DISQUS

DWAnderson · 1 year ago

Excellent last sentence.

mk · 1 year ago

I would make two comments:

1) "Ban," "tax," and "nudge" are related to each other. They are all forms of increasing the cost of a behavior thought to be undesirable.

A ban adds "going to jail" to the cost of a behavior, while a tax adds "pay 10 bucks" to the cost, and a nudge adds "take time out of your busy day to change the default option chosen for you," or whatever.

Only an idiot would say these are the same thing, but they are related.

One of the downsides of a ban is that it is a very extreme policy which can massively change the status quo. So from the standpoint of risk analysis, there has to be a correspondingly deep and strong certainty that the result will be salutary -- that the risk is worth it. This "risk analysis" should have pluralism as a component -- the risk I might be wrong.



2) Will clearly feels (rightly) that homo economicus is a bad normative yardstick for human behavior. But the snazzy "ought implies can" logic is a little too facile. Every time we perform cost-benefit analysis we make idealizations. There is no such thing as a perfectly accurate model.

So I'd ask Will, what distinguishes a morally legitimate cost-benefit analysis from a morally illegitimate one?

Perhaps in your view it is the difference between incorporating a model of my own behavior (which I can introspect and tweak to my heart's content), versus modelling someone else's behavior (which I can tweak, but I don't know how accurate it really is, and it is bound to be biased by my own preferences.)

This is indeed a fundamental risk-- how do I presume to know what someone else wants? But perhaps if psychology makes enough advances in modelling human preferences, and we send out enough surveys -- perhaps then we can start designing and executing paternalistic policies that with high confidence will fulfill the desires of our constituents (including the desires of our constituents to have policies designed for them on the basis of cost-benefit analysis). No?

Do you have a more fundamental objection to paternalistic CBA than "it is very hard to model other people's desires, but it is easier to model my own"?

Will Wilkinson · 1 year ago

mk,

Sorry, I don't think I understand what you're asking. When modeling behavior, you should use the best model. And there is nothing morally illegitimate about a cost-benefit analysis. Legitimacy pertains to policy, and the legitimacy of policy is a matter of justice, among other things, and the question of justice is not exhausted by determining a policy's net benefit.

nicole · 1 year ago

Your last sentence is spot-on. I wasn't expecting to find a diatribe about the housing crisis framing a book review, and I never thought I'd see Obama accused of being a crypto-libertarian because he doesn't want to force everyone to buy health insurance. He really takes this to a new level--zero respect for individual freedom.

berger · 1 year ago

I don't think this is very convincing, as it's precisely Cassidy's contention that politicians and other policy makers are equipped to make better decisions than us masses. This seems to me to be a rather uncontroversial assertion - it's just a matter of how much you want to extend the reach of such "decision makers" (not whether you want to have them at all).

Of course the key to Cassidy's approach is a move away from thinking about public policy as a matter of decisions and to consider it more as (ideally) a rational science. Cassidy is not all holding out that someone else should make decisions for you - classical paternalism - he's saying we should organize our government around the science of human behavior (a science that wasn't exhausted by Horatio Alger). You may want to call this a technocratic paternalism but, if so, you have to put your finger on what exactly is wrong with a technocracy. (Why is technocratic paternalism worse than irrational liberalism? Here I think the liberal answer is inevitably going to lean more towards religion than science.)

Of course whether or not it's the government who should make these decisions is another matter. But I think it's easy to see why Cassidy would argue that an objective government official might have a more dispassionate view what you need to save for retirement or what kind of mortgages are really feasible. Further, the private sector is organized around individual interests, so it's hard to see what kind of objective view it might be able to hold forth on how people make decisions.

Matt · 1 year ago

What I wonder is, why is he writing this review? Is he qualified in a way that doesn't show from being an editor at some magazines? This is something I don't understand with book reviews- giving reviews to people who don't seem qualified to write them. Does he have a background in philosophy or economics or government or anything? If not, why should we care what he thinks? If he does, that would be worth mentioning since it's useful in assessing his review. NYRB used to be better on this, I think, giving reviews to people who were qualified to judge the work, but to my mind they seem to be getting worse at it, much closer to the generally terrible non-fiction reviews in the NY Times.

Jim · 1 year ago

It is equally obvious that we ought to restrict the choices of people in government, since those people are people, and people so often make poor choices.

Cassidy was reaching for why Libertianism (like Marxism) looks great on paper and founders in real life. He simply failed to get his fingers around it.

Every Libertarian model presumes general democracy. But people who live dysfunctional lives are still allowed to vote. People who live dysfunctional cause dysfunctionality among their family and neighbors. Eventually dysfunctional people will seek someone to rescue them. Their family and neighbors will much sooner seek someone to rescue them. There will always be a battalion of panders in government (that ultimate whorehouse) who will build a career promising that rescue.

So if we could have a revolution tomorrow that instituted pure Libertarianism, in 20 years the People will vote in an even more powerful nanny-state than was ever imagined before.

Tracy W · 1 year ago

don’t think this is very convincing, as it’s precisely Cassidy’s contention that politicians and other policy makers are equipped to make better decisions than us masses. This seems to me to be a rather uncontroversial assertion

I'm taking from this that you don't know many politicians and policymakers.

Some reasons come to mind:
- politicians have a hearty interest in getting re-elected. If people don't act in their own best interests directly, then it seems entirely plausible that they won't necessarily act in their own best interests in voting.
- politicians and other policy-makers don't know the details of your own life as well as you do
- even under a limited government, politicians already have what are really too many problems to deal with for any one person (national defence, public health, environmental problems, the justice system, defining property rights, any one of these can be studied by one person for a whole life time, but the head of state has to make decisions across the whole range). The more responsibilities you add to politicans, the less well they will perform on any individual responsibility. There's only 24 hours in a day. Division of labour doesn't help as the decision-making process needs to include trade-offs, while there may be some win-win connections between say environmental problems and the justice system, at some point spending a dollar on one environmental problem means spending a dollar less on protecting elderly ladies from muggers or what not.

On an ancedotal level, it's easy to think of examples of politicans and policymakers completely stuffing things up.

The idea that politicians and policymakers are better equipped to make decisions than the masses is doubtful. The more decisions we expect them to make, the more doubtful it is.

But I think it’s easy to see why Cassidy would argue that an objective government official might have a more dispassionate view what you need to save for retirement or what kind of mortgages are really feasible.

The first problem is finding an objective government official. The second is finding enough objective government officials to fill all the positions that government officials are needed for.

Until we have found this magical supply of government officials, let us try to design a government that can cope with non-objective government officials.

Nor do I see why dispassionate is good. What's wrong with being passionate about my life? I find the passions is what makes my life worth living.

Further, the private sector is organized around individual interests, so it’s hard to see what kind of objective view it might be able to hold forth on how people make decisions.

The mind boggles at the thought of the private sector holding a view. Aren't you taking reification a bit far? Would you say that the private sector holds an objective view on, say, The General Theory of Relativity? How would you aggregate the views of, say, a subsistence farmer who never learnt to read and has no idea who Einstein even is, a businessman who once read A Brief History of Time, and a highly-paid physicist working for a private research company to determine what objective view the private sector holds on the General Theory of Relativity?

And for that matter, how can the government sector hold an objective view on the General Theory of Relativity, or on how people make decisions? The government sector includes guys working in the depths of the military who have PhDs in physics, PhD economists at the Treasury, elected policiticians with no background in science at all, PR guys who come from a background in journalism, etc. How on earth would you aggregate all their views to figure out what view the government holds on the General Theory of Relativity, or how people make decisions? Let alone, how would you figure out if the view is objective?

asg · 1 year ago

Wow, berger's comment is a real smorgasbord of grammatically correct sentences that display more different types of incoherence than one typically sees in blog comments.

BC · 1 year ago

I continue to object to Sunstein's self-description as anything even remotely resembling libertarian. The guy's an unreconstructed communitarian who's simply trying to attach the libertarian "brand" to his ideas in an effort to make them more palatable.

Bud · 1 year ago

Generally agree with Wilkinson's critique of John Cassidy's 'review'. Cassidy makes it clear that he is in the mold of the old Progressive Movement types such as Herbert Croly. Coercion 'for your own good' or 'for the greater good' is just fine so long as you are the one defining those phrases, which of course have no objective definition, but are clay to be molded into the politically convenient shape applicable to the moment.

I have not read Sunstein and Thaler's book, but am of the opinion that the best corrective for the irrationality of human behavior is to let people enjoy the undiluted consequences of their actions. Many may think me cruel, but I counter that it is far kinder to have an environment where people learn as efficiently as possible from their mistakes and successes. Damping of the feedback mechanism simply perpetuates bad behavior. Any paternalistic state apparatus makes people serfs and deprives them of their dignity, not to mention liberty.

The Founders clearly understood Wilkinson's point about government needing to be severely curtailed to protect the people. Most of the evil that has been visited upon people throughout history has been at the hands of their own governments.

To imagine a paternalistic government making people better is ludicrous on its face.

Micha Ghertner · 1 year ago

Jim,

Every Libertarian model presumes general democracy. But people who live dysfunctional lives are still allowed to vote.

Untrue. Libertarian anarchists do not presume democracy; they do not presume anyone should be allowed to vote.

pat · 1 year ago

Just finished LF
Cassidy can't resist the V word "...people often fall victim to confusion..."
Confusion, failure, learning from mistakes= BAD

Jeff · 1 year ago

Oh the irony! At the bottom of this page, as I write, is a Google ad for "Free Government Grants" that promises "Billions Available. Never Repay!" This is the problem that the modern libertarian faces. We have to realize that Big Government is here, at least until the next revolution. We have Big Government because people want Big Government. We want a government that will dispense "free government grants". And yet we are jealous of our liberties and we inherently recognize that Big Government = Fewer Liberties. So this "libertarian paternalism" seems like a way to chart a "real" Third Way, as the authors suggest, between oppressive nanny-state-ism (incompatible with our liberties) and complete pure libertarian laissez-faire economics (incompatible with our lust for government grants). But at the same time it sounds a lot like "compassionate conservatism" and we see how well that fared over the last 8 years. So I'm simultaneously optimistic and pessimistic about this idea. I'll definitely read the book now, so I guess I can thank Cassidy for something.

Joseph Hertzlinger · 1 year ago

The theory that human irrationality means more decisions should be made by state officials only makes sense if you think said officials aren't human.

Clearly, Cassidy is saying "I, for one, welcome our new alien overlords!"

adina · 1 year ago

It is true that people often make woefully mistaken decisions and statements. Therefore, we should use our benevolent government to restrict Cassidy's writing priveleges- for his own good.

Live lead transfer · 4 months ago

I agree with your last paragraph.. Behavioral economics, by demonstrating how people often fall victim to confusion, myopia, and trend following, provides another convincing ratio-nale for Keynesian policies, but you wouldn’t realize that from reading Thaler and Sunstein. Great post..