Peace at Last

I am pleased to say that we finally seem to be making some progress. If Professor Whitman has no qualms with what is written in Nudge then I am pleased indeed. And Whitman needn’t fear that there are two Thalers out there. Most would agree that one is more than enough.

Frankly, I do not see much difference between what we wrote in 2003 and what later appeared in Nudge, but of course five years of work does help one think clearly about an idea and learn how to express your thoughts in ways that lead to less confusion.

I do not understand what Whitman finds objectionable about the long passage from our 2003 article that he quotes in his latest installment. We are merely stating the obvious, that all policies have costs and that there is no bright line between libertarian paternalism and what might be called “almost libertarian” paternalism. In Nudge we use the expression “one-click” paternalism to make it clear what our ideal policy would be. The idea is that if you can opt out with one mouse-click then no one should really object to any costs imposed on those who prefer something other than the default. But of course that is not always possible. Some people do not use the web. So other policies might impose higher opt-out costs. It is also the case that at the other extreme, even outright bans impose few costs if they are not enforced.

The other passages from the old article that Whitman points us to should also raise no red flags. We never advocate the policies he seems to object to. We only discuss a range of policies that vary in the degree to which they would qualify as “libertarian paternalism” by our definition. And, I think the book makes out views quite clear about where we think lines should be drawn.

Finally, it is of course true that I cannot control how my ideas are used, either by those who advocate similar but more intrusive policies, nor by those like Whitman who criticize them by mischaracterizing them. When we say that we only want to help people make better choices as judged by themselves, we mean it. Really. And it is frustrating to constantly have to respond to those who criticize something we do not say or believe.

I have little to quarrel with Jon Klick’s last entry except that he seems to fall into exactly the trap that he rightly points out many of the other critics trip on, namely “projecting the sins of the paternalist paternalists onto” me. The point of libertarian paternalism is precisely to devise policies that help but don’t intrude. I don’t like most pure paternalism either. But I really feel that the best way to fend off pure paternalism is by utilizing nudges instead of shoves, and by insisting that we keep the nudges as gentle as possible. Can any true libertarian really disagree?

I truly believe that libertarian paternalism offers an approach to public policy that libertarians can embrace and, in so doing, avoid being mischaracterized themselves. Libertarians are not lunatics, though by taking extreme views they open themselves to caricature as in the cartoon that appears in this week’s New Yorker. A man is standing in front of his blazing home holding a bucket of water and turning down the help of the fire department with the explanation that “I am a libertarian.”

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?