The Economist article that I linked last week is, for the most part, a balanced discussion of the “new paternalism” that hints at what I consider the correct position. The new paternalists’ proposals are fairly stated and argued, with the opponents’ positions (including mine) represented as well.
But I have one major complaint: the article allows Sunstein and Thaler to continue playing fast and loose with rhetoric, in a manner that substantially muddies the water. S&T use the oxymoronic term “libertarian paternalism,” and the article goes along with them. Dan Klein has written at length about the disingenousness of S&T’s linguistic ploy. As Klein says, libertarianism is a political ideology whose central organizing principle is the distinction between coercive and non-coercive action. Yet S&T refer to such “libertarian paternalist” policies as cafeterias making their desserts difficult to find and employers automatically signing their employees up for the savings plans. Of course, libertarianism takes no position on such arrangements, except that they should be allowed as voluntary arrangements between individuals, as should alternative arrangements. If you want to patronize a restaurant that hides the desserts or take a job that offers a restrictive benefits package, that’s your business.
S&T might reply, “Yes, that’s what makes our proposals libertarian: they are consistent with non-coercion.” But then why mention libertarianism at all? We could just as well talk about “libertarian movie ticketing” (the theater can stop you from bringing your own popcorn!) or “libertarian dress codes” (stores can make service contingent on your wearing shirt and shoes!). S&T’s only purpose in mentioning the word “libertarian” is to associate it with the term “paternalism.”
The word paternalism has different but related meanings. To most people, its meaning is political – it refers to government policies that restrict individuals’ choices for their own (alleged) good. But it can also, sometimes, refer to non-government policies that do the same thing, such as the rules of a family or workplace. By juxtaposing the term “paternalism” with the unquestionably political word “libertarian,” S&T invite us to think of its political meaning, and then they proceed to talk about non-political issues like private savings plan rules. They suggest, but use the passive voice to avoid actually saying, that employers might be required to adopt their plans (which would be coercive and non-libertarian). Sadly, the Economist employs (or falls prey to) this sly rhetorical move: “One example of soft paternalism has already attracted the interest of governments and the backing of this newspaper: employees should be signed up [note the passive construction – GW] for company pension schemes by default. … Under [Thaler and Benartzi’s Save More Tomorrow] scheme, a fraction of workers’ future pay increases is diverted [passive voice again – GW] into their pension pot before arriving in their pay pocket.” So… will employers be forced to adopt such plans? No answer.
And then, like the paternalists whose theories it is reporting, The Economist proceeds to talk about even more clearly coercive policies such as sin taxes designed to reduce consumption of cigarettes or fatty foods. The paternalists’ rhetorical purpose here is to get us to think of paternalism as all one thing, a nice continuous spectrum from policies that restrict choice slightly to those that restrict choice substantially. As they slide along this spectrum, they fail (I think deliberately) to draw attention to when they’ve crossed the line from libertarian (non-coercive) to unlibertarian (coercive). As Klein puts it, “I believe they seek to dispose of libertarianism by speaking in a way that upsets libertarianism’s key semantics, but without making clear that that is what they are doing, much less challenging those semantics directly.”
If paternalism can be coercive (as with a sin tax) or non-coercive (as with an employers pension plan rules), it is crucial to distinguish between these two types; acceptance of one form of paternalism does not imply acceptance of the other. Lest it seem I’m drawing a distinction without a difference, we should note that private non-coercive paternalism can be avoided much more easily than the public coercive variety. You can choose whether to take a job with a restrictive benefits package; you cannot choose whether to contribute to Social Security. You can choose whether to join AA or Weight Watchers; you cannot opt out of a sin tax.