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Old 05-10-2008, 06:13 PM
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The new paternalism

How much intervention in citizens' lives is good for them? What kinds of intervention?

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The New Paternalism

An economist and a legal scholar argue that policy makers should nudge people into making good decisions

By EVAN R. GOLDSTEIN

"You see that?" Richard H. Thaler asks as we ride down picturesque Lake Shore Drive in Chicago. Thaler knows the route well. He travels it every day on his commute home from the University of Chicago Graduate School of Business, where he is a professor of behavioral science and economics. At the moment, he is excitedly jabbing his finger toward an approaching curve in the road, telling me that it is the scene of numerous accidents caused by drivers who fail to sufficiently reduce their speed. Then he directs my attention to a grid of lines that appear on the road ahead of us: Evenly spaced at first, as we near the apex of the curve, the lines begin to bunch closer together, which makes us feel like we are speeding up.

As Thaler taps the brakes and gently steers into the bend, he explains how the tightly spaced lines trigger an instinct that causes drivers to slow down. With evident glee, he notes that Chicago is effectively exploiting to society's benefit one of the many ways in which human perception is flawed. Or, as Thaler puts it, drivers are being "nudged" toward safety.

What does a peculiar pattern on the road have to do with fixing the nation's health-care woes, protecting the environment, resolving the thorny issue of gay marriage, and increasing donations to charity? Everything, according to Thaler and Cass R. Sunstein, a professor of law and political science at the University of Chicago. They are authors of a new book, Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale University Press), in which they articulate an approach to designing social and economic policies that incorporates an understanding of people's cognitive limitations.

They call this governing philosophy "libertarian paternalism." That is not an oxymoron, they insist in their book. Rather it is a corrective to the longstanding assumption of policy makers that the average person is capable of thinking like Albert Einstein, storing as much memory as IBM's Big Blue, and exercising the willpower of Mahatma Gandhi. That is simply not how people are, they say. In reality human beings are lazy, busy, impulsive, inert, and irrational creatures highly susceptible to predictable biases and errors. That's why they can be nudged in socially desirable directions.

A nudge is thus any noncoercive alteration in the context in which people make decisions. The libertarian paternalism behind it is rooted in Thaler's lifelong fascination with the power of small, seemingly innocuous details the arrangement of food in a cafeteria, the drawing of a small fly in the bowl of a urinal, a pattern of lines on the road to influence people's behavior. David Laibson, a professor of economics at Harvard University, says that Thaler's ideas, once a cry in the wilderness, are so influential that "about half of the profession now believes that psychology has a useful role to play in economic modeling, and that number is growing."

"Cass is always about 10 minutes late," Thaler tells me as we slide into a well-worn booth at Noodles Etc., a modestly priced Pan-Asian restaurant on the periphery of Chicago's Gothic stone campus. As we thumb through our menus, he predicts that Sunstein will order the same thing he always orders: tofu salad. Thaler should know. He and Sunstein have maintained a standing weekly lunch date at Noodles for the past few years as they sketched out the ideas in Nudge. (The restaurant is duly thanked in the book's acknowledgments.)

Ten minutes later, Sunstein appears, loping toward the table, a sheepish grin on his face. He blames his tardiness on the dearth of parking in the neighborhood, sits down, and promptly orders the tofu salad. Thaler opts for a heaping dish of chicken, noodles, and broccoli.

Sunstein explains the appeal of libertarian paternalism: "For too long, the United States has been trapped in a debate between the laissez-faire types who believe markets will solve all our problems and the command-and-control types who believe that if there is a market failure then you need a mandate." That debate has been exhausted, he says.

"The laissez-faire types are right that government can blunder, so opt-outs are important," he says. "The mandate types are right that people are fallible, and they make mistakes, and sometimes people who are specialists know better and can steer people in directions that will make their lives better."

Sunstein argues that understanding human irrationality can improve how public and private institutions shape policy by increasing the likelihood that people will make decisions that are in their own self-interest. Most important, he and Thaler insist, such nudges can be executed while protecting freedom of choice.

more at: http://chronicle.com/temp/reprint.php?id=pwq4w52rk7wg916xkfflm6r43x0h2d5s

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Old 05-10-2008, 07:48 PM
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Very interesting. As long as it's noncoercive, I'm ok with it. I don't like being told "Thou shalt not!," but a little nudge I don't mind. This seems like a good way to make my fundamentally libertarian view of government work with the real-world fact that there are an awful lot of idiots around.
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Old 05-10-2008, 07:57 PM
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So basically a lawyer and an economist have discovered that art exists. At least marketers have known for a while now.
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Old 05-11-2008, 09:09 AM
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Today is Mother's day, and it reminds me of the old days where we used to run 2000 people through the Mother's day brunch. We would "skillfully" arrange the buffet so folks would fill their plates first with salad, and then with mac n' cheese or mashed potatoes.
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Old 05-11-2008, 09:13 AM
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Quote:
Originally Posted by Kuan View Post
Today is Mother's day, and it reminds me of the old days where we used to run 2000 people through the Mother's day brunch. We would "skillfully" arrange the buffet so folks would fill their plates first with salad, and then with mac n' cheese or mashed potatoes.
To get to and from the casino restaurant you have to walk past several banks of slot machines.
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Old 05-11-2008, 10:56 AM
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It is a very difficult question. I like to think of it as living with Dad & Mom. In my own house, I can have naked women in every room waiting to boink me or each other when I am busy (fantasy here). Living with D&M, I have to live by their rules of no women except for when I am married and then only with the wife, pick up laundry, etc, etc.

What has this to do with the subject? Well, we have moved more and more into a "cradle to grave" style of government. Therefore, their house, their rules. Take SS for example. You want them to manage your retirement? Sure. They take care of it but on their terms and they get to "invest" it as they see fit. Medicare and Medicaid. You want them to take care of you? Again, their house and they want certain things done. An insurance company can drop you or raise your rates. They cannot. Therefore, what is left is to control your behavior.

Today, they "nudge" you one way or the other. Tomorrow, a push. Next day, a leash.
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Old 05-11-2008, 12:16 PM
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It is a very difficult question. I like to think of it as living with Dad & Mom. In my own house, I can have naked women in every room waiting to boink me or each other when I am busy (fantasy here). Living with D&M, I have to live by their rules of no women except for when I am married and then only with the wife, pick up laundry, etc, etc.

What has this to do with the subject? Well, we have moved more and more into a "cradle to grave" style of government. Therefore, their house, their rules. Take SS for example. You want them to manage your retirement? Sure. They take care of it but on their terms and they get to "invest" it as they see fit. Medicare and Medicaid. You want them to take care of you? Again, their house and they want certain things done. An insurance company can drop you or raise your rates. They cannot. Therefore, what is left is to control your behavior.

Today, they "nudge" you one way or the other. Tomorrow, a push. Next day, a leash.
Business has been doing this for years. Media too (though it's really part of 'business').I guess it just depends on whether you think your money should be lost or if you should get something back for it.

I'm gonna let the cradle to the grave comment go, but the mentailty precedes the government style. That's societal, not governmental. Government reflects societal mores.

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