A review of Nudge by Richard Thaler & Cass Sunstein

I first came across the term 'libertarian paternalism' in 2008 when Julian Le Grand proposed making smokers buy smoking permits. Le Grand was, and is, a classic Blairite—Eton-educated, champagne socialist, illiberal, wonk—and like all Blairites, he was obsessed with branding. Specifically, he was obsessed with finding friendly buzz-words to help sell unpleasant ideas.

Libertarian paternalism sounds better than authoritarianism. Nudging sounds better than shoving. And so it was that one of the least liberal public health policies imaginable was allowed to be prefixed with the word 'libertarian'. As I wrote in Velvet Glove, Iron Fist, this was an oxymoronic piece of doublespeak if ever there was one.

The idea did not go down well. As Julian the Great later said:

My e-mail inbox exploded. Mostly with pictures of Hitler, I have to say. People were very hostile to that sort of idea. So, although the nudge agenda, I think, does have possibilities I think care has to be taken that people don't feel that it's the nanny state, indeed the nanny state squared.

It is interesting that Le Grand has no voice on his shoulder telling him when he's crossed the line, and instead has to rely on the quantity of hate-mail he receives. Perhaps it's his focus-group mindset. Maybe he just lacks a moral compass. Most likely, as with many public health protagonists, he is an opportunist, lurching towards prohibition but drawing back when the public's apathy turns to disgust.

Le Grand was inspired by the ideas presented in Nudge, a book on behavioural economics written by Richard Thaler and Cass Sunstein. Thaler and Sunstein invented the phrase 'libertarian paternalism'. They also invented the phrase 'choice architecture'. You can see why this kind of management-speak appealed to the political class.

And not just in the Labour party. Nudge is said to be one of the Conservative party's favourite texts at the moment. Nudging is back in fashion and, in a shameless attempt to embrace the zeitgeist, the UK Faculty of Health titled its latest manifesto for authoritarian paternalism 'Healthy Nudges'. This document—which, in reality, is a glorified opinion poll—asserted that:

Sometimes legislation and regulation of the so-called ‘choice architecture’ are important tools for nudging people into making healthier choices.

As far the UK Faculty of Health are concerned, the kind of 'nudges' required are a ban on 'junk food' advertising, raising the minimum age of alcohol purchase to 21, reducing the speed limit in towns to 20mph, a minimum price on alcohol, banning smoking in cars and banning buy-one-get-one-free offers on food.

Since this was all I knew about Nudge, I began reading it this weekend fearing the worst. Nudging, I assumed, would be the latest euphemism for banning and prohibiting. But I was wrong. Nothing in Nudge justifies the kind of prohibitions being mooted by public health campaigners. Authoritarians will find little to console them in this book.

The underlying assumption of Nudge is that human beings are fallible, easily influenced and not always best-placed to judge what is in their own interests. Libertarians will find this a worrying premise from which to start. It echoes the Marxist concept of false consciousness and could be a charter for those who think they know what's best for people. But Thaler and Sunstein never view the public as unwitting dupes of corporations and peer-pressure. Rather, they view people as fundamentally sensible, if not always well informed. As such, they set significant limits on the kind of nudging that can be considered tolerable in a liberal society.

Libertarian paternalism, as defined by Thaler and Sunstein, aims to help people make the best decisions without obstructing those who still wish to make the 'wrong' decisions. In any government intervention, the costs to liberty and the economy should be close to zero. They would like people to save more for their retirement, take out the right mortgage, take advantage of pension schemes, save electricity and not get ripped off by high-pressure salesmen. In practice, this means making information readily available and comprehensible, cooling off periods, warnings and easy opt-outs.

When they talk about making 'good' choices easier, they actually mean it. Unlike the UK Faculty of Health and the last British government, they do not mean banning 'bad' choices. A paternalist solution to stop foreign tourists getting run over in central London would be to ban jaywalking. The libertarian paternalist solution would be to paint 'look right' on the street. It is difficult to see this as an unnecessary intrusion on personal freedom.

Nor do they appeal to the majority to decide the fate of the minority. Nudge almost exclusively deals with helping people avoid situations they could not conceivably desire. If asked, people would generally welcome a safer, healthier or cheaper option. You want to use a sun bed? No problem, but how about we fit the sun bed with a dial to make sure it turns off after ten minutes in case you fall asleep under it? You want to gamble? No problem, but if you know you have a gambling problem how about we enable you to be able to go to a casino and ask them to ban you?

It is hard to see even hardcore libertarians objecting to most of the ideas presented, although there are exceptions. Paying teenage girls a dollar a day to not get pregnant might save the taxpayer money in the long-term but it smacks of the nanny state and encourages public to see themselves as (to quote Alexis de Tocqueville) "a flock of timid and industrious animals, of which the government is the shepherd." Presumed consent for organ donations also sits uneasily with many people—me included—who are uncomfortable with the notion of the state owning its citizens bodies. 

Presumed consent is a classic Nudge problem. There is little doubt that many people would be happy to be organ donors but have not yet registered and will never do so. There is also little doubt that presumed consent would increase the number of organs available and save many lives. If opting out was as easy as making a one-off phone call or visiting a website (as the authors propose), it is difficult to muster up too much antipathy towards it. Presumed consent is not something I am fervently against, but I would like to see a more proactive attempt to get people to register voluntarily before we contemplate coercion. Years ago, I remember donor cards being available at shop counters. All you had to do was pick one up, fill it in and keep it with you. I haven't seem them for years and I doubt this is because budgets have been slashed. There are, in other words, better ways to help make choices easier without the presumption of consent.

The strongest argument against nudging is the slippery slope. Although most of Thaler and Sunstein's ideas would be of no practical detriment to either the target group or the wider public, they do concede that the impact cannot always be reduced to zero. Having accepted that small impositions on liberty and choice are not always avoidable, where does it end?

To be fair, Thaler and Sunstein address the slippery slope argument towards the end of the book, using an apt example:

Governments that start with education might end with stiff fines and even prison terms. The case of cigarettes offers a possible example. Some nations have gone from modest warning labels to much more aggressive information campaigns to high cigarette taxes to bans on smoking in public places, and a smoker would not have to be paranoid to think that the day might eventually come when one or another nation heavily regulates or even bans cigarettes altogether... Faced with the risk of overreaching, critics might think it is better to avoid starting to slide at all. (p. 235-6)

Thaler and Sunstein's counter-argument is that (a) individual proposals should be judged on their own merits; (b) their philosophy automatically puts a limit on further legislation by insisting on low-cost opt-outs; (c) some kind of action is inevitable, so it is better for it to be a nudge than a shove.

I am not fully convinced by these assurances. It seems to me to they overlook how the slippery slope works in practice. In reality, policies are not always judged on their own merits and the appeal to precedent is powerful. How often do we find campaigners demanding that 'loopholes' be closed, despite the fact that these 'loopholes' are actually deliberate exemptions created to make the legislation reasonable in the first place? And how easy has it been for health campaigners to apply the policies first used against the "unique case" of cigarettes to a whole range of products that carry an element of risk?

It may be fallacious to claim that because we are forced to wear seat-belts, we should be forced not to smoke or eat fatty foods, but campaigners who call it 'the next logical step' are not wholly wrong. Those who opposed seat-belt laws in the 1970s did indeed warn of a slippery slope and, what's more, they turned out to be right. One needs to look no further than 'Healthy Nudges' to see the truth of this. It refers to seat-belts no fewer than six times in eight pages. The message is clear—it was for your own good then and it's for your own good now.

When the idea is raised of regulating against allowing smoking in cars when children are on board, politicians are often concerned about legislation in the “private space”. Of course, there are clear parallels with seat-belt legislation...

It is often far cheaper and longer-lasting to introduce regulations or change the law. The classic example of this is the use of seat-belts...

Did politicians of the 1970s intend compulsory seat-belts to be used as a precedent for smoking bans and tax rises? Surely not. Would they have passed the legislation had they known what it would lead to? Probably not. Saying 'we did that therefore we must do this' might be fallacious, but people are susceptible to fallacious arguments. Since Nudge revolves around the idea that human beings are fallible, this point could have been more thoroughly explored.

But perhaps this is to blame the leader for the sins of his followers (see here for an amusing example of how nudging can be abused for malign purposes). If politicians stuck to both the spirit and the letter of Thaler and Sunstein's philosophy, the nudge agenda would be largely benign and almost certainly beneficial. Far from supporting the kind of policies being pursued by the UK Faculty of Health, any British government that was genuinely committed to the Nudge agenda would have no choice but to repeal whole swaths of legislation that already cross the line between libertarianism and paternalism. But as Le Grand and the UK Faculty for Health amply demonstrated, once an idea reaches the mainstream, you no longer get to make the rules.


[Elsewhere, The Guardian (which originally gave it a glowing review) has turned against Nudge for being too libertarian. For an alternative view, Spiked criticised Nudge for being too paternalistic. Who you agree with will depend on your politics.]