More Nudging

In an April post I reviewed Nudge by Richard Thaler and Cass Sunstein  (it's short so I've just copied it below).

This is an abstract of a recent article in The Review of Austrian Economics by Niclas Berggren which specifically references Nudge.  I believe the portions I've highlighted below support the basic premise of my review.  It's about who gets to make the decisions.  Cass Sunstein has just announced he is leaving his role as White House Regulatory Czar to return to Harvard Law School.   By the way, within the confines of his role in the Administration he has done a decent job, certainly compared to many of the possible alternatives.

 Abstract

This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program. Such an extension could be related to the concept of robust political economy, according to which the case for paternalism should be subjected to “worst-case” assumptions, such as policymakers being less than fully rational.

 

Nudge, Nudge, Wink, Wink

Nudge (2009) by Richard Thaler & Cass Sunstein

Problem Statement:  We, The People, are too stupid to know what's best for us.

Premise:  Trendy, but sketchy, social science can be used to develop policies of "libertarian paternalism" to make sure We, The Stupid People, make the right choices.

Action Plan:  Apply these techniques via government run by the tenured liberal arts faculty from elite colleges (they're the only ones smart enough know what those "right" choices are) who can teach your children well and send tuition bills to the parents when they run low on bucks.  Yeah, what could go wrong with that?

Know what I mean?  Say no more.