Comments on: “Libertarian paternalism,” or Socialism by any other name smells as bad

By: Roger’s Rules » Alexis de Toqueville, man of the moment

Roger’s Rules » Alexis de Toqueville, man of the moment — Wed, 04 Mar 2009 14:29:30 +0000

[...] readers know of my fondness (and here) for Alexis de Tocqueville’s Democracy in America, first published in 1835 but still the best [...]

By: Nudges « Jason’s Weblog

Nudges « Jason’s Weblog — Mon, 13 Oct 2008 22:28:50 +0000

[...] Nudges I’ve struggled to get through Thaler’s and Sunstein’s Nudge in which they discuss libertarian paternalism. The first third was OK, but it started being a drudge when talking about pensions. This book has stimulated quite a few discussions on the blogs [here, here, here, here]. [...]

By: amazment man

amazment man — Thu, 14 Aug 2008 23:40:25 +0000

“the American medical system which looks like a mess…. but delivers better medical care than does any other medical system.”
This is just taken out of the blue. In fact the US spends more many on health care than other industrial nations without acheiving better results in term of longevity, etc.

I think the really interesting question is to what degree this already goes on, from governments, corporation and other large organisations. And: if it already goes on, wouldn’t it be better to have it done openly where it can be scrutinized and the goals set democratically?

By: Xanthippe

Xanthippe — Tue, 08 Jul 2008 02:07:30 +0000

“There are three [401k] plans, A, B, and C… Extensive studies show two things: 1) people usually stick with the default plan… 2) the best risk-reward performance, historically, for the average person, is in plan B… SOMETHING has to be the default” so “make B the default plan.” (UC)

Assigning a default appears to be central-planning to me, and not just “ask[ing] the question differently” (pefty). So I think Alisa’s point still stands: what if the default has some bad unintended consequence?

Suppose central-planning’s study showed that plan B was the best for the average person, and suppose central-planning’s study is wrong? Or suppose central-planning doesn’t accurately describe the default plan to the user (and what if the misrepresentation is deliberate)? Or maybe central-planning (in)conveniently “forgets” to let people know that they’ve been defaulted into a plan of some sort.

That most people will go with the default is human nature — there’s just not enough time in the day to scrutinize all the paperwork of modern life and be productive at your work. And honestly, haven’t you ever found yourself defaulted in to some sort of plan that you didn’t even know existed, because your paperwork was “lost in the mail”, etc? It’s happened to me. And what does the user do about this if central-planning won’t communicate?

I wouldn’t necessarily call it socialism, but it doesn’t help me feel free, either.

By: pefty

pefty — Sun, 18 May 2008 04:46:23 +0000

Silvio and Sigivald have already made plain the main fallacies and inaccuracies in Roger’s “argument.” But since Roger appears not to have read even the first chapter of Thaler and Sunstein’s book, please allow me to knock out the third and final leg from Roger’s argument.
Thaler and Sunstein’s take on paternalism is to nudge individuals in their own best interest _as_those_individuals_perceive_it_, not as some central planners perceive it, nor as Thaler and Sunstein perceive it. So Alisa’s notion that the choice architects can damage the system is essentially moot, as long as we take Thaler and Sunstein’s concept at face value. Again, all the choice architects can do is ask the questions differently.

By: some guy

some guy — Tue, 13 May 2008 23:22:58 +0000

In the second-to-last paragraph, Kimball puts “right” in quotation marks. Is he a “libertarian relativist”? Should we be free to ignore reality and decry those who deign to put reality under our noses as despots?

By: alisa

alisa — Tue, 13 May 2008 11:21:47 +0000

UC: I would submit that a systematic government effort to engineer society in one direction can be worse than random. Central planners are fallible like the rest of us; the only problem is that when they guess wrong the costs can be devastating. Suppose the 401k plan, for example, were to create such a strong incentive to invest that consumption dropped precipitously and started to hurt growth. I’m not saying that particular scenario is likely: the point is that unintended consequences are always possible.

There are two independent problems with paternalism, in my view. One is the danger of state coercion and eventually brutality. Sunstein and Thaler avoid that problem by making everything voluntary — and they thereby claim that they’re “libertarian.” But the other problem with paternalism is that the state really shouldn’t be trying to shape society extensively, because of the danger that it might succeed. Randomness — the spontaneous order of individuals choosing according to their own judgment — incorporates more information about the state of the world than any central planner could accumulate. This problem remains whether the state is communist, socialist, or libertarian-paternalist.

One other objection I have is psychological. If the average American begins to believe he is not free and capable of reason, won’t his behavior change accordingly? Thomas Paine would shudder.

By: Silvio

Silvio — Sun, 11 May 2008 04:30:56 +0000

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?

By: lpcowboy

lpcowboy — Fri, 09 May 2008 03:44:16 +0000

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.

By: Conservatives are happier people! « American Elephants

Conservatives are happier people! « American Elephants — Fri, 09 May 2008 02:14:30 +0000

[...] The book is Nudge: Improving Decisions About Health, Wealth, and Happiness which Roger Kimball describes thoughtfully at Pajamas [...]