Will Wilkinson takes on Thaler and Sunstein's "libertarian paternalism." One quote:
Despite the welcome weight Thaler and Sunstein throw behind a few genuinely liberty-enhancing policies, the thrust of the conceptual renovation behind the term libertarian paternalism is to empower, not limit, political elites. In the libertarian paternalist scheme, the rules will allow for an easy opt-out only so long as those writing the rules happen to care about preserving choice. The "libertarian" part of the equation is secured by good will alone. If that falters, we are left with paternalism, plain and simple. Old-fashioned libertarianism, it turns out, had a great deal to say about the choice architecture of politics. Given the intense attractions of power and the limits of benevolence, liberty (and therefore the commonweal) is best secured by setting in place a structure of rules that strictly limits the discretion of the powerful. That includes the discretion even of choice-loving technocrats.
All Nudge really offers is the idea that we should use what we know about how people act in order to design policy that will help them. And we shouldn't take away their choices. Well, I'm for all of it. If some policy makers really are misled by unrealistic economic models of rationality, then they should cut it out and bone up on psychology. Behavioral economics provides valuable new information about what will and won't work, and why. Thaler's work on savings plans is a great example of what can be done by taking into account new findings in psychology.
But it's no source of ideological realignment, no basis for what Thaler and Sunstein call a "Real Third Way."
You can read his whole piece on Nudge at the Cato Institute. Our readers already know my problems with their line of thinking: "Libertarian paternalism" is an oxymoron, and the academics and political elites, who claim they want to "help" us by guiding our lives, have never impressed me as possessed of any particular wisdom in that regard - or even of any ability to manage their own lives any better than anybody else.
