Libertarian paternalism

There is a new Econoblog, Mario Rizzo vs. Richard Thaler.  Here is Mario in closing:

Richard wants to use the word "libertarian" to differentiate his
paternalism from the traditional variants.  Yet he uses the word in a
fuzzy way.  He wants to define libertarian along a continuous variable
— the cost of exercising the exit option.  However, libertarianism, as
every libertarian understands it, uses a bright-line test — who
imposes the cost?

The phrase "libertarian paternalism" is misleading.  It isn’t libertarian, but I don’t mean this point in the usual "rage against governmental coercion" sort of way.  A more consistent Thaler would simply emphasize that both paternalism and coercion are often ill-defined concepts or perhaps matters of degree.  Thaler wants to shock us by rejecting non-paternalism but when pressed he denies the underlying distinctions behind his big claim in the first place.  In other words, the whole debate should be focused on specific proposals, there is less to the philosophy than meets the eye. 

Comments

I really enjoy this blog, but sometimes I can't help but wish for the equivalent of the person conducting the less-strenuous workout while the instructor in the middle powers away.

Here's the paper

http://www.rand.org/pubs/working_papers/2004/RAND_WR158.pdf

Here's the nut:

"We suggest an alternative class of taxation policies that provide self-control and benefit
a smoker at every point in life. Smokers could be allowed to purchase “smoking licenses† when they
start to smoke, and in exchange commit their future selves to face compensated cigarette taxes. We
show that this scheme – which could be made voluntary – improves the welfare of current and
future smokers, generates positive revenue for the government, and can be made incentive compatible."

Comments for this post are closed