Glen Whitman at Cato Unbound:
For as far back as memory reaches, people have been telling other people what’s good for them — and manipulating or forcing them to do it. But in recent years, a novel form of paternalism has emerged on the policy stage. Unlike the “old paternalism,” which sought to make people conform to religious or moralistic notions of goodness, the “new paternalism” seeks to make people better off by their own standards.
New paternalism has gone by many names, including “soft paternalism,” “libertarian paternalism,” and “asymmetric paternalism.” Whatever the name, it arose from the burgeoning field of behavioral economics, which studies the myriad ways in which real humans — unlike the agents who populate most economic models — deviate from pure rationality. Real people suffer from a variety of cognitive biases and errors, including lack of self-control, excessive optimism, status quo bias, susceptibility to framing of decisions, and so forth. To the extent such imperfections cause people to make choices inconsistent with their own best interests, paternalistic interventions promise to help them do better.
What sort of interventions? To the casual reader, the new paternalism might seem to have little to do with government at all. Cass Sunstein and Richard Thaler’s Nudge and Daniel Ariely’s Predictably Irrational, for instance, often read more like advice manuals than policy manifestos.
But if you dig deeper, you’ll find a wide-ranging policy agenda at work. In seminal journal articles by Sunstein & Thaler, Camerer et al., O’Donoghue and Rabin, and others, you’ll find a panoply of policy proposals from mild to downright intrusive. The story begins with the seemingly innocuous proposal to enroll all employees in savings plans automatically (with the ability to opt out). Then it progresses to new default rules in contracts, such as a presumption of “for cause” rather than “at will” employment, again with an opt-out. And then? Default rules that can be waived only through a cumbersome legal procedure. Then default rules with some options ruled out entirely — such as maximum hours that cannot be waived for less than time-and-a-half pay. Then cooling-off periods for high-cost purchases. Then sin taxes for fatty or sodium-rich foods. Then outright bans on ingredients like trans fats.
Not every new paternalist supports every one of these policies, and they don’t advocate them all with the same confidence. But they’re all on the list, and all justified by an appeal to behavioral economics.
The Claim to Moderation vs. The Slippery Slope
New paternalists often present their position as striking a reasonable middle ground between rigid anti-paternalism on the one hand and intrusive “hard” paternalism on the other. But as the list of policies above suggests, this claim to moderation is difficult to sustain.
My claim (along with my frequent coauthor, Mario Rizzo) is that the new paternalism carries a serious risk of expansion. Following its policy recommendations places us on a slippery slope from soft paternalism to hard. This would be true even if policymakers — including legislators, judges, bureaucrats, and voters — were completely rational. But the danger is especially great if policymakers exhibit the same cognitive biases attributed to the people they’re trying to help.
The slippery slope is not, of course, the only argument against new paternalism. The slippery slope is not intended as a solo knock-out argument against any and all new-paternalist policies. In some cases, their benefits might be high enough to justify their costs. The key point is that the slippery slope risk must be counted among the relevant costs.
Unfortunately, the very manner in which the new paternalism paradigm has been advanced makes it likely that risk will be ignored.
Jason Kuznicki at Cato:
One often-cited example takes place in the cafeteria: Put fruit and healthy snacks up front, and people will be more likely to choose them. Put the chocolate cake first, and that’s what they pick instead. Paternalism, the argument runs, lies on a continuum, and some forms of it are really quite harmless. It’s not (or not only) a boot stamping on a human face forever. It’s also the nice lady at the cafeteria, who helps you pick out healthy food. Healthy food is what you really wanted anyway. So what could be wrong with that?
Whitman, however, turns the argument around a bit: Legislators, too, suffer from bias. What if paternalistic legislation proves sort of like that chocolate cake? By placing it up front, and by making it look appealing, legislators may choose it too often, and they may neglect the healthier — but to them less appealing — choice of freedom. What if a little paternalism now turns into a lot of paternalism later? And where are our “real” preferences, anyway? Whitman offers arguments for why a slippery slope may very well exist here, and examples of how the theory of soft paternalism has developed teeth in practice.
Katherine Mangu-Ward at Reason:
Small case study: Sodas in schools. Kids are fat. Bans loom. Soda companies—which generally prefer to fight to the death—collaborate to remove full-sugar sodas entirely from schools. Is this what a victory for non-coercive nudging looks like?
Call it “soft paternalism,” “assymmetric paternalism,” “libertarian paternalism” or whatever With Cass Sunstein as Obama’s regulatory czar, we all may be feeling the gentle nudge of the new paternalism soon enough. Whitman puts us on guard, arguing that the logic of the new paternalism sets us on a slippery slope toward plain old-fashioned not-so-gentle paternalism.
I’ve been relatively open to at least some of the ideas circulating under those banners—at least as libertarians go—but Glen’s arguments certainly provide ample reason for severe skepticism. Certainly, I share his concern that initiatives that begin as “soft” paternalism, in the form of default rules meant to steer people away from ill-considered decisions, may “harden” if people continue to make what regulators perceive as the “wrong” choices. In particular, I think there’s an unjustified tendency to privilege temporally later preferences—so that if someone in ill-health regrets their youthful excesses, we treat this as reflecting the “real” preference. But if we think people overvalue the short term pleasures of fatty food, drink, or tobacco, and undervalue the long-term costs, surely it’s equally possible that those costs will loom large when the bill comes due, and cause people to discount too heavily all the enjoyment they got while running up the tab.
Especially important, I think, is Glen’s argument about framing effects: Soft paternalism may currently seem like a middle-ground between a relatively more laissez-faire approach and “hard” paternalism that forecloses options rather than merely establishing defaults. Yet, as Glen points out, once “soft paternalist” policies are implemented, the debate may shift to position some more aggressive intervention as the new reasonable middle ground.
Yet it’s this very sort of logic that has made me at least somewhat interested in the potential of libertarian paternalist arguments. My (perhaps vain) hope is that this reframing effect can be exploited in the other direction, to make reform in the direction of greater freedom more appealing, provided libertarian paternalists are primarily deployed in spheres that are already heavily regulated. So, for instance, it seems that most Americans consider straightforward legalization of gambling or prostitution or drugs too extreme a position—though at least with regard to marijuana, the public opinion trend seems to be moving steadily in a more libertarian direction. But a proposal to combine legalization with some mechanism for permitting “problem users” to limit their own access—supposing the obvious privacy problems presented by such mechanisms could be worked out—might conceivably be presented as a reasonable compromise, recasting the status quo prohibitionist policies as the new “extreme.” At the very least, I’d be interested to see some polling that examines how people’s responses change when a “soft paternalist” alternative is added alongside prohibition and legalization.
More Kuznicki at The League:
Among non-libertarians, there’s a strong tendency to collapse all the different types of costs together. You’re unfree if you have a family you feel obliged to support. You’re unfree if you live far from civilization. You’re unfree if you get cancer. You’re unfree if your personal tastes are expensive. You’re unfree — I infer — if you’re thrown in a prison camp. Just another type of cost to pay. Something seems way off here to me.
That’s because political unfreedom is different. Political unfreedom isn’t the result of bad luck, or your moral code, or your freely made but unwise choices. Other humans did it to you, and those other humans could stop doing it if they wanted. Whitman’s argument above is that we should think carefully about which people get to impose costs, and how, and to what end — even though other costs exist, even though the world remains full of dysfunctional markets, bad personal choices, and brute facts of nature.
Now, these cost-imposers may act with a smile on their face, or they may be brutal about it. They may have a representative government to validate their acts, or not. But political and non-political costs should never be confused. Political freedom is the freedom from arbitrary interference on the part of other people. We find it striking, and worrisome, when we see political theorists who aren’t so careful about the distinction. (For more on this idea, see Tom Palmer, writing in last month’s Cato Unbound.)
Now, the obvious rejoinder is that our decisions are continually subject to the arbitrary interference from other people. And this is quite true, even apart from the trivial example that we are all constrained equally from killing each other, in a clever little constraint-on-constraint. Other constraints abound.
This is what libertarians always seem to get wrong—it isn’t paternalism (or, at least, it isn’t the “bad” kind of paternalism) when the state is protecting me from direct harm caused by someone else’s actions. I can claim a direct harm from inhaling second-hand smoke: emphysema and lung cancer. I can’t make a similar claim about somebody else’s lack of a savings plan.
I’d expect better from a guy at Cato, because I’m counting on them to help get pot, gambling and prostitution legalized everywhere
UPDATE: Will at The League