The new paternalism


As usual, Cato Unbound has a fascinating selection of essays. This month they are on the new paternalism. Glen Whitman opens the debate, attacking many of the proposed policies of this latest fashion in behavioural economics. As he states:

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.

Indeed, as he argues, we are on a slippery slope:

The top of the slope is gentle nudges to save more and eat less. The bottom of the slope is forceful shoves to eat right, drink right, exercise right, sleep right, have sex right, choose our professions right, and pick our lifestyles right.

For Nudge economists and its supporters, government interventions are taken as a given. As Whitman suggests, “the new paternalists have framed the debate as being not whether there should be paternalism, but how much.”.

I think the new paternalists' crucial mistake is to omit to frame their aruguments in the ideological baggage they bring to the table (see here for an interesting podcast on the issue bias in economics). They defend their policies as economists, yet come with an already formed vision of the good life, that they are pushing us to pursue. There is no escaping the fact that Nudge and its equivalents are packed full of plenty of ways and means for the government to take away our freedoms, founded in a belief that they could and should decide better how we live.