The Volokh Conspiracy
[Jonathan Adler, January 20, 2007 at 5:32pm] Trackbacks
Sunstein on Libertarian Paternalism:

University of Chicago law profesor Cass Sunstein blogs in defense of libertarian paternalism:

Becker and Posner make some nice points against those who like government bans and mandates (though Posner, interestingly, defends the ban on trans fats in New York City restaurants; libertarian paternalists would disapprove of any such ban). But libertarian paternalists do not mean to allow government to forbid the triumph of the supposed "weaker" self over the supposedly stronger one. If people want to eat a lot of candy and ice cream, or refuse to save for their retirement, that is their right. Far from neglecting the bounded rationality of government officials, libertarian paternalists emphasize government error as a strong reason for respecting freedom of choice.

What libertarian paternalists add is that the opposition between "individual choice" and "government" is confusing and unhelpful when government is inevitably establishing default rules that govern outcomes if choices haven't been specifically made -- and that influence people's choices in any case. A key point, then, is that private and public institutions can't possibly avoid a form of paternalism, so long as they establish default rules and starting points. (For some reason, economists in particular seem not to understand this point.) The question is how to make those starting points as good as possible, while also preserving free choice.

For more on this subject, see Sunstein's paper with Richard Thaler, "Libertarian Paternalism Is Not an Oxymoron," and Gregory Mithcell's response, "Libertarian Paternalism Is an Oxymoron."

Related Posts (on one page):

  1. Posner Again on Libertarian Paternalism:
  2. Sunstein on Libertarian Paternalism:
  3. Wright on "Libertarian Paternalism":
  4. Becker & Posner on Libertarian Paternalism:
John (mail):
What Sunstein seems to be saying is that there must always be some form of "paternalism" whenever a government has rules that affect conduct, e.g., rules that enforce contracts (the paternalism would presumably lie in the government coercively doing what is "best" for society by enforcing various rules of contract). So, he says, some paternalism is inevitable, and the job is to make it as good as we can. The point is that the distinction between "individual choice and government" is not the way to think about it, but rather between good and bad governmental rules, since there will always be some governmental rules and never pure individual choice.

I suppose he would say the only time true "individual choice" can be instituted under this thinking is in anarchy. And that whenever we deviate from anarchy we must have some form of paternalism. Since some forms of libertarianism reject anarchy, it follows that those forms must embrace a form of paternalism.
1.20.2007 6:36pm
AnonLawStudent:
Prof. Sunstein's thesis seems to fail in the realm of contract law. By enforcing contracts, society isn't enforcing a preference for or against the contract; it's enforcing a private law voluntarily adopted by the parties in question. No paternalism involved.
1.20.2007 7:33pm
Jason Fliegel (mail):
Contract law does not enforce every agreement between parties. It does not, for example, enforce an agreement wherein one or both parties agrees to do something illegal (we cannot make an enforcable contract for you to sell me five ounces of marijuana, for example). It does not, under some circumstances, enforce a contract where one or both contracting parties is a minor. It does not, under most circumstances, enforce a contract wherein only one party agrees to do something. These default rules all represent value judgments about when the government should and should not enforce "private law" between parties.
1.20.2007 8:16pm
Huh:
Not true, AnonLawStudent. Because contracts are almost always incomplete expressions of agreement, some terms must be governed by default rules. The most obvious example is the UCC. Indeed, the UCC is exactly what Sunstein is talking about: a concerted effort at making the default rules as good as they can be. Thus minimizing transaction costs and, in some cases, providing background rules that protect parties from their sins of omission.

Sunstein's point is that, since we have to have these rules anyway (if only to avoid needless litigation), we might as well choose rules that provide "good" results. It's a weak form of paternalism, but it's still paternalism.
1.20.2007 8:26pm
fishbane (mail):
AnonLawStudent seems to miss the point. The entire thesis is about relative preferences, not 'binary' law. The question is if there is a role for a libertarian government encouraging some behaviours over others. This is in contrast to, for instance, contract enforcement, where the end result is about rights enforcement, rather than a number of (potentially competing) concepts about improving society and wellbeing.

I'm not taking a position here, only pointing out differences.
1.20.2007 8:33pm
frankcross (mail):
I think this reduces to a semantic argument over the meaning of paternalism. As noted above, Sunstein suggests that any government action is paternalistic, insofar as it privileges some actions (making contracts), and limits the free choice to break them without penalty. To me, that's not paternalism, but I suppose it's a plausible definition and it does expose a common fallacy about government's role.

While libertarians often couch their arguments in rights-talk, their embrace of things like contract enforcement (or the military) reveal that their case is really a pragmatic one. Those things could also be handled without government. I suppose Becker and Posner recognize this, though, and employ a different definition of paternalism.
1.20.2007 10:04pm
P_A_C_O (mail):
Implementing libertarian paternalism is problematic. The Sunstein and Thaler paper discusses the potency of default rules, starting points, and framing effects, demonstrating that the context in which a decision is made effects the outcome. If a libertarian paternalistic government shapes the context in which people make a free choice, that government is effectively chipping away at an individual's freedom to choose in contravention with libertarian principles.

While the government may intend to merely encourage behavior, certain people will percieve the encouragement as coercion. Often the mere suggestions of an authority are coercive. Also, people within government will likely misinterpret the effort to steer people in a given direction as a grant of authority to compel people in that direction.
1.20.2007 11:07pm
P_A_C_O (mail):
Implementing libertarian paternalism is problematic. The Sunstein and Thaler paper discusses the potency of default rules, starting points, and framing effects, demonstrating that the context in which a decision is made effects the outcome. If a libertarian paternalistic government shapes the context in which people make a free choice, that government is effectively chipping away at an individual's freedom to choose in contravention with libertarian principles.

While the government may intend to merely encourage behavior, certain people will percieve the encouragement as coercion. Often the mere suggestions of an authority are coercive. Also, people within government will likely misinterpret a policy steering people in a given direction as a grant of authority to compel people in that direction.
1.20.2007 11:10pm
Kovarsky (mail):
the most accessible example of this idea probably involves intellectual property rights. self-styled libertarians often endorse strong "ownership" rights, even though the status of what exclusionary right "exists" is usually at issue.
1.21.2007 12:09am
Kovarsky (mail):
actually that's a bad example, consider it withdrawn.
1.21.2007 1:00am
lawmoldova (mail) (www):
this is very interesting, ive never heard of that,
but now i can think about it, thx
1.21.2007 4:06am
J. Bergman (mail) (www):
Actually, the best example of what Sunstein is talking about may be the "dessert option" he and Thaler discuss in their paper. Apparently, in a restaurant setting, the placement and timing of food presentation has a substantial effect on people's consumption — if you wait for customers to ask for dessert, they're much less likely to order it than if you bring around a cart to show them what's available (which is exactly why many restaurants do this). Setting a default "no dessert unless asked for" standard (either publicly mandated or via a restaurant association) might promote public health by limiting consumption, while still allowing anyone who wants that slice of cake to get it with minimal difficulty — they just have to ask the waiter.

In response to P_A_C_O, I think the idea is that very few, if any, people would honestly view this as coercive. That's the argument, at least — I'm not sure if I buy it myself.
1.21.2007 10:50am
Ken Arromdee:
If a libertarian paternalistic government shapes the context in which people make a free choice, that government is effectively chipping away at an individual's freedom to choose in contravention with libertarian principles.

I'd think a choice would mean someone's personal assessment of whether something is good or bad and how to make tradeoffs between it and other things. If someone can be induced to "choose" differently merely because they are told "10% are dead after 5 years" rather than "90% are alive after five years", how is that a choice at all in any meaningful sense?
1.21.2007 11:52am
Tom R:
Now, back in the good old pre-New Deal days (or a fortiori in 1776), Sunstein would have intituled his paper "Libertarian Paternalism No Oxymoron, OR, It Ill Deserves the Name of Confinement which Hedges us in only from Bogs and Precipices."
1.21.2007 8:17pm

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