Libertarian Nudges

By Mitchell, Gregory | Missouri Law Review, Summer 2017 | Go to article overview

Libertarian Nudges


Mitchell, Gregory, Missouri Law Review


I. INTRODUCTION

Libertarian paternalism gave birth to the nudge. (1) Under the philosophy of libertarian paternalism, a person in power seeks to create policies that steer people toward outcomes that should promote their welfare but also allow people "to go their own way." (2) The classic example of libertarian paternalism is an employee pension plan in which the employer sets the default to automatic enrollment with automatic annual contributions for all employees. (3) Under this plan, employees predisposed to accept the default option, due to motivational or cognitive inertia, will be sure to accrue some retirement savings, but those who want to spend time deliberating over their options can choose an alternative course. The libertarian paternalist planner does engage in some paternalistic judgments when designing the policy, but those judgments are not bindin; the final choice ultimately resides with those who must live under the policy. (4) Hence, under libertarian paternalism, the central planner "nudges" in a helpful direction rather than compels or restricts choices. (5)

The nudge, however, has outgrown its libertarian paternalist origins and now encompasses any policy that does not directly involve mandates, bans, rewards, or penalties. (6) Under this broader conception of nudging, there is no requirement that the nudge seek to promote the interests of those directly affected by the policy nor that those affected by the policy have any choice in the matter. Thus, we find attempts to push people toward other-regarding choices through the manipulation of charitable solicitation forms, (7) as well as placing restrictions on the number of pills that can be dispensed to reduce the risk of intentional overdose, (8) both being labeled nudges. Even policies that involve direct payments to encourage desired behaviors have been described as nudges. (9) A cynic might contend that the nudge label is sometimes used opportunisticall, as cover for run-of-the-mill paternalism.

With the proliferation of so many different nudges, with so many different justifications and implications for welfare and freedom of choice, it is a good time to return to the origins of nudging and ask whether any nudges can really fulfill libertarian paternalism's promise of promoting individual interests without infringing impermissibly on personal liberty. (10) I argue that a number of interventions now placed under the label nudge can in fact be fairly described as libertarian nudges. (11) In particular, libertarians should welcome nudges that seek to promote rational choice without favoring any particular choice. (12)

Nudges that fit the definition of truly libertarian nudges are what we might call instances of choice-independent nudging: when a "choice architect" (13) seeks to provide information, make the decision-making process less difficult, or make one's choice easier to implement, then the design is choice independen. So long as these designs are implemented in ways that may improve decisio -making competence in general or the rationality of a particular decision, while remaining agnostic about what choice should be made, there is no reason to object. The motivation behind the intervention need not be paternalistic: market forces may demand more information or the availability of commitment devices. In any event, given the lack of steering, the motivation behind the intervention should be irrelevant. Furthermore, even covert choice-independent nudging presents no special libertarian concerns so long as the effect is to encourage deliberation rather than favor a particular outcome. (14)

In contrast, many nudges do seek to steer choosers in particular directions. (15) These choice-dependent nudges increase the difficulty or cost of choosing one option over another, seek to take advantage of the cognitive or motivational biases of choosers to favor one choice over another, or may even seek to change preferences in a particular direction. …

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