Thursday, March 9, 2017

Take your one size fits all statist idea and nudge it

A good article on the insidious advocacy for centralized, government controlled nudging of citizens. Nudging people to make good choices can backfire by Bruce Bower.

Cass Sunstein first brought the idea to popular attention in the eponymous Nudge: Improving Decisions about Health, Wealth, and Happiness. The insidiousness is the statist's assumption that they know the desires, goals and constraints of others well enough for the Philosopher King to make a better decision on the part of others and then to use the technique of nudging to manipulate citizens into doing what the statist Philosopher King wants.

I find the arrogant presumption to be repulsive. There are, however, a lot of statists and therefore nudging has an enthusiastic following. Bower introduces the additional observation that emerging evidence suggests that while nudging might be effective in the short term, it has unanticipated negative consequences as well. Isn't that always the case?
Nudge proponents, an influential group of psychologists and economists known as behavioral economists, follow a philosophy they dub libertarian paternalism. This seemingly contradictory phrase refers to a paternalistic desire to promote certain decisions via tactics that preserve each person’s freedom of choice. Self-designated “choice architects” design nudges to protect us from inclinations that might not serve us well, such as overconfidence, limited attention, a focus on now rather than later, the tendency to be more motivated by losses than gains and intuitive flights of fancy.

University of Chicago economist Richard Thaler and law professor Cass Sunstein, now at Harvard University, triggered this policy movement with their 2008 book Nudging people to make good choices can backfire. Thaler and Sunstein argued that people think less like an economist’s vision of a coldly rational, self-advancing Homo economicus than like TV’s bumbling, doughnut-obsessed Homer Simpson.

Choice architects like to prod with e-mail messages, for example, reminding a charity’s past donors that it’s time to give or telling tardy taxpayers that most of their neighbors or business peers have paid on time. To nudge healthier eating, these architects redesign cafeterias so that fruits and vegetables are easier to reach than junk food.

A popular nudge tactic consists of automatically enrolling people in organ-donation programs and retirement savings plans while allowing them to opt out if they want. Until recently, default choices for such programs left people out unless they took steps to join up. For organ donation, the nudge makes a difference: Rates of participation typically exceed 90 percent of adults in countries with opt-out policies and often fall below 15 percent in opt-in countries, which require explicit consent.

Promising results of dozens of nudge initiatives appear in two government reports issued last September. One came from the White House, which released the second annual report of its Social and Behavioral Sciences Team. The other came from the United Kingdom’s Behavioural Insights Team. Created by the British government in 2010, the U.K. group is often referred to as the Nudge Unit.

In a September 20, 2016, Bloomberg View column, Sunstein said the new reports show that nudges work, but often increase by only a few percentage points the number of people who, say, receive government benefits or comply with tax laws. He called on choice architects to tackle bigger challenges, such as finding ways to nudge people out of poverty or into higher education.

Missing from Sunstein’s comments and from the government reports, however, was any mention of a growing conviction among some researchers that well-intentioned nudges can have negative as well as positive effects. Accepting automatic enrollment in a company’s savings plan, for example, can later lead to regret among people who change jobs frequently or who realize too late that a default savings rate was set too low for their retirement needs. E-mail reminders to donate to a charity may work at first, but annoy recipients into unsubscribing from the donor list.

“I don’t want to get rid of nudges, but we’ve been a bit too optimistic in applying them to public policy,” says behavioral economist Mette Trier Damgaard of Aarhus University in Denmark.

Nudges, like medications for physical ailments, require careful evaluation of intended and unintended effects before being approved, she says. Policy makers need to know when and with whom an intervention works well enough to justify its side effects.
The article then goes on to describe a range of empirical experiments highlighting longer term negative consequences to nudges.

My main objection remains philosophical and pragmatic - 1) it is not the role of technocratic experts to decide on behalf of others and 2) many of those experts end up being wrong. Bower adds a third - in the long term, nudging may have an ultimately counterproductive impact.

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