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What About the Simple System of Natural Liberty?

Posted By Don Boudreaux On April 23, 2013 @ 10:47 pm In Books,Man of System,Nanny State,Regulation,Seen and Unseen | Comments Disabled

In Wednesday’s Wall Street Journal I review Cass Sunstein’s new book, Simpler [1].  (Unfortunately, the review is gated.)  Here’s a slice:

But his [Sunstein's] faith in government combines with a scanty appreciation of the creative and disciplining powers of markets to render his case for active regulation, whether imposed through nudges or commands, less than persuasive. The pages of “Simpler” bubble over with examples of adults’ weak capacity to choose wisely, which, in Mr. Sunstein’s view, calls for more expansive government.

The author boasts, for example, that “to save consumers money, we required refrigerators, small motors, and clothes washers to be more energy-efficient.” Apparently producers are too benighted to compete for customers by offering such money-saving products. And consumers are too distracted by their own weaknesses to choose such offerings. Similarly, Mr. Sunstein believes that huge numbers of people really want to be organ donors but are prevented from agreeing to donate their organs simply by inertia.

In this worldview, people’s weak wills and eccentricities make them prey both to shameless hucksters and to their own strange psychological traits. Ironically, however, Mr. Sunstein fails to explain why the irrational and impulsively childlike people who are apparently the nation’s citizens will elect a government that is itself not irrational and impulsive—or why government officials won’t exploit, for their own corrupt ends, the people’s cognitive weaknesses. True, individuals often make poor decisions, and hucksters are never in short supply. Surely, though, the environment most favorable to poor decision-making and hucksterism isn’t competitive markets but, rather, politics. Milton Friedman didn’t need behavioral economics to know that each of us typically spends our own money on ourselves more wisely than a stranger spends other people’s money on us.

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[1] In Wednesday’s Wall Street Journal I review Cass Sunstein’s new book, Simpler: http://online.wsj.com/article/SB10001424127887324105204578384850872793208.html?mod=WSJ_Opinion_LEFTTopOpinion#

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