Is Libertarian Paternalism an Oxymoron?
In this article I have attempted to discuss two points brought up by Sunstein and Thaler's new perspective on paternalism. The first is that whatever individuals do, they have to take second rank decisions, i.e. decisions that are equally attractive for them but impact others' people welfare. They then face a three alternative choice: either they do not care of the collateral consequences of their choice and act randomly, either they select the option that will make others better off, either they pick the option that will make others worst off. The authors assume they will necessarily act benevolently. I argued this statement is mistaken, and that the authors did not sufficiently distinguish the functional and the personal motivations of the planners. This leads me to define paternalism as the personal benevolence of the planners. Because they do not have any professional or moral duty towards the non-planners, they have absolutely no obligation to be benevolent. In most cases, the easiest choice is to act randomly. This incertitude about the planners' choice has dramatic consequences on non-planners: unless they know and trust the planners they cannot expect them to be paternalistic. They are subsequently less prone to blindly adopt default rules. The second point of the authors is that one can conceive a paternalistic system based on planners' benevolence that would not infringe libertarian principles. Default rules can, for instance, be combined with absolute freedom of choice. I argued that freedom of choice would not contribute to individual freedom if choices are not voluntary. The easiest they set up opting out options the less discriminating their system is, and eventually the most inefficient it will be.
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- Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
- Dan Ariely & George Loewenstein & Drazen Prelec, 2005.
"Tom Sawyer and the construction of value,"
05-10, Federal Reserve Bank of Boston.
- Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, vol. 94(4), pages 1014-1033, September.
- Mui, V.L., 1992.
"The Economics of Envy,"
9306, Southern California - Department of Economics.
- Loewenstein, George & Adler, Daniel, 1995. "A Bias in the Prediction of Tastes," Economic Journal, Royal Economic Society, vol. 105(431), pages 929-37, July.
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