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Why Are Some Theories Not Recognized, While Others Are Succesful? «Meritorious Paternalism» of R. Musgrave and «Libertarian Paternalism» of R. Thaler

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  • Alexander Rubinstein

    (The Institute of Economics of the RAS, Moscow, Russia)

Abstract

The article considers two theories that are half a century apart from each other, justifying state intervention in market relations – Richard Musgrave's «Theory of Meritorious Goods» and Richard Thaler's «Libertarian Paternalism». Within the framework of a comparative metho­dological study, the sources and prerequisites of these theoretical constructions, the design of state intervention characteristic of each of them, as well as criticism of the meritorious and li­bertarian paternalism, are discussed. The thesis that both theories are based on the same initial assumptions is substantiated, they assume the same goals of state intervention and the conclusion is formulated – in these theories there is more in common than different. They are distinguished only by the institutional design of «pushing»: in one case, it is about creating economic incentives for the right individual choice, in the other – the manipulation of the «default option», which uses an arsenal of psychological tools. It is shown that with all the novelty, «new paternalism» is, in fact, a «new meritorics», based not only on the assumption of irrationality of individuals, but its psychological explanation, created by behavioral economists and which has become part of the mainstream, which determines the answer to the question of article. At the same time, this answer does not create a holistic picture, and the negative connotation of paternalism is still preserved in economic science. The article formulates an additional consideration, revealing another side of the success of libertarian paternalism: the «language game», inherent in Musgrave’s theory was outdated in the early 1950s, and, therefore, this theory was among the «forgotten» ones, and the concept of Thaler and his colleagues corresponds to the new «language game», the key elements of which are the word «liberalism» and speech constructions, corresponding to the modern language and terminology of the mainstream of economic theory.

Suggested Citation

  • Alexander Rubinstein, 2019. "Why Are Some Theories Not Recognized, While Others Are Succesful? «Meritorious Paternalism» of R. Musgrave and «Libertarian Paternalism» of R. Thaler," HSE Economic Journal, National Research University Higher School of Economics, vol. 23(3), pages 345-364.
  • Handle: RePEc:hig:ecohse:2019:3:1
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    Keywords

    meritorics; subsidies; transfers; behavioral economics; libertarian paternalism; pushing; rhetoric; language game;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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