John Cassidy on Libertarian Paternalism: Way Too Libertarian!

John Cassidy’s philosophically half-baked exploration of neuroeconomics a couple years back in the New Yorker inspired me to write an essay-length reply. I suspected then that he really liked what he erroneously saw as the paternalistic upshot of behavioral and neuro- economics, and was deliberately reading the results in a way that would seem to empower our benevolent stewards in government. Now, with his new NYRB review of Sunstein and Thaler’s Nudge, his command-and-control inclinations are in plain view. Cassidy is visibly annoyed that Sunstein and Thaler don’t embrace full-throttle paternalism and behaviorally-enhanced Keynesian economic planning! Toward the end, he writes:

Once you concentrate on the reality that people often make poor choices, and that their actions can harm others as well as themselves, the obvious thing to do is restrict their set of choices and prohibit destructive behavior. Thaler and Sunstein, showing off their roots in the Chicago School, rule out this option a priori: “We libertarian paternalists do not favor bans,” they state blankly.

The obvious thing for whom to do? One of the great merits of Nudge is that Sunstein and Thaler grasp and largely avoid the fallacy of assymetric idealization. Cassidy obviously just doesn’t get it. So here you go… 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. Moreover, the harm from error in government policy is not limited to the ones choosing it, but instead affects millions. Indeed, the most destructive behavior in history has been that of governments, and so, obviously, we must prohibit it. Cassidy can escape this bind only if making bad choices is something done only by people other than the ones that vote for politicians, appoint bureaucrats, and actually set policy. Anyway, it’s pretty rich to see him slamming Sunstein and Thaler for not being as stupid as he is.

Cassidy goes on:

If you start out with the preconceptions about free choice of John Stuart Mill or Friedrich Hayek, it is difficult to get very far in the direction of endorsing active government. …

A refusal to accept that individual freedoms sometimes have to be curtailed for the general good is an extreme position even for a neoclassical economist to take, and it is alien to the traditions of the Democratic Party.

If Cassidy made it all the way to the end of Nudge, he will have noticed that the authors pretty clearly admit that they’re not against all bans — not against all good old-fashioned paternalism. They really really aren’t wild-eyed libertarians, which is why they forget to suggest rolling back existing paternalistic laws. But they are liberals of a certain stripe. Cassidy sounds like he just can’t stand the fact that the Democratic Party stands firmly inside the liberal tradition, which just is the tradition of John Stuart Mill. If anti-paternalism is alien to the Democratic Party, then genuine liberalism is alien to the Democratic Party, which would be too bad for the Democratic Party. Pretty much everyone agrees that “individual freedoms sometimes have to be curtailed for the general good.” The argument of Nudge is precisely that that “endorsing active government” need not be the same thing as thinking, like John Cassidy, that respect for individual freedom is a load of crap that necessarily gets in the way of a better technocracy.

And I can’t leave you without this:

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.

Anyway, the gist here is that John Cassidy is the guy Jonah Goldberg is trying to warn you about.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center