by Tyler Cowen
on March 31, 2013 at 6:52 pm
in Books, Political Science
That is from Cass Sunstein (always worth reading), due out April 9. Here is a short video, previewing parts of the book, and here is a short review by Sunstein, also relevant.
Back in 1786, Rhode Island was preaching a political ideology that frustrated pretty much everyone, except for Rhode Island. Today, pretty much everyone would point to Rhode Island as the poster child of bad political ideology. The more things change, the more they stay the same. Rhode Island didn’t like taxes in 1786 and never have since, but they liked the simplicity before the US Constitution and all its complexity wrapped up in the three branches and all those enumerated powers, the most important two being the first and second, the ones that conservatives hate the most and that they seek to repeal by amending the Constitution.
Why don’t conservatives simply admit they think the US Constitution was a big mistake and call for turning the clock back to 1786?
They do. Why don’t people who reject a philosophy admit they don’t know enough about it to question it?
Whatever simplicity may (and I stress may) have been achieved, has been absolutely obliterated by Obamacare. Even its most enthusiastic supporters couldn’t, with a straight face, call it ‘simple’.
Well, Obamacare was designed by conservatives and written into law to please Republicans by a bipartisan committee of Republicans and Democrats with Obama cutting deals with businesses who usually back Republicans.
A simpler liberal solution would have simply been Medicare for all which would have eliminated employer, individual, government, and uninsured and uncompensated care with a single system of health care for 90% of the people (special provisions for military and disabled).
Wait, I thought the story was that Obamacare was flawed because the Republicans didn’t play ball?
I know it can’t be, but to the untrained it sounds like democrats are completely cherry-picking calling it a Republican (one guy at Heritage decades ago) plan to get it passed, and then claiming the good parts for themselves and the bad parts due to Republican over or under-involvement. It cannot possibly be political cynicism.
It’s not just one guy at Heritage. It was Romneycare too.
Simple, efficient government sounds great (and should be an improvement), but there are some unintended benefits from the complex mess of current regulations and interventions. For example the tax code has so many incentives built in that in the end a household or firm has a wide range of options with about the same tax implications … thus people not the government choose.
The simple, libertarian paternalistic government promoted in the post actually could have more influence over the “choices” people make. I see a lot of merit in understanding and acknowledging common mistakes, but I am wary of the policy response, incl. smart defaults and choice architecture. The line between lib. paternalism and coercive paternalism is pretty thin and I don’t understand why individuals aren’t instead given the tools to recognize their own unhelpful heuristics.
I will read this book and hopefully it will disabuse me of my prejudices, because I certainly agree there is a role for government…I do like simple, but simple is not always benevolent.
Re: “I don’t understand why individuals aren’t instead given the tools to recognize their own unhelpful heuristics.”
Do you really believe that if a credit card company were free to craft some default option favorable to them AND they “gave me the tools to recognize my own unhelpful heuristics” that the favorable default would not be chosen even if they disclosed it or if they gave me the tools to spot my errors.
Would be an interesting experiment, but I think I know the answer.
Default option: You agree with me.
I was suggesting education as a focus for government as opposed to just defaults and choice architecture. I do think some practices which are consumer traps should be regulated away. But this requires a lot of work to sort out and I am concerned to see very little emphasis on education.
No one is saying “just defaults and choice architecture” and not education, but what I took your statement to be was that education was a substitute for defaults and other choice architecture, and it isn’t. Wanna bet that education doesn’t trump defaults? It’s just a question of who choses the default and what are the consequences. And, later, who cleans up, regrets or pays for the cleanup.
wanna bet? there are several in the libertarian paternalism group who are quite negative on financial literacy programs. not saying the critques are entirely unwarranted but I do not like idea that some bureaucrat/academic knows best and the simpler government is the more powerful that influence will be.
It depends on How the “academic knows best”. In the American pragmatic tradition, if the academic runs a test program that works, or a study that shows it should work, I would say the academic knows “better” than the person who has not done a test.
fine. then just call it paternalism and spare us all the cost of pretend choice … I’d rather it be out in the open who is the real decision maker.
Disagree on education. There is much low-hanging fruit that has nothing to do with lack of information and everything to do with inability to execute on things that humans (in their ambivalent, schizo way) really ‘want’. I already know how to lose 20 pounds, that’s the easy part…
Quick, Claudia, there is time for you to sign up for Dan Ariely’s course on Irrational Behaviour on Coursera. Here is the link: Coursera.org
I am already taking it. Recommended. But I don’t expect everyone to be such info omnivores naturally.
How’z’about reducing frictions and transaction costs?
What is “libertarian paternalism”? Isn’t that an oxymoron?
I love epic fantasy, and a book about how the “far-reaching restructuring of America’s regulatory state” has made me totally better off over the last three years sounds like a pretty epic fantasy.
Yeah, we should block every attempt at better governance, and so prove we are right, even as we decline. After all, what’s important here? Good government or self-congratulation amid the ruins?
The behavioral stuff may be an advance. To prevent idiocy, the government could publicize what it thinks is known, and leave it at that.
A private enterprise, thinking its employees are more productive not drinking large sodas, or wishing to select such, can write that into the contract.
As many others have said before, the bureaucrats are subject to the same biases that the rest of us are, and the average bureaucrat ain’t smart, or he rationally suppresses his intelligence. In general, government policy toward risk, e.g., is far worse than what even many halfway normal people would choose.
So, you disagree with employers who require that the employees participate in fitness programs or face a fine or higher insurance fees. Or, employers who remove sugared softdrinks from the vending machine, replacing them with bottled water and diet drinks?
Of course I do. One problem with insurance is that it is not priced correctly and they don’t actually know more about you, they only know actuarial heuristics. For example, my wife is a runner. She is by far the most fit person at her place of business. If they were to implement a fitness program she would either have to waste time in their stupid spinning or whatever and end up less fit and much less happy.
It would be a very dim program which did not register her running and applaud her example.
Exceptions do not make for good policy.
I posed the employer example to see if you could substitute “employer” for “government” and see the irony.
I enjoyed the first week off Dan Ariely’s behavioral MOOC. From that I can suggest “The Great Rationality Debate,” Philip E. Tetlock and Barbara A. Mellers.
Pretty much the whole point is that “just saying” isn’t enough for our pants-wearing-monkey brains.
I have just been reading about Derrida and in particular his disastrous Oral exam where he decided they were out to get him and vastly over-complicated an interpretation of Diderot. Which means I wonder if Tyler Cowen meant anything by linking Sunstein’s book on making government simpler to one of his book reviews that praises the sort of soft-authoritarianism New Yorkers have come to know and love?
How can government be both simpler and regulate how much coke you are allowed to buy in one gulp? How can governments micromanage our lives and be less complex? Certainly a ban on smoking – which he does not seem to support except in theory – would be simple. But presumably he wants endless public service nagging and taxes and other forms of harassment until we all give up.
Besides, Sunstein is a liberal. For liberals one positive side effect of a powerful state is employment for their students and friends. Where else can you get a job with a second rate degree in sociology? But the Devil requires endless work for idle hands. So the state needs to regulate more and more or all those philosophy graduates wouldn’t have anything to do. Not to mention the disproportionate impact a smaller government would have on minorities.
No. I am not buying it. He may think he knows what he wants, but he doesn’t.
That was my problem with Orals. The asker doesn’t get penalized for a poor question too broadly worded to require the answer they have in mind. So, if they are out to get you they have an option on rating your answer as too complex or too simplistic.
RE liberals and employment, they can and do successfully employ the zerg hordes of their cohorts in NGOs. That way the State can be “simple” and simply give out grants like a drunken sailor while all the occupy-the-world types get jobs in nonprofits. An extra benefit here is that the bulk of these NGO jobs are internships or otherwise low paid, while highly paid and pensioned civil service jobs are reserved to the especially trusted cadres. Pay your dues as stormtrooper in “a thousand years ObamaCare” nonprofit and you too can get a nice government job in the new liberal normal.
Politicians are re-elected for spending money in their constinuancy–not cutting spending. The system is built to reward expansion, not simplification.
Could we separate policy from spending? Positive spending decisions could be tallied like corporate votes weighted by shares. Policies and negative spending decisions (spending vetoes, what money shall not be spent on) would be more direct-democracy driven.
Shorter ‘Simpler’ Sunstein: “Give me and my friends control over your life.”
But, Sunstein’s friends are all Good People, he swears! He and his friends all agree on that, so it must be true! Plus, they’ve managed to get *themselves* free from those harmful cognitive biases, by . . . Ivy League. Ivy League!
Well, if it’s Ivy League I guess it’s OK.
Given their assertion that the preponderance of evidence is so strong, it should suffice for Sunstein or Conly to have a simple conversation with me where they present their overwhelming evidence and I get to make a choice. They can even have the default be that they run my life. All of the behavioral issues can be pushed aside. I’ll be in a room where I can do nothing else for one hour accept review their proposal. No “short-termism”. I won’t be in the moment. They’ll make sure that I don’t suffer from representativeness. They I get to make my choice of whether I want them interfering in my life.
My choice, I suspect, will include a discussion of where they can shove their Ivy League degrees. Of course, I know that with all of the discussion of the autonomy that we possess, I will never be offered this choice.
Yeah, emphasis on the word “assertion”. It is telling that the prime example of an effective nudge is calorie labeling on menus, yet the best studies to date seem to indicate this increases calorie intake.
They aren’t driven by science, only their own overwhelming, smug sense of their own intelligence.
But if your choice is unlikely to even consider evidence, why should we go through the charade just to have you restate your a-priori?
Truth is, there are already countless techniques being used on you and me to influence our choices. Usually, it’s not so benevolent and more interested in separating us from our cash.
I don’t overly care if the gvt want in on the game. Presumably, if it really is a choice and you can still choose the ‘bad’ option, it’s not going to be a big deal. Which is totally different from banning large soda drinks or forcing people to go to spinning classes or banning cigarettes. Those are forcible paternalistic actions, not ‘nudges’.
Would a public choice view indicate that the government involvement would be benign? As Charlie Munger claimed, perhaps the biggest impact of the publication of “Influence” was by salesman seeking to exploit it. On the bright side, calling coercion a nudge might make it a little less obnoxious.
The problem with soft-drinks is the reverse nudge. This is most obvious at the movie theater. An extra liter of drink costs 10 cents. That’s not to affirm Bloombollocks. Blaming obesity on soft drinks is as ham-fisted as it is ignorant. The government’s only interest is in how obesity affects non-internalized costs. The government has caused most of the costs to be non-internalized.
I will listen very carefully, just as I have very carefully read most of the papers that Sunstein refers to. I’m not being close-minded. I should have a choice.
Anything less is tyranny.
I’m interested to see how you can both have a government that’s nudging everyone and yet, is simple. Seems like an oxymoron, but Cass is a smart guy.
Sunstein is a bit of a lightning rod, but I think all libertarians need to come to grips with behavioralism in some fashion. There is some low-hanging fruit here, but some slippery slopes.
I recommend Kahneman.
Libertarians have come to grips with behavioralism. It’s called public choice theory. You could also see Hayak’s critiques of rational positivism.
Am I mistaken, or is public choice theory a direct application of classical economics? That’s what I thought when Sam Peltzman told me about it.
Dayum- I could use your comment as a decisive argument in favor of my original comment.
It won’t be long before whatever high-minded principles have been solemnly agreed have been haggled away and only the means, those of routinely tricking voters into making the correct choice, remain. Democracy as a variant of choosing a cell phone contract, if you will. Let’s just call it paternalistic bureaucracy and be done with it.
“For coercive paternalism to be justified, Conly contends that four criteria must be met. First, the activity that paternalists seek to prevent must genuinely be opposed to people’s long-term ends as judged by people themselves… …Second, coercive measures must be effective rather than futile… ….Third, the benefits must exceed the costs…. … Fourth, the measure in question must be more effective than the reasonable alternatives.” Oh how practical. Lets just hire us some philosopher kings to discern this true form of the good and Kallipolis is just right around the corner. You would think that after the 20th century the utopians would give it a rest already.
How could one tell if riotous but short life yields less utility than a long boring life.
Comments on this entry are closed.
Previous post: The Flynn effect vs. population aging
Next post: The new changes to British welfare policy
Email Tyler Cowen
Follow Tyler on Twitter
Email Alex Tabarrok
Follow Alex on Twitter
Subscribe in a reader
Follow Us on Twitter
Marginal Revolution on Twitter Counter.com
Get smart with the Thesis WordPress Theme from DIYthemes.