Posts Tagged ‘Sunstein’

Nudge or shove? both infringe individual liberty

March 2, 2013

The great Anglo-Saxon historical battle to replace government coercion with individual liberty began with Magna Carta in 1215, continued through England’s Glorious Revolution of 1688, through the various British Electoral Reform Acts between the 1830′s and the 1920′s, the American Revolution in 1776, the US Constitution of 1787, followed by America’s Thirteenth, Fourteenth and Nineteenth amendments to that Constitution. Individual liberty was fortified immeasurably by the evolution of the rule of law both in Britain and America.

Those who fought so hard and so long to achieve individual liberty surely did not do so in order to remain under the light thumb or the heavy boot of those who are elected to represent them in the market-place of politics. We, the People, assumed control over our own destinies, to make what we will or can of the opportunities so provided, and to take full responsibility for errors of our own making.

Unfortunately, the battle for individual liberty can never be won outright. Public choice informs us that individuals attracted by power and money are especially prone to enter into politics and to seek for its highest offices. In a reversal of the principal-agent relationship, such politicians seek to coax, if they cannot openly coerce, those who elected them as their agents. Would-be Machiavelli’s emerge to advise such ‘princes’ how most effectively to achieve their desires to coax, when they cannot easily coerce.

Current players on this stage are Prime Minister David Cameron and his economist -adviser, Richard Thaler in the United Kingdom, and President Barack Obama and his adviser,lawyer Cass Sunstein in the United States. The book from which all such parties draw is not entitled, The Prince – that would be politically incorrect in the post-revolutionary environment of Britain and the US – but rather, more opaquely, Nudge, the 2008 book co-authored by Thaler and Sunstein that is now the Great Book for residents of No. 10, Downing Street and 1600, Pennsylvania Avenue.

This wretched book – this indirect attack on individual liberty – suggest ways for unscrupulous governments to coax individuals into doing what is ‘best’ for them. For example, by displaying bananas and skimmed milk prominently in school cafeterias, while hiding cookies and delicious sodas, children will be induced to eat and drink according to current dietary fads. Children, fortunately, for the most part, are not suckered by such sophistry. They endure hunger strikes rather than partaking of the ‘garbage’ put before them. School bureaucrats across America have recently had to beat a humiliating retreat into French fries, hot dogs, and peanut-butter sandwiches, despite the coaxing and nudging of America’s First Lady.

Many adults, unfortunately, do not share their offspring’s love of liberty. When shifts are made from allowing them to opt in to allowing them to opt out of company savings schemes, many of then take the easy route, and pay up. When the next Enron scandal erupts, just watch how quickly President Obama or Prime
Minister Cameron dip into their own pockets to reimburse those who were nudged into such financial sink-holes.

In general, individuals do tend to be biased towards the status quo. But this bias is justified. It is a great safeguard against being ripped off by slick talkers such as Cameron and Obama. Yes, individuals may tend to be excessively optimistic about the future. But such excessive optimism is the spark for entrepreneurial activity that can lift the wealth of an entire nation.

Nudging may be more humane than shoving. But for that reason, it is also more dangerous. Both Britain and America would be better served by shoving would-be nudgers, and their advisers, into the sink-hole of history. For those who are nudged into decisions that conflict with their own preferences are no longer truly free. Nor will they flourish as human beings to the degree that bearing full responsibility for free choices assuredly encourages.

Hat Tip: Christropher Caldwell, ‘Coaxers and coercers discover common ground’, Financial Times, March 2, 2013


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