# At The Money: Cass Sunstein on Shifting Your Career Focus

An episode of [Masters in Business](https://invisiblenetwork.ai/podcast/730188152), 12 Jun 2025, 17 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/4e4cd910-40a1-4619-a5f3-ae2b0012ffff/e1fc4979-b11b-4b7d-a507-b2fa01430ed4/audio.mp3?utm_source=Podcast&in_playlist=5873a3cb-298f-40bc-b71f-ae2b0013000d

How do you change careers when you are a highly accomplished, successful attorney? The answer is focus within your profession on what you love doing! Cass Sunstein, professor at Harvard Law School co-author of the new book, “Algorithmic Harm: Protecting People in the Age of Artificial Intelligence” Previously he co-authored “Nudge” with Nobel Laureate Dick Thaler. We discuss his shift in career within the legal profession. . Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work. See omnystudio.com/listener for privacy information.

## Transcript

[0:10] Speaker 1: What does it take to affect a significant career change?
[0:15] Speaker 1: How do you shift from a fairly safe, but perhaps
[0:19] Speaker 1: someone unsatisfying job into something that you really love. A
[0:24] Speaker 1: major career change does require some skills, some hard work,
[0:28] Speaker 1: and a little bit of luck. Today we're speaking with
[0:31] Speaker 1: Cass Sunstein. He is a professor at Harvard Law School. Previously,
[0:36] Speaker 1: he clerked for Supreme Court Justice Thurgood Marshal. He was
[0:41] Speaker 1: an attorney advisor in the US Department of Justice. He
[0:44] Speaker 1: spent over two decades teaching at the University of Chicago
[0:48] Speaker 1: Law School before joining Harvard, but he has also become
[0:53] Speaker 1: an author and a student of behavioral economics. So, Cass,
[0:59] Speaker 1: let's just jump into this. What was your original career plan?
[1:03] Speaker 1: Was the thinking I'm going to go be an attorney
[1:06] Speaker 1: and practice law.
[1:08] Speaker 2: Yeah, that's what I thought. So I went to law school,
[1:10] Speaker 2: I got to clerk for the Supreme Court, and then
[1:13] Speaker 2: after that I worked for the Justice Department. And at
[1:15] Speaker 2: that point I thought I'd probably work for the Justice
[1:18] Speaker 2: Department in a good long time.
[1:20] Speaker 1: And so what was the moment where you said, you know,
[1:24] Speaker 1: I'm going to play with teaching law and see where
[1:27] Speaker 1: that goes. Which is I don't know if I would
[1:29] Speaker 1: call that a career change, but certainly a pivot from
[1:34] Speaker 1: the practice of law.
[1:36] Speaker 2: It was relatively early the law schools come to the
[1:40] Speaker 2: Supreme Court to interview the clerks to see if they
[1:43] Speaker 2: might be teaching material, and the University of Chicago Law
[1:47] Speaker 2: School knocked my socks off. And the way they did
[1:50] Speaker 2: that was their energy and engagement with problems that really
[1:55] Speaker 2: are intellectually super interesting and are also practically important. So
[2:01] Speaker 2: I thought they were all firecrackers there. And then when
[2:03] Speaker 2: I was in the Justice Department after a year, I thought,
[2:06] Speaker 2: maybe I'll go into teaching. I'll kind of explore Chicago,
[2:09] Speaker 2: And I thought this would be not a way of retiring,
[2:12] Speaker 2: but a way of doing something that was continuous with
[2:15] Speaker 2: my law practice but had a little more theory in it.
[2:19] Speaker 1: So you spend twenty years teaching at the University of Chicago,
[2:23] Speaker 1: which is known for really fostering the entire field of
[2:29] Speaker 1: behavioral economics. You have Dick Faylor there, and you very
[2:33] Speaker 1: famously have Eugene Fama teaching there talking about market efficiency.
[2:38] Speaker 1: Tell us a little bit about how the University of
[2:40] Speaker 1: Chicago Law School affected how you thought about the practice
[2:46] Speaker 1: of law.
[2:47] Speaker 2: When I got to Chicago, I was surrounded by economists
[2:52] Speaker 2: or economics adjacent lawyers who said, almost like it was
[2:58] Speaker 2: a prayer, that human beings are rational, they are responsive
[3:02] Speaker 2: to his incentives a man. And this was Ronald Coost
[3:06] Speaker 2: who got a Nobel Prize, Gary Becker, who got a
[3:08] Speaker 2: Nobel Prize, George Stigler who got a Nobel Prize. I
[3:11] Speaker 2: knew all of them before they got Nobel prizes. They
[3:14] Speaker 2: seemed to me like giants, and I felt like I
[3:17] Speaker 2: was two inches tall looking up at these eight foot
[3:20] Speaker 2: tall people who were amazing. But though I was only
[3:23] Speaker 2: tiny and they were so big, I felt they were wrong.
[3:27] Speaker 2: And I was a literature major in college, and I
[3:31] Speaker 2: knew Shakespeare and Charles Dickens and Thomas Hardy, and I
[3:34] Speaker 2: also knew how economists play tennis, and it isn't fully rational.
[3:40] Speaker 2: I would see them and they'd be hitting these fourhands
[3:43] Speaker 2: they had no reason to try to hit, and it
[3:45] Speaker 2: would go into the net. And I thought, this rationality
[3:49] Speaker 2: stuff isn't right. So I started writing papers actually on
[3:53] Speaker 2: departures from perfect rationality, and during the writing of one
[3:57] Speaker 2: of them, an economist who was a rational choice economists
[4:02] Speaker 2: said to me, the paper you're writing is terrible and
[4:05] Speaker 2: you shouldn't publish it. It's so awful you'll ruin your career.
[4:08] Speaker 2: But he added, there's someone who's almost as bad and
[4:11] Speaker 2: idiotic as you are at Cornell named Richard Thaylor. So
[4:14] Speaker 2: he's a young economist who's hopeless, and your paper sounds
[4:19] Speaker 2: like his. You should read him, and then you should
[4:21] Speaker 2: stop writing your paper. And I did read him, but
[4:24] Speaker 2: then I got more excited about writing my paper. That's
[4:26] Speaker 2: how it started.
[4:27] Speaker 1: So because of criticism of your work from the orthodoxy,
[4:34] Speaker 1: you were directed to somebody who was a little less heterodox,
[4:38] Speaker 1: a little more out on the fringe. What happened next?
[4:41] Speaker 1: Did you reach out to the young Dick thalor or
[4:44] Speaker 1: how did you guys connect?
[4:45] Speaker 2: I did. I wrote a paper or two, maybe three
[4:49] Speaker 2: that were kind of informed by behavioral economics about law.
[4:53] Speaker 2: I did write Taylor a kind of fan letter, like
[4:56] Speaker 2: writing a rock star. It felt like saying, you know
[5:00] Speaker 2: you're great, you're amazing, you're incredible, and if you know
[5:03] Speaker 2: failor you won't be surprised to hear. He never responded
[5:06] Speaker 2: to my letter, but he did come to the University
[5:08] Speaker 2: of Chicago, and I think he reached out to me
[5:11] Speaker 2: and said, you want to have lunch, and we hit
[5:14] Speaker 2: it off immediately and then started being great friends and collaborators.
[5:19] Speaker 1: And one of those collaborations was the book you two
[5:22] Speaker 1: co author, Nudge, Improving Decisions about Health, Wealth and Happiness.
[5:28] Speaker 1: Tell us a little bit about what that process was like,
[5:32] Speaker 1: co authoring a book with Dick Taylor, and what has
[5:35] Speaker 1: been the fallouts of this really terrible career ending decision
[5:41] Speaker 1: you made.
[5:42] Speaker 2: When at one of our first lunches, he said he
[5:45] Speaker 2: was writing a paper with an economist lawyer named Christine
[5:48] Speaker 2: Joels on behavioral economics at law. And I was very
[5:52] Speaker 2: excited about that. And as the weeks went by and
[5:55] Speaker 2: then months, they hadn't produced a draft, and I said, Dick,
[5:59] Speaker 2: you better do this paper or else I'm going to
[6:02] Speaker 2: do it instead, and it won't be as good because
[6:05] Speaker 2: it's just me. And he said, why don't you join
[6:08] Speaker 2: us and we'll be a threesome. So we wrote the
[6:10] Speaker 2: paper together and we had a concluding section called anti
[6:14] Speaker 2: anti paternalism, in which we said we were in pro paternalism,
[6:18] Speaker 2: but knowing how human beings blunder, we are anti anti paternalism.
[6:24] Speaker 2: Now that's very clunky. And then a few years later
[6:27] Speaker 2: we did a paper at academic paper on libertarian paternalism.
[6:32] Speaker 2: One was a law paper and one was an economics paper,
[6:35] Speaker 2: and that was just the two of us, and we
[6:37] Speaker 2: were very excited about that, and it turned out a
[6:39] Speaker 2: lot of people were interested in libertarian paternalism as a concept.
[6:43] Speaker 2: I think a GPS device or a disclosure requirement, or
[6:49] Speaker 2: maybe automatic enrollment in some kind of plan. All that
[6:52] Speaker 2: preserves freedom of choice, but it's kind of paternalistic. So
[6:55] Speaker 2: we wrote these papers, and the interest in the papers
[6:58] Speaker 2: motivated us to think maybe we should do a book.
[7:01] Speaker 2: And originally it was going to be called Libertarian Paternalism.
[7:04] Speaker 2: I don't know if anyone would have bought that book.
[7:07] Speaker 2: An editor suggested the name Nudge, and that's what we
[7:10] Speaker 2: went with. Dick is, you know, I think the most
[7:13] Speaker 2: creative and important force behind the rise of behavioral economics.
[7:20] Speaker 2: He's not really mathy, which is good for me because
[7:22] Speaker 2: I'm not that good at math. I brought law and
[7:25] Speaker 2: policy focus to the book. So we had lunch like
[7:30] Speaker 2: all the time about what the chapters would look like,
[7:33] Speaker 2: and we planned out the chapters and one would write
[7:36] Speaker 2: one chapter, the other would write another chapter, and then
[7:39] Speaker 2: we go back and forth like a lot on the editing.
[7:42] Speaker 2: I think I was faster at chapter production than Dick was.
[7:47] Speaker 2: I think he was better at chapter production production than
[7:51] Speaker 2: I was, meaning mine would be quicker, his would be
[7:53] Speaker 2: more amazing and complete. And we were in our very
[7:58] Speaker 2: good editors of each other. We had a rule that
[8:01] Speaker 2: we kind of adopted implicitly early on and explicitly later,
[8:05] Speaker 2: which is, if we both didn't find the chapter fun,
[8:09] Speaker 2: we wouldn't put it in the book. So we both
[8:11] Speaker 2: had to find it really fun. That was our rule
[8:13] Speaker 2: of inclusion.
[8:14] Speaker 1: Huh, really really interesting. So I'm kind of fascinated by
[8:18] Speaker 1: the difference that you identified between on an individual basis,
[8:27] Speaker 1: especially with all the unforced errors you were describing amongst
[8:32] Speaker 1: the rational economists playing tennis literally a book Charlie Ellis wrote,
[8:37] Speaker 1: Winning the Losers Game. Hey, if you want to win
[8:39] Speaker 1: a tennis and you're not a professional tennis player, well
[8:43] Speaker 1: just make fewer unforced error. Just hit the ball back
[8:46] Speaker 1: over the net. Stop trying to kill it. You're not
[8:49] Speaker 1: that good. Which is a sort of individual dare I say,
[8:54] Speaker 1: nudge versus libertarian paternalism where you're setting up a society
[9:01] Speaker 1: wide systematic structure where the default is nudging people into
[9:06] Speaker 1: the right choice. So, hey, you have to check on
[9:10] Speaker 1: the organ donor box on your license, yes or no.
[9:15] Speaker 1: And if you don't check anything, it's going to be yes.
[9:17] Speaker 1: You have to put your four oh one k money.
[9:21] Speaker 1: It could be in whatever you want, cash, bond stocks.
[9:23] Speaker 1: But if you don't check the box, well, here's a
[9:26] Speaker 1: target date fund that's seventy thirty, sixty, forty whatever. How
[9:30] Speaker 1: do you think about both the individual behavioral options versus
[9:35] Speaker 1: system wide nudges?
[9:38] Speaker 2: Okay, so it might be a good idea to tell
[9:41] Speaker 2: people you're automatically going to be in a savings plan
[9:45] Speaker 2: and if you don't want to opt out. Now, note
[9:48] Speaker 2: that that's not more paternalistic than saying you're not automatically
[9:52] Speaker 2: in a savings plan and if you want to have
[9:55] Speaker 2: to opt in. Both have a default which require action,
[9:58] Speaker 2: and both are completely free to preserving. In lots of domains,
[10:02] Speaker 2: individuals benefit from, let's say, a choice architecture which has
[10:07] Speaker 2: a paternalistic feature but also maintains freedom. So I leased
[10:11] Speaker 2: a new car recently. If I start to go like
[10:14] Speaker 2: towards somebody that I'm about to hit is going to
[10:17] Speaker 2: go beat beep, beep, and various unhappy noises or property
[10:21] Speaker 2: or if I switch lanes, there are various things that
[10:24] Speaker 2: the car will signal to me which are nodges to
[10:28] Speaker 2: be more careful or drive more safely, and those are
[10:31] Speaker 2: at the individual level. At the system level, we can
[10:35] Speaker 2: imagine a grocery store and this isn't going to be
[10:38] Speaker 2: very imaginative at all on my part. A grocery store
[10:41] Speaker 2: that is full of nudges in the sense that it
[10:43] Speaker 2: might have healthy foods at places that are super visible
[10:47] Speaker 2: for people, or it might have medicines let's say the
[10:50] Speaker 2: relevant population benefits from that are extremely easily accessed by
[10:57] Speaker 2: people who are there, and it might have, say, the
[11:00] Speaker 2: less healthy stuff there, but you're going to have to
[11:03] Speaker 2: do a little work to get there. Or it might
[11:05] Speaker 2: be that the less healthy stuff is going to be
[11:07] Speaker 2: right there because the grocery shore knows that people really
[11:11] Speaker 2: like that. And website design is the same way. Investment
[11:15] Speaker 2: offerings have the same characteristic. If you go to a
[11:18] Speaker 2: financial advisor, there might be some libertarian paternalism. My financial
[11:23] Speaker 2: advisor certainly engages in that. It's implicit you can do
[11:26] Speaker 2: what you want, but if you're going to sell everything
[11:29] Speaker 2: because the President said something about tariffs, I think you're
[11:34] Speaker 2: going to regret it and maybe sleep on it. And
[11:37] Speaker 2: that's not just at the individual level. There can be
[11:40] Speaker 2: a system of investment advice that is kind of organized
[11:44] Speaker 2: for people. This is your neck of the woods, not mine,
[11:47] Speaker 2: which is designed to promote better outcomes for savers.
[11:52] Speaker 1: So what's so fascinating about this discussion is how far
[11:56] Speaker 1: afield we are from the traditional practice of law. When
[12:02] Speaker 1: did it kind of dawn on you that I went
[12:06] Speaker 1: to law school, I clerked at the Supreme Court, I
[12:09] Speaker 1: teach law. I'm not really going to be a practicing
[12:12] Speaker 1: lawyer anymore. How did that realization come to pass? And
[12:17] Speaker 1: did you have to make peace with it or were
[12:19] Speaker 1: you very comfortable with that decision?
[12:22] Speaker 2: Well, the good news is there are twenty four hours
[12:25] Speaker 2: in a day, and you get to be awake during
[12:28] Speaker 2: the majority of them. So I teach administrative law most years.
[12:34] Speaker 2: That's kind of my bread and butter law course. I
[12:38] Speaker 2: write about constitutional law. I'm not going to say most days,
[12:43] Speaker 2: but most months and maybe even most weeks. So I've
[12:46] Speaker 2: stayed there and through all the years. Sometimes I think,
[12:50] Speaker 2: am I in an area that I understand less well
[12:54] Speaker 2: that is economics, than the area that's kind of home,
[12:58] Speaker 2: which is law. If I'm feeling like that, I might
[13:01] Speaker 2: start doing law. But I should say the behavioral economics
[13:04] Speaker 2: is what I like best. It makes me smile, it
[13:08] Speaker 2: makes me laugh, It creates a kind of sense of
[13:14] Speaker 2: excitement that law isn't quite there. I love law a lot,
[13:19] Speaker 2: I love legal problems a ton, but the behavioral economic
[13:23] Speaker 2: stuff seems to me the most exciting intellectual development in
[13:27] Speaker 2: the last fifty years. Part of it is it's a
[13:29] Speaker 2: little like reading the best Charles Dickens novel that Dickens
[13:33] Speaker 2: never wrote. That is the behavioral economists are so observant
[13:38] Speaker 2: of humanity and our foibles, and I think there's comedy
[13:43] Speaker 2: and warmth in it. So to see that if you say,
[13:45] Speaker 2: you know ninety people are alive after five years, do
[13:48] Speaker 2: you want to have their operation, People including doctors say sure.
[13:52] Speaker 2: If you tell people ten or dead after five years,
[13:54] Speaker 2: do you want to have the operation, people including doctors
[13:57] Speaker 2: say probably not.
[13:58] Speaker 1: But it's the same exist set of circumstances. It's ninety
[14:02] Speaker 1: ten or ten ninety.
[14:03] Speaker 2: Yeah, exactly. So framing effects are really funny. I think
[14:07] Speaker 2: as well as you know usable and behavioral findings. You know,
[14:12] Speaker 2: there's a recent paper out that shows that for certain assets,
[14:17] Speaker 2: people have no idea what the right value is, and
[14:20] Speaker 2: so their willingness to pay for the assets will be
[14:25] Speaker 2: very variable because it's not like a shoe where if
[14:28] Speaker 2: you see certain prices, you think that's a deal or
[14:31] Speaker 2: that's crazy. For certain assets investors, including sophisticated ones, they
[14:35] Speaker 2: just have no idea what the right value is, and
[14:38] Speaker 2: that's very important to know. And we keep coming up
[14:42] Speaker 2: with streams of behavioral findings which are either small and
[14:47] Speaker 2: important or large and quite fundamental. I was an international
[14:52] Speaker 2: conference in n Abu Dhabi not long ago. There were
[14:54] Speaker 2: seven hundred people approximately from all over the world, and
[14:58] Speaker 2: the findings they were described ibang were you know, felt
[15:02] Speaker 2: like a candy store.
[15:05] Speaker 1: Huh. So final question, you seem to have very comfortably
[15:11] Speaker 1: shifted your focus from traditional practice of law to teaching
[15:16] Speaker 1: law to an adjacent field of behavioral economics. What sort
[15:22] Speaker 1: of advice would you have for anybody, lawyer or not,
[15:25] Speaker 1: who was thinking about a pivot in their career.
[15:29] Speaker 2: Great, think what would make your days better? So if
[15:34] Speaker 2: you think of the pivot, imagine how's Monday, Tuesday, Wednesday, Thursday, Friday?
[15:39] Speaker 2: Go I look compared to how it's looking now. If
[15:43] Speaker 2: the pivot makes you think, boy, I'm going to be
[15:46] Speaker 2: overwhelmed with things I don't understand. I'm going to be anxious,
[15:49] Speaker 2: and I'm going to be poor, then maybe hesitate. If
[15:53] Speaker 2: it makes you think rush every day is going to
[15:56] Speaker 2: be really fun and new and full of discovery and people.
[16:02] Speaker 2: Maybe if that's what you like, or engagements that are
[16:07] Speaker 2: something I've not seen before and they're likely to stand
[16:09] Speaker 2: the test of time, then go for it.
[16:12] Speaker 1: Huh, really really interesting stuff. Thanks Cas for all your insight.
[16:16] Speaker 1: So to wrap up, if you're thinking about a career
[16:19] Speaker 1: change and you have an aptitude towards a particular research
[16:23] Speaker 1: area or a skill set, see if you're capable of
[16:27] Speaker 1: performing that and earning a living doing it. Be aware
[16:31] Speaker 1: merely pursuing your bliss may not pay the bills. You
[16:34] Speaker 1: have to have both the skills and the tools and
[16:38] Speaker 1: the abilities to earn a living in your new career.
[16:42] Speaker 1: If you find you have the aptitude and you're good
[16:45] Speaker 1: at it, well why not go for it? I'm Barry Ridults.
[16:50] Speaker 1: You're listening to Bloomberg's at the money

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