Cass Sunstein and Richard Thaler endorse what they call "libertarian paternalism." My initial temptation is to accuse this term of possessing no more meaning than terms such as "dry water" or "ugly beauty." But reflection nudges me away from such a harsh conclusion. There is genuine content to their proposal — content that is worthwhile to carefully consider.
As I say in my letter (below), a nudge from government is better than a command from government. Preserving the freedom to resist government nudges is a good thing, particularly if the alternative is to be commanded by government.
Maximum freedom of individual choice might well capture the core policy prescription of libertarianism (or, better, "radical [classical] liberalism"). But the political philosophy that today stands on the strong shoulders of the likes of Adam Smith, Wilhelm von Humboldt, F.A. Hayek, Milton Friedman, and James Buchanan involves more than a commitment to maximum possible freedom of individual choice. It involves also a tolerance of all peaceful individual preferences, even when — perhaps even especially when — these preferences differ from those of the majority or of the prevalent opinion leaders.
That is, it’s not just that libertarians want everyone to have maximum possible freedom of choice; libertarians also resist passing judgment on other person’s peaceful choices. Libertarian Joe will (indeed, should) judge how well Sam’s peaceful choices might comport with Joe’s own values and lifestyle, but libertarian Joe will not stand in judgment of Sam’s peaceful choices as these affect Sam’s life.
In short, libertarians neither want government to nudge them into making different choices nor to nudge other persons into making those choices that we would make if we were those other persons.
And, at a more practical level, libertarians recognize the state to be an institution more vile and cagey than it is generally understood to be by non-libertarians. Thus my letter to the Financial Times:
Cass Sunstein and Richard
Thaler seek to replace most government force with government "nudges"
("The dramatic effect of a firm nudge," August 13). They say that such
nudging preserves "freedom of choice [as] an important safeguard
against the bias, confusion and self-interest of government." While I
agree that nudges are preferable to force, better still would be to
stop government, as much as possible, from having ANY influence on
persons’ choices. Neither force nor nudging.
Profs. Sunstein
and Thaler inadvertently offer a reason why government nudging is
dangerous, namely, that government decision-making is biased, confused,
and self-interested. Surely such an institution is not to be trusted
to act wisely when it nudges us – especially if the authors are correct
that we respond to nudges so dramatically.
Sincerely,
Donald J. Boudreaux
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http://www.newsweek.com/id/142638
George Will's take from a few weeks back.
When nudges don't work, they might try whipping! Paternal nudges are annoying.
As a better-than-nothing compromise, I can deal with government nudges instead of government fiat. However as a first choice I am opposed to such nudges. Why I have a problem with "libertarian paternalism" as general policy:
It is not sufficient to contrast the imperfect adjustments of unfettered enterprise with the best adjustment that economists in their studies can imagine. For we cannot expect that any State authority will attain, or will ever wholeheartedly seek, that ideal. Such authorities are liable alike to ignorance, to sectional pressure and to personal corruption by private interest.
Pigou A., Wealth and Welfare 1920, p. 296
I was lucky enough to have a class with Glen Withman, who co-wrote one of the first rebukes to Libertarian Paternalism. I actually spoke with him about the paper and the whole idea of Libertarian Paternalism and it was the only time I saw him look angry. He said that advocates of Libertarian Paternalism were slick and know how to manipulate language in order to dress up their case.
It was also the only the time that I saw him look mad or frustrated. I was intially pulzed about this because it seems like making an opt in a default and still giving people the option of a an opt out is nothing compared to the much more coercive economic policies that the last hundred years has witnessed. I finally realize thatr it was because the most coercive forms of government and most coecive economic systems have generally been rejected, especially in the United States and that Libertrian Paternalism has a much greater potential of being accepted and than proving to be the wedge that facilitates more paternalism.
Hooray! I'm so glad that they were able to overcome what I view to be the worst marketing decision in academia in a long time — "libertarian paternalism" is a monstrosity as terminology; good only for inducing cognitive dissonance.
The differences between Messrs. Sunstein, Thaler, and Boudreaux may be vanishingly small, in fact. In principle, it is possible that Sunstein and Thaler might be in favor of instituting nudges where gov't interference with private action did not already exist; and I understand Boudreaux's strong stand against such interference. But in practice, there are few aspects of community life that have not been invaded by the state at this point. And the tide does not seem to be turning. Thus, nudges are in fact a step in the right direction for libertarians who want less state interference. The choice is truly not between regulation and no regulation. It among various kinds of regulations. What Sunstein and Thaler offer is (ultimately, I think) a nonpartisan, empirical strategy for designing defaults that will promote private partnerships, reduce the need for gov't interference, and thus ultimately make everybody a bit more free — i.e., "free" from state interference.
I wonder how hard the "nudges" will get? Will arrest eventually be considered a "nudge"?
I agree with the main point of the piece. But this assertion seems to go too far:
"That is, it's not just that libertarians want everyone to have maximum possible freedom of choice; libertarians also resist passing judgment on other person's peaceful choices. Libertarian Joe will (indeed, should) judge how well Sam's peaceful choices might comport with Joe's own values and lifestyle, but libertarian Joe will not stand in judgment of Sam's peaceful choices as these affect Sam's life."
I don't think the state should force (or nudge) Sam to wear a helmet while riding his motorcycle. But I also don't think that libertarian precepts call upon me (or anyone else) to refrain from telling people who don't wear helmets that they're stupid for reasons X, Y, Z.
JP,
One of us read that quote wrong, and reading it again I am not sure which one of us that is!
Anyway, the way I read it is that Don B was saying that libertarians may think poorly of Sam's lack of helmet wearing and (ought to) tell him so face to face, but that they won't try to get government to use its coercive force to stop him from going helmetless.
Replace my words in parentheses with Don B's words in parentheses, i.e. "ought to" with "indeed, should" and it appears to me we are saying the same thing.
But it isn't quite clear what he means by "indeed, should" or "judge". Maybe he means neither what I was thinking nor what you were thinking he said.
Jug, are you trying to say that it all depends on what is is?
Governmental nudges are definitely a good idea. As has been suggested by Robin Hanson, the FDA is a public good institution and is probably necessary, but giving them the power to prohibit something is a mistake. Far more information is presented in approval messages (even more when using various levels of approval).
Thus instead of having to choose between items that are not banned, most assume that what they use is perfectly safe, which of course isn't true. But if you are choosing between items the FDA recommends you definitely NOT use, those that you definitely SHOULD use, and a few levels in between, most will pay more attention to what they are using and choose more carefully. This results in better care and health on average.
TOP-DOWN LIBERTARIANISM
Gov't nudges, gov't nags,
gov't opts, gov't wags,
gov't ought, gov't does
From the top, all the way down
dote on us! Mighty gov't frown!
The situation that libertarians would like to have of maximum freedom reminds me of the chaos and oppression described in the Book of Judges during those periods when there was no government and everyone did whatever seemed right in their own eyes.
As opposed to the time of Christ, when everybody was really really good.
666 was the number of talents of gold they brought to Jerusalem under Solomon. Scholars always recognized that as the height of their power and the height of their sin as it violated the 3 rules laid out at the end of Deuteronomy. Isreal should not have a king ("but Israel will cry out for one") and while Deuteronomy listed the curses associated with the violation, it laid out 3 rules the king, whom they were forbidden to have, could never do. He could never have multiple wifes, never hord gold and never quarter horses.
It was Solomon's 400 wives that came with the obligation to defend their extended families and alliances that led to deals with Alexander and then Rome that lead to Israel's downfall and the total destruction of the temple in 70 AD. Historians note that the fire was so hot, that the gold inlayed on the walls melted and ran into the mortar cracks. Later vandals came and and pried all the stones apart (ALL of them). The only thing left was the base that the temple was constructed on. The wailing wall.
You may want to do a little more bible study David.
Libertarian “Nudging” (altering default choice) is de facto incompatible/oxymoronic with true economic libertarianism, much like
Jumbo shrimp
Neutron star
Representative (intelligent) politician
Affordable Ferrari
&c.
When the paternalistic 'libertarians' cannot acheive their desired outcomes with carefully crafted choice schemes, can we expect them to accept the consequences? Or is it more likely that the nudge turns to shove?
I think even the most sympathetic to paternalism out there know the answer. I have not known someone to just quit their desire/quest to have others conform.
Robert Heinlein through his characters:
Don't make the perfect the enemy of the good! The biggest problem libertarianism has these days is the number of Americans who don't believe it's viable. And the best way to convince them that things won't go to hell without government is to move slowly, one step at a time. Assuming libertarianism is right, small increases in liberty should lead to greater success, convincing people that larger increases are ok, and so on. That's exactly what happened with the right to bear arms, after all – we went from a consensus that there wasn't really such a right, to a couple states issuing limited concealed carry permits, and the lack of 'wild west shoootouts' led more people to give it a try. Now we're down to just a few enclaves that forbid weapons, and Heller suggests that even those may go away.
'Nudge', although certainly not a perfect scenario, is something we might actually be able to get, and its success would be the best argument for greater liberty we'd have.
No more regulation! Bring back the robber barons, we need them.
As far as I can tell, Thaler and Sunstein agree that "better still would be to stop government, as much as possible, from having ANY influence on persons' choices". However, a point they make at the start of Nudge is that most of the time, you simply can't avoid nudges in one direction or another. For instance, in just your presentation of some choice, you have influenced the decision. Presenting in a passionate tone has an effect. Presenting in a dispassionate tone has an effect. Considering this, Thaler and Sunstein contend that we might as well present in a way that works for the "best" (reasonably defined).
I never quite understood all the ire directed against Thaler and Sunstein. Their argument seems relatively clear:
1. There are certain choice points where the setting of the default (if indeed there must be one) can make a drastic difference in how people choose.
2. We want to maximize utility.
Thus
3. Set the defaults so that they result in choice sets that maximize utility.
This seems relatively innocuous to me. There might be disagreements on just what would maximize utility (and if there is radical uncertainty that might undermine the whole project), but I really don't understand any of the objections that contend that such actions undermine choice in general.
JPM,
I'm puzzled by your response. By your own account, Solomon disobeyed God and evil came to Israel. How does that answer my comment about the quotation from Judges? One can logically eschew both libertarianism and authoritarianism.
How do you nudge a tenured professor? Firmly or gently?
How do you nudge a paper like The Financial Times? Firmly or gently?
Nudgers of the world…unite!
I don't know if anyone in this forum besides me enjoys reading science fiction, but libertarians would really enjoy Michael Z. Williamson's FREEHOLD novel. It has as its backdrop a world named Freehold which incorporates libertarian principles. Even though I think that libertarianism is flawed, Williamson presents a compelling presentation of how such a society would work in practice and work well. Of course, the baddies in the novel are the statists in the UN which have turned earth into the ultimate nanny government. Like Boudreaux's books, FREEHOLD is available on Amazon and probably at most local booksellers.
I do not have a big problem with nudging, especially when the economic incentives are essentially unchanged. After all, our choices are framed by advertising companies all the time. Is it really so different that governments get into the game as well?
Would legislating that tobacco companies display warning messages and gruesome images on packets of cigarettes constitute nudging? Or is that just the provision of information? A bit of both?
As a faithful and enthusiastic EconTalk listener, the only time that I can recall that Russ lost a "debate" (really a friendly conversation with each taking an opposing stance) was when he interviewed Thaler on Libertarian Paternalism (posted on November 6, 2006). Russ would question whether government should do this or that and Thaler would respond, "well since we have Government Program X, shouldn't we structure the program to maximize people's well-being." Like Don and Russ I would prefer that government neither nudge nor compel. But if government is going to do something it ought to do it smart rather than stupid. But when it does something well, it has the unfortunate effect of protracting the place of government in our lives. Sunnstein and Thaler live their lives in the real world of government policy. Russ and Don prefer to tilt at windmills for libertarian nirvana. Thaler and Sunstein work within their sphere of influence. Don and Russ attempt to work within their sphere of concern. For better or ill, Thaler and Sunstein will always have greater influence as a result.
Steve
Urstoff: "There might be disagreements on just what would maximize utility"
There just might be disagreements on questions of allocation of scare resources, mightn't there?
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