If you have been around TOL lately, you know that Gina O’Neill-Santiago recently wrote a primer on libertarian paternalism. Since she talked in abstracts and theoretical concepts, you may not know that these kinds of polices and “nudges” are in place in some places of the world as government policy.
You’d be forgiven for not realizing that libertarian paternalism was all along intended to be enacted by a government, as opposed to the free market. While Cass Sunstein, the author of Nudge, almost exclusively uses private sector examples when discussing libertarian paternalism, this is a bit of showmanship, designed to allow his ideas to get past the “dogmatic anti-paternalists.” He freely admits that “the same points that support welfare-promoting private paternalism apply to government as well.” Sunstein, apparently, does not see the difference between “voluntary” and “government-imposed.”
And wouldn’t you know it, it didn’t take long for so-called libertarian paternalism to become government policy. Britain’s Behavioral Insights Team was created in 2010, under the advisement of Sunstein’s partner Thaler. The “Nudge Unit,” as it is informally known, already counts several successes: Tax compliance was increased through use of social pressure. Citizens with late forms were told that “9 out of 10 of their neighbors are in compliance” and compliance rates increased by 15 percent. Another success increased energy efficiency. Despite a program that provides free attic insulation, thereby increasing the overall energy efficiency of a home, few people were accepting the offer. The Nudge Unit found that providing free labor to clear the attic dramatically increased the rate of installment.
A former customer, the White House last year created its own Behavioral Insights Team. So far, the projects suggested include only measures that were tried in the UK; new ‘nudges’ have not been publicized.
As libertarian paternalism is transitioning into becoming actual policy, we need to examine what is necessary to prevent it from being the same old paternalism.
As it stands, there are three problems with how these policies are being enacted:
Lack of transparency.
Last year, the Nudge Unit was part privatized in order to sell its services to local governments and corporations all over the world. As a result, the Nudge Unit is no longer susceptible to information requests under the Freedom of Information Act. By its very nature, nudging operates without people’s conscious knowledge. Freedom of Information Act requests can only be carried out by request, but if nobody knows these nudges are happening, how can they know to request information? Will all governments advertise that they have hired a nudge team? I hardly think so.
Whose idea of right and wrong is being promoted?
There are no ideologically neutral choices. Any choice you make is a reflection of the values and preferences that you hold. Under the influence of nudge units, however, someone else’s value system will leave its fingerprints all over your life, and you will have no idea. In a particularly creepy example, Thaler, one of the authors of nudge theory, even advocates “an emotion detection system” for emails that will warn you if you are about to send an angry email. Perhaps this will save those who aren’t great at gauging their tone from an embarrassment, but should such a thing be government-imposed? Whose values are being promoted here.
100% compliance = 100% train wreck.
Increasing the rate of public compliance with government policies ensures that even more people will be dragged into any errors the government makes. For example, Trans fats were once “the healthy fat.” Now, as we all know, it’s actually one of the most dangerous types of fat. If, by law, grocery stores had to start putting the trans-fats items at eye level to encourage consumption, how much would public health have suffered?
Not to mention that government operates on less than ideal information all the time. It’s also slow to change, meaning that when new data comes onto the market, government bureaucracy would be in charge of nudging people in the new direction—if such a thing would even be possible.
So, is it justifiable to call it libertarian paternalism? Not unless these concerns are addressed. Additional transparency would help, but even so, libertarian paternalism has the usual problems with government policies: it is the exercise of some elite’s preferences, without correction by competition, and subject to all the flaws of limited knowledge.
But what, then, does real libertarian paternalism look like?
First off, choice architecture, or the process of encouraging certain decisions, already exists in the private sphere. For example, almost every aspect of your weekly trip to the grocery store is highly engineered. What’s supposedly new is the idea that these design choices can be used for good instead of merely to increase profits. But this doesn’t have to be done by the government; there can be a market for constructed choices. Would you eat at a restaurant whose goal was your welfare, and whose slogan was “we make it easy to eat right?” Or hire an architect to create a home that would encourage fitness, sociability, or creativity?
This seems like true libertarian paternalism.