Libertarian Paternalism Redux

I just looked at Sunstein & Thaler's paper again, and, again, it strikes me as amazingly empty of content. The entire rhetorical effect of the paper comes from its abuse of language.

The pivot of the paper is to call any instance of institutional choice based on concern for the welfare of the people who will live within the institution “paternalism.” So, if you prefer institutions or sets of rules that would tend to make everyone involved better off than they would be under the alternatives, you're in favor of “paternalism.” Which is, of course, a position that everyone has agreed with pretty much forever. Because “paternalism” is a term that actually has content narrower than “in favor of a good set of rules,” that can't be what paternalism is.

Usually, paternalism is thought of as essentially involving interference with someone's liberty or autonomy for their own good. As Dan Klein notes in his totally dispositive reply to Sunstein & Thaler, a restaurant manager's putting the dessert bar at the back isn't intereference with autonomy. Nor is eliminating the dessert bar. A guy who wants to order a burger at a sushi place isn't having his autonomy meddled with, even if sushi is better for him.

We call the Founding Fathers “fathers” because the republic is their progeny, not because the separation of powers is good for us. Vernon Smith, to take another example, has studied experimentally how different forms of market institutions result in different outcomes (even if formally identical), because of the way actual people actually interact with the set of rules. Is Smith's program “paternalistic” for promoting the use of market designs that are actually as opposed to notionally efficient? Is an improvement in the floor rules of the Chicago Mercantile Exhchange “paternalistic” because it makes the trader and his principals better off? Of course not.

And, of course, when somebody exercises their liberty, the action isn't therefore “libertarian.” Libertarianism is a poltiical philosophy that is about the minimization of state coercion. When I choose vanilla over chocolate, that's not “libertarian ice cream flavor selection.” And when a restaurant manager, or human relations director, excercises the legitimate powers of her role in an organization, and decides where to put the salad bar, or decides how to structure the benefits package, there's nothing specifically “libertarian” about that, either. None of S&T's example of libertarian paternalism are examples of libertarianism or paternalism. And otherwise, the paper is more or less empty. (“If you're picking rules, pick good ones!”) So you'd think that would be a problem.

I'm not saying anything Klein doesn't. So, if you haven't read his paper, do. And read his rejoinder to Sunstein's evasively glib reply. As Klein points out, it's part of Sunstein's long-term project is to abuse the meanings of words so that his opponents' positions come to appear conceptually impossible.

So, don't let people get away with calling an employer's choice to set their benefit or investment defaults one way rather than another “libertarian paternalism,” since such choices are neither libertarian nor paternalistic. Accuse them instead of making a category error and speaking nonsense. And why not? There is no better way to win friends.

  • bbartlog

    BTW, did you know that plants absorb sunlight incredibly efficiently? Like, nearly 100% And that we hardly know how they do it?

    *Absorbing* sunlight efficiently is no trick. A blacktop parking lot does that. If you mean that they convert the sunlight into a store of energy (starch/sugar) incredibly efficiently, I’d have to say – not really. 6-7% is the usual high end estimate after various losses are accounted for. By comparison, cheap solar will get you 10% and solar-with-bells-and-whistles (concentrator and stirling engine) can get you 30%.
    There’s still a lot to be said in favor of plants (solar panels don’t grow and multiply by themselves) but from a pure efficiency standpoint they aren’t that amazing.

  • Paul O’Pinion

    It would be great if the Federal Government could turn on the money spigot and have break-through innovation and technology flow out. Experience has shown us that the money disappears into the pockets of the few, the connected and now, the politically correct.
    True innovation is always market-driven.

  • eaglewingz08

    Maybe if everyone says they believe in Tinkerbell and claps their hands, or if they click their heels three times, and say there’s no energy like solar energy, Tinkerbell will come back to life, and all our energy problems will vanish. Or maybe if the democraps don’t hamstring our energy production by forbidding us from exploring for and producing our own energy which has the potential to be cheap and available for the next five hundred years or so, we wouldn’t have to avail ourselves of hoax energy sources and ‘solutions’ that will kill the economy and drive a tax/fee stake into the hearts of ninety five percent of the American public.

    • DMonteith

      …exploring for and producing our own energy which has the potential to be cheap and available for the next five hundred years or so…

      Cite please.

  • uknowbetter

    Solar has some good potential as materials science is making some decent advancements. Nanotech will have a big impact here.

    One concern is that we roll-out huge infrastructure costs too quickly and miss out on breakthroughs in storage and transmission. It’s a dumb move to spend $500 billion a year from now when breakthroughs happen 2 years later that would have brought the cost down to $10 billion. That is a big misallocation of resources.

  • jeppen

    Please note that your EROEI figures are not mainstream. Nuclear and hydro are far better than you quote. Other than that, I agree, adding that another fundamental problem with most renewables are their unreliability. You can only integrate so much stochastic production in our grid – wind probably don’t scale beyond 20%. Currently only nuclear really does, aside from fossils.

  • newshutz

    Most of the solar cell improvement has been due to the semiconductor industry’s research.

  • DMonteith

    One concern is that we roll-out huge infrastructure costs too quickly and miss out on breakthroughs in storage and transmission.

    Well, another concern is that we start investing in infrastructure late and no breakthroughs arrive to make our procrastination look smart. Following your logic, building the telephone network and failing to wait for the development of cell phone technology was a “misallocation” of a lot of copper.

    Not to endorse Rumsfeld in any way, but you fight a war with the army you have. If the army you’d like to have shows up halfway through, bonus.

  • uknowbetter

    That analogy doesn’t work. There is significant progress being made on the nanotech front. If we start rolling out a huge solar network right now and start mass producing solar cells with current technology, we know we are missing out quite a bit on improvements that are right around the corner. There is early-stage research that is showing massive improvements.

    It’s like digging up all the ground to put in a telephone network when cellular is 3-6 years away.

  • DMonteith

    The numbers for nuclear are actually a pretty tough nut to crack based on what I read here, so I’m not too comfortable arguing this one in either direction. Nuclear’s also got so many other moving parts beyond EROEI (security, waste, economics, construction time, depletion/breeders, etc.) that it’s really a whole different discussion by itself.