I wanted to expand on one of the criticisms of Nudge that I made below. Namely, I criticize Thaler and Sunstein’s inability to dispense with the fundamental fact of subjective human preferences.
The authors refer to their preferred program as “libertarian paternalism”. I suspect this term is insincere, (perhaps merely an attempt to woo libertarians into more state-friendly territory?) since Thaler, for example, seems quite willing to endorse clearly non-libertarian paternalism. But for argument’s sake I’ll use their nomenclature. After all, the authors’ inability to stand by their professed principles is not a rebuttal of those principles per se (though it does undermine their pat dismissal of slippery-slope arguments).
Facially, libertarian paternalism attempts to account for subjective preferences in its definition. Paternalism, Thaler and Sunstein say, “tries to influence choices in a way that will make choosers better off, as judged by themselves” (page 5). This neat trick hangs subjective consumer preferences as the goal-point of all rigid government interventions. But it gets us nowhere.
Any of the chapters could be used to demonstrate the inability of libertarian paternalism to choose a “correct” direction in which to point consumers. But the discussion of retirement planning (Chapter 6 – “Save More Tomorrow”) struck me as the most obviously futile.
