Escaping paternalism: rationality, behavioral economics, and public policy

In their new book Escaping Paternalism, Glen Whitman and Mario Rizzo try to persuade readers to be skeptical of behavioral paternalism (Rizzo & Whitman, 2019). Rizzo and Whitman describe behavioral paternalism as a new form of paternalism that uses research in behavioral economics to justify paternalist interventions; works they say advocate for behavioral paternalism include Nudge by Richard Thaler and Sunstein (Thaler & Sunstein, 2009), Inside the Nudge Unit by David Halpern (Halpern, 2015), and Against Autonomy by Sarah Conly (Conly, 2013) (p. 3). Behavioral paternalism is sold in these works as a more scientific and ethical form of paternalism than traditional paternalism because interventions aim to preserve freedom of choice and use empirical research to help agents satisfy their genuine preferences – not the preferences of paternalists. Whereas a traditional paternalist might support a ban or high tax on smoking cigarettes, believing smoking is bad for people independent of their attitude towards smoking, a behavioral paternalist prefers a nudge that requires cigarette manufacturers to post pictures of unhealthy lungs on cigarette packs. In theory, behavioral paternalists believe this nudge leaves those who still want to smoke, and might all things considered benefit from smoking, able to do so without prohibitive costs. However, despite its ostensible appeal over traditional paternalism, Rizzo and Whitman provide reasons to doubt the benefits of behavioral paternalism. They focus primarily on epistemic problems and argue that behavioral paternalists do not have the necessary knowledge of agent’s preferences and the net welfare effects of their interventions to justify their policies. And while behavioral paternalists are Rizzo and Whitman’s main targets, these epistemic and practical challenges are relevant to all pro-paternalists. Even a traditional paternalist who wishes to impose their objective values on people must have reasonable knowledge about the overall welfare effects of their interventions. However, while their arguments are relevant to paternalism broadly and behavioral paternalism specifically, the book’s title might be overstated given the scope and focus of the book. Rizzo and Whitman do not offer decisive objections against paternalism or behavioral paternalism. While the authors sow seeds of reasonable doubt, they do not establish conditions that paternalists must satisfy to justify their policies. They mention difficulties with interventions passing ‘cost/ benefit analysis,’ but do not provide details on how this cost–benefit analysis works and why a policy fails to pass a cost/benefit test. Accordingly, a pro paternalist might see Rizzo and Whitman’s challenges as an opportunity to make paternalistic policies better informed and more effective, lobbying to re-title the book Improving Paternalism. Rizzo and Whitman say,