Nudged

All hail the rise of "soft paternalism:"

The incoming administration of President-elect Barack Obama will name Cass Sunstein, a Harvard Law School professor who pioneered efforts to design regulation around the ways people behave, as regulatory czar, the Wall Street Journal reported.

A report on WSJ.com said Sunstein would head the White House Office of Information and Regulatory Affairs, overseeing "regulations throughout the government, from the Environmental Protection Agency to the Occupational Safety and Health Administration."

Will Wilkinson slapped around Sunstein's Nudge in our October 2008 issue.

Comments

[Nigel Watt]

The next four years just keep getting better, don't they?

[Elemenope]

Giggle or not, but changing standard defaults is one of the most intriguing approaches to non-coercive social engineering, IMO. Whether or not it turns out to be useful in practice is another thing entirely.

[Mike M.]

I honestly had no idea that there was actually a position in this country named "regulatory czar".

[cunnivore]

Too many czars and too few Russians.

[Michael Solana]

Ah, but Sunstein only subscribes to "Libertarian Paternalism." Don't you see? He doesn't want to control your life like all of those extremist paternalists, he wants to ensure your freedom... by controling your life.

I love the trend in placing "Libertarian" before completely non-libertarian abstracts. They took liberty, liberal, and progressive. Up next: libertarian (as many liber-rooted words as they can get their hands on). Whatever it takes, I guess, to not admit that these practices (socialism, paternalism, etc.) are really just different varieties of statism and authoritarianism.

[Nigel Watt]

Elemenope, please explain how regulations can be non-coercive.

[Elemenope]

Elemenope, please explain how regulations can be non-coercive.

The notion is that there exists in most choices a default such that if a person does nothing, something will happen anyway. You can, by regulation, change the defaults. The choice is still available, and so there is no coercion (unless the default switch is backed up by intentional bureaucratic hobbling).

Ta da!

[Seward]

Elemenope,

More importantly, whether it actually turns out to be non-coercive is also another story.

[Nigel Watt]

Elemenope, you're not coercing the people you want to change, but you're coercing those who interact with them.

[Seward]

Elemenope,

When you make a choice harder by government fiat that is coercion. Maybe it is coercion which is less consequential in its aspects, but it remains coercion nonetheless.

[Elemenope]

More importantly, whether it actually turns out to be non-coercive is also another story.

Agreed. Hence my comment about practice.

Elemenope, you're not coercing the people you want to change, but you're coercing those who interact with them.

Government agents that provide a government service are *by definition* already coerced by whatever public policy is in place. I'm not seeing how that matters to the fact that the relative freedom of the person making the choice *does not change*.

When it comes to private service, it gets dicey, but still, if the freedom of the choosing agent is not reduced, it is hard to call the result "coercive" so long as the choice itself is still intact.

[Seward]

Nigel Watt,

Well, this whole notion also assumes that a centralized bureaucracy is far better at determining "the default" than the freely entered into interactions of individuals, which is not the "default" position I would take given the history of central planning.

[Lefiti]

Go fuck yourself, Seward. Do it non-coercively.

[Seward]

Nigel Watt,

In other words, the idea is problematic on a number of levels.

[thoreau]

If the default was set by somebody other than the state, then the state changing the default is still coercive regulation.

However, one could still use this idea of changing defaults as an alternative to additional regulation, i.e. if something is already regulated, then changing defaults would be a way to tinker with the existing regulations without increasing the amount of regulations.

[Other Matt]

Maybe it is coercion which is less consequential in its aspects, but it remains coercion nonetheless.

The funny part to me is that if you design a "regulation" around the way people already act, why do you need the fucking "regulation" to begin with? On the face, it appears to be government for government's sake, which is on par with what I expected from this administration but what the hell, he hasn't even been sworn in yet?!

[Hugh Akston]

social engineering

I've always loved that term. The idea of applying the same principles used on metals, electricity and chemicals to living, breathing human agents is just breathtaking.

And if a method doesn't work out, heck, we can always use them for scrap.

[Seward]

Nigel Watt,

And of course we haven't even gotten into the public choice, bootleggers & baptists, etc. problems associated with the creation or amendment of regulations.

[Seward]

thoreau,

Good point.

[Franklin Harris]

"non-coercive social engineering" = oxymoron - oxy = same old shit + new label.

[Elemenope]

However, one could still use this idea of changing defaults as an alternative to additional regulation, i.e. if something is already regulated, then changing defaults would be a way to tinker with the existing regulations without increasing the amount of regulations.

Yep. This is where the idea seems, practically speaking, the strongest.

[Elemenope]

"non-coercive social engineering" = oxymoron - oxy = same old shit + new label.

Way to engage the topic.

[Hound]

Regulations to influence people into desiring to behave a certain way = Brainwashing much?

[Nigel Watt]

However, one could still use this idea of changing defaults as an alternative to additional regulation, i.e. if something is already regulated, then changing defaults would be a way to tinker with the existing regulations without increasing the amount of regulations.

Yep. This is where the idea seems, practically speaking, the strongest.

Certainly keeping the amount of coercion the same is superior to increasing it.

[joe]

Scenario One: My employer witholds 4% of everyone's paychecks to put into individual 401ks. Anyone can opt out by filling out a form. They do this because they wanna.

Scenario Two: My employer withholds 4% of everyone's paychecks to put into individual 401ks. Anyone can opt out by filling out a form. They do this because the government tells them to.

Scenario Three: My employer withholds 4% of everyone's paychecks to put into individual 401ks. There is no opt out. They do this because they wanna.

Scenario Four: My employer pays everyone 4% less. They do this because they wanna.

Am I supposed to believe that I am being coerced more in #2 than #1?

Am I supposed to believe that I am being more coerced in #2 than #3?

Am I supposed to believe that I am being more coerced in #2 than #4? If I don't like having my paycheck a little lower under scenario 2, I can fill out a form. If I don't like it under #s 3 and 4, I have to find a new job. To say that #2 is more coercive seems to require that the term be simultaneously stretched and cropped beyond recognition.

[Zubon]

Other Matt: just to codify that there is a default, rather than trying to litigate afterwards what everyone assumed to be the case. When you bought that property, how high into the sky did you think you were buying, and do you own all the gases that pass through your territory, and are I technically trespassing if I exhale and the carbon dioxide gets on your property, and can radio waves pass through your air, and has your neighbor deprived you of property if he builds a wall that blocks the sun out 1/3 of the day, and...

Please do not answer those. They are just examples, and no you cannot spell out a contract explicitly enough to take care of everything, partly because science marches on to discover new things. No property contracts in 1776 addressed questions relating to radio waves passing through.

One interpretation of constitutional regulatory authority holds that "regulate" meant simply "to make regular," i.e. to set the defaults. If you do not note otherwise, these are the assumptions we make, and you will be legally held to them unless you stipulate otherwise in your contract.

[Elemenope]

joe, the concern that's being raised, if I understand it correctly, is that the regulations necessary to create option two coerce the *employer*.

[Zubon]

"...am I..."

[Nigel Watt]

joe, do you voluntarily work at your job, or are you required by force to stay there instead of going somewhere with a retirement plan you find more palatable?

[libertarian democrat]

Still seems like one of the least destructive uses of government force ever, and probably a better sign than someone even more regulatory.

[Other Matt]

No property contracts in 1776 addressed questions relating to radio waves passing through.

So, it would seem that any "regulations" based on today's default would most probably be inadequate in future scenarios. Hence, why do we need the regulation to begin with, as all of these instances you cite are pretty much covered by common law?

Again, seems like regulation for regulation's sake. Then again, I start from the premise that government has a moral obligation to maintain as light a hand as possible.

[Elemenope]

Still seems like one of the least destructive uses of government force ever, and probably a better sign than someone even more regulatory.

That's kinda my thing. The gnashing of teeth about this seems to take on a "but this is how they [nefarious regulating scum] get in the door, by looking all innocuous" tinge to it.

But the truth is, there no longer is a door; it's been smashed to splinters by the evolving regulatory state. If the current reality is that regulation is a fact of the scene, is it not better to pursue and encourage regulation that is less invasive over that which is more?

Or is that too practical and "compromisey"? I mean, isn't there something a little perverse about demanding that regulation not be made friendlier in methodology to freedom on the off chance that someone might like the world it makes possible better than the one we have now?

[Hugh Akston]

OTOH, if this means that I'll get to opt out of Social Security and Medicare, then bring on Obamamerica.

[Pro Libertate]

I rather think I can handle my own engineering, thank you.

I was disappointed in the title. I thought it meant that Ted Nugent was joining the Obama government.

By the way, OIRA is where I was housed during my fellowship. It's a surprisingly powerful agency (along with the rest of the OMB) and is one of the principal levers that the president has to control administrative agencies. OMB isn't just about dollars; it's also about reviewing regulations (among other things).

[Russ R.]

On a very practical note, applying the "nudge" approach would mean that everyone should be allowed to opt-out of Social Security payroll taxes and future benefits. N'est-ce pas?

As long as the opt-out procedure isn't made artificially difficult, I'm all in favor.

Sounds pretty libertarian to me.

[Nigel Watt]

Can I opt out of the entire government, aside from infrastructure usage fees?

[joe]

Nigel,

I am equally free to leave my job whether my 401k contribution is mandated by the employer or the government.

It is precisely as easy for me to leave my job becasue I dislike decisions made by the management as decisions made by the government.

It remains a great deal easier to fill out a form than to leave my job.

There, now I've answer your questions, and with a great deal more detail than you even requested.

So...what conclusion should I draw from the fact that you can't answer mine in a manner you find poitically acceptable?

[joe]

If your definition of "coercion" requires you to pretend that finding a new job is easier than filling out a form, you're just making up excuses to get the answer you want.

[Seward]

Elemenope,

...it's been smashed to splinters by the evolving regulatory state.

The primary problem is using this sort of thing in new areas of the citizenry's life. That's where the "get in the door" issue is alive and well.

As for already regulated areas...

I'm not terribly certain that it will ever come to pass; regulations generally have distinct beneficiaries and dispersed payers, as such any regulation which allows for an opt out that will harm the former is unlikely to come into being.

Russ R,

I doubt that we'll ever be able to opt out of SSI. The government depends far too much on the payroll tax for day to day financing of the government for that to happen.

[Scott66]

People should hate regulation. It is one way of keeping regulation to a minimum.

Hidden regulation is not fought. Consider the way the government collects income taxes from most people.

[joe]

LMNOP,

OK, the employers. Point taken.

[Seward]

joe,

Well, it would be coercion if the company in question had such market power that it could freeze out your ability to find other employment. That only happens with government granting a company such power. Then again, what is and is not coercion may be an eye of the beholder sort of deal. What is certain though is that sanctions from a government violate the ability to choose and thereby choice far more than any market entity can.

[Elemenope]

People should hate regulation. It is one way of keeping regulation to a minimum.

And, um, how's that working out?

The point is that *currently* that ship has already sailed halfway to Indonesia.

Hidden regulation is not fought. Consider the way the government collects income taxes from most people.

This would matter if it could be shown that obvious regulations are fought more successfully than "invisible" ones. (BTW, in what way is the Income Tax/Payroll Tax "invisible"? I see the damn deductions on my pay-stubs every week. I suppose if a person is into Direct Deposit...but I just don't trust that shit at all.)

[Elemenope]

The primary problem is using this sort of thing in new areas of the citizenry's life. That's where the "get in the door" issue is alive and well.

My thing is, you'd really have to wrack your brain pretty hard to come up with such a creature.

[Seward]

Elemenope,

Well, most of what goes on here on the internets is pretty much free of regulation, particularly when it comes to things like the distribution of these free e-mail services, social networking services, etc.

Anyway, any conversation regarding regulation should by necessity start with how regulation is made, and yet I see little of that in most conservations on the subject.

[R C Dean]

The thing is, if you don't need coercion to get where you want to go, then you don't the need government to get where you want to go. So, yes, non-coercive regulation is, indeed, an oxymoron. Somewhere in the system, the government is requiring someone to do something, under penalty of law.

"Changing the defaults" is most likely just hiding the pea under a different shell.

[Zubon]

Other Matt, fair. But you do not write contracts for everything, and you do not spell out everything in contracts. Either there is a legal default, or everything goes to court because both people assume that "common law" favors them in this dispute, at which point you have a legal ruling that serves the same function as the legal default. (And one questions whether common law says anything about whether CDs can contain root kits as DRM.)

Having defaults makes commerce more efficient. You can still contract out of them, but both parties should be able to predict what happens if the contract is silent on an issue.

This is the least intrusive interpretation of the constitutional regulatory authority. See Randy Barnett in Restoring the Lost Constitution: The Presumption of Liberty. If a libertarian originalist's interpretation of the Constitution is not light enough a hand for you, you will need to call Patri Friedman about seasteading.

[Scott66]

"And, um, how's that working out?"

In comparison to what? Is it your position that regulation will not increase if people do not view it as a negative? If so you have more faith than I in the non-maternalistic nature of our poltical class.

[Seward]

R.C. Dean,

Well, for those most effected by any regulation, they'll either be beneficiaries of it or if they are effected negatively, they'll find ways to avoid it. It is basically only those who are effected in a minor way who get screwed.

[Zubon]

I think Will Wilkinson covered it, so I am just going to point to that link in the OP rather than argue the purity test points.

It is less intrusive than the status quo. If Cass Sunstein is closer to your views than Barack Obama is, then adding him to the team shifts things in your direction. It is not a panacea, but it is a gift horse.

[Elemenope]

In comparison to what?

That's precisely the problem with this thinking.

"The lightbulb blew out."

"Yeah, but the screwdriver still works!"

"Um, OK, but I need light."

This isn't a continuum of fail, this is just plain FAIL. The fact that other approaches *also* fail is immaterial to the point that this one is a failure.

[alittlesense]

My problem is more with Sunstein himself. His positions on a number of issues have been almost the polar opposite of any sort of libertarian or classical liberal.

[Joshua Holmes]

joe,

I'm surprised you don't know this, but "coercion" has a specific meaning in a libertarian context. It means "action that violates rights". Read the comments about "coercion" in with that meaning in mind, and it will make more sense.

"Coercion" is an imprecise word, of course, but "action that violates rights" is too clunky.

[joe]

Jashua Holmes,

It was probably surprising to you that I allegedly don't understand that, because in fact I do.

It is precisely the gap between the real meaning of the term "coercion" (and freedom and liberty as well) and the way it is used by libertarians that I was drawing attention to.

What you end up with, using the libertarian meanings, is a situation where a heavier hand imposing fewer choices on people and making it more difficult to go against the grain gets defined as less coercive, while situations that provide people with more choices, and making it easier for people to choose among them, is defined as greater coercion.

Of course, this is absurd, and inversion of reality - which is why nobody will answer my question, and say "Yes, joe, it is more coercive for you to have to fill out a form than to have to find a new job."

[joe]

Or rather, "in some cases that is more coercive, but in other cases it is less coercive."

[Seward]

joe,

It is precisely the gap between the real meaning of the term "coercion" (and freedom and liberty as well) and the way it is used by libertarians that I was drawing attention to.

The "real" meaning?

The term has multiple meanings (as is evidenced by the various literature that deals with the subject) and varying philosophical positions have used it differently and will continue to use it differently. You aren't a word czar joe and it is perfectly reasonable to hold a position at variance with you on the subject.

[Scott66]

"This isn't a continuum of fail, this is just plain FAIL."

So we are at maximum fail and things could not get any worse. Our best solution is to quit worrying about it and let the policticans fix it. Gotcha, thanks for the advise.

[Seward]

Anyway, since coercion has entered the mix, it might be helpful to determine whether this form of regulation would be specified or unspecified coercion. I think it could either way, but if the former, that would be worse than the latter.

[Elemenope]

So we are at maximum fail and things could not get any worse. Our best solution is to quit worrying about it and let the politicians fix it. Gotcha, thanks for the advise.

If all you're gonna do is caricature, this is going to get old fast.

[Kolohe]

The funny part to me is that if you design a "regulation" around the way people already act, why do you need the fucking "regulation" to begin with?

To reduce the standard deviation and/or mitigate/eliminate the tail ends of the normal distribution. And to avoid strange attractors.

[oldtimer]

When the standard deviation is reduced, does not that become the standard deviation?

[Colonel_Angus]

If the government is mandating that businesses must do something, costing them money, making the business less efficient, and conflicting with what the businesses owners want, how is that not coercion?

If it leads to price increases, or inconvenience, or makes certain products or services harder for individuals to obtain, how does that increase choice?

[MJ]

"which is why nobody will answer my question, and say "Yes, joe, it is more coercive for you to have to fill out a form than to have to find a new job." - joe

It's more coercive in that in your Scenario #2 the choice of the employee to seek out an employer with a less coercive policy is eliminated as the government regulation that mandates the current employer's policy also presumably mandates the same policy on every other potential employer. The employee loses a choice. The employer also loses his choices to offer compensation policies in the job market that's going to attract the kind of employees he wants. Scenarios #1, #3, & #4 will discourage new recruits and lower morale among existing employees, which will harm the company long term, they may be poor positions to take on the job market. The coercion is on several levels.

You rather arbitrarly refuse to consider the coercion on the employer's level as being important and treat the employee's option to fire his employer for policies he does like as being so terrible no one would want to do it. Scenario #2 eliminates choices for everyone involved, so in that way it is more coercive.

[Scott66]

"all you're gonna do is caricature"

Sorry, I will try to use more non sequitur like you.

[Guy Montag]

Great. Starbucks has been open for an hour and I am reading through another episode of word games between the nonsensical authoritarians and the potential victims.

Need to leave the house BEFORE playing on the intertubes.

[Guy Montag]

Silly me. If I substitute incentive for coertion in the discussion then joe makes all sorts of sense.

I was just playing the game wrong. My bad.

[Rose]

Well, we all knew Sunstein was Obama's man -- the only question was his precise job title.

This is an interesting -- maybe a very difficult -- challenge for libertarians, pro-market people, or what have you. Obama has attracted a lot of talent, and it's somewhat disparate. Sunstein is one of the best examples. He's also got Christina Romer, Tim Geithner, Bob Gates, Susan Rice, Larry Lessig; undeniably impressive people. The Obama brand of liberalism is a new breed: pragmatic, ambitious, often willing to look at business for inspiration, but not all that interested in individual liberty. Someone like Sunstein wants good government, effective government, but not necessarily less government.

These people are harder to counter than the Bush people.

I'm both attracted to and concerned by the appeal of government to smart people these days. Reminds me of "Frankfurter's Happy Hot Dogs," the influx of fresh-faced policy wonks into the Roosevelt administration. Half of me wants to be one (on the economic or quant side of things) and the other half thinks it's all monstrous.

[Brandybuck]

Damn. First "conservative" got redefined as wild drunken spending, now Sunstein is going to go redefine "libertarian" as massive meddling regulation.

Well at least "capitalism" still means what it used to. What?