GMU law professor (and FTC commissioner nominee) Joshua Wright and Judge Douglas H. Ginsburg have a new paper in the Northwestern Law Review, “Behavioral Law and Economics: Its Origins, Fatal Flaws, and Implications for Liberty.” Here’s the abstract from SSRN: Behavioral economics combines economics and psychology to produce a body of evidence that individual choice […]
Archive | Libertarian Paternalism
Steven Levitt’s “Daughter Test” for Paternalistic Policies
Famous economist Steven Levitt, coauthor of Freakonomics, recently described his “daughter test” for assessing paternalistic policies: Most of the time there is broad agreement as to which activities should be made criminal. Almost no one thinks that theft or violence against innocents is socially acceptable. There are, however, a few activities that fall into a […]
Broccoli, Slippery Slopes, and the Individual Mandate
By Ilya Somin on January 25, 2011 3:26 pm in Federalism, Health Care, Individual Mandate, Libertarian Paternalism, Paternalism
Opponents of the constitutionality of the individual mandate have emphasized that upholding the mandate would give Congress the power to mandate virtually anything, including forcing people to eat broccoli. Northwestern law professor Andrew Koppelman appears to agree, but argues that this slippery slope is nothing to worry about: One of the most rhetorically effective arguments […]
Does the Supposedly Superior Expertise of Regulators Justify Libertarian Paternalism?
By Ilya Somin on April 19, 2010 9:56 pm in Libertarian Paternalism, Paternalism, Political Ignorance, Public Choice, Uncategorized
Some of the commenters on my last two posts criticizing libertarian paternalism accuse me of ignoring the possibility that such paternalism is justified by the supposedly superior expertise of government regulators. Actually, I have addressed this point in several previous posts, such as here and here. However, readers can’t be blamed for not taking the […]
Richard Thaler Responds to Critics of Libertarian Paternalism
Economist Richard Thaler, a leading advocate of libertarian paternalism, has briefly responded to some of the points I made in my most recent post on that subject. In that post, I argue that advocates of libertarian paternalism implicitly rely on the assumption that regulators and voters are rational, while consumers and other private sector actors […]
The Double Standard of Libertarian Paternalism
By Ilya Somin on April 15, 2010 12:35 am in Libertarian Paternalism, Libertarianism, Paternalism, Political Ignorance
Cato Unbound has an excellent symposium on “libertarian paternalism,” the theory that argues that government should intervene to protect people against cognitive biases that lead them to make decisions that ultimately reduce their ability to achieve their own objectives. Advocates of libertarian paternalism argue that their approach is different from and superior to traditional paternalism, […]
Welfare Evaluation, Behavioral Agents and Rational Agents
By Kenneth Anderson on April 14, 2010 10:48 pm in Economy, Libertarian Paternalism, Paternalism, Regulation
A reader sends me the following comment, further to the several VC posts on behavioral economics (initially occasioned by Andy Ferguson’s Weekly Standard essay): One basic issue that this whole-“behavioral econ– good-or-bad?” discussion seems to have neglected the following simple point: welfare evaluation is much harder with “behavioral agents” than “rational agents.” With “rational” agents […]
Further to Andrew Ferguson on Behavioral Economics
By Kenneth Anderson on April 10, 2010 5:53 pm in Economy, Libertarian Paternalism, Libertarianism, Regulation
Todd’s right, Andy Ferguson’s Weekly Standard piece is excellent – whether one agrees with his ultimate take on it or not. The bottom line of the piece, however, is not simply a skepticism about the powers of social science – behavioral economics as the New Social Engineering. It is, rather, a broadly libertarian point, going […]
Rational Ignorance Alert! Rational Ignorance Alert!
I hereby respectfully draw Co-Conspirator Ilya’s attention to Alan Wolfe’s witty and insightful book review in today’s New York Times of Derek Bok’s The Politics of Happiness. In particular to the following two sentences; should we call this rational political ignorance or not? Americans are most certainly misinformed. Dumb they are not.
How Markets Make Us More Rational
By Ilya Somin on January 6, 2010 8:36 pm in Libertarian Paternalism, Paternalism, Political Ignorance
Advocates of “libertarian paternalism” cite experimental evidence showing that people often make irrational decisions, and argue that we need government regulation to guard against such problems. Economist Richard McKenzie challenges part of this rationale by citing experimental evidence showing that markets actually give people incentives to act more rationally than they would otherwise, thus undercutting […]
Paternalism and Slippery Slopes
By Ilya Somin on November 6, 2009 12:59 am in Libertarian Paternalism, Paternalism, Political Ignorance
Advocates of the “new paternalism” (sometimes also called “libertarian paternalism”) argue that carefully calibrated government interventions can help consumers avoid mistakes caused by their own cognitive biases. In this interesting new article, economist Mario Rizzo and legal scholar Glen Whitman argue that new paternalist policies are vulnerable to slippery slopes that will extend them far […]
Hayek on the Use of Superior Expert Knowledge as a Justification for Paternalism
In my most recent post on paternalism, I criticized claims that paternalistic policies can be justified on the grounds that government-appointed experts have greater knowledge than consumers and are less likely to be influenced to cognitive error. Among other points, I emphasized that government experts have no way of determining how much benefit consumers get […]
Pitfalls of Paternalism
By Ilya Somin on October 14, 2009 12:43 am in Libertarian Paternalism, Paternalism, Political Ignorance
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 […]