Paternalist Slopes
A growing literature in law and public policy harnesses re-search in behavioral economics to justify a new form of paternal-ism.1 The thrust of the argument is straightforward: Human beings are not fully rational, in the sense traditionally used in economic theory, but in fact exhibit an array of cognitive problems, including but not limited to: status quo bias, optimism bias, hindsight bias, context dependence, susceptibility to framing effects, and lack of willpower. These cognitive problems lead to errors in decision making, meaning that people systematically behave in ways that fail to advance their own best interest. Insofar as actual behavior deviates from optimal behavior, governments (as well as other people and institutions) can potentially intervene in ways that will improve the individual’s well-being.
The leading contributors to the “new paternalist” literature (as we shall call it) place great emphasis on the modesty of their proposals. The policies advocated are said to be minor and nonintrusive. A recent feature article in The Economist captures the tenor:
Their aim is not the ‘nanny state’, a scold and killjoy forcing its charges to eat their vegetables and take their medicine. Instead they offer a vision of what you might call the ‘avuncular state,’ worldly-wise, offering a nudge in the right direction, perhaps pulling strings on your behalf without your even noticing.
