Marketing Thought

Nudging: Calm Down It Really Is Not The End Of Freedom

Mark D. White has written an ominously titled book “The Manipulation of Choice: Ethics and Libertarian Paternalism”. He really doesn’t like the sort of Nudging proposed by Thaler and Sunstein in their book, Nudge. I think that he needs to chill out. He gets excited about minor philosophical issues while ignoring big social issues. Nudges — the end of freedom? No, of course not. Don’t be silly.

The Problem Of Knowing Other’s Interests

Putting This At Eye Level Is Not A Fundamental Attack On Liberty

He says that no one can know anyone else’s “interests”. (This term is as slippery/poorly defined as it sounds.) Given this, governments, employees, and other libertarian paternalists shouldn’t try and help us make better decisions. This is a highly dogmatic position: he violently objects to minor tweaks to the way choices are presented.

Telling a new employee “you will be enrolled in the 401k unless you say otherwise” is apparently a gross violation of freedom. White argues this because we don’t know whether the employee’s “interests” are to enroll. He is right employers can’t know any employee’s “interests” with certainty. But to be fair neither can the employee truly know their interests perfectly. (There is almost certainly some prediction in there). Furthermore, young employees may have special problems understanding their longer-term interests. We have a massively hard problem. The simple practical solution is to set a default that seems helpful while letting the employee change the choice if he or she wishes.

What Should Be The Default?

One can, and should, argue about whether using a default will be the most effective solution. That said, I think we should at least experiment to improve choices given changing the default on pensions is a small tweak designed to alleviate pensioner poverty which is a massive social ill.

Although White says his approach can appeal across the political spectrum it seems to have a traditional libertarian underpinning. His “So What Should We Do Instead” (White 2013, page 137) basically says ‘do nothing’ because government should be as small as possible. He then suggests that we should worry about: “Holding People Accountable For Their Choices” (White 2013, page 145). I agree accountability is often good and may sometimes encourage learning. Unfortunately, life is only lived once. If you didn’t save for retirement you don’t get a do-over to try again after you have learned that pensioner poverty is something to avoid. If smoking kills you, you can’t resolve to make a different choice to not smoke next time because you have learned your lesson.

Nudges Not The End of Freedom

Overall White’s approach only works if you are willing to ditch all social welfare programs. If collectively we aren’t willing to abandon the sick and old — even if they have made bad decisions that contributed to their problems — then we need a better response than telling people that their suffering is preferable to a minor tweak to a default.

One should always worry that a nudge may be too intrusive given the value of what it could achieve. Some nudges will undoubtedly be ineffective or even counter-productive. Still, I want to be nudged to help me make better choices. I don’t feel that choosing to put healthy foods at eye level is a fundamental attack on my freedom. If you think that being forced to see apples when you checkout at canteen is a massive problem in the world then maybe you need to calm down a bit?

For more on Nudges see here.

Read: Mark D. White (2013) The Manipulation of Choice: Ethics and Libertarian Paternalism, Palgrave Macmillan

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