Why Context Matters

I’m in agreement with most everything in Jonathan Klick’s reply. But I wish to emphasize a couple of his best points.

First, Klick revisits the public/private distinction. This is important because the new paternalists rely extensively on private non-coercive examples, from alarm clocks to ergonomically designed iPods to calorie-controlled food portions, to build support for their position. But to my knowledge, no libertarian has ever opposed these types of private “choice architecture” (although they might be inclined to call them “good product design” or “giving consumers what they want” instead of “paternalism”). The same goes for non-profit private options, such as joining Alcoholics Anonymous, advertising your diet to friends, and so forth.

But the situation changes once the state is involved. In the private sector, you have other options. You can adopt many bias-correcting measures, or some, or none at all. You can refuse to patronize establishments that adopt choice architecture you don’t like. You can search for employers who adopt human resources policies you appreciate. But most people realistically have only one government to choose from; if you don’t like the state’s debiasing methods, too bad. They might allow you to opt out of some measures… or they might not, as a careful reading of the new paternalist literature makes clear.

More importantly, keeping paternalism strictly private creates better incentives. If you fail to correct your own biases sufficiently, you bear the consequences. This at least gives you an incentive to get it right (though not everyone will). State actors, on the other hand, do not bear the consequences of getting it right or wrong. They lack both the information and incentives to pick appropriately.

Second, Klick draws attention to another adverse effect of paternalism: encouraging dependency. The more people believe that the state or some other avuncular party will protect them and guide their choices, the less reason they have to invest in good self-management skills. As a result, paternalism can ironically lead to more of the behaviors it was supposed to correct. This, too, can generate a slippery slope: the worse self-management skills become, the more areas of life seem to invite corrective intervention.

Note lastly that when Klick sanguinely observes that if new paternalism turns out to be a bad idea “we can simply reverse course to fix things in 20 years or so,” he is being facetious. (I wasn’t sure at first, so I asked.) State intervention is notoriously difficult to reverse. Prohibition was the happy exception, not the rule.

Also from this issue

Lead Essay

  • In his lead essay, Glen Whitman argues that “soft” or “libertarian” paternalism lends itself to ever more intrusive regulations in a variety of ways. Some of these are due to the very cognitive biases that advocates of soft paternalism have identified in their own research. For example, behavioral economists note that people exhibit extremeness aversion — a phenomenon in which they avoid what appear to be extreme positions. Yet introducing some amount of paternalism will make more paternalism, rather than less, appear to be the plausible middle ground. The dividing line between “soft” and “hard” paternalism is difficult to find, and Whitman offers many reasons why policymakers will tend toward more and more intrusive paternalism over time.

Response Essays

  • Richard Thaler argues that libertarian paternalism does not face any of the dangers that Glen Whitman suggests. Given that policymakers and administrators are commonly forced to set up default rules anyway, it only makes sense to set these up in ways that help the governed individuals to realize their true goals. Given that the problem of choice architecture is unavoidable, Thaler argues that this is a reasonable, mainstream solution.

  • Jonathan Klick argues that not only is the slippery slope real, but a host of other difficulties lie ahead for libertarian paternalists. While we might find academic behavioral economists sensible regulators, in reality regulations are made by lobbyists and Congressional staffers, whose incentives don’t necessarily lie in the direction of good policy. In the long term, too, allowing people to shift the burden of decision to others will habituate people to not deciding — and stunt their abilities.

  • Shane Frederick explores some of the unanswered questions of soft paternalism. He admits that Whitman is right to doubt whether we can postulate a given preference set as the “true” one for all time, for a given individual, and by implication for a given society. Still, he argues, this doesn’t mean we must refrain from all opinions about the behavior of others. Why not express such opinions in our choice architecture, if they are sincerely held and not terribly hard to opt out of?