Wednesday, July 13, 2005

Paternalism and Parentalism

Julian’s written up an excellent piece on “parentalism” – the desire of some people to have their own freedom restricted for their own good. He cites a forthcoming Cato Policy Analysis by yours truly on the subject of “internalities,” a term of art for within-person externalities that people impose on themselves. In so doing, he helpfully saves me the trouble of having to summarize my own argument:
There are plenty of practical problems with the parentalist impulse. As economist Glen Whitman notes in a forthcoming Cato Institute paper, we cannot assume we always help people by giving preference to their "long term" over their "short term" interests. Imagine an aging man in ill-health lamenting his sybaritic youth. We are tempted to say that his younger self, seeing the pleasures immediately available to him and giving short shrift to their long term consequences, exhibited a foolish bias toward the present. But surely it's also possible that his older self, faced with the proximate pains and inconveniences of poor health, discounts the pleasures past he'd have forsaken had he been more health-conscious. If we're prone to the first form of cognitive bias, why not the second?

Whitman also argues that, just as simple Pigovian taxes on pollution may be less efficient than allowing market negotiation to determine how much pollution will be produced in what location, sin taxes, smoking bans, and other parentalist attempts to spare our future selves the costs of our present choices may displace a rich variety of mechanisms for self-restraint that would match the rich variety of risk profiles and time-discount rates we find among members of a pluralistic society. And as the young man interviewed by the Village Voice demonstrated, we can be ingenious at outwitting imposed restraints—even those we welcome in principle. We may find ourselves running up bigger credit card bills to buy more sin-taxed Twinkies and cigarettes, or traveling inconvenient distances to find a smoke friendly bar.
So what’s the difference between parentalism and paternalism? Paternalism involves other people favoring restrictions for a person’s own good, whereas parentalism involves people favoring restrictions on themselves. While this distinction is clear in principle, in practice the latter quickly shades into the former. True paternalists will seize upon the (possibly idle) statements of parentalists to justify their favored policies. Indeed, the whole thrust of the “new paternalism” is that restrictions on personal liberty will help people to better achieve their own preferences, not externally imposed preferences. As I put it in my article, “[T]he old paternalism said, ‘We know what’s best for you, and we’ll make you do it.’ The new paternalism says, ‘You know what’s best for you, and we’ll make you do it.’” The problem is that the policymakers, who cannot possibly know the “true” preferences of all those affected by their policies, ultimately have to impose an external set of preferences via their regulatory choices.


Gil said...

Maybe there's a market for services to help people enforce their own restrictions on themselves? They could use monitoring equipment, testing, other clever methods appropriate to the task...

People could always cancel the service, if they chose, but perhaps not without forfeiting a substantial deposit.

At least that way, their peculiar self-imposed denial wouldn't have to affect others who weren't interested in it for themselves.

People who genuinely wanted to help people succeed in their own goals could subsidize the use of these services, rather than impose regulations on everyone. If they preferred the latter, it would be clear that voluntary help wasn't their real motivation.

I always thought it was weird for people to limit their own options to protect against moments of weakness, but most people I've asked think it's straightforward and reasonable.

I remember reading several years ago about a guy who shipped his own modem cable to himself so that he would get some work done for a few days without being tempted to get on the Internet. Of course, he could go buy another one, but that would be a temptation that would be easier to overcome.

Gil said...

I think Whole Life Insurance another example. It's not a great deal for insurance, or savings; but combining them "forces" people to save who are afraid they might otherwise not do it at all.

Kind of like Social Security, except for the cash value of the policy.