I was content with my Acura Integra."

(re: visiting Africa when it might not be financially the best decision) - "For me, summiting the tallest mountain of a continent was one of those things that I wanted to check off my list of things to do at some point in my life.  It went with my life philosophy of valuing experiences over things."

In collaboration with Ryan Howell and Paulina Pchelin at San Francisco State, we've been developing a measure of experiential buying.  In validating that measure, we've found that happiness->less materialistic values->experiential buying->more happiness.  Conversely, neuroticism->more materialistic values->less experiential buying->less happiness.  The simple correlational pattern indicated that those who were more approach oriented were more experiential, while those who are more avoidance oriented are more materialistic in terms of the purchasing styles.

I've since extended this model in looking at the relationship between values and experiential buying.  Consider the below graph and notice that liberals (in blue) prefer experiences over possessions compared to conservatives (in red), who value experiences and possessions more equally.  Libertarians also prefer experiences to possessions.

In further analysis, these differences were mediated fully by differences in values between liberals and conservatives.  Specifically, liberals valued experiences due to their valuation of stimulation (using the Schwartz Values Scale), while conservatives' relative preference for material objects was mediated by endorsement of power.  I subsequently experimentally manipulated values by having participants recall a low or high power situation (based on the idea that people of low power will seek power and work by Dacher Keltner that high power->stimulation).  Sure enough, having people recall low power situations leads to more materialistic buying, while recalling high power situations leads to more experiential buying (preliminary graph below).

These results mirror what Tony Hsieh talks about concerning his values.  He is a more approach than avoidant oriented, per this quote from p.103:

My plan was to take almost everything that I had left in my name and liquidate it in a fire sale.  I would bet the farm and put all the proceeds into Zappos.

And he thought of his possessions as a means toward stimulation, rather than power or security.  From p.115...

selling the party loft symbolized the end of an era for me. It was hard not to feel wistful and nostalgic.  The loft had created so many experiences and memories for so many people.

Of course, it's easier to think about stimulation rather than power, when you've made millions in your 20s.  But perhaps it explains some of the Zappos culture which includes approach/stimulation oriented statements like "Embrace and Drive Change", "Create Fun and a Little Weirdness", "Be Adventurous, Creative, and Open-Minded", and "Pursue Growth and Learning".  One of Zappos' core values ("Be Humble") seems almost the opposite of power.  Perhaps the key to Zappos' success is that its culture is conducive to selling shoes as experiences, rather than possessions.

- Ravi Iyer

The most classic case of perverse motivation and moral hazard is the case of Wing Chau, who "was making $140,000 a year managing a portfolio for the New York Life Insurance Company.  In one year as a CDO manager, he'd taken home $26 million." (p.142)  For what was he paid?  CDO's are the instruments that allowed people to bet on the housing market.  Wing Chau's clients, pension funds that only looked at the AAA ratings these instruments got from rating agencies (more on this moral hazard later), lost a ton of money, but Chau himself was "paid a fee of .01 percent off the top, before any of his investors saw a dime, and another, similar fee, off the bottom...His goal, he explained, was to maximize the dollars in his care."  Simple put, he was paid on volume, not on performance.  This may seem odd, but other such situations exist.  Real estate agents also get paid largely on volume, as they don't get you a higher price, but do make more money the more homes they can sell quickly.  Loan originators, such as New Century (p.169) or Countrywide, had similar incentives as they made loans and sold them, making them indifferent as to whether the borrower could actually be paid back.

The ratings agencies themselves get paid on the volume of bonds they rate.  "Moody's...revenues had boomed, from $800 million in 2001 to $2.03 billion in 2006.  Some huge percentage of the increase...flowed from the arcane end of the home finance sector, known as structured finance.  The surest way to attract structured finance business was to accept the assumptions of the structured finance industry."   Pension funds often have rules that state that they can only invest in bonds that have high enough ratings, but how useful are these ratings likely to be given that the companies that create these bonds pay the agencies to rate them.  It's the same practice that incentivized Arthur Anderson to "audit" Enron, with the fees paid by Enron, with similarly disastrous consequences for those who believed in such audits.

Still, some CEOs are paid based on the performance of their companies.  Are those incentives enough to create a lack of moral hazard?  The book gives many instances where there is still much moral hazard, as individuals have lots of upside, but very little risk.  If the company makes money, they make millions.  If the company loses money, then maybe they find a new job, but they lose nothing.  Consider the tale of Howie Hubler, whose group was at one time responsible for 20 percent of Morgan Stanley's profits.  He was paid $25 million a year, but was "no longer happy working as an ordinary bond trader.  The best and the brightest Wall Street traders are quitting their big firms to work at hedge funds, where they can make not tens but hundreds of millions."   Morgan Stanley made a deal with Hubler to pay him a lot more money, whereupon he subsequently lost $9 billion.  Hubler appears to have been honest, but mistaken, and now runs a company where the slogan "100% of the shots you don't take don't go in". That makes perfect rational sense.  If you go to a casino and earn 10% of the winnings and lose 0% of the losses, you can make a lot of money just by making bigger and bigger bets.

Having limited risk, but huge potential gain means that even the dumbest individual can make money.  Based on performance, Hubler's previous gains weren't necessarily due to skill, but rather to circumstance.  Steve Eisman, a central character in the book who foresaw the collapse "got himself invited to a meeting with the CEO of Bank of America, Ken Lewis.  'I was sitting there listening to him.  I had an epiphany.  I said to myself, 'Oh my God, he's dumb!''  They shorted Bank of America along with UBS, Citigroup, Lehman Brothers, and a few others." (p. 174)   Dumb is perhaps too strong a word, but it seems self-evident that money managers are rewarded as if they are better at money management than they actually are.  There is a psychological dimension to this.  Both liberals and conservatives attribute their success in work life to ability and effort more than luck or circumstance.  Conservatives and libertarians (likely a majority of those who read the Wall St. Journal) are slightly more likely to attribute success to effort and less likely to attribute it to context.  Below is a graph of our YourMorals data, which mirrors previous research.

Of course, there is plenty of blame to go around for creating moral hazards.  Conservatives tend to focus on government organizations like Freddie Mac and Fannie Mae, as well as the government officials that do not let firms fail, creating a moral hazard as firms no longer suffer the consequences of their actions.  In contrast, many liberals might focus on the moral hazard created by executive compensation packages given to upper management.  This blame bias mirrors this psychology study, where Scott Morgan et. al, show that attributions are influenced by one's feelings for the groups involved.  As shown below in our yourmorals data, conservatives feel warmer toward upper management, while liberals feel warmer toward government officials.

Both types of moral hazard are evident in The Big Short, and perhaps we as a society, can work to reduce moral hazards for both companies (e.g. let them fail) and individuals (e.g. proportional risk/reward in compensation).  Or Barry Schwartz articulates another, perhaps idealistic answer, in this video: that we need people who are less motivated by incentives and more motivated by wisdom.

- Ravi Iyer

From a political psychology perspective, one fact about Warren Buffett is particularly interesting.  He has a liberal position, obviously contrary to his self-interest, on the estate tax.  From p.596 of my edition of his book:

He liked to compare his tax rate to his secretary's, pointing out how
unjust it was that she paid a higher tax rate on her income than he
did, just because most of his income came from investing.  Having
already angered all the plutocrats and would-be plutocrats, but with
his credibility at a peak in other quarters, Buffett vowed to carry on
the fight against repeal of the estate tax, and would spin on this
subject for years.

Not only is this position contrary to his self-interest, but from the book, one might infer that he is low on openness to experience and high on conscientiousness, two traits which have been found to be central to ideological preferences, with Buffett's pattern being opposite to most liberals.  As an example, Buffet is described as unable to eat foreign foods, preferring plain hamburgers, consistent with low openness to experience scores (e.g. liberals are more adventurous eaters).  He is famously conscientious in terms of his business dealings.  Below is yourmorals data relating these personality traits to ideology, replicating the study linked above.

From reading the book, my answer to the above question would be that Buffett is also very high on empathic concern, which might logically be related to agreeableness in the above graph, where you might notice that liberals score a bit higher.  Answers to questions like "I would describe myself as a pretty soft hearted person" correlate highly (r=.5) with agreeableness scores and with liberal identification (r=-.2, 1-7 lib-con).  Buffett is not a social person in the book, but he does care about the people around him a great deal, a realization that appears to ever more salient as he gets older and mortality is a more salient concern.  Perhaps it is this empathic concern that leads him to be more liberal on tax policy, while other wealthy individuals actively fight the estate tax.  Some research indicates that the primacy of ensuring economic growth versus caring for others, both noble goals that sometimes conflict, is central to notions of distributive justice.  Buffett may have fewer productivity goals compared to other CEOs, as his investing has the feel of a game that he loves, rather than a job.

Finally, I'd like to share one last tangientially related quote from the final pages of the book, which I found especially wise, more wise than his investment advice actually.  I do recommend the whole book.

People ask me where they should go to work, and I always tell them to
go to work for whom they admire the most,  It's crazy to take little
in-between jobs just because they look good on your resume.  That's
like saving sex for your old age.  Do what you love and work for whom
you admire the most, and you've given yourself the best chance in life
you can.

- Ravi Iyer

It was hard to be sympathetic, but the closest I can come is to think of them as having a radically different time perspective than most people.  As Zimbardo says in the below video, addiction is related to a present hedonistic time perspective, and the members of Motley Crue certainly reaped what they sowed in terms of addiction.

The natural question that occurred to me was to determine the time perspective differences among liberals, conservatives, and libertarians. Unfortunately, I don't have specific time perspective data, but I do have scores on the Hedonism dimension (e.g. how important is "Enjoying Life"?) of the Schwartz Values Scale in the chart below, which equates to Zimbardo's Present-Hedonistic perspective.

Unsurprisingly, liberals and libertarians score the highest on hedonism scores.  Obviously, Motley Crue went overboard, but I don't think hedonism is necessarily good or bad. Zimbardo's work doesn't say that any particular time perspective is superior, but rather that individuals should attempt to find a balanced time perspective.

In the same way, I would argue that the country needs a balanced time perspective, balancing respect for the past, enjoying the present, and considering the future.  Conservatives policies might leave us constantly growing our economy and military, so that we can ensure our future security, but perhaps at the expense of the current welfare of many, especially those individuals who are less productive or less fortunate. Liberal policies might ensure that all individuals have basic needs met and that society cares about the happiness of it's citizens, but at the cost of preparing for the future. A balance of these concerns seems most prudent and perhaps appreciating the benefits of different time perspectives, as Zimbardo states at the end of his video, will allow us to make fewer negative attributions of those on the other side of the aisle....and maybe even of people as hedonistic as the members of Motley Crue.

- Ravi Iyer

...there are two big incentives that drive behavior at the intersection where politics meets media. One is public attention. The other is money. Experience shows there’s lots more of both to be had by engaging in extreme partisan behavior.

Fox News has soared on the strength of commentators like Bill O’Reilly and Sean Hannity, both of whom fanned the Sherrod story on the strength of the misleading Breitbart video. (A Fox senior executive, by contrast, urged the news side of the operation to get Sherrod’s response before going with the story, The Washington Post reported.) On the left, MSNBC is trying to emulate the success of primetime partisanship. Meanwhile, CNN, which has largely strived toward a neutral ideological posture, is battling steady relative declines in its audience.

If media executives hunger for ratings, politicians hunger for campaign cash and fame.

Obama put it best earlier this year, after Republican Rep. Joe Wilson of South Carolina shouted “you lie” during the president's State of the Union speech. "The easiest way to get on television right now is to be really rude,” the president told ABC News.

Indeed, at first Wilson seemed embarrassed and apologized for his outburst. But within days, Wilson and his opponent were both flooded with campaign contributions; Wilson took in more than $700,000 in the immediate aftermath of his outburst and was a guest of honor on Hannity’s show and Fox News Sunday.

We reward politicians and news organizations, with our attention and our money, that engage in the very incivility that makes politics so ugly. This is true on both sides of the aisle.

At the recent meeting of the International Society of Political Psychology, Linda Skitka gave a talk which puts a lot of this in perspective for me. Her lab studies the dark side of moral conviction, which I call hypermoralism in the hope that the term catches on. Roy Baumeister studies a similar concept, idealistic evil. In Skitka's talk, she demonstrates in a Chinese sample that political intolerance (e.g. "people with different positions than your own about this issue should be allowed to have their phones tapped by the Chinese government") and social intolerance (e.g. "How willing would you be to have someone who did not share your views on this issue as a close personal friend?") were best predicted by moral conviction (e.g. "To what extent are your feelings about this issue or policy based on your fundamental beliefs about right and wrong?").  When controlling for moral conviction, all other variables (e.g. demographics, political position, attitude importance, and attitude strength) were all insignificant predictors of social and political intolerance. I look forward to seeing how this replicates on a US sample and how political intolerance is operationalized. Perhaps something along the lines of liberal consideration of censoring Fox news or conservative publication of what many would consider private discussion would make good operationalizations of political intolerance as they mirror what we see in reality, where considerations of privacy, context, and free speech are considered secondary to partisanship. Moral conviction may underlie the hyperpartisanship that Politico talks about.

Hyperpartisanship and hypermoralism may be another instance of the effects of what evolutionary psychologist Deirdre Barrett calls "Supernormal Stimuli". As the Wall Street Journal writes about her book:

As Ms. Barrett notes, modern life surrounds us with supernormal stimuli. An example: Humans evolved strong tastes for fats and sweets, tastes that conferred a reproductive advantage in the days when starvation was common. But these tastes can be a burden when we're confronted with such supernormal stimuli as the 400-calorie Frappuccino at Starbucks. An evolutionary adaptation that once promised survival is more likely nowadays to produce Type 2 diabetes.

Ms. Barrett pushes her thesis too far at times, but her plain-spoken disquisition makes a strong case that supernormal stimuli "can help us understand the problems of modern civilization."

One might even argue that supernormal stimuli—or perhaps our reactions to them—are the biggest problems faced by affluent societies.

In the case of hyperpartisanship and hypermoralism, our evolved moral senses, which allow human beings to cooperate, are now subject to the stimulus which is the 24 hour news cycle and the non-stop political campaign. Moral emotions are powerful forces, which are now activated routinely, rather than rarely.

If anybody has ideas on how to escape this cycle, I would love to hear them. Humanizing and getting to know the opposition, along the lines of intergroup contact theory, is an idea. Perhaps moral emotions can be activated against hyperpartisanship itself, rather than against individual ideologies. Or maybe with greater understanding, we can all learn to recognize supernormal moral stimuli and give them less power in our lives. Ideas welcome and I'm open to operationalizing particularly promising ideas as studies to be run on yourmorals.org.

- Ravi Iyer

This may be an odd thing to say, but as a liberal, Rolling Nowhere helped me to appreciate American libertarians better. There are surely lots of differences between liberals and libertarians, but there are similarities as well.  The book helped me contextualize the relationships we've found between being libertarian, which implies a sacredness placed on the value of freedom, psychological reactance, and the desire for stimulation.  These are traits where liberals tend to score higher than conservatives as well.

The below graphs, taken from our yourmorals.org data, show these characteristics, using the Schwartz Values Scale, comparing liberals, libertarians, and conservatives. Notice that while self-direction is valued highly in all groups, it is highest in libertarians, and the difference between self-direction and the next highest value, is greatest for libertarians. Liberals score higher in self-direction than conservatives.

In the above graph, libertarians also show a relatively high desire for stimulation (equal to liberals, higher than conservatives) and a relatively low value placed on tradition and conformity.  This is consistent with the idea that libertarians are experience seekers, an idea further confirmed by the below graph of libertarian big five personality dimensions, where libertarians score relatively high (similar to liberals) on openness to experience.

Conover writes a fair amount about the motivation that made him (who seems to lean liberal) seek to experience life as a tramp:

I hit the rails to learn and because, as Lonny said, when you become afraid to die, you become afraid to live. Confronted by the prospect of entering a laid-out and set-up life largely devoid of the need to be resourceful, I had desired an activity with an unpredictable outcome. Risk-taking, in a way, seemed its own reward.

Notice how in the above graph, libertarians score relatively low in agreeableness (e.g. "likes to cooperate with others").  That converges with the below measure of psychological reactance (e.g. "I become angry when my freedom of choice is restricted").

As Conover writes -

To understand tramps...you have to understand the idea that people cannot always do what they are told. Maybe you are told to get a job, but there aren't any; maybe you return from a crazy war and are told to carry on as though nothing ever happened...Many tramps' careers on the road began when the tramp told society, "You can't fire me-- I quit!"

There may indeed be a lot of overlap between the tea party movement and traditional republicans.  But that doesn't mean that there isn't something that liberals can't identify with in the American libertarian. Both groups share a desire to escape established structure (liberals score higher than conservatives on reactance) and seek new experiences (high openness to experience scores), and I bet Rolling Nowhere, with it's portrait of individuals who have escaped life's routines, living by their own resourcefulness, is the kind of book that would appeal to many members of both groups.

- Ravi Iyer

This scene is not unique to Los Angeles.  In fact, riots appear to occur with regularity when sports teams win.  There were riots in Boston when the Celtics won in 2008 and riots in Los Angeles when the Lakers won in 2009 too. This seems to counter the common sense idea that people should be happy when they win, such that they are more generous with others. Happy people tend to be generous people (though the causal relationship might run in the reverse direction), not rioters.  Shouldn't the people in the losing cities be the ones who rampage out of frustration?  Yet there is an astonishing correlation between rioting and winning in the Lakers-Celtics series and in sports rioting more generally.

A colleague of mine dug up this study (Bernhardt et al, 1998) to explain it to me and I think it's worth sharing. It's been replicated by others as well.  Unfortunately, the article itself is protected by the wall of the academic journal system, but the basic pattern of results is illustrated below.

Fans of Winners Experience Testosterone Increases

Basically, fans of the winning team gain testosterone, which has been linked to aggressive behavior. Fans of losing teams lose testosterone, which makes sense from an evolutionary perspective. Winners are encouraged to compete more...losers cut their losses.

Does this same effect extend to politics?  My gut tells me no, as politics is less primal and the results develop over months, not hours.  In fact, most of the time, we know who will win before an election and so what the winners feel is relief (an idea somewhat validated by this study).  This article (fully visible by the public, since it was commendably published in an open access journal) illustrates that for some individuals, there was indeed no testosterone increase among winners, but the same decrease among losers, in the 2008 presidential election.

Another interesting resource, for those interested in the consilience of multiple views on the subject, is Bill Buford's book, Among the Thugs, where he lives among chronic sports rioters, fans of English football.  His explanation dovetails nicely with Bernhardt et al's research (quote thanks to this source):

I had not expected the violence to be so pleasureable....This is, if you like, the answer to the hundred-dollar question: why do young males riot every Saturday? They do it for the same reason that another generation drank too much, or smoked dope, or took hallucinogenic drugs, or behaved badly or rebelliously. Violence is their antisocial kick, their mind-altering experience, an adrenaline-induced euphoria that might be all the more powerful because it is generated by the body itself, with, I was convinced, many of the same addictive qualities that characterize synthetically produced drugs.

For more information, here is another parallel view and a link to a more general overview of the causes of violence in sports riots (unfortunately, again, full text inaccessible without a university login...hrm!...I hope someday to be in a position to publish only in open access journals).

- Ravi Iyer