Nudge, nudge, wink, wink
Thursday, October 12, 2017 at 19:30
Simon Clark

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).

Article originally appeared on Simon Clark (http://taking-liberties.squarespace.com/).
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