Will Nudge author Richard Thaler cut regulation or build a new Tory Nanny State?
University of Chicago economist Richard Thaler has reportedly joined the Conservative party as an adviser on regulatory issues. This may be good news for the cleanliness of British urinals, but not much else.
Professor Thaler is the doyen of the school of ‘behavioural economics’, which is based on such non-astonishing insights as the fact that human beings are not wealth-maximizing automata; they procrastinate, lack self-control and occasionally act like headless chickens. He recently wrote an article in The New York Times in which he compared the average punter to Homer Simpson! Behavioural economics thus represents yet another attack on the straw man notion that the validity of free markets depends on rational humans and perfect markets. Adam Smith certainly never made any such claims. He noted that it was all about higgling, bargaining and propensities to ‘truck, barter, and exchange’. Behavioural economics is yet another excuse for intervention, as if the return of Keynesianism wasn’t bad enough!
The Bible of the ‘new’ economics is Professor Thaler’s Nudge: Improving Decisions about Health, Wealth, and Happiness, which he co-authored with Cass Sunstein, President Obama’s regulatory czar. The book is aimed at promoting an oxymoronic ‘paternal libertarianism,’ a ‘real Third Way’. Thaler and co-author Sunstein make the claim – much beloved of Communist rhetoricians – that there is no ‘real’ freedom. Since all choices are made within particular ‘contexts’, policymakers are obliged to become ‘choice architects’, subtly rigging our environment to stop us making the ‘wrong’ decisions. For support, the authors quote – with an example whose bizarre triviality you could not make up if you were deliberately trying to discredit them -- how Dutch airport authorities reduced urinal spillage by 80% by etching target flies into the porcelain!
It seems that people can’t even piss straight without someone in authority telling them how.