Tuesday, May 06, 2008

There's No Such Thing As A Libertarian Paternalist

Reason's Nick Gillespie has a long, meandering, link-happy post on libertarian paternalism that's worth a read if you're at all interested in such things. The focus of the discussion is "Nudge," a new book by University of Chicago law professor Cass Sunstein and University of Chicago economist Richard Thaler. The book- which I have not read (but probably should)- is supposed to be a template for libertarian paternalism, the use of noncoercive alterations in certain decision making processes.

I've blogged about the topic before (see Hair Nets, Ear Plugs, and libertarian paternalism from last January) but it's worth revisiting.

If you look at the examples cited by Sunstein and Thaler in this excerpt- 401K plans, placement of fruit in a school cafeteria, and urinal design- you're not talking about government action in any sort of traditional libertarian analytical framework. To the extent you're talking about say a public school cafeteria, you're only discussing the absolutely necessary follow through of government action. Because we have public schools with cafeterias providing lunches, it's necessary to decide, down to the smallest bit of minutia, how that cafeteria is going to be set up.

In other words, you're talking about specific instances of policy that libertarian thought has never really been concerned with. Libertarians believe in free choice first and foremost because of moral precepts, not because of economic notions of efficiency. More importantly, libertarians are concerned when freedom of choice is restricted by government action. We're not so concerned if Skippy eliminates the style of peanut butter you really liked, but we would be concerned if that same style of peanut butter was somehow restricted by the government. It's an important distinction- perhaps the most important part of being a libertarian- and Sunstein and Thaler seem to just gloss it over.

If schools are placing fruit at a height in the cafeteria making it more desirable to children, then good for them. Let democracy sort all that out in it's own inefficient way. As to something like 401K plans, well, if a company is going to have a default rule, there's nothing wrong with encouraging companies to set the default rule as automatically enrolling employees. Of course, we're only talking about company policy, not law- Mandating that default position by law wades into the realm where libertarians would have a problem.

Basically, the problem is that this notion of libertarian paternalism refers solely to these policy concerns and recommendations outside the realm of traditional libertarianism or it refers to something else resembling modern liberalism, where a law like a trans fat ban would be justified because it's in everyone's best interest. Either way, it doesn't seem like anything new (although, maybe I really should read the book.)

The one thing I had noted last January was that there is room for limited regulation, even within a framework of limited, libertarian government. In my earlier post I distinguished regulations in a food plant about hair nets and ear plugs. Ear plug regulations are designed solely to protect the workers in the plant and as such is a paternalistic sort of regulation. A strong argument can be made that the workers themselves are in the best position to know when and where in the plant they actually need ear protection. Hair nets however, are another matter, as hair net regulations are designed to protect consumers. Obviously, safety regulations geared toward providing consumers with a safe product can be over done, and in fact, usually are over done. But on a very basic level, such regulations are far more justifiable in that they set before-the-fact legal standards. If you bought a food product with hair in it, you could sue the food company. At trial, the judge could decide that the lack of hairnets was not an acceptable practice in the food industry, setting a defacto hairnet standard. Regulation just avoids the after-the-fact litigation.

In terms of "libertarian paternalism," this is all I could really think of in terms of the government actually restricting choice. And it's nothing about nudging people to make the "right" decisions it's just simply a recognition of the world as it is and a means of providing more legal certainty than would otherwise be available.


Anonymous b.rose said...


Thought you might enjoy this insanely insightful, objective, truly in touch and relevant study from none other than the world's only enlightened people; professors at NYU of course!

"Our research suggests that inequality takes a greater psychological toll on liberals than on conservatives," the researchers write in the June issue of the journal Psychological Science, "apparently because liberals lack ideological rationalizations that would help them frame inequality in a positive (or at least neutral) light."

I would assume Libertarians are good rationalizers too, seeing as how you believe in individual responsibility and all; how callous.

10:45 AM  

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