In recent years, advocates of paternalistic policies, such as economist Richard Thaler, argue that government-appointed experts should limit the choices available to consumers in order to prevent them from making poor decisions because of ignorance or cognitive bias. After all, they claim, experts are likely to know better than ordinary consumers which products are too risky for us to use. This kind of “new paternalism” (also known as “libertarian paternalism”) has had a lot of influence in the academic world. It has also caught on in the Obama Administration, which has based major policy initiatives on it such as the proposed Consumer Financial Protection Agency.
In this recent essay, New Zealand economist Eric Crampton points out a serious flaw in the logic underlying the new paternalism. Experts may be better than consumers at figuring out the health risks posed by various products. But they usually have no reliable way to estimate the benefits the consumers get from them. Paternalism can only be justified, if at all, in cases where the risks posed by the product outweigh the benefit purchasers derive from it. Experts who have no way of estimating those benefits are in no position to determine which products should be regulated or banned:
None of us holds health as our only goal. Every time we take a slight risk in traffic, or decide to drive at all, we’re trading the risk of accident against the benefits of getting to where we’d like to go. When we decide to go skiing, we trade off fun against the risks of a broken leg or worse. Even where our children are concerned, we make trade-offs. We could always choose to purchase a little more safety for them than we do. We could spend a little more on the slightly safer car or car seat. We could always expend a little more effort in keeping them from harm. But we don’t make our toddlers wear padded helmets: the child wouldn’t like it and neither would we....
The new paternalists often cite asymmetric information about health risks—in which producers take advantage of consumers’ inadequate knowledge of health consequences or dangers—as justifying taxation or regulation. Often, however, consumers are not ignorant. For example, the best evidence suggests that individuals overestimate the health costs of smoking. If there’s an information market failure, it’s causing folks to smoke too little, not too much....
More recent work by behavioural economists focuses on costs borne internally which individuals have trouble reducing due to self-control problems. A drinker might sincerely wish he could drink only two pints per day, but instead drinks four and he’s not been able to find any way of stopping himself. If taxes were increased to the point where he’d only purchase two pints per day, so the argument goes, he’d be made better off by his own measure of his own wellbeing....
These ‘internalities,’ as they are sometimes called, might matter on the blackboard but it’s difficult to see them as the basis for public policy. Unless a regulatory agency can see into our souls and discern that weakness of will is the problem, we can’t tell that a tax really makes drinkers better off by the drinkers’ judgment.
To put it a different way, a public health expert probably knows more than I do about the risks of drinking or smoking. But only I know how much enjoyment I derive from drinking a beer or smoking a cigarette (in my case the answers are very little and none, but preferences differ). I discuss this point in greater detail in this post.
Paternalism might still be justified if the only options were either going with the experts’ ignorance about benefits or going with consumer ignorance about costs. Fortunately, however, consumers can make use of expert knowledge without government coercion. There is a great deal of expert-produced information on the risks of smoking, drinking, financial products, and so on, that interested consumers can access on the market, or even for free through the internet. True, consumers might make mistakes in choosing which experts to rely on or in deciding to forego expert advice altogether. But those errors must be weighed against the much greater impact of ignorance and cognitive errors in the political process. If consumers sometimes forego expert advice out of ignorance or cognitive errors, similar mistakes are even more likely to plague “rationally ignorant” voters, as I argued here and here.
All of the above assumes that government-appointed experts tasked with formulating paternalistic policies are honestly doing their best to apply their expertise in a disinterested way. In reality, of course, a government agency with the power to ban or restrict important consumer products is likely to be heavily influenced by interest group lobbying. Industry and labor groups are likely to push hard to get the agency to adopt regulations that benefit them at the expense of consumers and competitors. Moreover, government regulators themselves are not always above using their power to pursue their own self-interest or ideological agendas. Crampton gives several examples of such behavior in New Zealand, and American regulators are unlikely to be much better.
CONFLICT OF INTEREST WATCH: Crampton and I are coauthors on another article.
UPDATE: Some commenters claim that Thaler and other “libertarian paternalists” don’t advocate policies that actually restrict choices. This is simply false. They advocate numerous such policies. See here for some examples. The distinctive element of libertarian paternalism is not that it doesn’t restrict consumer choices but that it purports to do so on the basis of what the consumers themselves would prefer if they weren’t influenced by ignorance or cognitive error.
MatthewM says:
Excellent post and link. Thank you.
Quote
October 14, 2009, 1:02 amRandy says:
So I guess these guys would be in favor of legalizing pot.
Quote
October 14, 2009, 1:06 amRicardo says:
Libertarian paternalism can cover some pretty broad territory. So let’s go to specifics where I think some of the generalities above fail:
1. Crampton says we can’t see into others’ souls and therefore cannot quantify “internalities.” But we don’t need to look into anyone’s soul. We can observe that some poeple with self-control problems jump at the opportunity to sign themselves up to be punished when they engage in the compulsive behavior they are trying to stop. New Jersey maintains a voluntary blacklist of individuals who are prohibited from entering gambling casinos: people do in fact sign themselves up for this list. For an economist, the only two options are to either admit that sometimes we might be able to increase utility by voluntarily limiting our future choices or else to throw out the entire revealed preference argument. If you throw out the revealed preference argument, you are left with pure agnosticism when it comes to whether paternalism makes people better off or not.
2. Evidence shows that many people pay only the default amount owed on their credit card statements which is generally also the minimum amount owed. If you increase the default amount owed but put the minimum payment in small print elsewhere on the statement, people will still tend to pay the default amount. This is trickery but it is designed only to trick those who would likely be tricked by various gimmicks credit card companies use. The chance this actually hurts anyone is small since a simple toll-free phone call or more careful reading of the statement would clear up the actual minimum amount someone would owe. The more likely outcome is that it lowers consumers’ indebtedness by encouraging but not forcing them to do something they should in fact do: spend more money paying off high-interest debt. A nice side-effect of such a policy is that it makes it less likely credit card companies would go whining to Congress in the future about the need to change bankruptcy law.
Quote
October 14, 2009, 1:16 amKen says:
As I understand Thaler’s position on “libertarian paternalism,” the quote above is a serious mischaracterization. He’s not suggesting that anyone “limit the choices available.” The reason this “new paternalism” is supposed to be “libertarian” is precisely because choices are not limited.
Instead, he’s arguing that every time you ask a question, you influence the answer. Asking someone if they want to opt out of a retirement savings program gives them the same choice set as asking if they want to opt in to the same program. Studies show, however, that people make systematically different choices depending on how the question is asked. Since you have to phrase the question in one format or the other, why not choose the one that favors the outcome you think best? Nobody who disagrees is forced to do anything.
Libertarian paternalism is rephrasing the question. Pure paternalism would be to select for everyone without asking at all—and it’s pure paternalism that advocates limiting choice sets.
Quote
October 14, 2009, 1:47 amThe Divine Conspiracy Blog » Blog Archive » Public Health says:
[...] at The Volokh Conspiracy. Posted in Politics | No Comments » Leave a [...]
Splunge says:
Gosh, who could object to a benign wise man to make all your decisions? But a one-patron-fits-all scheme seems...unnecessarily limiting. This is America! We love consumer choice! If there are forty-six varieties of frozen pizza in my neighborhood Food Ultramegamart, why should I have only one choice in to whom I turn over my adult liberty?
We could have, say, many different systems ruled over by benign wise men, or councils of same, and people could voluntarily turn themselves over to be ruled by whichever they choose. Each wise man would report to a higher wise man, of course, and over all there would be one very wise leader.
We could call each system a “manor” and the wise leaders “lords” or “barons” or (depending on area of expertise) “bishops,” and the top leader a “king” — and all those who have empowered the wise men to make every decision “serfs.” Naturally, our social mythology would emphasize a lot of self-congratulatory pageantry around the lords. Wouldn’t want people to get out of the habit of vast deference to their wisdom. Even if the king is a fool, you need to respect the office of king, not go around disrespecting it, and him.
Forward into the new Dark Ages!
Quote
October 14, 2009, 2:18 amRicardo says:
Ken is right on Thaler’s views. Prof. Somin is confusing the issues here. He equates libertarian paternalism with what Crampton calls “new paternalism.” After reading the article, it is clear that Crampton really isn’t attacking Thaler-Sunstein-style libertarian paternalism but rather the paternalism that is in fashion in public health departments. These are quite distinct. Libertarian paternalism as such has nothing to say on the subject of sin taxes, for instance.
Maybe Somin’s co-author has strongly negative views on libertarian paternalism as well but that isn’t the subject of this particular article.
Quote
October 14, 2009, 2:53 amJakeCollins says:
This question seems impossible to answer in the abstract. Their are many markets where consumers can and should have nearly absolute choice. But there are others, like pharmaceuticals, where the government needs to step in to prevent the distribution of unsafe products. Anyone familiar with the state of the American pharamaceutical markets in the late 19th and early 20th centuries prior to government regulations would laugh at the blithe and banal praise of “consumer choice” as a miracle cure all.
Quote
October 14, 2009, 2:58 amSteve says:
Smoking is probably the classic example of a risky product where consumers are already well-informed about the risks and can weigh them appropriately. Mind you, one of the main reasons they are well-informed is decades of painstaking efforts by, you guessed it, the government. Absent government intervention, people would still be trying to sort out the truth amidst a plethora of well-funded industry propaganda claiming that tobacco is perfectly safe.
Once we move beyond the special case of smoking, the concept of “consumer choice” as an overriding consideration becomes even sillier. Pharmaceuticals are a great example. Financial products are another. Yeah, let’s get the government out of the business of regulating the securities market, so investors can finally have a real choice! That should work great.
Quote
October 14, 2009, 5:03 amThe Cloakroom » Newscall says:
[...] Pitfalls of Paternalism by Ilya Somin In this recent essay, New Zealand economist Eric Crampton points out a serious flaw in the logic underlying the new paternalism. Experts may be better than consumers at figuring out the health risks posed by various products. But they usually have no reliable way to estimate the benefits the consumers get from them. Paternalism can only be justified, if at all, in cases where the risks posed by the product outweigh the benefit purchasers derive from it. Experts who have no way of estimating those benefits are in no position to determine which products should be regulated or banned [...]
PersonFromPorlock says:
The overwhelming flaw in governmental paternalism is that it will become corrupted. Whatever benefits can be adduced for it, the reality is that it will end up being run for the benefit of the few. Who can look at government and predict any other outcome?
Quote
October 14, 2009, 7:30 amrunape says:
Ken and Ricardo have much the better of this. Thaler/Sunstein would not force drivers to purchase slightly safer car seats (to take an example from the passage Ilya quotes). Suppose, though, that a car manufacturer came up with a warning bell that would go off if one of its cars was started and the belt meant to secure the car seat was not buckled. The warning bell could be set to go off when the car is started, but could also be switched off. Thaler/Sunstein would require car manufacturers to set the alarm to go off by default, unless the owner of the car affirmatively chose to turn it off. (This is, admittedly, a somewhat stilted example, but the idea is clearly not the one Ilya is attacking.)
I have been exceedingly disappointed in the Volokh-ers purported critiques of libertarian paternalism. Too often they read as knee-jerk deregulators as opposed to considered academic commentary.
Quote
October 14, 2009, 7:43 amSplunge says:
Anyone familiar with the state of the American pharamaceutical markets in the late 19th and early 20th centuries prior to government regulations would laugh at the blithe and banal praise of “consumer choice” as a miracle cure all.
And yet, curiously enough, there are those, for example with PhDs in chemistry, who imagine the failures and follies of the 1890s pharmacopia had more than a wee bit to do with the limitations of scientific knowledge in biochemistry in the horse ‘n’ buggy era, at a time when a substantial fraction of the world’s best scientists still debated whether or not atoms existed.
A story ran recently in the New York Times in which it was noted that flu sufferers in the 1918 pandemic were regularly dosed with 1000 mg of aspirin every 3 hours (25 modern tablets per day!), far above doses now considered safe, and that this may have contributed some unknown fraction to the deaths. No doubt the work of Wild West “unregulated” profit-mad aspirin-mongers! Er...except that these dosages were recommended by JAMA and the US Surgeon General. Almost one might wonder how many additional deaths were caused by having a government imprimatur on dangerously high doses...
But what am I saying? This is just some weird isolated incident. Everyone knows that “regulation” is the magic elixir not subject to the ordinary failings of mere science. When you “regulate” stuff you just declare the proper outcome, and poof! it happens. This messy business of needing to work out means that actually reliably attain the desired ends is for those of little imagination.
Quote
October 14, 2009, 7:59 amKen Arromdee says:
What if they require the minimum payment if you pay within a week, but the larger payment if you pay within three weeks? After all, anyone who’s aware can pay within the week, so this isn’t stopping anyone. What if they make you go to the bank to make the minimum payment, but you can make the larger payment by mail? Can they say “if you want to make this minimum payment, copy this 1000 character random string exactly”, and consumers who miss an “e” in the middle are required to make the larger payment? After all, any errors in copying the string can be avoided with enough patience, so this doesn’t limit anyone, right?
Is it going to end up like the Hitchhiker’s Guide to the Galaxy, where they can make the minimum payment as long as they go to a locked filing cabinet in a disused lavatory with a sign reading “beware of the leopard”? At exactly what point does tricking the consumer into not making the minimum payment become too strong?
Quote
October 14, 2009, 9:13 amCato The Elder says:
I caution any libertarian thinking about embracing this “libertarian paternalism” to understand it won’t be Richard Thaler types who hold dominion over you in the realized vision of this idea — it will be Elizabeth Warren types, that is, people who use and embrace dodgy statistics to promulgate their very strong ideological agendas. Much of the problem with the idea is “who chooses/influences the nudge point”, and realize that the academy who will play a large part in guiding that choice are something like 70% doctrinaire Democrats. How sure are you that your views will comport with their standard of “reasonable”? You have no idea what you need to be protected from, young man.
Quote
October 14, 2009, 9:17 amRowerinVA says:
This critique of “paternalism” is valid, but another one is more powerful: rent-seeking political factions find it much easier to control and manipulate the process by which “experts” are appointed, and consumer choice is constrained, than to control the consumers without the hand of government.
The “paternalism” argument assumes that government can be automatically assumed to act efficiently, altruistically, and for the benefit of the common man. Good luck.
The absolutely amazing thing is that the “paternalism” argument has gained currency at the very same time that government subsidies and mis-regulation by the last batch of experts caused the massive and nearly worlwide economic slump. Apparently, these “experts” aren’t very good at learning on the fly.
Quote
October 14, 2009, 9:55 amanguslander says:
Crampton gives up too easily here:
There are all sorts of ways you can figure out (a) whether preventing someone from doing behavior B is likely to make them better off and (b) whether someone is doing B because he is akratic or otherwise irrational.
As to (a): Compare the well-being (either self-reported or ascertained in some other way) of those who do B with the well being of those who don’t and of those who’ve quit. Compare the well being of those who suffer the adverse effects of B with the well-being of those who do not (and discount it by the risk that the adverse effects will obtain).
As to (b): Figure out whether those who do B express regret (or feel guilt). Ask those who used to do B (and used to defend doing B) and then quit believe that, when they defended doing B, their defense was sincere. Test whether the considered judgments about the prudence of pursuing some course of action correspond with their decisions (and see whether the decision to do B is appropriately analogous to those circumstances in which decisions typically diverge from what, by the agent’s lights, prudence demands).
It probably isn’t easy to implement these tests. And, by themselves, their results wouldn’t recommend one policy over another. But Crampton’s (and a lot of economists’) glib (“see into our souls”) reaction to the suggestion that we can take halfway sophisticated soundings of people’s practical rationality is unwarranted.
(It’s an interesting question why economists are inclined to dismiss realistic models of moral psychology. The “see into our souls” business provides a clue, viz. they think moral psychology is unscientific / metaphysical, and have a positivist’s prejudice against metaphysics. But it’s not as if economists themselves don’t presuppose a conception of moral psychology / what it means to be practically rational. So, if I’m right, there’s an inconsistency here.)
Quote
October 14, 2009, 10:25 amPitfalls of Paternalism (Government Knows What's Best For Us) | KEYTLaw says:
[...] recent years, advocates of paternalistic policies, such as economist Richard Thaler, argue that government-appointed experts should limit the choices available to consumers in order to prevent them from making poor decisions because of ignorance or cognitive bias. After [...]
Martinned says:
Not that I don’t agree with your general point (as long as you aim it at paternalism generally, not the libertarian kind), but:
Quote
October 14, 2009, 10:48 amray_g says:
There is nothing libertarian (or ‘new’ for that matter) about any type of paternalism. It is still based on the idea that I know what is ‘better’ for you than you do, AND that I somehow have the right to make you do what I think is correct. It doesn’t matter whether it is done by a ‘nudge’ or sending jack booted thugs, it still comes down to me trying to impose my choices over yours.
It is not libertarian. It is at best elitist and at worst authoritarian. Splunge in comment #6 has it right, we will be back to the idea that the ‘nobles’ being so much wiser than the peasants, have the right, nay, the obligation, to impose their rule on the peasants.
Quote
October 14, 2009, 11:58 amMartinned says:
@ray_g: On the contrary. What is coercive about a law or other government measure that changes exactly nothing about the individual’s opportunity set? Libertarian paternalism only matters to the extent that, and for those individuals who, are less rational than libertarian philosophy assumes. In that sense, it is a perfectly tailored idea.
Quote
October 14, 2009, 12:09 pmSeaDrive says:
“I do not see what right Mr. Darcy has in determining in what manner his friend was to be happy,” she began before releasing a deep breath and collecting herself,
Quote
October 14, 2009, 12:53 pmray_g says:
“What is coercive about a law or other government measure that changes exactly nothing about the individual’s opportunity set?”
The point isn’t any particular measure, it is the attitude, and where it can lead. What if, despite your ‘nudges’, the masses don’t do what the rule makers want them to. Then what? Do you trust people with the attitude of “I know better than you” and the power of government behind them to stop at ‘nudges’?
When people seriously propose an oxymoron like “libertarian paternalism” it reminds me of the H.L Mencken quote, “The urge to save humanity is almost always a false-face for the urge to rule it.”
Quote
October 14, 2009, 1:01 pmohwilleke says:
One middle ground that is underused in American policy is what one recent book called a “nudge.” Rather than outright banning things, one can put hurdles in front of them and run publicly funded advertising campaigns to convinced people that a court of action is a bad idea.
While propoganda has a bad reputation in the U.S, it is only trivially coercive (public funds are used to make it and distribute it that come from taxes). More importantly, it works, really well.
* The U.S. has the lowest levels of tobacco use in the developed world. Almost all of these reductions happened well before the recent bunch of bans on smoking in public places (and those bans, while clearly coercive, were not absolute prohibitions on smoking in all places, and were based on solid scientific evidence that they greatly reduced health harms to non-smokers exposed to second hand smoke, e.g., creating large percentage reductions in pulmonary ER visits for non-smokers). What drove U.S. behavior was propoganda.
* U.S. food recommendations have had major impacts on the American diet. We drink more skim milk, use less butter, and have changed the mix of meats we eat in clearly measurable ways because of them, despite the fact that no formal dietary laws were enacted.
* P.R. campaigns to reduce water use in the Denver Metropolitan area were highly effective, cutting use by large double digit percentages and causing people to rethink their water hungry landscaping even when the cost of doing so far exceeded water bill reductions. While a first year during a drought included some mild penalties followed by warnings, continuing P.R. without penalties for excess water use kept the water thrifty habits put in place alive.
* MADD campaigns were as big a factor in reducing drunk driving as increased criminal penalties which continue to be imposed inconsistently.
Some countries (Japan, for example) make much heavier use of propoganda as a policy tool than we do, to great effect. U.S. policy makers can use P.R. and inconvenience factors to change outcomes with a light regulatory touch as well.
Quote
October 14, 2009, 1:05 pmShelbyC says:
I don’t know, I’m still trying to sort out whether or not cigaretts are more addictive than, say, cheeseburgers, gambling, or sex.
Quote
October 14, 2009, 1:20 pmFub says:
Times have changed. These days people want a wise Latina.
Quote
October 14, 2009, 1:25 pmcjwynes says:
The government bureaucrats making these calculations will never be doing so in a vacuum of pure science, they’ll be doing so in a certain political climate. That will always taint their calculations and tip the scales one way or the other.
For instance, do you think the BENEFITS of smoking — not just the intangibles of personal pleasure, but its health benefit as an appetite suppressant — would ever be given proper weight by the government? Not likely. Hell, anytime some study shows alcohol consumption having some benefit, they practically fall all over themselves qualifying their conclusion and the government won’t let the alcohol companies use any of those benefits in their marketing.
The government just isn’t trustworthy in this area given the extent to which science has become politicized from all angles. Unless we have a cold, unfeeling computer in a dusty basement plugging complete and apolitical numbers into the Hand formula, we can’t even begin to talk about accurate and effective “nudging”.
Quote
October 14, 2009, 1:52 pmSteve says:
I’m still trying to sort out whether or not cigaretts are more addictive than, say, cheeseburgers, gambling, or sex.
My advice is to try them all tonight, and let us know which you want more of in the morning.
Quote
October 14, 2009, 2:03 pmBarbara Skolaut says:
Silly Ilya — don’t you know the whole point of paternalism is not how much enjoyment you have, but how much enjoyment the nannies get out of controlling you
for your own good?Quote
October 14, 2009, 2:15 pmRandy says:
Splunge: “Everyone knows that “regulation” is the magic elixir not subject to the ordinary failings of mere science.”
Hogwash. It’s precisely because we have good science now, so that we can regulate the good from the bad. In the past, opium was regarded as a tonic (Freud became addicted). Radium was considered a cure. Most potions in the 19th century were either ineffective or harmful — do you really want to go back to a time when anyone could sell anything?
Even if you want to, I think most Americans would agree that the world is much better by regulating the bad and ineffective stuff out of existence, on behalf of the public.
Quote
October 14, 2009, 3:17 pmAnti says:
@Randy
“We” the people? Or “We” the government? Really, how could anyone survive without the omniscient government regulating where we live, what we eat, what we do?
The “bad” and “ineffective” stuff as you define it? A panel of experts? Perhaps we should let someone with a mindset different than yours determine what is “bad” or “ineffective” for you. Everything is hunky dory until the “other guy” is in charge.
Is your whole post a witty bit of sarcasm flying over my head? Please let it be so.
Sheesh, it’s amazing the lengths people will go to have someone control, I mean regulate, their lives when the “right” people are in charge.
Quote
October 14, 2009, 4:23 pmKristoffer V. Sargent says:
Anguslander writes, “There are all sorts of ways you can figure out (a) whether preventing someone from doing behavior B is likely to make them better off and (b) whether someone is doing B because he is akratic or otherwise irrational.”
From Dostoevsky’s “Notes From The Underground”:
I suppose that would be my rebuttal.
Quote
October 14, 2009, 4:50 pmJohn A says:
There are benefits. But a continent sized problem, especially when “advice” becomes “rule” becomes law.
Minor example: for over fifty years, I have shuddered when doctors and others flatly state that everyone should eat a certain amount of green vegetables. You see, I am allergic to them. Not life-threatening — unless I am forced to eat some at every meal, because the allergy involves projectile regurgitation of stomach content. And yes, it is also disgusting, especially in a restaurant that slips something by my attention.
Quote
October 14, 2009, 5:17 pmThe Volokh Conspiracy » Blog Archive » Hayek on the Use of Superior Expert Knowledge as a Justification of Paternalism says:
[...] my most recent post on paternalism, I criticized claims that paternalistic policies can be justified on the grounds that [...]
Carl The EconGuy says:
If libertarian paternalism boils down to giving information about the downside of certain choices, there’s no harm in it and doesn’t merit the label paternalism. So, there’s more to it — it’s not just about providing information about consequences, it’s about steering choices, however gently. That’s what makes it paternalism, and not libertarian. I’d call it liberal paternalism, for liberalism it is, pure and simple. It assumes, as other have pointed out above, that the pater knows best, and is untainted by other motives in imposing constraints. Both assumptions are obviously dubious at best.
But there’s another element to it, one that I think lies at the heart of liberalism. The liberal pater is offended by the behavior of other people. Liberals suffer pangs of negative externalities when other people don’t behave as liberals think they should. It’s not guilt, it’s anger at having to live with the offense they suffer when other people make free choices.
So, the problem liberal paternalism attempts to solve is that meddlers are trying to resolve their own internal resentments against other people’s choices. They are truly the modern incarnation of that old joke about puritans: Why are puritans so sour? It’s the deep conviction that someone, somewhere, somehow is having a bit of fun.
And that’s what makes a liberal pater. He is offended by the free choices exercised by others. He hates it that someone, somewhere, somehow enjoys the freedom to take responsibility for his/her own actions.
Quote
October 14, 2009, 8:59 pmfrissell says:
should limit the choices available to consumers in order to prevent them from making poor decisions because of ignorance or cognitive bias.
Good luck with that. With eBay and overseas purchases via the nets it’s a lot harder to restrict choices these days. I can and have bought plenty of unsafe products on eBay (including a copy of the Button Book — banned by the CPSC) that I donated to Eugene.
Infinite sellers are hard to control.
Why we can even increase our CO2 and other GHG releases if we feel like it and there’s not much the oposition can do about it.
Quote
October 14, 2009, 10:14 pmBruce Hayden says:
The problem there is that we have come to a point where there is nothing offsetting the regulators. Sure, maybe someone can quantify how many people were not harmed due to FDA oversight of medicines. But what is always ignored is the question of how many people died because some drug was either delayed, never approved, or, even never brought into formal testing for economic reasons. And, it is likely that that number is far higher than those saved. But in the regulatory state, that statistic is irrelevant. Only the number “saved”.
My view is that we have a much better regulator for product safety, esp. in drugs, in the form of a robust tort system.
Quote
October 15, 2009, 12:02 amBruce Hayden says:
And, this is based on the fallacy that man is perfect, and not, as we all know, selfish and self-centered. The idea that we can trust the regulators because they are somehow any less self-centered than the rest of us, or somehow so much smarter, is not realistic.
Quote
October 15, 2009, 12:06 amIlya Somin says:
Ken is right on Thaler’s views. Prof. Somin is confusing the issues here. He equates libertarian paternalism with what Crampton calls “new paternalism.” After reading the article, it is clear that Crampton really isn’t attacking Thaler-Sunstein-style libertarian paternalism but rather the paternalism that is in fashion in public health departments. These are quite distinct. Libertarian paternalism as such has nothing to say on the subject of sin taxes, for instance.
Not true. Thaler and some of his coauthors advocate numerous policies that actually restrict choices. See here for some examples.
Quote
October 15, 2009, 2:39 amRicardo says:
We could all debate each of the policies discussed in the blog post but these have nothing to do with the policies that Crampton addresses. Has Thaler advocated higher alcohol taxes and called them “libertarian paternalism”? Not in anything I’ve read of his.
I would note that most sensible libertarians I’ve met think you should not be allowed to sell yourself into slavery. That’s even more “libertarian paternalistic” than the examples Whitman gives since there would be no way of getting around such a restriction on right of consenting adults to freely contract. There’s no point in being doctrinaire.
What’s ironic about the opposition to libertarian paternalism here is that a big part of the goal of libertarian paternalism is making freedom of choice palatable to an electorate that would, in many cases, rather restrict freedom outright. A lot of the misguided regulations we currently have came about through high-profile cases of abuse. Dishonest financial advisers and stockbrokers taking advantage of the elderly and the financially unsophisticated led to a lot of modern securities regulation, for instance. Reduce the cases of abuse and you remove the impetus for more restrictions on freedom.
People will never support completely removing Social Security and letting each person fend for themselves in retirement. They may well support (and have in other countries) a system where people can divert some proportion of their paychecks to a list of screened index funds or balanced mutual funds offered by reputable companies in exchange for forgoing SS in the future. Reforms like these need libertarian paternalism to be politically viable.
Quote
October 15, 2009, 3:07 amRandy says:
anti: “The “bad” and “ineffective” stuff as you define it? A panel of experts? Perhaps we should let someone with a mindset different than yours determine what is “bad” or “ineffective” for you. Everything is hunky dory until the “other guy” is in charge.”
Perhaps you would like to have a world where thalidomide is still available, despite it’s being called “the biggest medical tragedy of all time.” I mean, hey, if a pregnant woman is stupid enough to take the medication and it results in birth defects, that’s her problem, right?
I, along with most Americans, prefer to have an FDA that is checking upon the safety and efficacy of drugs to avoid problems like this in the future, even if you think this is ‘paternalism’
Bruce: “My view is that we have a much better regulator for product safety, esp. in drugs, in the form of a robust tort system.”
Possibly. But that’s an ‘after the fact’ remedy. The harm has already been done. If your child died because he took a medication that killed him, you can certainly sue and that might prevent future deaths, but it’s cold comfort to you. Me, I would rather have the medication pulled before it causes any deaths.
Yes, certainly, there are medications that are delayed because of this process. Prior to the 90s, the process was actually very long and cumbersome. It was only because gay men were dying of AIDS that various protests were made at the FDA, and that forced the process to be speeded up, and to allow experimental treatments to be approved. So the process is now greatly improved, which is a good thing.
Quote
October 15, 2009, 11:26 amRandy says:
If you all are so enamored with pure libertarianism, you should move to China. There, there are few if any regulations of the sort you complain of. And the few that they have are often ignored. You can pollute as much as you want in many parts of China, you can sell toys that have lead based paint on them, the drugs may have been made in a dirty factory filled with contanaments, and any consumer product may be unsafe. No paternalism in that market! Heck, you can still buy tiger’s penis to solve your impotence problems (not that any of you have such bad luck). It costs a fortune and doesn’t do a darn thing, but hey, it’s a free market anyway. The only one who loses is the tiger, but who cares about regulations to save them?
Quote
October 15, 2009, 11:34 amAnti says:
@Randy
*Sigh* So much for witty sarcasm. In any event, one can be hard pressed to equate authoritarian and communist China with “pure libertarianism.” China is more free today, due to its RELAXATION of communist policies, and adoption of more liberal, in the classic sense, policies. These libertarian ideas have moved untold millions from poverty to more fruitful and enjoyable lives. However, China is no where near close to “pure libertarianism.” You are either trolling or woefully ill-informed.
Did my post mention thalidomide? Well, let’s say it did. Did you know the FDA has approved thalidomide for treatment of multiple myeloma? Or that it only did so seven years after the first reports of its effectiveness in treatment appeared in medical journals? How many people suffered or died while the FDA dragged its feet?
Regardless, companies conduct studies on their drugs, other companies conduct studies on its competitors products, colleges conduct studies on products, physicians review literature, consumers make choices every day regarding products they use. All of this information spread over numerous actors can never be fully enveloped in a governmental regulator.
Quote
October 15, 2009, 1:13 pmRandy says:
Well, I was being sarcastic to a degree, but not totally. China IS in fact virtually regulation free regarding consumer protection. So are a lot of other countries. And there is no question that we have flaws in our system. But just go ahead and try to convince Americans that we should go the way of third world countries and regulate consumer products less. So I repeat — if you want a place where there is little in the way of government regulation to protect the consumer, go to China. Or how about Mexico? You can buy virtually anything there as well. They sell all sorts of fraudulent cancer cures that do nothing except take your money.
“All of this information spread over numerous actors can never be fully enveloped in a governmental regulator.” Baloney. The internet has made it easier than ever to coordinate all the information.
But let’s say you are correct — the gov’t can’t fully envelop all the information. Then how do you expect any consumer to either? The fact is that most consumers get their information from advertising, which is hardly accurate or gives a full picture.
Regarding Thalidomide. Okay, so the gov’t approved it for use initially, until they found out that it produced birth defects. Are you then arguing that there should be no FDA, and that the product should still be sold? Are we just supposed to rely upon the good will of the manufacturer to tell us the truth about it? The tobacco companies didn’t until forced to, so I suspect most companies won’t either.
Quote
October 15, 2009, 3:50 pmThe Volokh Conspiracy » Blog Archive » Paternalism and Slippery Slopes says:
[...] have myself previously criticized the new paternalism here, here, here, and here. Rizzo and Whitman correctly emphasize that the danger of slippery slope [...]