How do you spell “oxymoron”? My current favorite candidate is “libertarian paternalism.” That’s the phrase that Richard H. Thaler and Cass Sunstein promulgate as an alternative to socialism in their new book Nudge: Improving Decisions About Health, Wealth, and Happiness. Of course, they don’t say their form of paternalism is a synonym for “socialism.” And they naturally rebel at the idea that the phrase “libertarian paternalism” is a contradiction in terms. As an article in the Chronicle of Higher Education about the book puts it, they view libertarian paternalism as “a corrective to the longstanding assumption of policy makers that the average person is capable of thinking like Albert Einstein, storing as much memory as IBM’s Big Blue, and exercising the willpower of Mahatma Gandhi.”
Who among policy makers, you might ask, believes that “the average person” is like Einstein, Big Blue, or Gandhi? Name just one. Take your time . . . And while you are scratching your head trying to come up with a name, ponder Sunstein’s remark that “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.”
According to the Chronicle, “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.”
Haven’t we been down this road before? The socialist experiment has never worked out as advertised. But it continually blooms afresh in the human heart–those portions of it, anyway, colonized by intellectuals, that palpitating tribe Julien Benda memorably denominated “clercs,” as in “trahison de.” But why? What is it about intellectuals that makes them so profligately susceptible to the catnip of socialism?
In a brief memoir called “My Early Beliefs,” John Maynard Keynes summed up its psychological metabolism in his description of Bertrand Russell and his Bloomsbury friends:
Bertie in particular sustained simultaneously a pair of opinions ludicrously incompatible. He held that in fact human affairs were carried on after a most irrational fashion, but that the remedy was quite simple and easy, since all we had to do was to carry them on rationally.
What prodigies of existential legerdemain lay compacted in that phrase “all we had to do”!
Professors Thaler and Sunstein are contemporary avatars of this sunny “all-we-have-to-do” rationalism. They speak of “nudging” people to make the right choices (i.e., the choices that Thaler and Sunstein want them to make). In a famous passage in Democracy in America, Tocqueville anatomized this form of paternalism. He called it “democratic despotism,” a less pleasing phrase than “libertarian paternalism,” perhaps, but one that has the advantage of truthfulness. Such despotism, Tocqueville wrote, would
resemble paternal power if, like that, it had for its object to prepare men for manhood; but on the contrary, it seeks only to keep them fixed irrevocably in childhood; it likes citizens to enjoy themselves provided that they think only of enjoying themselves. . . . It willingly works for their happiness; but it wants to be the unique agent and sole arbiter of that; it provides for their security, foresees and secures their needs, facilitates their pleasures, conducts their principal affairs, directs their industry, regulates their estates, divides their inheritances; can it not take away from them entirely the trouble of thinking and the pain of living? . . . [This power] extends its arms over society as a whole; it covers its surface with a network of small, complicated, painstaking, uniform rules through which the most original minds and the most vigorous souls cannot clear a way to surpass the crowd; . . . it does not tyrannize, it hinders, compromises, enervates, extinguishes, dazes, and finally reduces each nation to being nothing more than a herd of timid and industrious animals of which the government is the shepherd.
Echoing and extending Tocqueville, Friedrich Hayek argued that one of the most important effects of extensive government control was psychological, “an alteration of the character of the people.” We are the creatures as well as the creators of the institutions we inhabit. “The important point,” he concluded, “is that the political ideals of a people and its attitude toward authority are as much the effect as the cause of the political institutions under which it lives.”
Thaler and Sunstein would doubtless pooh-pooh such objections. The “nudges” they propose, they assure us, are innocuous things like putting fruit at eye level in school cafeterias so that children are more likely to choose the “right” thing to eat.
Do you believe that their nudges will end there? A nudge can be close to a push. And we all know, comrade, what a push can come to.
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13 Comments
heather:Intellectuals think they are smarter than they really are. An intellectual is outraged when events are confusing, ie, the American medical system which looks like a mess…. but delivers better medical care than does any other medical system. But, says the intellectual, how can it ? It’s a MESS!!!
Intellectuals are weighed down with Hubris: they believe that if ONLY the world was run according to their Idea, perfection would be achieved.
I recommend “The Wisdom of Crowds, why the many are smarter than the few and how collective wisdom shapes business, economies, societies and nations”, by James Surowiecki.
May 6, 2008 - 12:51 pm Tim Dees:Sorry sir. Socialism involves the means of production being owned by the government. It is different from what Thaler and Sunstein are talking about. Libertarian paternalism may be mere rhetoric, but calling it socialism is too.
May 6, 2008 - 12:54 pm 11B40:Greetings:
I prefer Neo-Com(mie)s.
May 6, 2008 - 4:23 pm RES:I agree with Tim Dees - what Thaler and Sunstein prescribe is not socialism, it is fascism.
May 6, 2008 - 6:14 pm Concerned Citizen:Res and Tim, you’ve got a point, but the long term implications of fascism are fundamentally socialistic. When a government forces a certain percentage of a market to conform to their “idea” of what a product and pricing should look like, even though the rest of the market is supposedly voluntary, it is only a matter of time before something voluntary becomes mandatory. Smaller, non-conforming businesses are bankrupted or regulated out of business. Large businesses, initially attracted by guaranteed profits are less able to innovate and the path to investor liquidity becomes challenged.
However, as anyone who has studied corporate governance quickly realizes that equity ownership is but a small part of ownership. Control of management, stacking the board, prodding unions to strike, blocking rights with regard to sale to foreigners and others, onerous regulations, approval of the operating plan, etc. can very quickly turn fascism into socialism. The government doesn’t have to own businesses to “own” them.
May 6, 2008 - 7:56 pm John the Baptist:Socialism meant the ownership of the means of production by government, or, it means it ideally. But to reach that point, socialism is happy to abandon such quest, especially after the catastrophic historical experiences of socialist countries, to simply pursue the conquest of power - the means with which to influence, control and eventually own the means of production.
May 6, 2008 - 9:49 pm UC:I do not think that this criticism was particularly fair. You are objecting to the paternalist motives (fine), but you fail to address one of their fundamental points: you can’t ask a question without influencing the answer. Any question can be phrased another way, a way that encourages a different response.
Given that you ARE going to influence the answer, why should that influence be random? Obviously this position where you get to decide what’s “best” is influential, but that’s why Thaler and Sunstein want to limit that influence- the person in charge can only pick how to phrase the question, he can’t change the answer choices (or at least, that’s what they are advocating-your slippery-slope point is perfectly valid).
Take an example Sunstein and Thaler like: 401k plans. There are three plans, A, B, and C. A is the default plan, selected in a non-paternalistic way: coin tosses. Extensive studies show two things: 1) people usually stick with the default plan, whichever it is, and 2) the best risk-reward performance, historically, for the average person, is in plan B (A and C make sense for some people). SOMETHING has to be the default (or the first answer in the list, or whatever is the “favored” choice). All Sunstein and Thaler are saying is that you should make B the default plan. People (whoever cares to, or whoever is not “average”) can still pick plans A or C, just like before.
If the “elite” person making the pick was wrong, you’re no worse off than before - a random plan is the default. If the person was right, then things are better for a lot of people.
Other than the potential for people to take the idea of libertarian paternalism and run to pure paternalism, why wouldn’t their suggestion be a good one?
Heather - just FYI Sunstein is a big fan of that book, and has written on the same topic.
May 6, 2008 - 9:54 pm Daniel Crandall:UC, Thaler & Sustein’s example fails because they leave out one very important fact: Who is managing the plans. In Thaler & Sustein’s world it is the government. Call if fascism, call it socialism, either way that means less freedom for me and you.
May 7, 2008 - 1:12 pm dragonfly:I consider the acccelerating drift towards socialism to be THE major issue facing our republic.
The Socialist Party is moribund, its membership at the lowest point in a century. They don’t even enter candidates for local elections any more. Yet our colleges and universities turn out committed socialists by the thousands, so ill-educated they think hey are just Democrats. And the academic elites are dedicated to “nudging” s all more firmly into the sheep pen.
I am constantly amazed at the universal insistance in the press and commentaariat on the use of “leftist”, “liberal”, or “progressive” when referring to a SOCIALISTS. At which point does a “centrist” become “left-leaning”? At what point has one leaned far enough to become “leftist”? Where does a “leftist” become a “radical leftist’? What distinguishes a “radical leftist” from a “Marxist”? Is a “fascist” to the “left” or “right” of a “radical leftist”? Why does everyone use euphemisms, unlike the Europeans who openly declare themselves as “Democratic Socialists” or Communists? Why is socialism the politics that dare not say is name? And why do conservatives refuse to use the apparently “dirty word” when confronting Democrat politicians and agendas?
It is crazy. Democrats will howl if they are identified as “Euro-Socialists” rather than “left- leaning”. Canadians elected the “Liberal” Pierre Trudeau and wound up ten years later fully embedded in Orwellian Socialism without ever having voted for it. My greatest fear is that the Pied Piper, Obama. is playing the same tune, and our children will follow and lead us down the same path to servitude.
May 7, 2008 - 2:52 pm Sigivald:That there are default positions in the real world is unquestionable (though the more libertarian the government, the fewer there are related to goverment).
My understanding of Sunstein’s “libertarian paternalism” parallels UC’s - that it’s about managing the defaults so that the default position is most beneficial without removing liberty to choose other positions.
This is neither socialist (at least, no more socialist than the specific things that there are default positions on, which is another matter than managing the defaults) nor (remotely) fascist.
May 7, 2008 - 4:10 pm lpcowboy:The biggest problem with Thaler & Sustein’s work is that they fail to apply it consistently. For example, while they argue employer-based retirment schemes should require action to opt-out rather than opt-in, I’ve never heard them say that social secutiry should have a way for people to opt-out.
If Thaler can convince Barack Obama that even a single young and health individual should be able to choose not to be insured independent of what everyone else does, and that there should be a clear and easy way for all US citizens/workers to choose to opt out of social secutiry, I would greatly respect his accomplishment.
May 8, 2008 - 8:44 pm Silvio:Without having read the book, I make the following point. Governments already exist and already make decisions — a default already exists. It’s hardly “socialism” to suggest that governments go a different way about making decisions they already make in way that takes into greater account the irraitonality of the populace. This says nothing about increasing the scope of government power.
Furthermore, given “free” choice (I’m obviously skeptical about how real such freedom is), people routinely make terrible decisions. Is it not worth investigating ways in which these decisions could be influenced towards the better, at least in more “clear cut” cases, without overriding an individual’s free choice?
May 10, 2008 - 9:30 pm