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Thursday
Oct122017

Nudge, nudge, wink, wink

It's not often that I disagree with Chris Snowdon but this is one of those occasions.

Earlier in the week it was announced that US economist Richard Thaler, 'one of the founding fathers of behavioural economics', had been awarded a Nobel Prize for Economics.

Thaler is better known to me and many other people as the author of Nudge.

One of Chris's arguments is that libertarian paternalism, which Nudge promotes, is more libertarian than paternalist.

Most of those who disagree with Nudge, he adds, haven't read the book.

Well, I have read the book (although I may not have finished it) and I'm not a fan.

I wish I'd kept my original copy because I read it on a long haul flight – before it lulled me to sleep – and I remember making copious notes in the margins.

The following comments then are less about the book and more about libertarian paternalism in general.

Libertarian paternalism, or nudging, is often defended on the grounds that it excludes prohibition.

That's true. The problem is, while the theory may be fine, in practice it is invariably embraced by those whose endgame is prohibition.

Thaler's policy, as expressed in his book, is far more benign than that but libertarian paternalism rarely ends with a nudge.

Instead it works like this. Policies are introduced that are designed to change people's behaviour by exposing them to 'healthier' choices as opposed to 'unhealthy' choices.

'Unhealthy' choices aren't banned but they're made less visible. It could for example mean the removal of confectionary around supermarket checkouts.

If people prove resistant to being nudged governments invariably decide to intervene. Nudging therefore is often no more than a stepping stone to regulations or legislation.

E-cigarettes are a classic example of how nudging should work. Smokers have a choice of smoking or vaping and so far 1.6 million people in Britain have chosen voluntarily to switch permanently to e-cigs. (In total 2.9 million now vape but 1.3 million are dual users.)

The problem is, the rate at which smokers are switching to e-cigarettes is slowing down, hence the suggestion that smoking should be banned outside pubs or even offices to "encourage" smokers to vape instead.

As far as I know Thaler doesn't recommend that type of policy but it's a small step from a benign nudge to a more forceful push.

The use of taxation to change people's behaviour is also a form of nudging. Again, this may not be a policy Thaler endorses but I've heard so many people defend punitive taxation on the grounds that it 'encourages' people to smoke less that nudging and taxation are effectively partners in crime.

By the same token a tax on sugar could be described as nudging. Or minimum pricing of alcohol. The list is endless. 'Libertarian paternalism' is an oxymoron and it's wrong to suggest otherwise.

The first time I heard the term was in 2007 when it was unveiled with a great flourish by Professor Julian Le Grand, a former adviser to Tony Blair. I wrote about it here:

Professor Le Grand said instead of requiring people to make healthy choices – by giving up smoking, taking more exercise and eating less salt – policies should be framed so the healthy option is automatic and people have to choose deliberately to depart from it.

Among his suggestions are a proposal for a smoking permit, which smokers would have to produce when buying cigarettes, an "exercise hour" to be provided by all large companies for their employees and a ban on salt in processed food.

The idea, dubbed "libertarian paternalism", reverses the traditional government approach that requires individuals to opt in to healthy schemes. Instead, they would have to opt out to make the unhealthy choice, by buying a smoking permit, choosing not to participate in the exercise hour or adding salt at the table.

By preserving individual choice, the approach could be defended against charges of a "nanny state," he said. "Some people say this is paternalism squared. But at a fundamental level, you are not being made to do anything. It is not like banning something, it is not prohibition. It is a softer form of paternalism."

Does that sound more libertarian than paternalist to you?

In 2008 I helped launch The Freedom Zone at the Conservative party conference and as part of that two-day event I organised a panel discussion called 'Libertarian Paternalism and the Nanny State'. I described it here:

Chaired by Claire Fox (Institute of Ideas), it featured rather a good panel - Tim Montgomerie (editor, Conservative Home and an influential figure in Conservative circles), Dr Eamonn Butler (director, Adam Smith Institute), Brian Monteith (The Free Society) and Shane Frith (director, Progressive Vision).

Tim was the lone voice in defence of libertarian paternalism (aka "nudging") and without him the meeting would not have worked half as well as it did. Eamonn expressed sympathy for the concept, but doubted that politicians could implement it without going too far. Brian talked of the "bully state" and Shane criticised the extent to which government intrudes into people's lives. A lively discussion, well chaired, in front of an appreciative audience.

Anyone who knows anything about centre right-wing politics knows that Tim Montgomerie, the founder and former editor of Conservative Home, is no libertarian. Far from it. In January 2010 for example he wrote an article that is no longer online but, again, I wrote about it here:

If you want to know where we're heading under the next Conservative government, there's a clue in this article by Tim Montgomerie, founder of ConservativeHome.

The title alone is fairly explicit: "We need a state that helps people who do the right thing". It all sounds very reasonable, doesn't it? The problem is, who decides what the "right" thing is? Politicians? Bureaucrats? The media? And what does Montgomerie mean by "help"?

At the Conservative party conference in Birmingham in 2008 Tim was a panellist at a fringe meeting organised by The Free Society. We called it "Libertarian Paternalism and the Nanny State" and it followed reports that David Cameron was in favour of a policy known as "nudging".

This, it seems, is the acceptable face of the nanny/bully state. Instead of forcing people to change their behaviour, they are encouraged or "nudged" in the "right" direction.

Montgomerie's article for ConHome was prompted by a speech David Cameron had given to Demos, a Blairite think tank, the previous day. The Conservative leader (he was yet to be prime minister) told his audience:

"I know this is tricky territory for a politician. We're not exactly paragons of virtue ourselves. But to those who think politics should stay away from issues of character and behaviour, I say this:

When there are more than 120,000 deaths each year related to obesity, smoking, alcohol and drug misuse. When millions of schoolchildren miss out on learning because their classmates are constantly disruptive. When British families are drowning in nearly one and a half trillion pounds worth of personal debt.

And then ask yourself: do any of these problems relate to personal choices that people make? Or are they all somehow soluble by top down government action, unrelated to what people actually choose to do? Can we hope to solve these problems if we just ignore character and behaviour?"

Commenting on Cameron's speech I wrote:

I don't disagree with the reference to disruptive schoolchildren. But what about obesity, smoking and alcohol which he describes as issues of "character and behaviour".

I am not denying that there are problem areas (for example, excessive drinking by some young people) that need to be addressed. But what is he implying? That people who smoke, drink or are overweight are guilty of bad character or poor behaviour?

Cameron and his associates will deny it, but this smacks of a moral crusade (more echoes of Tony Blair).

For me, libertarian paternalism not only has echoes of Tony Blair, it suggests the same self-righteousness that became a hallmark of both Blair and David Cameron.

Graphic warnings, the tobacco display ban and plain packaging are all nudges. Likewise minimum pricing of alcohol and a sugar tax.

No-one is banned from buying or consuming any of these products (unless it's Lucozade where the company has simply removed the 'unhealthy' product from sale and replaced it with a 'healthier' version giving consumers no choice or say in the matter) but the slippery slope is clear to see.

All these policies may be designed to nudge us to make 'better' choices. Sadly it doesn't stop there, does it?

See also Nudge and liberty (Velvet Glove Iron Fist).

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Reader Comments (10)

I don't deny that some unsavoury people have adopted the word 'nudge' and used it inappropriately, but the same can be said of lots of things. We wouldn't disavow the principles of JS Mill just because some people who call themselves liberals espouse authoritarian beliefs.

The golden rule of nudging, as Thaler defines it, is that a nudge can't change the costs and benefits and it can't involve a ban. Sin taxes are therefore off limits, as are most of the policies you mention, such as smoking bans.

It's true that governments get more authoritarian if nudges don't work but that's because they don't actually believe in the free market principles behind nudge in the first place.

After briefly flirting with the nudge concept, the 'public health' lobby abandoned when they worked out what it actually involved. It is far too libertarian for them, as it is for every government in the world. This, I think, is a point in its favour.

Thursday, October 12, 2017 at 20:04 | Unregistered CommenterChristopher Snowdon

So I should probably write a post about this and continue the chain. In the meantime...

So I was in graduate school when this stuff was first becoming a thing. I knew Thaler, though not all that well. Of the professors from my past who won that prize, I would have to put him near, though not at, the bottom of the list for contributing something that was really useful.

In the early days, the example that was always given, and often still is first listed today, is simply changing a default choice. If basically everyone, if forced to sit down, learn what they were talking about, and make an affirmative choice would opt for "why, yes, I would like my employer to contribute to my retirement account", then that should be the default. You should never have to check a box to get that, even if you can track down the box to check if you somehow do not want it.

But it *immediately* gets more fraught with the very next example usually given, making the agreement to donate your organs upon death a default rather than an opt-in. Yes, it dramatically increases organ donors. And, yes, that is good by most measures. But we live in a world where for some people donation is an abomination. There is a legitimate case to be made for telling them "fuck you and your primitive mysticism -- everyone's organs are up for donation". But if you are uncomfortable with that, you should be uncomfortable with making it easy for them to accidentally opt in by default.

Next we move on to making options available. Such as "every cafeteria must have a healthy choice option" (defined in more detail, obviously). No one has to buy it, so it is not authoritarian paternalism, right? Except it it going to have to crowd something else out. And the merchant might actively object to it.

Then there is the "cost-free" moving of candy bars away from the checkout and such. Well, it is cost-free in the sense of not changing the purchase price. But it does impose some cost on those who now need to go find the items rather than having them convenient.

Don't get me wrong: I am personally in favor of making it very hard to not be an organ donor. Healthy choice mandates for cafeterias with captive customers (e.g., schools) seem like a good idea. Clearing away tempting junk from the checkout line is not a terribly unreasonable mandate. But the point is that once you get beyond the "everyone would opt-in if asked" simple case, there is no longer a bright line *at all* between nudges and more authoritarian policies. There is no clear definition of when it stops being a nudge.

There is nothing wrong with a bit of authoritarian paternalism (especially if there is a way to circumvent it if you want). But most things that are called nudges (and I am not talking about out-and-out abuses of the term) are just that. They are not something magically apart from it.

Friday, October 13, 2017 at 0:03 | Unregistered CommenterCarl V Phillips

To paraphrase the late Hon Robert Jackson, it is not the business of the state to tell its citizens when they've fallen into error. It's the other way around.

I guess ideas like that are foreign to us now? Does everyone believe that those clay-footed legislators and public health grandees are so much more knowledgeable than the rest of us? That they have both the wisdom and the right to decide what's best for us, as long as it's sof-sell? Chris, what am I missing here? The state doesn't have any business in these kinds of personal choices involving smoking, eating, or drinking - only if people are too drunk to drive and therefore an imminent danger to others.

Friday, October 13, 2017 at 2:28 | Unregistered CommenterChanah See

"But what is he implying? That people who smoke, drink or are overweight are guilty of bad character or poor behaviour?"

Yes, that is what he is implying and it is a new "truth" pushed as part of the hate campaign against smokers who are legitimate consumers.

In this new Orwellian world where war means peace, freedom means slavery, and lies appear to be accepted as truth - "help" in a modern consumer context means force - brute force via exclusion and discrimination if necessary.

My life is mine. My body is mine. My home and my car are mine. I will not be forced by some young smug face who has not been breathing air in this world as long as I have been smoking to push me around. Any choice to quit has gone. Continuing to smoke is now the only choice I can make for myself. To quit is the Govt's choice and Debs Arnott's choice and neither give a damn about me or my family. They care about their Utopian vision of a world without smokers and they will use any underhand and immoral means to get it and they sure as hell couldn't care less if I die for want of a simple operation denied on no other grounds than my identity as a smoker - something also forced upon me.

Friday, October 13, 2017 at 12:16 | Unregistered CommenterPat Nurse

Chanah, in the UK, there is a large body of opinion which thinks (read the comments below any newspaper article on the topic), that because we have the taxpayer funded NHS, it is the state's business what we eat, drink and smoke. The logic doesn't extend to being given a tax refund in return for providing your own health care and consuming what you want.

Friday, October 13, 2017 at 13:35 | Unregistered CommenterJonathan Bagley

In a true Libertarian world, nobody would be bothered about nudging anyone else as they would not consider it their business.
Libertarian Paternalism are two words that do not go together

Friday, October 13, 2017 at 14:33 | Unregistered CommenterBucko

I'm with Chanah, here. Because it comes down to the old dilemma of Quis custodiet ipsos custodes?

We have here a bunch of people who are presuming to know better than us what is best for us; the self-anointed 'experts'.

The same 'experts who have got it horribly wrong in the past (salt and saturated fats come to mind as a couple of examples, but there are many more), and will continue to pursue their personal agendas regardless of any evidence to the contrary in telling us how best to live our lives, and what we should (not) eat and (not) drink and (not) smoke.

As Channah says, it's no business of government to get involved in the minutiae of our lifestyle choices, whether by way of a nudge or a push. We neither want it nor need it.

Friday, October 13, 2017 at 15:44 | Unregistered Commenternisakiman

Jonathan - here in Canada it may be slightly worse, albeit it's been about 15 years since I lived in the UK. You have to sign a contract now if a doctor gives you any drug that's controlled - or even if they don't (and most won't), but you have a chronic pain condition, which entails all sorts of unpleasant giving up of rights. I'm in the latter camp, and had a day yesterday that would have made Orwell have nightmares. Random drug testing. Which may or may not include nicotine, and there are doctors who won't treat you because you're a smoker. Do you have that there now, too? Sadly, I think we might now be ahead of you in the nanny state contest.

Friday, October 13, 2017 at 18:43 | Unregistered CommenterChanah See

Talking about refusing treatment to smokers, my son in law had an uncle who was suffering from chest pains, the nhs told him to stop smoking before they would give him any treatment. He stopped and they had him hanging around for three months waiting, you probably guessed he die of a heart attack as they did not treat him because he was a smoker. To my way of thinking, this was corporate manslaughter at the very least. As smoking to my knowledge is still not illegal.

Friday, October 13, 2017 at 21:11 | Unregistered CommenterDavid Kerr

David, that's absolutely horrible. Here they have no problem treating drug addicts, you can get a naloxone kit free from any chemist to revive overdose vicitms, and where I live, it's the bulk of emergency services these days. Despite street drugs being illegal. But smokers are a special category. Maybe it's because we're murderers (SHS). They do seem to have a special hatred for us, and as far as I know, we're the only group in the so-called civilised world that has no enforceable human rights. It's okay not to hire a smoker, or to fire one, or to kick one out of housing, or to deny medical treatment, or to harass on the street, it's utter madness. And the world shows no sign of waking up.

Friday, October 13, 2017 at 22:28 | Unregistered CommenterChanah See

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