Tuesday, September 30, 2008

Good Reading

Will Wilkinson reviews "Nudge" by Thaler and Sunstein in Reason. A nugget:
The great hope among many left-leaning behavioralists is that wider recognition of our earthbound limitations and self-defeating tendencies will loosen the grip of Chicago-style laissez-faire dogma in social and economic policy, clearing a little intellectual and political space for benign, welfare-promoting government regulation. The fear—shared by libertarians, liberals, and some of the behavioral economists themselves—is that exposing humans as "irrational" perpetrators of cognitive "anomalies" invites invasive control by paternalistic elites. Thaler and Sunstein's libertarian paternalism is best understood as an attempt to hasten the hope—the death of laissez faire—while assuaging fears that our would-be rulers have been handed a dangerous intellectual weapon. "Emerging developments should strengthen, at once, the principled commitment to freedom of choice and the case for the gentle nudge," they write. The "gentle nudge," they assure us, is to be welcomed, not feared.

He comes down harder on Thaler than I would for these ideas. From Thaler I have usually heard the reasonable argument that if government is going to do something, we might as well get that something to be libertarian paternalism. The general libertarian view (as I interpret it) is that opening the door for libertarian paternalism simply opens the door for paternalism of all types, very little of which will wind up being libertarian.

I continue to hold the view that paternalism is endogenous, so government supply will create its own demand, which is dangerous. If I take for granted that regulation of food ensures safety, I don't develop the habit of looking on the wall for a certificate of inspection. Meanwhile, I accept all sorts of paternalism from the private sector when I deem it appropriate. My ability to spell has been decimated by Spell Check, as well as the ability to remember phone numbers in the presence of unlimited speed dial memory.

The private sector's aim to satisfy my demands for paternalism doesn't concern me. Politicians looking for a new venue to lord over me does.


Matt E. Ryan said...

I wrote about this book a little while back-- outside of saying people tend to choose the convenient choice (not a market failure, by the way, nor necessarily irrational), I'm not sure what it adds to the landscape. I think it vastly underestimates the public choice problems that could arise with its prescription.

Anonymous said...

All you boys can go ahead and poo poo libertarian paternalism; the libertarian pragmaternalists amongst are quite comfortable with the notion of framing choices that encourage Wendy McWelfare to get a job so that my tax dollars don't have to subsidize her cable bill.

Anarcho-capitalism ain't happenin' anytime soon, so until then, let's try and make the gubmint a little more nimble, shall we?