lifestyle leader

A frequent criticism leveled against the liberal/progressive camp is that they approach policy in an arrogantly paternalistic way: the liberal elites have decided what new government programs will be good for you and if only you were smart enough to vote the elites into office the world would be a better place. This is the nanny state that has introduced annoying speed limits, forced you to pay taxes for things like "education," and banished smokers to Siberia.

Well here's an interesting review of an alternative idea: libertarian paternalism. What's the difference?

To make us choose what is good for us, they avoid fines, compulsion, and prohibition in favor of “nudges” – institutional arrangements that we could, in principle, easily override, but that, given our tendency to rely on [our gut], we end up going along with.

This approach builds on the idea that we often don't spend the time to think important decisions through and instead go with our basic emotional reaction. This can often lead to unfortunate results. But to make a suggestive nudge is not the same thing as making the decision for you:

As long as choice engineering tricks us into making choices that our own more deliberate self would make, they say, manipulation is justifiable. Well-chosen nudges have been shown to be extremely effective in altering choices that make a substantive difference to the lives of many (say, enrollment in pension plans).

This is certainly true. But by now the alarm bells are ringing. My brief exposure to behavioural economics and psychology tells me that by aiming to create more rational decisions, rather than emotional ones, you've created a false dichotomy. In fact, our emotions - our gut - play a fundamental role in decision-making; studies have found that people who have suffered accidents which leave them without functioning "emotion-rich" parts of their brain have difficulty making simple, seemingly-rational decisions like whether or not to go grocery shopping.

Moreover, as the author points out, such nudging still suffers from the same problem as liberal paternalism: the "right" decision has been pre-determined by the nudgers. What if there is a range of right decisions to choose from, depending on individual preferences? And since ultimately people's rational preferences are plastic, and change over time, this does not strike me as being a particularly libertarian approach at all.

In fact, this concept of "nudging" is used all the time in marketing - making the decision to buy one product easier by placing it next to a crappy one. Is this how we want our politicians shaping policy? I'm not convinced. Read the rest of the article as it raises some other excellent points.