Cass Sunstein and Richard Thaler’s concept of “libertarian paternalism” is generating renewed discussion on the heels of a Wall Street Journal debate between Thaler and my quondam mentor in the occult mysteries of libertarianism, NYU economist Mario Rizzo.
For all that I’m a fan of linguistic precision, I think Will Wilkinson’s semantic critique of the phrase “libertarian paternalism” splits some hairs that could’ve gone unsliced. Even on a strict reading of the component terms, it’s not obvious that paternalism necessarily entails coercion, and there aren’t some kinds of paternalist default-setting that even the strictest libertarian would permit. The law must decide, for instance, when a valid contract has been entered into, and asking (for instance) whether someone has really given consent will mean ruling out certain kinds of apparent agreement—assent given while drunk, say—that we think are unlikely to reflect a person’s true or reflective interests. And this does, albeit in a pretty minor way, restrict people’s freedom insofar as it rules out entry into any contract under any circumstances. Leaving that aside, though, the terms in compound phrases do frequently modify each other from their strict independent meanings. Someone who objects that boxer-briefs aren’t quite boxers and aren’t quite briefs has missed the point of adjoining the terms. I think what’s intended in this case is clear enough to most readers: “Libertarian paternalism” is “paternalistic” in the sense that it seeks to shape people’s behavior for their own benefit—if not coercively, then often by exploiting cognitive bias in a way that differs from ordinary rational persuasion—and “libertarian” in the sense that it seeks not to seriously burden individual choice when it differs from the paternalist’s assessment. This, too, is scarcely a wholly novel use: Replacing public schools with a voucher system or preserving the FDA in a strictly advisory capacity might not be the pure libertarian position, but we all know what is meant by the claim that this would be more libertarian than the status quo.
Glen Whitman objects to certain specific policies Sunstein and Thaler class as instances of “libertarian paternalism,” which he may be right about, but I don’t know that it goes to the heart of the concept. Indeed, to reject certain specific cases is precisely to acknowledge that the concept has intelligible content. If the point is that Thaler and Sunstein are shoehorning some cases of old-fashioned paternalism under their new rubric, fair enough, but then it’s worth debating whether there are some other sorts of policies that would pass muster. One I’ve found intriguing, not mentioned in this debate, is a policy alluded to in this Economist article [subsc.]: People who know they have gambling problems can request to be placed on a list of people barred from casinos, against which gamblers must be checked at the chip window. If I recall correctly, they can fairly easily remove themselves, though not, as it were, on the spot with a phone call, creating just enough of a hurdle to frustrate spontaneous attacks of akrasia. This is, of course, coercive toward casinos, who are required to check players against the list, but I think it works as an instance of “libertarian paternalism” in the sense that it seeks only to help individuals adhere to their own considered judgments about their best interests.
Ilya Somin at Volokh objects if that if people are plagued by cognitive biases in their decisionmaking at the individual level, they will a fortiori be subject to the same biases in their capacity as voters. And that’s certainly true, but the kinds of narrow policies we’re talking about here are almost certainly going to be designed “by unelected experts” rather than referenda, a possibility with which Ilya also has problems. Here, too, I think the problems may be less severe than Ilya makes it sound. Somin contrasts market consultation with experts, whom one may ignore, with state experts. But if we’re talking about cases of genuine libertarian paternalism, the programs will be such that it is, after all, quite easy to ignore the expert judgment. If it is not, then we’re talking about old-fashioned paternalism of the kind we all agree is a bad idea. True, the program designers still need to be at least indirectly chosen by the political process—appointed by legislators who may be held responsible if the programs prove harmful or burdensome—but this is one case where I’m not sure I find the “bias, bias, everywhere” concern as pressing. Yes, short-term bias may be ubiquitous, but it’s also context activated. It’s likely to be a more significant factor, for instance, in the decision to step into the casino tonight than it is in the selection of a person to design a voluntary no-gambling list, or in that person’s deliberate construction of a program to combat short-term bias.