Real Value | Economics Documentary with Dan Ariely | Sustainability | Social Entrepreneurship

our brain is active all the time trying to infer things about the world what is this robot what is going on here and it's using relevant cues but also irrelevant cues and once it gets these cues it uses them to interpret the world our perception of value is dramatically subjective it comes from lots of things from the environment neoclassical economics has a very simple answer something this value is whatever people are willing to pay for it but a deeper question of what value is is much more complex one of the experiments we did on their purchases was to sell people coffee we had the regular condiment milk and sugar and cream and so on but we also had these six condiments that nobody ever uses lemon peel and cardamom and you know stuff like that and sometimes we put these condiments in there beautiful metal and glass containers with a little spoon and so on and sometimes they were in styrofoam cups kind of tall we wrote it in a filthy pan really ugly and now the question is do these things that were on the side that nobody ever used influence the perception of how good the coffee was their answer was absolutely yes and they also influence how much people are willing to pay they're willing to pay about twice as much I have a friend who's a expert in wine we continuously have this discussion about what's the right way to figure out the value of wine if you do blind tasting of wine you taste the wine you have no idea about it it turns out the correlation between price and quality is basically zero more expensive wine is not perceived as better quality than cheaper wine when you know the price now it does have a positive correlation because your expectation that this wine is going to get better actually changes the way you experience it and therefore change the value so it's actually very difficult to think about what is the value of something [Laughter] we fight a lot about the role of prophet and its primacy in business prophets a healthy thing prophet is a metric of sustainability without being profitable we don't get to be here but there is also arisen this false equality around profit a couple years ago couple Harvard Business School professors were in our article called creating shared value what they said was there's a new way of thinking about how businesses can serve philanthropy is the old way philanthropy is sharing wealth that's already been created but a better way is to create wealth by serving and so in creating shared value you then have to say well that's interesting because now we're going to create a profitable business that does good and they coined a phrase that I just love they said all profits are not created equal those that carry a social benefit are better so let's stop arguing about this because if you're an investor why wouldn't you invest in a company that returns adequate reward to you but also does good if your government why wouldn't you favor those businesses why wouldn't you look for businesses that do good in addition to making a profit and then here's the rub if you're a business leader and you're competing for capital why wouldn't you choose a business model that does good in addition to rewarding shareholders because you yourself will be rewarded and salva sudden we've just changed the incentives completely all profits are not created equal let's be honest about that those that carry a social benefit are better NAFTA was the wake-up call NAFTA was epiphany NAFTA not only destroyed my personal life destroyed my business policy making a six-figure salary I was driving up the MW at a nice home I had a great wife I had Country Club membership I played golf on weekends it just destroyed everything that they told us you know in business school everything that I felt like I was on the path to do the people are associated the direction I was going you know I was a pretty hardcore Republican in those days I was living you know it's in this kind of matrix I was living this world that hey it's all seemed great and afterwards that kind of breaking point maybe this past not the path I need to be on we're a t-shirt printer we're a custom wholesale t-shirt printer here in North Carolina was a big textile hub and I had lots of friends and a lot of companies that either made that venture overseas or they went out of business but we did not want to do that we just felt even in the mid 90s with something wrong with this scenario that yeah we're going to outsource to make more money here but then we're going to sell our product to a person we just laid off it just didn't really make much sense to us mid 90s we changed the mission of Tess's eyes we want to be a successful company while looking after our people the planet and profits of everything we do every decision we make every product we buy has to ask what's the impact not only to the bottom line what's gonna cost the company but what's going to be the impact of the plan and the people we felt like it's important not only to talk about this stuff but demonstrate the step out there and do these things so we're in a little industrial park here put our first tracking array Godley that thinks 12 years old 13 years old never forget we first put it up I mean that was the the second one in Alamance County the biggest one in Alamance County a lot of people thought it was some type of satellite dish you know what kind of TV station will pick up on that thing I like to describe sustainability being a journey not a destination and I'll be on that journey to the day I died got wind and we got sold and we got biofuels and we got chickens without Gardens and we've got fees because of how in the heck can you do that as a small business owner what I've come to find out is once people realize that you have a care for a business beyond just maximizing your personal bottom line then they want to support you but a lot of times people you're trying to extract information to benefit yourself once people realize you're trying to do something beyond just yourself they want to help that's one thing that we really lost focused on the last twenty or thirty years we want to kind of pick out one piece and really maximize the efficiency of it but we don't realize the impact that we're having to other parts of the system so it's reconnecting those dots and that's exactly what we're trying to do it ts designs would be an example of in a business that wants to reconnect and be a part of this local living system that we deal in we got an early wake-up call you know we could have fought and resisted to to not go that direction but NAFTA allowed us to to make that transition so we've been on this journey a lot longer than most people have things happen to change how people value things often what we try to do is we are in one state of the world and we're trying to predict how you would feel about life you were in a different state of the world we have a very hard time doing it so we say oh how would life look like if I marry this person or how would life look like if I bought this house about this car and move to California whatever it is and we often have all kinds of perception and beliefs about how life will be but then life changes and then we don't become the same people having children and that's probably true for many parents is when you start to really think about well I want my baby to grow up healthy how am I gonna do that it was then that I became much more conscious about knowing where food comes from and how badly unfortunately the United States is doing in terms of letting us all know where our food comes from labeling whether or not it's good at genetic modification in it having it be a mono culture that could in fact collapse so it's still cool season here in Asheville and a good time to plant beets and chard this is Chioggia beet which is a wonderful heirloom seed it's a beautiful beet that grows into beautiful globes of rings of color the beet is on the inside is both red and white so it makes for a beautiful salad i'm planting this between some other things and it's not very hard to do so I generally speaking don't plant things in rows just because I don't like rows that sometimes makes it hard to find them again when I started the company I wanted to essentially in a small way create the world I wanted to live in and that would not be terribly hierarchical or authoritarian I wanted people who worked for so true seed to have a sense that their jobs were important and a certain empowerment to make those jobs better we were gung-ho on finding the seeds and connecting with farmers and growing seed and doing the kind of evangelical things that we wanted to do however we didn't have a business plan I didn't know that P&L meant profit and loss I learned a great deal about the necessity of making a business a business that is to say the basis for sustainability is being able to pay for yourself one of my favorite things in the world is Swiss chard and especially the rainbow chard because it's so beautiful it withstands heat better than other greens so they look like beet seeds and that's because they're in the same family Swiss chard is we want a sustainable company and that means a whole bunch of things basically a company to be sustainable has to be able to pay for itself but also we want to be able to sustain ourselves in the community the way we nourished that is to be part of the community we try to buy everything that we need locally we have a community program for instance where you can come in and exchange seed for working we have wonderful educational programs so people can come in and learn how to plant their seeds we donate leftover seeds to local community gardens to schools the result is that we are loved and it's very very heartening not just to me because it doesn't just extend to me it's for all of us that were a part of the community we're sustainable by virtue of making enough money to cover our cost and by employing people and being part of this community it's very very it's I don't know how to express the the kind of value you get from that business is a powerful force for positive social change one of the only ways to think about that is that we've seen business be a powerful force for negative social change a lot of times and we've gone to the place where we're not surprised by that anymore Bangladeshi factory collapses a thousand people die and it's a horrible thing but people kind of you know shake their heads and think well just another example of the bad behavior of business you don't have to shift the frame too much to think well wait a minute it's not that there were people in Bangladesh making things what if they'd been in a safe factory what if they'd been paid a living wage in a place where there's not much work well then all of a sudden it's pretty simple to see that that might have been a good thing what if the goods they were working on were made from organic cotton grown close by then also now we've got we've made an environmental statement that's powerful and positive so they're all kinds of ways that the very same transaction could have done good and instead of doing that we think about this in ways that today seem like the exception and they seem fringe right so the biofuel industry makes all the sense in the world but it seems a little bit like it's not something that we run into every day and so that's to me the bigger challenge for business is not to have people begin to even anymore conceive that business can be a force for positive social change it is to say how do we scale the change I've been making fuel since 2002 started in the backyard just trying to meet my family's fuel needs and we scaled up and became a cooperative and then from there we scaled up to this place in Pittsboro which is our industrial plant our story is one of trying to scale up we've been permanently out of fuel and we still are to this day this is a million gallon biodiesel plant and we still can't make enough fuel to meet demand we make what's called B 100 biodiesel or 100% bio our biodiesel is a renewable fuel made from waste that can be put into any diesel engine so we have a cooperative of members that drive around in Volkswagens and Mercedes and Dodge trucks and these kinds of things and our biodiesel can go directly into any diesel engine as a replacement for petroleum fuel [Applause] we collect used and waste fats oils and greases from within around 50 miles of our plant and we bring them here and we spin them into fuel and then we put that fuel back out into the same community so the members of Piedmont biofuels they're off the petroleum grid they are not attached to war spills in the Gulf or pipeline eruptions or anything that has to do with the oil industry has really nothing to do with us we are an RSB accredited facility that is the roundtable on sustainable biofuels that's out of switzerland and that is a fiendishly complex accreditation that essentially measures the sustainability value of our fuel we're the only biodiesel producer in the United States to have that accreditation and that's important because not all biofuels are created equal and biofuels are not without sin when we started this we would show up and you know at a fast-food restaurant and say hey can we have the grease out of your dumpster and I think that people just thought we were quirky as time wore on and people started realizing that you know maybe there was something to climate change and maybe we did have a problem with petroleum there was a moment there when biofuels were going to save the world and they became very big and it was crazy we became rockstars we were sort of heroes for in the biodiesel movement along came the I guess it was the summer of 2008 world commodity prices went to an all-time high you know when air Stearns died and you know the world the world changed but what happened there was biofuels became evil that's when we were on the front cover of Time magazine as the greatest hoax ever perpetrated against the American people and that's when the United Nations came out and said anyone making biofuels should be charged with crimes against humanity and there was some truth to that because what biodiesel did in our industry is like you know let's do this let's go to Malaysia let's burn down the rainforests and let's plant oil palm trees all in a row and let's squish the seeds and take out the oil and put the oil on a super tanker and send it to Seattle and spin it into fuel and put it on a rail car and send it to North Carolina and put it on a truck and take it out to the airport and after the airport has burned enough of it let's give them a prize for being green it's like stop the madness it's critically important to us that our feedstocks what we use to make product come from the local area that that if you're gonna make a sustainable biofuel that's rather important so the RSB certification is I think quite important to us because it does let people know that not all biofuels are created equal that's true of quality and also how they're made and from what they're they come from you know we wouldn't use palm oil that's not what we're about you businesses have to run well for profit and nonprofit alike in order to be able to accomplish their really high purposes we think a lot about the efficacy of social enterprises and we have a little three cell model first you have to do important work and that's just fundamental but the point of your work has to improve the quality of life in communities in some what you have to do important work the second thing is you have to do the important work well that means you have to be financially sustainable but it also means that you have to create a workplace that's good for all a brutal workplace that forces people to be unsustainably self-sacrificial isn't anything to be proud of you have to be able to treat your employees well as as well as your customers and all other stakeholders so you have to do that important work well and then third you have to move your work to scale and you have to find a way to be selfless collaborate with the other folks who can come together to help you scale that work and often for profit and nonprofit alike we're not great at that kind of ego free collaboration so do important work do the important work well move it to scale in 1840 there were no seed companies people swapped seeds they saved seeds they got them from the people on the other side of the mountain still here there are beings that are named after families because they've been saved for so long those seeds are disappearing because you can't buy them from big companies so it's we small seed companies and there are several of us scattered all over the country that are trying to save the biodiversity the different kinds of varieties of seeds and the reason to do that can be well illustrated in the Irish potato famine potatoes come from Peru and Ecuador and there are hundreds of kinds of them Ireland in the 1800's was growing five kinds and those potatoes got a blight and it affected every one of them if they have been growing 25 or 30 kinds of potatoes chances are pretty good that one or two or three of those potatoes would have been blight resistant but they weren't and millions of people as I recall starved because of the lack of biodiversity well now we have genetically engineered corn it's the same one being planted time after time after time year after year it's depleting the soil and now we're noticing there are lights that are happening and they're happening to the whole crop so the reason to save your seed have a hundred kinds of tomatoes in your region is that sure to blight come along or a bug one of them are five of them are going to be resistant and that's how mother nature works and we want to help out what the peril industry has done since the mid 90s is they've run around the world utilizing cheap energy chasing cheap labor but even that the business schools the Chamber of Commerce the Department of Commerce all the economic folks says your labor is your most expensive cost of doing business in the payroll manufacturing so you need to outsource it fast-forward today see where that's gotten us devastate local economies very high unemployment our employees are by far our most valuable asset we have taken major major hits at TIF designs not only personally financially what we've tied up and had to give up but we've always maintained retirement benefits we've always maintained health benefits then what we did behind us represents our whole garden system so all the produce that comes out of the garden all the eggs that come from our chickens go back to our employees to make them healthier so they base they're more productive they're going to be less likely to be sick we change our company policy every employee that works at t–'s designs if there is work need to be done in the garden we pay them to work in the garden we had employees that were never connected this environment employees that went first started bringing squash and zucchini and asparagus out of the garden had no idea what it was we're very transparent with our employees what we're doing why we do it some of them get on board immediately some take time as long as they're supporting what we do at TS on to please hi Quietus stainable t-shirts then long as they're meeting that job that's what they're mostly valued on but over time their understanding the value of what we've done here with the garden I like describe what we do is you know this is something we're passionate it's not a religion I won't Jam down your throat we have no employees at smoke we have no employees that are overweight not because we have some rule or mandate that says you can't be can't be fat you can't smoke it's just this environment that we started crate around them this is system we're all connected together for employees having that's a local healthy food is just as important to us as producing sustainable t-shirts there's something in the human animal that says if I can make a gallon Wow maybe I could make 100 gallons if I can make 100 gallons like I could make a million gallons if I can if I can make a million I'll make a hundred million gallons someone managed to put it in our heads that big is better and the economies of scale or what can drive pricing down and at the end of the day it is exactly that that's driving us into environmental ruin especially when it comes to energy if you think about energy and your energy choices you can't graduate from college and say I'm gonna be a utility company you know that's not gonna happen because we've dealt out a monopoly and we have this massive scale a nuclear plant that is you know so expensive it would never get built without government subsidy well really energy is the perfect example of how that should all be reversed energy should be made where it's consumed if you're going to drive you should be taking the waste products from your community turning it into fuels and using that to drive if you're gonna power your house it should be done with solar panels we should be moving to a distributed generation model of all of our energy consumption that's what sustainability will look like in the future it won't be an oppressive top-down infrastructure that you really have no role in you know you can turn off the lights when you're not using them but you can't really go into the utility business very easily in the future that that absolutely will change so the next hundred million gallons of biodiesel should not come from a hundred million gallon plant in the harbor the next 100 million gallons should come from one hundred little peed Lots there should be one on the edge of every town in our case we're using cooking oil if you have another community that's you know it has a lot of rotting apples what we should be using rotting apples and you know they should power themselves from the waste streams that are you know bio specific in their bio region the sustainability movement you know are we are we just a bunch of dirty hippies with exhaust that smells funny our exhaust tends to smell like french fries the reality is of course there's there's technology involved there's invention involved and actually if you're going to get at that conservation resource you're not going to do it by rubbing sticks together to start the fire you're going to do it by say coming up with an LED light bulb that uses a fraction of the electricity but produces the same amount of loom that kind of invention and progress is something that you're gonna find I think at every level of society so I think the future of biodiesel will come from deeper in the waste stream and the way you drill deeper into the waste stream is through the technology today you might say oh I can't touch that stuff but tomorrow you'll say this will make a fine fuel in all things there's probably a constant need for improvement certainly true the biodiesel space it's true in the in the sustainability movement in general it it's true even if you look at our at our corporate structures there's obviously vast room for improvement there there's a screaming need for integrity authenticity and transparency think about something like trust which is incredibly important in society imagine for a second how it would feel like to live in a society with not trust you would have to lock your car in your house and not have a bank account and all kinds of things would be really really tough nevertheless it is not clear that we have a good trade-off between what we're willing to pay for something and Trust what we often find is that something is coming to play in what we call sacred values so as long as we have sacred values we put tremendous value on things like trust and social and public good but the moment they come into the market relationship and we have regular trade offs with them I think their value is going to be really vastly diminished because all of those things on the per moment transaction are worthwhile giving up trust I want in principle but right now if you gave me a lot of money maybe it's worthwhile to sacrifice in pollution I want the world to be clean but right now if you gave me something maybe I would sacrifice it so I think that's why we have these sacred values and things were not willing to trade off because as human beings every time we start trading off these values we might think short-term and sacrifice them too much I'm utterly convinced that sticking to principles is profitable and a local community it's profitable because people can trust you and building trust is huge at the moment there is such an atmosphere of mistrust almost everywhere that it is of great value to this community that we remember that we really can trust each other and that we prove it by being trustworthy and I think it's terribly important for a business in a community like this or anywhere to make sure that they're really upfront with their customers and if you lose some customers that way that's too bad but in truths most people want to be able to trust I can tell you for example a couple of years ago we sold garlic this garlic had a blight on it and we didn't find out until after we've chipped it so we went back at great expense and contacted everybody we chipped that garlic – it was just one box fortunately and said please be aware that this could be blighted check it send it back if you don't want it or just throw it away we'll happily resupply you it cost us a lot of money to do that and I can't tell you how many customers have commented on how much they are willing to buy seeds and other things from our company now because we went right out there and said uh-oh we goofed I think that is sustainable and I believe it's profitable if you make yourself transparent it just builds an unbelievable trust factor if there is a question I can't answer or the thing that you want to we what we will find that answer there's no secrets five years ago we launched what we call the supply chain cotton of the Carolinas and that has really been our focus we've seen our biggest growth our biggest interest it's a lot like what's happened in local food movement people are starting to realize I want to know my food comes from we won't do the same thing with apparel we want to know what that apparel comes from what we describe make a shirt that's dirt t-shirt in 600 miles impacts 500 jobs in a completely transparent supply chain and so when you get a cotton Carolina's t-shirt now we have a style number that you drop into a website that brings you to a Google map and that when that google map pops up you get not only a picture a phone number a physical address an email of everybody involved in the supply chain the farmer the Jenner the spinner the knitter the finisher the cut and sew and then us the print dye we make our supply chain completely transparent now what they'll tell you in business school just basically told somebody your whole how to get compete with you and what we like to say we feel there's more benefit being transparent compared to yes there's people that can can see that information and if they have enough money and they're foolish enough they can be in the t-shirt business too bring up values and all of a sudden people start saying whoo I don't want to go there because that even the word values has been co-opted by a political group a religious group as as being almost exclusionary or judgmental that's not what it is I mean the word is much more fundamental I love the work of a guy named Rush Kidder a word of book a few years ago called moral courage he went to every continent 160 some countries talk to people from every faith community as well as folks who didn't grow up in faith communities and he tried to find out what were the values that were universally shared he came up with five core values which I think are just beautiful caring honesty respect responsibility and fairness those are the values that unite us that bring us together that build sustainable communities not the values that judge and separate and divide us that is enormous ly important because now we can start talk about the things that we share and we can argue forever about how to fund public education or what's the best form of Taxation but as long as we do it in a way that's informed by that group of values we're gonna come to really good outcomes because we're gonna have what respectful and civil discourse you have to start with that and if you start with that end up with coming to a really good place so I talk about values all the time because I don't see them as a bad thing I see them as the foundation to what we're doing [Applause] our company is a social enterprise we started the company to stop kids from being hurt principally from being sexually abused or from drowning that's kind of the reason the company exists we have a relatively simple but a pretty elegant model we use the platform of insurance to gather a tremendous amount of data about how kids get hurt we aggregate that data and then share that with our customers in such a way that they'll change their business practices that do minimize the chance that something bad will happen that has the benefit of keeping kids safe and healthy and driving down the cost of insurance over time so we're nominally an insurance provider but we're mostly about changing behavior and keeping kids safe it's really important to understand that when we founded the company literally have a business model that was written on the back of a cocktail napkin it says right at the top says serve others that's why the company exists we didn't start the company to make money we asked ourselves do we matter does our company matter in other words if we dry up and go away tomorrow somebody else will provide insurance to our customers so we have to matter for a completely different set of reasons we have to matter because we will help our customers keep kids safe interestingly though top of the pyramid says serve others right beneath that it says make a profit and we're not apologetic about that if we can't adequately monetize the work we do we can't be here to serve others so for us profit is simply a metric of sustainability that's all and I would argue that that should be true for any purpose driven business whether it's for profit or not for profit now because whoa I'm not for profit I can't have profit on there that's wrong they might call it a fund balance or a reserve or a surplus or whatever but non profit for profit does making a difference you have to be financially sustainable but interestingly because we exist for a higher purpose we are much more mission aligned with our customers and by being mission aligned when they do business with us they recognize they're not just buying insurance there is a competitive differentiation if you talk to all of our customers they'd say no I recognize I can get insurance on place else I choose Redwoods we're going to be an operating partner with them and so at the end of the day quite frankly customers tend to pay a little bit more for our products and services which makes us a little bit more sustainable [Applause] [Applause] when you think about products that have social good in them the question is whether people at the moment are willing to pay for a social good and not only that are they willing to pay in a social good in a trade of kind of a way so if I had the rule I don't buy anything that is not produced organically with fair labor whatever whatever the rule is then I wouldn't do these trade offs but once you start making these trade offs a little bit more child labor for a little bit more saving you know how much child labor I'm willing to do everyone has some affected or how much exactly am i trading off all of a sudden these trade offs become polluted and it's not good at the moment your selfish motivation about getting something cheap is not going to win [Applause] when you stand at the shelf the most salient thing is price and price is not just very salient it's easy to look at it has decimals right you look at things like quality you look at child labor or whatever you want these are hard things to grasp what are they the price 729 815 that's really easy to compare so because price is numerical and decimal easy to compare it occupies a bigger part in our brain that's one thing and the second thing is that at the moment that's the most salient thing you're paying now you're going to consume later and the effect on the environment will be later and the product was produced already the thing that is immediate and easy to compare is price and therefore people focus more on price sometimes too much yes our t-shirts cost more because where they're made in how they're made but there are people getting back the food understand there's a value beyond price what's the social impact and what's the environment impact when you buy that apparel product in Bangladesh yeah the price itself is cheaper but really what's the total impact of what you're doing there you know what's the real cost achieve we're in a commodity business we're in a business that unfortunately our value on price I'll compete with anybody in the world and bring price to the table but also bring social impact environment impact and then less top but if you're gonna come the table and only look at for price we're gonna have a short conversation I don't have conversation in the big-box stores I mean they might put solar panels on the building and stuff like that but they have totally destroyed the apparel industry and the apparel market because what have they done they've built a model on cheap unsustainable transportation and labor so when they come back to the US and want to source you know their apparel here well first of all their margins won't support it they're not going I don't think greatly raise their prices they're not going to reduce their margins they're looking for people like us to make it up and there's no way when it's on my Bangladesh you fifty-five cents an hour I mean that you know our average labor cost so that's 500 people NorCal it's probably $15 an hour the gap is so great you know we have just totally screwed up and destroyed the apparel system so it's that back to that reeducation buy better buy less buy local in a very general way we are focusing on the short term rather than the long term and sometimes we call it a present focus bias that we just focus on on now and you can see it everywhere right you could say a healthcare you know good long term short term doughnuts are really fun now with purchasing that actually becomes a step more difficult because if you think about it when you go to a grocery store let's say or to a shopping mall that shopping mall is defining the environment that you're in and the environment has a large effect on your behavior you might think that you decide what to do but the environment actually has a big effect and when you go into a shopping environment you're basically in their mercy they decide what kind of pieces of food to let you taste and what kind of promotions to expose you to all the motivation of the commercial environment around us is to get us to do things that are good for them in the short run they want our time money attention right now so you know I'm not very optimistic that we can educate people about the importance of child labor fur trade and unless we get it to be something that likes to boot trade off that we're going to get people to reconsider it and therefore be willing to pay at the pump or at the grocery store you know it if you think about fuel for example we do have more clean fuel and less clean fuel and if you had their one time decision like which car do you want to buy one that goes on clean fuel or non clean fuel many people would say no let me make this commitment it also public statement other people can see what car I'm driving and so on but if you drive to the pump and you can choose cheap or expensive bad for the environment you're good for the environment I think that's way too often we would focus on the short term on money and on being selfish as an individual you start wrestling with these unfathomably complex problems peak oil Wow what are you gonna do as an individual about peak oil and the fact that you know u.s. reserves peaked in 1974 and global reserves peaked on Thanksgiving Day of 2007 you know blablabla you get into whether the Saudis are overstating their reserves and you get into just an extremely complex issue that can be overwhelming and maybe many people sort of go can't deal the trick is to get into the scale of me try to chase it down into a scale that I can understand and what I can understand is my family's footprint I can understand my electric bill I can understand my miles driven I can understand these things and so by focusing on the scale that I can understand I can make some progress and feel that I am doing something about peak oil I am engaged in these unfathomably complex problems when I started making my own fuel in the backyard I slipped into this pathology of I'm never gonna go to a gas station again and when you do that while do you conserve it's Friday morning your fuel gauge is on empty your next batch is not going to be done until Sunday night and you kind of say well I either go to the gas station and break my promise to myself or let's see these three trips to town my wife's already in town maybe she can pick that up for me I might be able to let that one wait until Monday and do those two at the same time and so conservation kicks in at the time I was a metal sculptor and I put 27 thousand miles a year on my truck my mileage dropped to about 9,000 miles per year and you say well gosh that's not bad you can have a you know two-thirds reduction in the amount of driving that you do and the answer is absolutely and in fact I would say it's probably true in all of our lives the the really good news is we can all cut by 75% it's a little astonishing but it's there you know and it's also you know kind of fun kind of rewarding and so I treat conservation as being sort of like a game one thing I want to go to another meeting I'll usually ask the question can you tell me without looking the country of origin shirt you're wearing today I probably ask that question 150 times I've got probably less than 10 answers the problem we've got today is most people are not aware of what you're doing so every day they'll pull that wallet out of their pocket they'll make that purchase of coffee gas apparel whatever and sometimes you make a bad decision because of the environment and that's okay the example I love to give people which right down the road here is a fast-food restaurant and there's probably maybe once or twice a month that I'll end up there the reason I end up there is I'm stuck between two meetings and I realize if I don't get some food in my system I'm gonna have a hell asia's headache and then I'm gonna be not as productive that I need to be the rest of the day but I realize when I go in there to buy that food I'm not helping myself I'm not helping the local economy I sympathize for the the chicken I'm getting ready to eat because they don't have the Claudie these chickens over here have but at least I'm aware of what I'm doing here but by you making a decision by not being aware of the impact you have that's the problem that's what we gotta fix and if we can just get people to start to be aware we will greatly accelerate down this path and make our communities a lot better place but the problem is we get so caught up in we don't have time or we depend on information giving back to us you know this product here is a dollar compared to two dollars that's got to be a better doing I'm buying there's things happening globally climate change Peak Oil 9 billion people on the planet access to cheap resources that's not going to go away everybody thinks we're gonna grow ourselves out of the economy with those four things I just told you or not when just allow us to grow it out of the economy the way we're going to make it a better place for everybody we all got to participate the more you extract from the community the bigger house a bigger car whatever basically just pushes smiles down an air-filled we first start our business I mean success was determined by a country club membership and driving a Mercedes Benz what was portrayed as successful in the path to be owned is really not going to work I really believe in local economies I think it's the most sustainable way for us to go forward the joy it brings to be able to have a business that counts to people and to me and to four people to be able to make what one of my employees called a right living that is to say work for a company where we're not ever going to get rich but we are going to work in a way that makes us happy at the end of the day for what we did nobody goes home worried about the consequences of the kinds of work that we do it's a good living for people to have that is value enough because if there are enough of us if there are enough small seed companies than enough communities that will make a huge difference the role of business in society today not only can be different but must be when we get involved in business all of a sudden we can only talk about spreadsheets and quarterly profit statements those are important but they're not the reason we exist the reason we exist is for love is for service we appreciate people who are honorable people who do the right thing too often in business leaders do what they can instead of what they should know what we should do why don't we do it because we have this set of rewards that incensed us to do the wrong thing and we now know that environments that are built around the wrong incentives make moral people behave morally and those of us that have the great blessing of leading businesses don't get to check our morals at the door when we come to work that's a part of who we are and so everything we do all day every day ought to be a part of serving a business has the opportunity to serve its employees it has its opportunity to serve its customers but it has an opportunity obligation to serve the broader wider community anyone who says I just exist for profit is lacking a moral courage because that's a person who says here's what I think personally but here's what I think professionally and there are two different things not only are they different they can't reconcile we have the obligation to reconcile our personal values and our professional responsibilities and that calls us to look the shareholder in the eye and just say here's the deal you're right I am levying an undue tax on you this quarter because I'm gonna take some of our excessive profits and try to help others all businesses are of not above their of the community and so if the community is broken it's just a matter of time before the business is going to be broken there is at the end of the day a compelling economic case to be made that we ought not have poor people or we ought to do all we can to minimize the number of poor people there are because at the end of the day that grows our economy that gives us better ideas that gives everybody greater opportunity that's a fundamental almost a math case for that there's also the moral case that can be made you know most of us have grown up in one or another faith tradition that tells us that we are our brothers and our sisters keepers we're responsible and if you buy that which I think most people do then you have to think about everything you do as what am i doing for those others who are not as fortunate as I am the people that think that everything is a market take something very basic away from being human imagine I asked you for something simple like would you help me change a tire on my car ask yourself how likely would you be to help me now imagine that I offered you money I said would you help me change the tire on my car I'll give you five dollars what happens when I offer you five dollars you set yourself gee I get to help them plus I get five dollars now most people say oh this is work I'm not interested in that I'm not not interested at all now if I offered you 500 dollars you would do it again but what's interesting is that I can add money to an equation and make the motivation lower so with no money you would be willing to help I add money to the equation it's you don't get social motivation and financial motivation the social motivation goes away now you get just the financial motivation and five dollars not enough 500 that's enough so what's interesting is what we call crowding out social and financial motivation don't end up the substitute each other and I think often we don't understand that this is what happens when we bring things to the market so think about something like pollution right what would happen if we create a tax on pollution there would probably be some people that I can't afford it let me look at how I save money but there would be some people who would say now it's just money when we moved to Durham we bought relatively old house and we decide to insulate the attic and change the air conditioning system and so on and the contractor that came was shocked he said we will never recuperate this amount of money because we're going to spend so much money insulating the attic and electricity is so cheap it's not going to be ever effective and of course financially he was right but we did not make a financial decision we were saying this is what we think good people do we try to save the environment we try to insulate the Attic we're doing all of these things that are not about the Kannamma efficiency but if all of a sudden the computation was different and it says it's not part of the social obligation of how we think about the world and our kids and so on it's just a financial thing would you prefer to pay this amount of that amount all of a sudden we would have probably thought about it differently and said okay we'll just pay the tax for this and let's not think about so I think this question about social norms and financial norm is actually very important and what kind of things should we not even introduced into the market and I think there's lots of those things that we should basically say these are not things that we should make part of the market these are things that you should keep as the sacred values with no trade offs my dad who's coming to visit shortly he's like 84 year old veteran of World War two my kids can climb onto his lap and he can tell them war stories all afternoon the question is if I make it to having grandkids that pile onto my lap what am I gonna tell them that I did in the war on climate change do I want to say oh we didn't try that because we didn't think it would work do I want to say oh you know what we thought that would be too expensive no I absolutely not I'm gonna tell the more stories I'm gonna tell them about the things that flop and tell them about the things that worked I'm gonna tell them what the progress that we made and I'm gonna tell them that I was in the war and I served valiantly in the war effort to make it so that the human animal and other species could sustain life on this garden planet at my age you do start to think about legacy I have children and grandchildren and they're the most important legacy but I like to think that 15 years from now there will be a thriving seed company that's still learning how to do what it's doing and doing it better and better saving seeds that might otherwise disappear if it weren't for somebody very specifically saving them and passing them down and that that will be my legacy everybody has a part to play and don't forget that no matter how small the part is it's this the pieces that make the community it's not the materialistic things in life that make us happy money is important you gotta have money you know their to eat and live and stuff like that but he just comes out it's not the only thing money doesn't give you the passion give you the heart and it doesn't connect you to your friends and community and there's more to life and business and community than money often people say no I get it I get it I understand that so what I'm gonna do is I'm gonna go off and I want to make a lot a lot of money for X number of years and then I'll start giving that money away or then I'll start serving and I would simply tell you that in many ways we're out of time we are at a place where our global society is more profoundly broken than may be at any time in history and we have the opportunity to change that when we start thinking about a business school graduating 300 people and 25 of them are going to go into nonprofit work are gonna work for for benefit corporations I'm proud of that group that's bucking the trend in doing that but for the 250 they're going to work for banking or consulting and all they're gonna do is make shareholders more money you have to ask yourself do you matter you're the personal strategic question is do you matter if you don't do that is somebody else going to do that but maybe there's something inside your god-given set of skills that will allow you to help others in a profound way that no one else in the face of this earth could do I would ask people to respond to that I don't miss a lot of meals I Drive a nice car I'm not asking people to live a smart existence what I'm asking people to do is open their eyes and understand the broad global context in which we exist today we're profoundly fortunate and there are an awful lot of people depending on what we do in the next day week month year in our careers it's time serve you you

26 thoughts on “Real Value | Economics Documentary with Dan Ariely | Sustainability | Social Entrepreneurship

  • Fantastic! 😍🙏🔥

    The true heroes of today, 💝

    Small business, local, change agents. Leading by example. ☝️

    And the documentarians to spread these examples, far and wide. 😀👏

  • Nice and very inspiring, but it doesn't go far enough according to my taste. These impact businesses are still subject to the current "tyranny of value" an expression that Michel Bauwems from the p2p Foumdation likes to use. This is ironic taking into consideration the name of the video. In other words, all these businesses rely on fiat currency, on money, to function.
    See more about how we can go off money on
    See as an example of a new form of organisation, a hybrid model designed to reduce its reliance on money, designed to function in a society where money as we know it don't rule the world.

  • Very insteresting Doc and I kind of found a great correlation between this on the debate of separating an artist from his art. Companies are people, and I remember one of my art professor saying your work is you. Shared values is all about creating value by doing good, not creating value with what you got and being a monster like RKelly, Bill Cosby or MJ or ExxonMobil ,Mosanto or companies squandering our environment why making profit. Oops.

  • YouTube stop these EU add's. It's not funny. The EU is a corupt club of people not chosen by the European people. miljons of euro' s have disapeard, nobody knows wat has been done with that taxpayers money and nobody is accountable. 75% of it's members don't pay there fee and nobody is doing anything about it. so stop thes add's.

  • Thanks for a great film! On my channel I also make clips on democracy, economics, gender roles and other interesting matters… welcome 🙏🏽

  • I'll be as brief as possible:
    1) a) Thank you for the doco – I appreciate the effort
    1) b) Only three segments touch on "Real Value". The rest of the doco focuses on future sustainability and Dan tries towards the end to try and tie it all in but I didn't buy it.
    2) Dan Ariely's segments are great however.
    3) As soon as that seed lady spoke, I fast forwarded it. Contributed nothing to the documentary
    4) I appreciate Dan Ariely and the rest of the people around the USA "trying" to be green. The bio fuels guy was saying he used to travel 27,000 miles a year! Taxi's I don't think travel that much. The fact that he asked his wife to pick up something from the town as opposed to driving is not being green, that's genuine common sense that seems to be not-so-common in the US.
    5) Remember USA, it's not USA., et al. The other developed coutries are already onto your "advancements" in being green.
    6) Your contribution to being green is trumped tremendously by the Asian countries that give less than a f**k about the environment. China and India have 1.2ish billion people per country compared to USA. The rivers of plastic they have going on in the Philippines for example make the toughest people on the planet weep.
    There's plenty more points I wanna add but i'll leave with…
    7) The fact you want to make products locally is not an achievement. There is a documentary showing how thousands of workers had no work and their families were lining up at red cross for food hand outs. You take work from Bangladesh or Thailand and they suffer, you take it from locally, citizens suffer. There's no right or wrong.

    1) Buy second hand. Why recycle it when you can sell it. Give the object a second home. I sold a gaming chair for $100 IF they took another chair I wasn't using. If they didn't want the other chair, I would increase the price of the gaming chair to $950. Sold in 4 minutes as the guy was looking for a chair for his kid and himself.
    2) Common sense: why does it nearly always seem that the US doesn't have much of it. Why would you travel by car when there's a bus stop 300 feet from your house? Do you really need 3x 40 minute showers a day?
    3) Stop buying everything. Nike released a new shoe. WOOOWW! I cannot contain my excitement *Rolls eyes*.

  • A very
    good video. This is also a fantastic video explanation of social entrepreneurship. : Please see

  • Change that makes sense… any change… scales on its own. If it isn't scaling.. it's because you don't understand how it doesn't make sense

  • A very American documentary. America and the west in general only wakes up when the policies that once helped them now hurt them. Free market is now helping the developing world and hurting the west, so change the narrative and tell the world what's REALLY important.

  • It's nice as an owner to want to do better for others, but I feel investors often shut these ideas down or remove the owners control.

  • If only we could stop governments from giving big multinationals our tax dollars, giving them an unfair advantage. Instead, small business should receive subsidisation as those profits tend to stay in the country and community.

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