Monday, September 22, 2008

More of a Shove than a Nudge

Nudge could be one of the most important books of the next ten years, given it has apparently inspired both Obama and Cameron.

I haven't read all the book yet, but I've seen enough to realise so-called libertarian paternalism isn't as benign as it initially sounds.

People are not rational and sometimes make bad decisions. But, instead of banning the bad choice, authors Thaler and Sunstein recommend setting things up so the unwary blunder into your preferred option. This, they term 'choice architecture' or giving people a 'Nudge' in the right direction. For example, since people tend to stick with the status quo, occupational pension schemes are better being 'opt-out' rather than 'opt-in'.

So far, so good. Well, maybe... The authors argue that since people are 'Nudged' by their surroundings, failing to intervene doesn't stop people making biased choices. It's just their choices are randomly biased by their environment, rather than them being 'Nudged' in the right direction. They give the example of children in a dinner queue. Children will preferentially choose the first thing they see. So, surely, it's better to put fruit first, rather than leave this to chance?

Well, sort-of. Government should 'Nudge' people if the alternative if banning something. But only in places where the Government should intervene and only where it's blatantly obvious which direction people should be 'Nudged' in. So I'm entirely happy for the state to 'Nudge' people towards paying their taxes or saving for retirement. The problem comes when the Government decides that no part of human society lies outside its remit.

Cameron is an indiscriminate 'Nudger'. Anyone remember his rant at WH Smiths about putting chocolate rather than real oranges close to the tills? It's a textbook example of Nudge. Two problems:
  1. Should the exact position of (legal, non-age-restricted) products in a shop be any of the Government's business?
  2. What should the Government do about it if it is?
Once you take the political position that people's choices are strongly influenced by powers outside of their control, and they often make ones that are bad for themselves and society, then no aspect of life is and should be outside of Government influence. I say 'political position' here - it's possible to believe this personally, but not believe it's a good idea for Government to get involved.

Furthermore, if people can be effectively 'Nudged' to make better choices without stirring up resentment by banning everything, then why not? Surely a little extra legislation to stop WH Smiths selling more chocolate oranges by putting them close to the till where people are bound to pick them up is better than mass obesity? Why not force retailers to put health foods in impulse-buying 'hot spots'?

You can see where this ends. And that's why 'Nudge' should be viewed with care. Not everyone is a zombie sleepwalking to the world of 'Wall-E'. And the Government doesn't necessarily know better than us which direction we need to be 'Nudged' in. Therefore, although it's useful to understand how to tailor public services better, we should give further state interference a good 'Shove'.

1 Comments:

  • At 5:08 am , Anonymous Anittah Patrick said...

    If you're feeling a bit paranoid, that's understandable. However, the policy-creation process in this country will never be opaque; we live in a democratic republic where every inch towards decision framing will be scrutinized and available for public consumption and corresponding discourse.

    Frankly, if we can take insights regarding the suboptimal ways in which humans make decision to simply re-engineer welfare policy alone (away from policy that's hostile to wealth creation; away from policy that instills learned helplessness), that'd be a wonderful, wonderful thing.

     

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