"Designing Better Choices"

Something about "libertarian paternalism" bothers me. I think it's the subtle manipulation to get me to do things someone else thinks I should be doing:

Designing better choices, by Richard H. Thaler and Cass R. Sunstein, Commentary, LA Times: The director of food services for a big-city school system hatches an interesting idea: If she changes the arrangement and display of school food, will it alter kids' decisions about what to eat? Without modifying menus, she decides to place the desserts first on the cafeteria line in one school, last in another... The results are dramatic. Simply by rearranging the cafeteria, the consumption of ... items increases or decreases.

This example is a product of our imaginations, but we know from similar real-world experiments -- in supermarket design, for example -- that the arrangement of settings is important to the choices consumers make. ...

Those who design supermarkets and school cafeterias are engaged in what we call "choice architecture"... Choice architects are everywhere. If you design the ballot that voters use..., you are a choice architect. If you are a doctor and must describe the alternative treatments available to a patient, you are a choice architect. If you design the form that new employees fill out to enroll in the company healthcare plan, you are a choice architect. ...

Cognitive psychology and behavioral economics have shown that small and apparently insignificant contextual details can have a major effect on people's behavior. Researchers tell us that if a candidate is listed first on the ballot, he may well get a 4% increase in votes. If a doctor says 90% of patients are alive five years after a certain operation, far more people will have the operation than if the doctor says 10% of patients are dead five years after having it. ...

Let's return to the cafeteria line. If, all things considered, you think the arrangement of food ought to nudge kids toward what's best for them, then we welcome you to our new movement: libertarian paternalism..., a whole new approach to the role of government.

The libertarian aspect ... lies in the straightforward insistence that, in general, people should be free to do what they like. They should be permitted to opt out of arrangements they dislike... The paternalistic aspect acknowledges that it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier and better.

Private and public institutions have many opportunities to provide free choice while also taking real steps to improve people's lives.

• If we want to increase savings by workers, we could ask employers to ... enroll them automatically [in a 401k plan] unless they specifically choose otherwise.
• If we want to increase the supply of transplant organs in the United States, we could presume that people want to donate, rather than treating nondonation as the default. ...
• If we want to increase charitable giving, we might give people the opportunity to join a ... plan, in which some percentage of their future wage increases are automatically given to charities...
• If we want to respond to the recent problems in [credit markets], we might design disclosure policies that ensure consumers can see exactly what they are paying and make easy comparisons among the possible options.

We find ourselves these days mired in political battles that pit laissez faire capitalism ... against heavily regulated capitalism... But this opposition is false and misleading. Any system of free markets will include some kind of choice architecture, and that means libertarian paternalism can offer a real "third way" around the battleground. The most important social goals are often best achieved not through mandates and bans but with gentle nudges. In countless domains, applying libertarian paternalism offers the most promising alternative to the tired skirmishing in the increasingly unproductive fight between the left and the right.

Comments

[reason]

Mark,
are you saying you are not rational in your choices?
Actually, I think it is a good idea as long as people are TOLD this is what is happening. See David Brin "The Transparent Society".

[reason]

Mark,
this is just the same as software that has default actions, but lets you override if you want (perhaps after a warning). I don't see anything wrong with it, as I said, so long as it is openly discussed. It is secrecy that is the enemy. Are you against health warnings on cigarette packets?

[Dunc]

Once you've recognised the phenomonen, not rearrangeing food also becomes a choice architecture - Just one with a predicted negative rather than positive health outcome, which seems a bit irresponsible.

[Paternalism]

In the case of children, paternalism is a good idea. Children's minds are not yet fully developed, and adults should nudge them in the direction of doing things that are good for them.

[reason]

All the time teaching them the skills needed to make conscious full informed decisions?

[ken melvin]

Don't think that having choice and being manipulated are one and the same.

As to libertarians, they are those folks that like to play the game but only by their own set of rules. Taxes (fees), regulations, etc. are the rules of the game. Either abide, or don't play. You can't have it both ways.

[dd]

Notice how the discussion moved from schools and children to consumers and for profit supermarkets to employees and employers so seamlessly that one feels a bit well, manipulated into thinking that employers ought have paternalistic powers over employees. Notice how "choice architecture" is just another name for rules and regulations and "paternalism" is a euphemism for transfer of government power to private hands with no accountability.
Notice a reference to "heavily regulated capitalism" that is nowhere to be found in the current credit mess caused by deregulation.
Notice the "third way" is yet another undermining of the New Deal reforms that empowered employees, consumers and investors through unions and regulations. Notice how all the bans and gentle nudges are for citizens and how all the power to nudge is vested in "institutions" that are the ultimate repository of Solomon's wisdom.

[hari]

Never heard anything like *Libertarian Paternalism* nonsense in my seventy years! Where do these socalled "intellegentia" and their *dna* origin from? They must be uprooted otherwise we shall be debating this *nonsense* for a whole day or more.

Moreover, given the nature and depth of subprime meltdown, there is a lot more to come for Libertarians to consumate and wander how and what for, global hi fi markets are becoming the next line of insolvency (eg. UBS!).

[Noni Mausa]

If we want to increase savings by workers, we could ask employers to ... enroll them automatically [in a 401k plan] unless they specifically choose otherwise...

Or here's a brain wave -- put that money into a proper pension plan -- one insulated from predatory influences.

401k's are subject to the vagaries of the market, and the market is ineffectively regulated at present and overall hasn't delivered gains much higher than inflation (we saw that posted here at AB, if I recall correctly).

Personally, I am all in favour of structuring choices so that those most beneficial to the chooser are also those most conveniently chosen. We have too dam many choices to make every day, and I freely admit that I am uninformed, uninterested, or simply foolish about many choices. If the desserts are first in the line, and the salad is at the end, do you really think I will save space for that radish? Hah!

Provisos in structuring choices:

--All choices should be visible and clearly explained
--Potentially deleterious or risky choices should be flagged
--It would help if it's apparent who has structured the choices in the first place
--the choice process should be structured with the good of the most inept chooser in mind.

Sadly, many choice environments (viz Kwiki-Mart penny candy, grocery store pop and chips) have been structured the other way around -- with the most costly choices easiest to pick, with comparisons made difficult rather than easy, with the best choices (e.g. high nutrition with low cost) made so unattractive or inaccessible that effectively they are never chosen at all.

The structuring of choices is a pretty exact science, widely used in marketing. Thus, when I enter a store which structures even a few choices counter to my best interests, I take that as a sign that the store can't be trusted.

Noni

[robertdfeinman]

Paternalism in general and libertarianism both have a common philosophical origin - they are basically elitist and authoritarian.

Those making the recommendations think they are superior beings who should be telling the rest of us (who are inferior) how to live our lives.

Conservative authoritarians want everyone to play by the rules which they lay down and claim that they do so as well. The libertarians want everyone to live by the rules they lay down, except for themselves who don't need rules because they only make wise decisions.

In any social organization there need to be rules, the only question is who gets to make them. So far the only equitable arrangement that I've seen is to use democratic processes. Unfortunately in modern society these are in the minority. Government has a imperfect democracy where the elected officials don't represent the interests of the majority of the population. In for-profit and non-profit firms there is no democracy. The stockholders, employees, customers or suppliers have no say in how the firm is managed. Withholding participation is not a governance mechanism.

In other social organizations such as universities and religious denominations there is also no democratic governance. People have little real control over their lives and being influenced by propaganda or advertising is just another example of this powerlessness.

[Noni Mausa]

I said: (we saw that posted here at AB, if I recall correctly).

~slaps forehead~ I was experiencing a senior moment. Sorry.

Noni

[Larry]

"Libertarian paternalism" is an oxymoron, no?

Some on both the left and right prefer authoritarian approaches. E.g., the rule that requires pharmacists to carry products they object to selling, or that require abstinence-only sex education.

I agree with those above who note that whether explicit or accidental, choice architecture is real, and those in charge are accountable for their designs. As our understanding of human behavior continues to improve, our ability to influence that behavior will also improve.

Other design rules are possible, however. E.g., design for the most common choice rather than for the "best" choice. I.e., run an experiment that allows you to determine which way people most often go. In the 401k case, if more people opt out than opt in, then go with opt in (saving the more numerous opt out-ers the effort.)

In the end, I'm ok with "optional" paternalism, because it doesn't force my hand. I.e., if the kid really wants that dessert, it's there.

[zak822]

dd, that was superb!

This, "Notice a reference to "heavily regulated capitalism" that is nowhere to be found in the current credit mess caused by deregulation", is priceless.

[piglet]

The only interesting aspect of that article is the implicit admission that "free choice", that mantra of US libertarians, doesn't really exist. We are constantly being manipulated. Most consumers aren't really in the position to make informed choices (hence the need for "design disclosure policies that ensure consumers can see exactly what they are paying"), and ditto for citizens and voters. "Choice architecture" is a nice euphemism for that phenomenon.

The admission that "free choice" is an illusion takes much of the substance out of US libertarian philosophy. Social Security as a mandatory retirement program is more honest, and more efficient, than letting employer paternalism loose on ill-informed employees.

[Bruce Webb]

You want to tear your hair out.

What these guys are describing, once you descend from the Ivory Tower, is some combination of marketing and advertising. It's called Product Placement and is something well known to every successful retailer or more precisely to every product rep. Wholesalers pay cash money to grocery chains for the rights to choice shelf space.

I know it is fashionable for the Econ guys to look down on the Finance guys who is turn are superior to the B School folk who in turn maybe don't think too much of the people who churn out undergrads through the Marketing and Communication program but this 'Choice Architecture' thing would make you the laughing stock of any grocery wholesaler ever.

One of the biggest failures of classical economics may be rooted in the fact that is was formed before the days of modern advertising which by a combination of information and misinformation, of signals and misdirection seeks to tilt the information environment in a way that means that no market participant could possibly remain fully informed Homo Oeconomicus. Lets try some substitution to see how vapid these claims are. Where they say:
"Any system of free markets will include some kind of choice architecture, and that means libertarian paternalism can offer a real "third way" around the battleground."
I say:
"Any system of ostensibly free markets will include some kind of marketing strategy and that means Madison Avenue can offer a real "third way" around the fact that our economic theories fail miserably when put to real world test"

[bakho]

Don't college profs do this all the time by assigning some readings and not others? Requiring some courses but not others?

[dd]

Thanks zak822.
The article seemed not about designing choice but designing artifices around the credit meltdown and implying that consumer behavior was the issue rather than unconstrained profit-driven institutional behaviors.
Nice try guys and how about that 401k solution for retirement savings? How's that working out for Bear Stearn employees left holding the bag on a 30% interest while uber-Papa Bear Cayne walked away with $61 million? True Libertarian Paternalism in action.

[The Baron]

I really wish they had left the term 'Libertarian' out of their thesis. It carries so much baggage at this point that it is bound to lead to knee jerk rants and inclusion of spurious arguments. Their core thesis has nothing to do with the political philosophy of 'Libertarianism'.

First, this seems to be repackaged Skinnerian Radical Behaviorism. Now the merits and problems with that have had numerous books and college courses taught over them, but, as Bruce Webb points out, it really devolves into marketing. It is inherently obvious, and a well known fact, even a science, that people are not completely rational independent actors. This is why product placement and advertising are such big business.

Now, for the most part government has stayed out of the advertising game, but propaganda has a long history.

The big question to take issue with is:
The paternalistic aspect acknowledges that it is legitimate for choice architects to try to influence people's behavior in order to make their lives longer, healthier and better.

Who decides what is "better"? It is very easy to go from:
# If we want to increase charitable giving, we might give people the opportunity to join a ... plan, in which some percentage of their future wage increases are automatically given to charities...
To:
If we want to increase charitable giving, we might enroll people automatically in a ... plan, in which some percentage of their future wage increases are automatically given to charities...

opt out of course...

And can someone explain exactly what the difference between:
If we want to increase savings by workers, we could ask employers to ... enroll them [in a retirement account] automatically unless they specifically choose otherwise.
and Social Security is? Other than not being able to opt out that is? Because obviously people are too stupid or unreliable to save for their own retirement, so we must make that choice for them. (Note, for anne and others: I agree that it is empirically obvious that they are too stupid to make arrangements for their own retirement, so we need to have the safety net. I am NOT attacking SS in any way here.) The same argument goes for mandates in health care coverage.

Most on this forum don't seem to have any problem with forcing people to do what is in their best interest (as determined by government) through laws and regulations, so why does it cause qualms when it is just 'tricking' them into doing the same thing, and making them think it was their idea? If they are smart enough to recognize the con they can opt out of it, and are probably smart enough to be making their own choices on what is 'best' for them.

[evagrius]

Free choice isn't necessarily free will- and vice versa.

This has been an ongoing problem in western civilization for millenia.

[Joy]

Personally, I am all in favour of structuring choices so that those most beneficial to the chooser are also those most conveniently chosen

What actually appears to happen is that choices are structured so that the most beneficial to the entity offering the choice are also the most conveniently chosen. How does the entity offering the choice know about the benefits for each chooser?

Case in point: my company introduced a new health plan, a high-deductible one. It allowed some other choices to remain. It made the HD plan cheaper, raised the premium significantly on all other plans, and automatically signed everyone up for it--you had to explicitly opt out and choose another one if you did not want this plan. In the (online) interface for doing so, opting out got you a **WARNING** type message. Now, HD health plans are definitely NOT for everyone (depending on various factors) but how would the "choice architect" know whose situation was best suited? The choice architecture was set up to minimize expense for the company.

[evagrius]

Free Will: Now You Have It, Now You Don’t ;

http://www.nytimes.com/2007/01/02/science/02free.html?em&ex=1169701200&en=4368940834a55329&ei=5087%0A

[robertdfeinman]

When governments "force" people to do certain things (like contribute to Social Security) the only valid argument against this coercion is that it is done without the consent of the governed.

If people in the US think that this is the case then it can only be because our democratic processes are not working properly. In the case of Social Security, it was popular when created and remains popular - democracy in action.

In the case of repealing Glass-Steagall the picture is much different. Libertarians take the position that even laws which are supported by the vast majority are not valid when they don't approve of them. That is not a rational philosophy on which to govern a society, which is why there are no societies run by libertarians.

If the lack of a functional democracy has gotten out of hand then the primary focus should be on reform. The current election cycle may be the beginning of a new phase, or it may just highlight how distorted the electoral process has become as more time is spent on raising money than discussing the issues.

Any electoral system which requires extracting $1 billion from the public and special interests during a campaign is not democratic. We are supposed to count votes not dollars.

[paine]

is this an april fools post??

[donna]

Libertarian paternalism would imply that you give the kid a choice of whether or not to be at school at all in the first place, so the lunchroom line is a moot point anyway.

I prefer this libertarian paternalism for the poor/socialism for the rich solution to the credit problem, myself -- let me pick which Wall Street big shot's yacht I want to own after the government bailout, since I'm paying for it....

[donna]

BTW, I raised my kids according to Alcatraz rule #5 - "you are entitled to food, clothing, shelter and medical attention. Anything else you get is a privilege." It's still posted in my kitchen on the refrigerator magnet.

[paine]

"unconstrained profit-driven institutional behaviors"

dd dear soul of course you mean external constraints
of a
by uncle sam for the whole of us people kind

let's have none of this
flap doodle about corporate " govern-meant "
by and for
the broad mass of direct and thru funds indirect
outside stockholders....
ie
the small fry

the corporations only exist
as public holdings
because rubes can be skinned
otherwise private equity would reign everywhere
not just where the big inside boys
don't want sec watching em
and maybe "straight jacketing " em
....oh ya and the courts having
a lawful way
to throw em in jail

[paine]

some avenues could use a dose of liberty
case in point :

"Libertarian paternalism would imply that you give the kid a choice of whether or not to be at school at all in the first place"

end the high school draft

[jean]

Besides, don't people traditionally NOT opt out from all those credit card and insurance things that you have to decide and sign and stamp and mail from inertia, boredom, inattention, whatever? (Who can even SEE that printing?) Doesn't that change equations in that the paternalistics have more control than ever? (I mean, sometimes you can't even tell what you're opting out FROM).

[Noni Mausa]

May I add an old definition (pre-Milton, and I don't mean Friedman) of "choice".

"Choice is the expression of the energy of a free and conscious being." (I found a discussion of choice in Northrop Frye's collection of essays on Milton.)

If you accept this definition, and I do, it becomes obvious that pure free choice is not something which exists anywhere, it's in a continuum. Most of our choices (including mine) have been preformatted by circumstance, culture, and at its deepest level, the structure of our bodies and senses. I also believe that there is an element of free will, generally struggling to understand and then reach consensus with the rest of the self in order to direct action.

If the freedom or the consciousness of the being are compromised, (and they always are) then the actions that being undertakes are only partially "choices" in the pure sense.

Acting to expand knowledge and understanding is essential to expanding that cramped little elbow room of choice. This is part of why this book (http://www.amazon.com/Age-American-Unreason-Susan-Jacoby/dp/0375423745) is an important one.

[Jim Harrison]

The most serious question is not about whether authority should manipulate people's behavior by choice design, regulation, law, or any other means. It's about who gets to be the authority in the first place. How to make this authority responsible to the wishes and interests of the people is also pretty important.

[Patricia Shannon]

Every place I've lived has had laws that people have to keep their grass mowed.
In Huntsville, I was against the law when I had my own car in non-running condition in my own drive-way.

[swells]

Jim Harrison, good point. I view our primate reliance on hierarchical systems of control as an unfortunate contingent fact of our evolution that we may or may not be able to change. True, for there to be communication (a necessary precondition for human society) there has to be a substrate of predictability upon which novelty can be imposed. There are many, probably an infinite number, of ways that that substrate of predictability can be achieved. Hierarchical organization is simply one such way and I think it was John Maynard Smith who demonstrated that evolutionary approaches can be stable without being optimal.

It would appear that reliance on hierarchical systems of social control would illustrate one such non-optimal stability.

Why should there be an authority at all? Are human beings to forever be in thrall to a contingent fact of their evolutionary history?

[Patricia Shannon]

If we want to increase the supply of transplant organs in the United States, we could presume that people want to donate, rather than treating nondonation as the default. ...

As long as there are people who aren't eligible to receive transplants because they can't afford them, this would be an evil practice.

If we want to increase charitable giving, we might give people the opportunity to join a ... plan, in which some percentage of their future wage increases are automatically given to charities...

United Way

[Patricia Shannon]

Swells, I like consensus when it is possible. It is time consuming. And sometimes it means necessary things don't get done. If a group of lions is attacking your village, there is not time to have a discussion about who does what.

Obsession can be helpful, maybe necessary, for the accomplishments of creative geniuses. For others, it may simply detract from doing as much as could be done. Regardless, it can be really boring for other people to have to listen to. I say this as a person who can get very interested in a subject, but I try to be considerate of other people and not bore them to death.

[JRossi]

To me a key issue is who the paternalist is and whether he or she has a financial or other non-altrustic interest in changing people's behavior in a certain way. That's bad. But re-arranging lunch items so as to help people eat better-that's just good public health.
Each issue needs to be looked at individually with the general idea that paternalists should try to change people's behavior for the people's benefit, not the paternalists' , and that people should be free to opt out at any time. Full disclosure is also a good idea : "We think this asset allocation works for most people, but you are free to change it at any time."

[Patricia Shannon]

JRossi, right on!

[swells]

I personally don't think this is a hard question. We all manipulate other people. That's part of staying alive. What I usually try to ask myself is whether I am treating other people as means to their own ends or mine. If the answer is that I am treating them as means to my own ends, I change my behavior.

That said, there is a lot to be said for letting children make mistakes and experiencing the consequences of those mistakes while they are young, before the consequences get serious.

[paine]

"Why should there be an authority at all?"

after all there's

no king neuron of my neurons

obviously you figure there ain't no good enough reason
for folks to have popes and princes and captains and such

keep thinking
history suggests
maybe there's more to this authority gig
then meets your eye

[paine]

"To me a key issue is who the paternalist is "

really ???
or do you mean not "is" but " up to "

btw
seems personal preference
may vary
even to the point of contradictions

[James Killus]

One of the consequences of the Death Star that is the Conservative Movement is that it has poisoned discourse by destroying the meaning of words. "Libertarian," for example, used to mean something other than "just let corporations run everything and the invisible hand will pat you on the back." There is, in fact, a philosophical strain of "left libertarianism" that used to hold some real sway in political discussions. Now, libertarian means "propertarian" and "corporativist," if you're lucky, and "racist swine" if you are not.

As for "libertarian paternalism," that sounds a lot like Scott Adams' concept of "confusopoly," and I suspect that is the root of what is bothering people here.

[donna]

I think the left libertarians still hold sway. After all, we're the ones who have been shirking for the last seven years and letting everything go to hell. ;^)

Oh, you mean I was supposed to actually work in this economy and support this mess? Don't think so.

[piglet]

>

Spot on. That's why I always use the qualifier "US libertarianism" in these debates. I have long ago come to the conclusion that US libertarianism is one of the most politically bankrupt movements. In an earlier life, on a different planet, I had no difficulty describing sympathizing with the "libertarian" movment but then, the meaning of the term was somethign along the line "nobody should have power over other people", and that includes economic power, and of course the military (as the tool of coercion par excellence). How US libertarians have managed to get away with that travesty "libertarianism = total freedom for the rich" is Orwellian beyond imagination, on a par with that other lie "the Republicans are the party of small government", as if war, torture, and deficits were the characteristics of "small government".

[Noni Mausa]

James Killus: As for "libertarian paternalism," that sounds a lot like Scott Adams' concept of "confusopoly," and I suspect that is the root of what is bothering people here.

Good comment, James.

A number of the people here are readers of C.S. Lewis.

In "The Final Battle", the slippery wheeler and dealer cat, Ginger, is punished at the end of the world for his twisting of divine truths by losing the gift of speech and comprehension.

Sadly, the accounts payable seem to be mixed up. We appear to be paying Ginger's price for other people robbing us of speech and comprehension.

Noni

[paine]

"Spot on"

that's winny the poooh speak for

you got that right bub

piglet are you a brit
or just a lingo traitor

[ScentOfViolets]

I've got a scholarly type question: is there any literature out there detailing the co-option of libertarianism in America? There was a time, from '76 to, say, '81 where I hung out with libertarians and they weren't the right-wing useful idiots they are today. But something happened in that time, where they went from the libertarianism of Anderson's Nicholas van Rijn or Piper's Federation to the libertarianism of a late Heinlein or Rand (and yes, I think there is a distinct science-fictional component to the group and it's philosophy.)

Was this just random drift, or was there a deliberate campaign?

[reason]

swells...
I'm pretty sure in this:
If the answer is that I am treating them as means to my own ends, I change my behavior.

You left out the word only. Otherwise you just destroyed the whole of capitalism.

[swells]

reason, Okay, include only. One basic thing I'm pretty sure about is that apparent conflicts of interest are only apparent conflicts of interest. It seems to me that anytime a conflict of interest appears to pertain, I'm simply not seeing my own interests clearly or the other person isn't seeing their own interests clearly. That's a faith based position on my part. I can't prove it but I'm pretty convinced that social interaction does not have to be a zero-sum game. That said, one does have to recognize that others can always reduce things to the lowest common denominator and make things into zero-sum interactions. Sometimes you can't really prevent that from happening.

[piglet]

paine,

"spot on" is certainly not Winnie the Pooh speak. Pooh Bear was never that convinced of anything, except for the fact that it's time for a little something. Btw, Winnie the Pooh is, as Harry Rowohlt pointed out, the most important book that was ever written.

Now tell me, what linguistic or idiomatic fault line did I violate to earn your suspicion?

[reason]

I always thought that "spot on" was aussie slang. But I'm not sure. I found a Wikipedia entry with "spot-on" as a brand name for toy cars. Curious because another brand of toy cars is Dinky and Dinky Di in Aussie slang means "genuine" in aussie slang - not so different from the "spot on" meaning of "exactly right". Language gets around now adays. Only the French Dirigists should be too worried about dastardly imports.