By Dickey, Christopher
Newsweek , Vol. 161, No. 07
Byline: Christopher Dickey
Government by Nudge
Richard Thaler, who co-authored the 2009 bestseller Nudge: Improving Decisions About Health, Wealth and Happiness, has been working with the British government applying his principles of persuasion to tax collection and pension plans. Cass Sunstein, the other co-author, spent much of the first Obama term at the Office of Information and Regulatory Affairs looking to convince Americans they could "collaborate" with myriad government regulations. This "libertarian paternalism," as they call it, has become a major ongoing experiment in modifying public behavior. But as Thaler sees it, they're just nudging people to do the right thing. "Make it easy" is their mantra. And if people disagree with automatic enrollment in British pension plans, for instance, they can opt out. The behavioral bet is that few take the initiative. "Of course you don't blazon across the front of that letter, 'We are enrolling you in this pension plan because we know if left to your own devices you are absent- minded and procrastinate and may never get around to this,'" says Thaler. Some critics are uneasy about government manipulating minds in any form. But Thaler insists "nothing is secret, everything is documented; we are not the CIA."
Sometimes scientists seem to be telling us what we already know. Thus a recent study at Britain's University of Portsmouth determined that if you told a dog not to take a piece of meat, then turned out the light so he thought you couldn't see him, he'd likely steal the food anyway. (I once lost half a Thanksgiving turkey like that, but it was no experiment.) What the rigorous testing done with scores of dogs of different breeds at Portsmouth has proved scientifically is that our canine friends really do pay attention to whether or not we are paying attention to what they're doing--a level of cognition that puts them in a category of intelligence that can begin to be compared with primates. "Dogs show some specialized skills in how they read human communications," says Juliane Kaminski, one of the authors of the Portsmouth study. "This seems to be a direct result of selection pressures during domestication." To put it unscientifically, they've been man's best friend so long, it's in their blood. Kaminski says she doesn't know of any similar studies done on felines. But, then, we already know cats don't really give a damn what humans think.
The Internet, which played such an important role in bringing on Egypt's revolution two years ago, may yet help to save its foundering post-uprising economy, according to a recent study commissioned by Google from the Boston Consulting Group. Even though Cairo seems mired in perpetual political crisis, entrepreneurs are excited and in many cases thriving as they exploit the rapidly evolving market for online goods and services. A decade ago the Web was almost nonexistent in Egypt; now 31 million of the country's 85 million people are users, while cellphone penetration exceeds 100 percent in many regions. The Internet economy already contributes as much to the GDP as Egypt's health services or its education sector or oil refining. And the potential for growth remains enormous, because Egyptians are just beginning to get the hang of e-commerce. At the moment, to take one obvious case, Egyptian companies are exploiting only about 5 percent of what the study estimates is a potential $2 billion online marketplace for travel and tourism. "The report underscores that the opportunity is now," says entrepreneur Chris Schroeder, author of the forthcoming book Startup Rising: The Entrepreneurial Revolution That's Remaking the Middle East. …