Libertarian History/Philosophy

Nudge, Nudge, Push, Push…Are You Ready for Libertarian Paternalism?

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Here's an account in The Chronicle of Higher Education discussing Nudge, a new book about "libertarian paternalism" by University of Chicago profs Cass Sunstein and Richard Thaler. They define LP as "noncoercive alterations" in various sorts of social and economic decision-making contexts.

Sunstein explains the appeal of libertarian paternalism: "For too long, the United States has been trapped in a debate between the laissez-faire types who believe markets will solve all our problems and the command-and-control types who believe that if there is a market failure then you need a mandate." That debate has been exhausted, he says.

"The laissez-faire types are right that … government can blunder, so opt-outs are important," he says. "The mandate types are right that people are fallible, and they make mistakes, and sometimes people who are specialists know better and can steer people in directions that will make their lives better."

Sunstein argues that understanding human irrationality can improve how public and private institutions shape policy by increasing the likelihood that people will make decisions that are in their own self-interest. Most important, he and Thaler insist, such nudges can be executed while protecting freedom of choice.

Take two examples in their book. Studies show that placing fruit at eye level in school cafeterias enhances its popularity by as much as 25 percent. Or consider this stroke of creativity by an economist in Amsterdam charged with cleaning up the restrooms at the Schiphol Airport: He had a fly etched into the wells of urinals, giving male patrons something to aim at. Spillage was reduced by 80 percent. The problems of childhood obesity and foul restrooms are remedied with very little inconvenience to people—or cost. Children remain free to grab that piece of chocolate cake, and there is nothing preventing visitors to Schiphol's restrooms from ignoring the fly and aiming elsewhere. It is merely less likely that either group will do so.

"Nudges are inevitable, so they might as well be smart," Sunstein says with a grin. The inevitability—and potential—of nudges is most clear when it comes to default options. For example, 401(k) employee-savings plans generally have an opt-in design, meaning that when employees become eligible to participate, the onus is on them to join. Many will procrastinate - even though it is usually in their best interest not to. According to Sunstein and Thaler, that inertia can be harnessed. They suggest that companies adopt automatic enrollment for 401(k) programs, pointing to studies that show how doing so significantly increases levels of employee participation. And, they stress, because there is still an opt-out, people aren't forced to do anything against their will.

More here.

This all sounds fine and innocuous enough, especially the 401(k) example, since there is going to be default setting one way or another in most payroll departments (the urinal example sounds a bit too pat. I admittedly have not read the book and its notes, but how exactly does anybody—even the Dutch—measure urinal spillage in such exact percentages?) Yet there's a logic here: If there's going to be default settings, why not tip them to one for which you can make a strong argument for the greater good, right? However, as any schoolteacher, drill sergeant, or playground bully will tell you, nudges have a knack for becoming outright shoves pretty quickly, and without much discussion. Certainly it should give one pause that in 2004 Cass Sunstein wrote a book about FDR's "second Bill of Rights" and "why we need it more than ever." FDR's uplift mofo party plan included guarantees of:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

More on that here. We can quibble over whether FDR's second Bill of Rights has effectively been delivered or not in contemporary America, but there's little question that it's chock full of the old sort of paternalism, and is predicated upon very forceful state action that would allow for very little opting out. Whatever large discomfort I have with the utilitarian and social-engineering impulse lurking close to the surface of libertarian paternalism is dwarfed by more prosaic concerns that it would immediately devolve into a my-way-or-the-highway scenario at larger and larger levels of governance.

Jacob Sullum on LP here.

Julian Sanchez on the matter here and especially below, where he discusses what Nobel Laureate James Buchanan called "parentalism" (which is basically LP by another name):

Yet when it comes to our most central choices-what kind of person am I to be, what work will I find rewarding?-we may take as least as much satisfaction in the feeling of responsibility for our choices, in knowing that we have shaped a life that is ours even when we have chosen badly.

Classical liberals have become good at explaining how the market order they favor promotes freedom and happiness. They have been less adept at explaining why-at least past a certain point-people ought to want that freedom, which when genuine is always at least a little frightening. In the face of the parentalist impulse, we may need to develop the case that our bad choices, the choices that make us unhappy, are as vital and precious as the ones that bring us joy.

More here.

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  1. Slightly off topic, but part of the reason that these things inevitably slight towards stronger and stronger coercion is that people tend not to be able to separate their “personal moral code” from their “coercive moral code”. That is, the code that they think should be applied towards everyone around them. It is one thing to feel that you yourself should eat more fruit, but it is another entirely to feel that everyone else should eat more fruit. For most people, they are one and the same.

  2. What is the point of this article? “Libertarian paternalismA” is a contradiction. I think I will be letting my subscription run out.

  3. I don’t see anything wrong with persuasion, if it does not turn into force. Which is a big IF.

  4. I would imagine that if you were the one cleaning urinals you’d be able to assess a change in habits pretty quickly.

    It’s an interesting idea (the nudges, not the urinals). I also saw the 401(k) idea in Arielly’s book Predictable Irrationality – a neat read.

    I’m not sure its very good art to try to impugn the idea just because Sunstein has authored other less cogent stuff, by the way.

  5. “The mandate types are right that people are fallible, and they make mistakes, and sometimes people who are specialists know better and can steer people in directions that will make their lives better.”

    This sounds like run-of-the-mill elitism to me.

  6. Um, or just run-of-the-mill logic.

    1) People make mistakes
    2) people who have specialized knowledge may know better
    3) such people can help one to make better decisions.

    Lordy. not very controversial, until/unless you start mandating it.

  7. More on topic, the slippery slope of this kind of paternalism is fairly obvious. In the hands of the controller on whom the subtlety is lost, it quickly goes from “fruit at eye level and cake at chest level” to “fruit at eye level and cake under the counter and off the menu and available only by asking the scary lunch lady with the harelip and the Amish beard”.

    I’m having more difficulty seeing the fly thing get out of control. Again, a subtlety-retarded control-monkey would want to put a sign in the urinal that says “You’re mother’s gotta be pretty low for you not to pee right here,” but more likely it would be a matter of having American Standard mold a “target” in the porcelain that can be cleaned easily and still has the intended subconscious effect. (I have heard that this type of unintended targeting has been used successfully in other contexts, not just in “Batman: The Dark Knight”, cause that’s fiction, dawg.)

  8. I honestly don’t perceive a political issue here.

    Libertarianism is about the relationship between the individual and the state. It doesn’t mean that the people involved in running institutions can’t run them well.

    I don’t think McDonald’s is engaged in “libertarian paternalism” when they put up an in-store display tieing in some movie to a Happy Meal toy. They’re “nudging” behavior, isn’t it? But it doesn’t require a funky label like “libertarian paternalism” to explain.

    Trying to design a toilet that people will piss in, instead of near, isn’t a political issue. It’s simply facilities management.

  9. Chris Baker,

    You suck. I can’t afford to drink this early. I gotta work!

  10. Lordy. not very controversial, until/unless you start mandating it.

    Except that inevitably, it will always end up as a mandate, backed by force. And part of the reason for this is that if you include force, you can fine people for not doing what you say, thereby generating revenue for the state. So politicians always have a strong motivation to jump to force eventually, and almost always will.

    Seat belts. Helmets. Second hand smoke. And so on.

  11. Fluffy –
    those were my first thoughts upon reading this as well.

  12. 1) People make mistakes
    2) people who have specialized knowledge may know better
    3) such people can help one to make better decisions.

    As long as you have an objective (or even broadly accepted) definition of “better” in premises 2 and your conclusion, sure.

  13. Nick,

    Did I miss the Radicals for Capitalism plug? Looks like a good place for it.

  14. 1) People make mistakes
    2) people who have specialized knowledge may know better
    3) such people can help one to make better decisions.

    That is fine in the micro sense. Works great for large agencies and various companies, but in the macro sense it seems to fall apart. The “hurds” are going to decide, no matter what some expert tries to get them to do, even with the threat of force.

  15. So is the answer that limited government types agree to go along with these changes on the condition that they come with a Constitutional Amendment that protects the right of the people not to be included should they choose to opt out?

    Seems like rather than seeing this a slippery slope towards greater government involvement, we could seize on it as an opportunity to further clarify and reiterate the founder’s limited government intention, while agreeing to programs that might ultimately be helpful to a lot of people.

  16. When it becomes evident to the paternalists that “The Surgeon General has determined that smoking cigarettes is hazardous to your health” is not working to their satisfaction, they do not merely shrug their shoulders and say, “Too bad for you, stupid. We tried to save you.”

  17. [wacky self-interest-for-all-voice]

    Now that this is settled science, we can eliminate the federal income tax and federal funding of mass transit! Yeaaaa! (downs victory martini)

    [/wacky self-interest-for-all-voice]

  18. If only our problem was that government policy had shifted to this and we were trying to ensure that it didn’t become a slippery slope…

  19. PB,

    You mean the notion that “prohabition does not work [except for stuff I don’t like]”?

  20. I’m gonna second Bryan’s remarks. Currently, the laws are “Do what we say or we taser you.” The opportunity to turn that into “Do what we default you into unless you care enough to change it to something else” is a huge step forward for liberty. We should be pimping this but hard to the rest of the population.

  21. From the Chronicle article linked (italics in original):

    On many issues, including environmental protection, family law, and school choice, they argue for less government coercion. “If incentives and nudges replace requirements and bans, government will be both smaller and more modest,” they write. “We are not for bigger government, just for better governance.”

    So it’s not as if Sunstein and Thaler are unaware of the slippery slope argument, nor are they insensitive to the distinction between incentives and coercion. I have the impression that their retort would be similar to Reinmoose’s comment above, though I can’t pinpoint the origin of that impression. The article also notes that the duo had a joint appearance at the AEI to promote the book. One would think the slippery slope argument would have come up in a Q&A session there.

    Anon

  22. If it slips, it could be bad.
    But this is the sorta thing left libertarians can get behind: ideas that help people without forcing them to do anything.

  23. “Lordy. not very controversial, until/unless you start mandating it.”

    Hamilton, the very fact that this is proposed in a POLITICAL context gives a strong indication of future mandates regardless of their assurances to the contrary. If they had no desire for mandates they would propose something akin to Consumer Reports, Good Housekeeping or, for the computer minded out there, CPU.

  24. I am all in favor of interested (nongovernmental) parties providing information in favor of regular apple-eating; they may also freely pontificate against the use of meth (or HFCS, if that is what keeps them awake at night). I welcome this.

    Unfortunately, advocacy groups (like MADD) have a hard time accepting the notion of limited force. When they begin to agitate for tossing people in jail for doing things they disapprove of, and they inevitably do, I object.

  25. hamilton, the very fact that this is proposed in a POLITICAL context gives a strong indication of future mandates regardless of their assurances to the contrary.

    Come on, that sounds slightly conspiratorial. Look, pols are not looking for a back door to sneak in mandates, because they shove them through the front door on a regular basis! There is no slippery slope, because we are already at the bottom of the slope. Any change in attitude away from mandates and prohibitions towards opt-in/opt-out incentives is an awesome one.

    I really don’t get how people can shit all over it.

  26. When it becomes evident to the paternalists that “The Surgeon General has determined that smoking cigarettes is hazardous to your health” is not working to their satisfaction, they do not merely shrug their shoulders and say, “Too bad for you, stupid. We tried to save you.”

    The right to fuck up your own life might not be the best marketing slogan, but that’s what we’re talking about. Encouraging people, who most here will agree make a shitload of dumbass decisions, to choose wisely without coercing them is way down on my list of governmental outrages.

  27. Cigarettes is a good example here. Banning them would be absolutely wrong. However, taxing them higher than other products seems fair to me (assuming that there must be some taxes, it makes sense to me to tax “bad” products somewhat higher than “good” ones, provided the tax isn’t so high to be a defacto ban). Also, banning smoking in public places isn’t an attempt to ban or restrict cigarettes in a paternalistic manner; the assumption here is that second hand smoke affects the health of non-smokers. Now, one could argue that the health risk is minimal-but that’s a battle of the scientists-the reason for the law is not paternalism, but to protect the health of non-smokers.

    Now, the reason for banning recreatational pharmecuticals other than alcohol and tobacco is paternalism. I am absolutely in favor of legalizing such. I also think high taxes on such would be appropiate (again, provided they aren’t so high to be defacto bans).

  28. “The right to fuck up your own life might not be the best marketing slogan, but that’s what we’re talking about. Encouraging people, who most here will agree make a shitload of dumbass decisions, to choose wisely without coercing them is way down on my list of governmental outrages.”

    It ought to be way high on your list of outrages. It is none of the government or self appointed Brahmins like Sunstein’s fucking business how people live their life or what choices they make beyond obeying the law and supporting themselves. Sunstein is a first class fool for believing this crap. First, it assumes that we can all get together and agree on how exactly everyone should live their life. Just because Sunstein thinks that we should manipulate people into living as he thinks fit as opposed to shooting people makes him different in degree but not different in kind from every other utopian do gooder. Further, what if people don’t properly respond to Sunstein’s manipulation? Am I to believe that the government will go quietly into that good night and just accept that? Fat chance.

  29. This sounds quite a lot like what left social analysts consider a central governing strategy of “neoliberalism.” Gillespie is correct to note that power can be exercised in non-coercive ways that remain problematic. This “nudging” serves to conceal the power relationships inherent in these ways of governing and the process of deciding what constitutes individuals’ self-interest. It is also worth thinking about how these forms of governance shift the relationship of the state to individuals (in ways libertarians often seem to like) yet do not in fact eliminate state involvement nor do they alter the one-sided power dynamic of governmental interventions.

  30. John:

    “Just because Sunstein thinks that we should manipulate people into living as he thinks fit as opposed to shooting people makes him different in degree but not different in kind from every other utopian do gooder.”

    Just so I understand, is this based on the examples given or on something else Sunstein has written? After all, I tend to distinguish between, say, moral suasion and justice at the end of a gun. Moreover, Sunstein’s example of putting apples at eye level is something your local supermarket has been doing for years. Sunstein just wants to do it for apples as opposed to Chocolate Frosted Sugar Bombs. Both acts are manipulative (and easily sidestepped once recognized), but I don’t see either as utopian.

    Again, I acknowledge the slippery slope argument but still think Reinmoose and Elemenope are putting it in the proper context.

    Anon

  31. alley:

    This “nudging” serves to conceal the power relationships inherent in these ways of governing and the process of deciding what constitutes individuals’ self-interest.

    Although there is nothing inherent about the plan that requires secrecy. That is to say, there is nothing to prevent the widespread dissemination of criticism of the power relationships inherent in these ways of governing (via outlets like this magazine).

    It is also worth thinking about how these forms of governance shift the relationship of the state to individuals (in ways libertarians often seem to like) yet do not in fact eliminate state involvement nor do they alter the one-sided power dynamic of governmental interventions.

    This, I think, is more intriguing, and it is something I don’t imagine Sunstein and Thaler address directly. But it might come up indirectly: Since they both acknowledge that governments can “blunder,” is the ability to opt-out really a sufficient safeguard for individuals? (It’s a much softer version of your observation.)

    Anon

  32. Annon,

    “For example, 401(k) employee-savings plans generally have an opt-in design, meaning that when employees become eligible to participate, the onus is on them to join. Many will procrastinate – even though it is usually in their best interest not to.”
    This is one example. Notice how Sunstein is certain that a 401K is in everyone’s best interest. Maybe, maybe not. I would argue that the people who do not save are making a perfectly rational decision based on their view of the value of money. It is entirly rational to sacrifice future wealth for current enjoyment under some circumstances. Maybe you don’t feel like you will live long enough to enjoy the wealth. Maybe you don’t trust the govenrment not to steal it in the name of fairness when the time comes to retire. Maybe you would rather be old and poor than young and poor. I don’t think it is Sunstein’s or anyone else’s business to automatically enroll them into a retirement program and expect them to tell them no.

    Someone above mention smoking and taxing to discourage it. Well, basically there is a one and three chance that smoking will kill you. It is entirely my choice to decide if the enjoyment of smoking is worth the risk and neither Sunstein nor Elemenope or any other swinging dick libertarian has the right to tell me otherwise, as long as I am paying the bills.

    Either Sunstein is arguing for really insignificant changes like putting fruit at the right level, in which case he is not really making a point, or he is arguing for using this method over fundamental things in our lives, in which case he is embracing the idea that the government ought to through manipulation rather than coercion control the lives of its people. No thanks.

  33. Not sure if this is entirely on-topic, but I think we can agree that one of the main reasons libertarianism doesn’t sell well at the voting booth is that it is perceived as callous and uncompassionate.

    I don’t think we will get past that unless we put forth a positive vision of what people can do voluntarily to replace a lot of the “necessary” government programs we want to get rid of. Community based charities will have a greater, more positive impact than one more crappy government program – and I think that should be part of the vision of a free society.

  34. The right to fuck up your own life might not be the best marketing slogan, but that’s what we’re talking about. Encouraging people, who most here will agree make a shitload of dumbass decisions, to choose wisely without coercing them is way down on my list of governmental outrages.

    It ought to be way high on your list of outrages.

    Uhh, John
    – There is a goddam war going on that we have NO FUCKING BUSINESS being involved in.
    – The presidential candidates are all trying to bail out people who made stupid investment decisions (home mortgae “crisis”).
    – The agriculture bill.
    – Torture.
    – Welfare for those too stupid to realize that babies eat and cost money.
    – Welfare for billionaires (see baseball stadiums and the Ag bill.
    – The War on Drugs Sanity.
    – Medicare Prescription Drug Benefit.
    – No Child Left Behind.
    – The Department of Homeland Security.
    – Dr. Haynes and Forrest Allgood.
    – Militarization of the police.
    – Speech codes.
    – Just about every zero tolerance policy.
    – Kelo v. New London
    – Anti-smoking ordinances.

    That is hardly a complete list. The food pyramid and brush after every meal campaigns just don’t quite measure up.

  35. Get over yourself J Sub D. Outside of the war and torture, all of those things are just manifestations of the idea that the government should control people’s lives. Sunstein beleives in that concept just as much as the biggest drug warrior. Just because he wants to manipulate you into not using drugs as opposed to coercing you, doesn’t make him any less loathsome. If Libertarians are going to deny personal autonomy and buy into the idea that it is okay for the government to manipulate people into whatever our betters think is the proper choice, then they have ceased to be Libertarians and are just soft totalitarians.

  36. If Libertarians are going to deny personal autonomy and buy into the idea that it is okay for the government to manipulate people into whatever our betters think is the proper choice, …

    You do realize how much that reads like a leftist diatribe about advertising and corporate manipulation of the masses, don’t you?

    …then they have ceased to be Libertarians and are just soft totalitarians.

    Does this mean I lhave to turn in my decoder ring? Thank goodness it’s after noon. Drink!

  37. You do realize how much that reads like a leftist diatribe about advertising and corporate manipulation of the masses, don’t you?

    Could have something to do with the Leftists accusing decent people of what they are actually doing.

  38. This nation needs, more than anything else, a healthy dose of “mind your own fucking business.” Libertarian paternalism is obnoxious, even if not coercive.

  39. J Sub D,

    If it is not manipulation what is it? Sunstein is very clear that it is “paternalism” meaning that we get people to do things that people like Sunstein thinks are good for them. That whole concept makes my stomach turn. Fuck Sunstein. I won’t tell him how to live his life and he can do the same for me.

  40. You could imgaine a world in which we get very good at these sorts of things. Where everything from what we read to how we dress to what we eat is determined by a set of libertarian paternalistic cues. The problem with the liberals’ critique of mass marketing is that it is not one source. It is chaotic. It is never put towards one set of goals. A government run system of do gooder manipulation would be and it would be much more dangerous.

    Further, perhaps the leftists are nuts when they say that the media manipulates us and people ignore the cues and do what they really would do anyway. In that case, then Sunstein’s ideas won’t work any better. In order for his ideas to be effective, you have to beleive that you can subtly manipulate people into certain behaviors. Once you start that, I really don’t see an end to it.

  41. I see two different kinds of attempts to influence choices in the examples. I’m not sure what the difference actually is, but I can’t imagine any but the most hardcore libertarian opposing the front-and-center placement of fruit. That seems to be all about psychology. I’m not even convinced it’s all the way paternalism.

    Meanwhile, on changing opt-in programs to opt-out ones – wasn’t there a move to do this with organ donation? Again I’m not entirely opposed, and the people who argue that an opt-out program is illegal or unconstitutional are totally off-base. Whether it’s a good or workable idea is still up for debate.

  42. “Nudging” and urinals are generally not a good mix. Just sayin’.

    Anyone who can’t see a fundamental difference between setting the default at “you are participating in program X” (401(k) or whatever) and “you are not participating in program X”, regardless of your ability to opt in or out, has no business setting public policy.

    It has long been the case that you can’t obligate me to buy something by simply shipping it to me and forcing me to “opt out” of the implied contract by shipping it back. Why should we reverse this rule for state-approved products/services?

  43. I don’t think we will get past that unless we put forth a positive vision of what people can do voluntarily to replace a lot of the “necessary” government programs we want to get rid of. Community based charities will have a greater, more positive impact than one more crappy government program – and I think that should be part of the vision of a free society.

    Amen. Back when I was still active in the Libertarian Party, I floated the idea several times of just getting members together to participate in non-political, philanthropic activities. Maybe even set up an apolitical libertarian sister organization, basically a service club. Nobody was interested. I realized, oh well, I might as well just go volunteer at existing non-libertarian organizations.

  44. I certainly like the idea of being able to opt out of all kinds of government paternalism. Opt ins would be better, but I’d take opt outs.

  45. I think “Libertarian Paternalism” would make Tocqueville cry.

  46. Mike Laursen | May 6, 2008, 3:34pm | #

    I don’t think we will get past that unless we put forth a positive vision of what people can do voluntarily to replace a lot of the “necessary” government programs we want to get rid of. Community based charities will have a greater, more positive impact than one more crappy government program – and I think that should be part of the vision of a free society.

    Amen. Back when I was still active in the Libertarian Party, I floated the idea several times of just getting members together to participate in non-political, philanthropic activities. Maybe even set up an apolitical libertarian sister organization, basically a service club. Nobody was interested. I realized, oh well, I might as well just go volunteer at existing non-libertarian organizations.

    That’s because, in general, if people cared about their greater community (as opposed to just themselves and possibly their immediate family and friends), they wouldn’t be Libertarian Party memebers. In the real world, the vast majority of libertarians are quite selfish. “Don’t take my stuff (via taxes or gun bans or whatever)” sums up the attitude of most libertarians, maybe with a “let me smoke dope” in there as well.

    If one is a “pure libertarian”, one believes this to be true:

    The government should not take by force (via taxes) money from rich people to feed and clothe and house poor children, even if private charitable groups are unable to do so.

    That is a selfish, cruel philosophy.

  47. In the real world, the vast majority of libertarians are quite selfish.

    I will concede that some libertarians I know fit your description. Not all, though.

  48. While I think Libertarian Paternalism goes _too_ far, having just finished reading Predictably Irrational (http://www.predictablyirrational.com), a book about Behavioral Economics, I am now convinced that the typical 100% Free Market answer has a flaw which at this time hasn’t been addressed, and needs serious study: it can be scientifically proven, in experiment after experiment, that people do not act as expected in traditional economic belief. Since they don’t, provably so, that means the real world science shows the theory of ‘free markets will solve all problems’ has flaws that haven’t been foreseen. Time for a new theory, one that addresses the results found: All of the things Dan Ariely brings up in the book must be addressed in a way that Libertarians / Objectivists / etc understand and can accept as valid and work with, or else we’re following as broken a model as the socialists are.

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