The unbearable arrogance of the "Nudge-ers"
Behavioral economics has never been my favorite type of economics (for now neuronomics remains my absolute least favorite) but I couldn't describe succinctly exactly what bothered me so much.
Now I can.
It's the incredible arrogance of some of its practitioners. Really. Check out this NY Times story about the "Nudge" movement:
Let's begin with this:
"Mr. Thaler has found that people often don’t act rationally and in their own best interests, as is assumed by traditional economic models. He calls such idealized people “Econs,” as distinguished from “Humans.” Econs are walking computers, and behave according to the laws of classical economics; Humans are quirky, like the people you meet on the street. Humans may know that they should eat less and exercise more, but they often miss the mark. They may know that they should save more, but often don’t. And so, Mr. Thaler says, most of us would benefit from a nudge."
Ah yes, pity us poor, weak, misguided, humans. Lucky for us we have benevolent demi-gods like Sunstein and Thaler to shove us onto the path of enlightenment via their "libertarian paternalism".
Yes people, that's what they call it; libertarian paternalism:
"Nudging people for their own benefit in unobtrusive ways is part of what the co-authors call “libertarian paternalism,” a seeming oxymoron that links the notions of freedom from constraint and firm, well-intentioned guidance.""Mr. Sunstein and Mr. Thaler say that this apparent contradiction is reconciled through what they call “choice architecture.” This is the deliberate imposition of structure in an environment — etching flies in a urinal — to induce people to make better choices. Consider a cafeteria where healthy foods like fruit and yogurt are placed in a prominent location, while junk foods are relegated to an out-of-the way spot. People are free to choose, but they are being nudged toward healthier decisions. "
So I would ask the nudge-ers: if people are quirky humans who don't know what's best for themselves, how in the world can you know what is best for them and exactly where to nudge them? After all, you are human too, aren't you?
This stuff is pretty much just trying to enforce a particular view of the world or pattern of behavior on others via implicit taxation. Paternalistic, yes, but libertarian? No.
Almost any economist, if asked how to curb some behavior or increase some other behavior will tell you they'd alter the incentives on the margin. This is not a new insight. What is new I think is the glee with which the Nudge-ers propose to use economics for social engineering. I can't see any way how it's not saying "We are better than you so we will make the rules of the game for you".