Richard Thaler, co-author of the book Nudge will be joining Camp Cameron as an adviser on regulation. Should the Conservatives form the next government, he will sit in a regulatory “star chamber” designed to analyse the impact and effect of proposed regulation.
Thaler is an American behavioural economist whose work has long been popular with the Conservatives. He argues that the concept of humans as fully rational and logical is wrong; instead, we often react instinctively, affected by emotion or acting in ignorance. In essence, Thaler doesn’t believe that we are entirely capable of making our own decisions. Instead he suggests that the government should create social nudges that encourage and influence us to make the ‘best’, socially useful decision. Examples include presumed consent for organ donation, and the proposed Tory policy of comparing a household’s energy expenditure with their neighbours on the bottom of gas and electricity bills.
Thaler calls such ideas examples of “libertarian paternalism”; they are deemed libertarian because they do not force anyone to change their habits, yet they are paternalistic because they assume that the governments’ desired outcome is the most correct. A major problem is that this work is based upon an individual’s unconscious and psychological reactions to the situations before them. ‘Nudging’ people to act in a certain way requires the manipulation of these reactions, such as our ‘herd instinct’, encouraging people to ‘make the right choice’. As Lib Dem MP Danny Alexander claims: “There’s something worryingly illiberal about all this Nudge stuff. If governments wanting to change our behaviour don’t need to explain what they’re trying to do, how they’re trying to do it, or what outcome they’re after, then they are ignoring what voters want.”
The influence of economists like Thaler add to the creation of our Nannying State, where citizens are perceived as too ignorant and base to rely on their own desires and morals. It is difficult to see how principled views such as a reluctance to donate organs can be ob ‘wrong’, even if we do make rash and impulsive decisions in day-to-day life.
One hopes that we have enough awareness not to be nudged. However, if we are as susceptible as Thaler claims it is a serious cause for concern. Perhaps it is better to be shoved than nudged; at least then you can retaliate in self-defence.