Nudge: paternalism of the neoliberal kind?

Imagine that marriage becomes privatised. Privatising marriage would mean that the state monopoly on government licensing of marriages would come to an end. Marriage-granting organisations would be free to set their own rules of marriage and license couples accordingly, while the word ‘marriage’ would disappear from legal code. In its place, one would have contractual domestic partnership agreements between any two individuals, similar in kind to a business partnership. Such agreements would regulate the distribution of resources upon cancellation of the agreement for example, as well as organising care for any dependants.

Richard Thaler and Cass Sunstein, the authors of Nudge (Caravan, 2008), are convinced that the partnership agreements just described would allow society to take a step back and consider the social benefits of stable cohabitation on their own merit, freed from any ideological or religious connotations that come with the concept of marriage. Their underlying proposals may sound radical, but they are based on the fundamental insight that the most important aspects of decision making have to do with the prevailing ‘choice architecture’ within which decisions are made, and those choice architectures have decisive influence on how we behave. In fact, it may be much more effective to redesign a particular choice architecture so that individuals receive a gentle ‘nudge’ in the desired direction, than to try to change individual behaviour directly by fiat.

But even this nudging towards preferable behaviour already runs counter some longstanding commitments of liberally minded economists who have traditionally held that ‘de gustibus non est disputandum’: individual tastes should be taken as given. What Thaler and Sunstein’s benevolent paternalism suggests instead is to step beyond suggestions that given tastes are innocent starting points of analysis. If choice architectures are as easily amenable to change as their analysis, and that of numerous other behavioural economists, suggests then a more realistic approach would have to formulate economic choice in terms of its underlying choice architecture, which may be open to attempts to redesign it.

See also Thaler & Sunstein’s blog: Nudge

(A version of this review has been published in: “Book of the Month: Nudge.” The Grapevine, December 2009, p. 12)