Monday, June 28, 2010

Phrase Of The Day: Libertarian Paternalism

"The most important social goals are often best achieved not through mandates and bans but with gentle nudges."  That is the basic theory behind Libertarian Paternalism (google it), as explained by the authors of "Nudge: Improving Decisions About Health, Wealth, and Happiness" (which I have not read).

You've no doubt come across this tactic in your day-to-day existence.  When I renewed my vehicle registration, the default selections included a donation to charity.  I was free to opt out, but only if I paid attention and decided to be proactive in my choices.  The authors of "Nudge" think that large cultural problems could be addressed by making important life decisions for you.  How about automatically enrolling everyone in the draft, or in their company's 401k program?  They would retain the right to intervene, and choose to opt out.

This is a compelling argument, but it has it's critics.  The Ludwig von Mises Institute features a fairly thorough examination of Libertarian Paternalism, and there's a nice book review by the LA Times.

One major problem with LP is that, in American society, the default can easily become the norm; and we often find it difficult to deviate from the norm.  It's not just that we are ignorant or indecisive.  Peer pressure also steps in.  When draft registration is the default (and, therefore, the norm), people will undoubtedly feel pressure to be "normal."  When these tactics are used on children, the results could be even worse.  Children are very susceptible to mob mentality and are easily pressured.  Thus, Libertarian Paternalism could potentially devolve into a "Hitler Youth" rally of sorts (come on, you knew I was going to mention Hitler somewhere).

I like the idea of nudging people toward healthier decisions.  But I usually try to draw a line between private enterprise and government policy.  For instance, I like surveillance in the bank lobby; but not on the street corner.  In this case, I think families, businesses, and non-profits should learn how to harness LP, but government should try to stay "hands-off."