Thursday, July 17, 2008

Do you want the government to give you a nudge?

This post continues my comments on “Nudge”, by Richard Thaler and Cass Sunstein. For earlier comments, see here.

In his comments on “Nudge”, Julian Sanchez, refers (here) to James Buchanan’s concept of ‘parentalism’. Whereas paternalism refers to the attitudes of elitists that sometimes people - other people - need to be restrained for their own protection from making poor choices, parentalism refers to the attitudes “of persons who seek to have values imposed on them by other persons, by the state or by transcendental forces” (James Buchanan, ‘Afraid to be free ...’, “Public Choice”, 2005, p 23).

Buchanan suggests that “many persons do not want to shoulder the final responsibility for their own actions. Many persons are, indeed, afraid to be free”. He argues that parentalism will be a more important “motivation for maintenance and extension of control over the activities of persons through collective institutions” during the first half of this century than other, more familiar, sources of socialism – managerial socialism, paternalistic socialism and distributionalist socialism.

If Buchanan is correct the classical liberal vision is likely to remain no more than a vision in the foreseeable future. In that context it becomes relevant to consider whether libertarian varieties of paternalism (or parentalism) are preferable to more coercive varieties. It seems to me that provisions enabling people to opt out of the nanny state are particularly important for people who do not want to have nanny’s values imposed upon them. Those who are at present content to accept the default options provided by the government’s choice architects may also benefit from being able to observe how other people fare when they opt to choose for themselves.

The question remains, however, of how libertarians could persuade other people to think twice before voting in favour of the use of choice architecture by governments to help them make better decisions in areas currently relatively free of government regulation. In this context it seems to me that Will Wilkinson makes a good point when he suggests that although Sunstein and Thaler may wish to design the presentation of choices to bias decisions in favor of, say, happiness, “other choice architects may be more interested in biasing our choices toward virtue or toward participation in great collective projects”. Wilkinson suggests that “political choice architecture may do a great deal to shape us, even if, in its libertarian paternalist incarnation, it makes a show of leaving the ultimate choice open to individuals” (here).

It seems to me that it is just as important for people to be vigilant in dealing with choice architects in government - who are attempting to serve many masters with differing objectives - as it is to be vigilant in dealing with choice architects in the private sector who have a clear responsibility to serve the interests of the shareholders of the firms they work for.

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