Richard H. Thaler & Cass R. Sunstein, “Libertarian Paternalism Is Not an The idea of libertarian paternalism might seem to be an oxymoron, but it is both. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN*. Many economists are libertarians and con- sider the term “paternalistic” to be. Libertarian Paternalism. By RICHARD H. THALER AND CASS R. SUNSTEIN’. Many economists are libertarians and con- sider the term “paternalistic” to be.

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There is thus practically unlimited scope for the state to suppress liberty: Libertarian paternalism is the idea that it is both possible and legitimate for private and public institutions to affect behavior while also respecting freedom of choice, as well as the implementation of that idea. But libertarians can support it, because oibertarian forces no one to donate. For a sense of Thaler’s views on government interventions in the marketplace, we have posted below David Gordon’s review of one of Thaler’s more well-known books.

Loyalty program Safety culture. View the discussion thread.

Libertarian paternalism

People often make mistakes in logic. If you think that sudden impulses when confronted with tempting food will lead you to fall off your diet, you may contract with a friend to forfeit money should you fail to meet certain weight requirements.

Further, people are often subject to so-called “framing” effects: Libertarians need not deny obvious facts. What they in effect are saying is that unless someone meets the textbook criteria for rationality and information, he is not really choosing in the full sense. What he “really” wants is that his preferences be fulfilled in the way best fitted to do so.

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An obvious objection to their proposals arises, and their efforts to respond rhaler this objection form the theoretical substance of the book. Suppose an employer has a voluntary plan that allows workers to save for retirement.


Grynbaum November 7, There is a problem here that Thaler and Sunstein fail to note. The authors might answer that decisions on whether to restrict one’s future choices are themselves less than fully rational and libertwrian but to say this is merely to reiterate their original argument, and the libertarian rejoinder to it is unchanged. Why not rely on a free market in organs, rather than concoct schemes to restrict liberty in the guise of preserving it?

The term was coined by behavioral economist Richard Thaler and legal scholar Cass Sunstein in a article in the American Economic Review. Retrieved 4 July By using this site, you agree to the Terms of Use and Privacy Policy.

Nudges, not force, are on their agenda.

Our eminent authors, though, are not convinced: Though the authors cite two papers by Epstein, they do not respond to this book or even mention it sujstein their bibliography. It can avoid doing anything at all. Choices paternalis, these circumstances, Thaler and Sunstein aver, are problematic: They do not favor doing so; but this leaves them free to support a less exigent variety of paternalism.

Smokers, putting aside the issue of secondary smoke, do not violate others’ rights: Journal of Political Economy Whether or not they have ever studied economics, many people seem at least implicitly committed to the idea of homo economicusor economic man — the notion that each of us thinks and chooses unfailingly well, and thus fits within the textbook picture of human beings offered by economists. You were aware that I might do this and could easily have avoided my company. They answer worries that libertarian paternalism will lead to more severe restrictions by treating this complaint as an ordinary “slippery-slope” argument.

Those who wish to preserve liberty must take people’s actions as they find them, not substitute for them “better” or more “rational” actions, based on an assessment of what people “really” want.

There seems nothing “irrational” about this preference, but if someone thalr it, purchasing the extended warranty makes sense. He has a choice: Nevertheless, a paternalist about smoking would think it justifiable forcibly to prevent people from smoking.


Will not the supposed libertarian policy defended here lead to much unnecessary unhappiness? Research by behavioral economists demonstrated, moreover, that firms which raised the default rate instantly and dramatically raised the contribution rates of their employees. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

Thaler and Cass Sunstein. Sometimes, though, the evidence for irrationality, taken in their economic textbook sense, is weak.

The authors respond that this objection rests on an pagernalism view of choice. Thaler and Sunstein may not share this preference, but their doing so is not a requirement of rationality in preferences. He strongly prefers that payments for breakdowns be handled in advance.

Libertarian Paternalism | Mises Institute

That power is absolute, minute, regular, provident, and mild… The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting.

Thaler and Sunstein published Nudgea book-length defense of this political doctrine, in new edition But what if the purchaser has a strong aversion to paying for repairs when an appliance has broken down? The authors do not point out that this is not a case of paternalism, libertarian or otherwise, since prospective donors are nudged for what is taken to be the general good, rather than their own.

To reiterate, in their view, only actions that meet rigid requirements count as full choices.