Monday, August 25, 2008

When Nudge Comes to Shove

Tim Harford is right: “nudging” people to make better choices is best left to markets, not government. In politics, the nudging rubric simply provides cover for all manner of nanny-state schemes: “Praising the egalitarian bonus scheme at John Lewis, the department store, is apparently a nudge. Criticising lads’ magazines seems to be a nudge. Giving unhappily married couples a tax incentive to stay together is a nudge, and so is sending health visitors into new mothers’ homes.”

But Harford seems to think these schemes are a perversion of Sunstein & Thaler’s concept of libertarian paternalism: “Some of this is good policy, some is bad policy, some is old-fashioned posturing and none of it has anything to do with libertarian paternalism.”

Sadly, not so. Sunstein & Thaler’s “libertarian paternalism” has been an expansive notion from the very beginning. In their published works on the subject, S&T refuse to draw a clear distinction between public and private action, or between consent and coercion. As a result, they reach the conclusion that there is no line between softer and harder forms of paternalism:
But in all cases, a real question is the cost of exercising choice, and here there is a continuum rather than a sharp dichotomy. ... [A] libertarian paternalist who is especially confident of his welfare judgments would be willing to impose real costs on workers and consumers who seek to do what, in the paternalist’s view, would not be in their best interests. (p. 1185-86)
In short, even if S&T don’t particularly like the policies currently being advanced by the British government, they would have to admit such policies fall within the “libertarian paternalist” schema.

And it was entirely predictable that politicians and interest groups would take the concept and run. The notion of libertarian paternalism is inherently slippery, and its creators and initial advocates should not be surprised to see it slip through their hands.


Phil B said...

I would LOVE to see what adam curtis has to say about Nudge & libpat... wouldn't you?

Eric Crampton said...

Best critique I've seen thus far wonders why libertarian paternalism is only applied to new nudges and not to rolling back previous non-libertarian paternalistic policies. Where are the libertarian paternalist alternatives to drug prohibition? To bans on prostitution? To FCC content regulation? Surely we could come up with some defaults that preserve paternalism but let anyone sensible opt-out. But no. Instead, Sunstein and Thaler come up with new ways of binding us.

Anonymous said...

Truth is, when Government tries to 'nudge' me, my response is to give it a sharp knee to the crotch.

celandine said...

If you look at the official "Nudge" website, there's a feature where people can write in ideas for nudges. Interestingly, most of these ideas are not suggestions for government at all -- they're suggestions for private firms on how to design products better (where "better" means easier to use, or easier to be environmentally friendly, or more efficient in some way.) If the responses are any gauge, most folks don't necessarily want to be nudged by the government.