Richard Thaler and Cass Sunstein's coauthored (2008) Nudge is among the most favored texts of political classes on both sides of the Atlantic and beyond. This work defends targeted “nudges” by policymakers to improve the everyday decisions made by citizens concerning health, wealth, and happiness. Thaler and Sunstein claim that nudges should be understood as a case of libertarian paternalism. Nudges are libertarian because they must maintain, if not increase, the available choices that citizens should be free to make for themselves. However, nudges are also paternalistic by framing choices in ways that might better promote superior decisions. For example, school cafeterias might reorganize their display of fruits, vegetables, and desserts so that no options are removed, but some become more eye-catching and more likely to be chosen for the benefit of schoolchildren. While the authors acknowledge various objections, they conclude that libertarian paternalism respects choice while supporting better outcomes, often at minimal expense. It is easy to see how such an approach has found strong appeal among politicians and policymakers eager to improve public policy in difficult economic times.
Gilles Saint-Paul's The Tyranny of Utility is a well-argued critique of the behavioral economics that underpins libertarian paternalism. Saint-Paul is concerned that behavioral economics may contribute to more paternalistic interference by government and not less. Governments often seek to introduce policies that lead to improvements across indicators, such as health and well-being. The problem of libertarian paternalism is that it is perhaps a less transparent form of paternalism where citizens believe they are deciding freely for themselves, but in fact their choices are influenced by almost secretive manipulation of the choice architecture. So citizens will be steered, or “nudged,” more often toward making the choices that policymakers have determined for them in advance.
One concern is whether any government should be justified to structure individual decision making in this way. While governments should be able to pursue policy goals, these should be more transparent: Citizens may be misled into believing that their choices are determined as autonomously as they may assume. The greater use of nudges as policy instruments might contribute to the public's becoming less informed about the policies pursued by governments and, more especially, the means by which these policies are pursued. Citizens deserve better clarity about why their choices should be different and how their choice architecture is constructed. For Saint-Paul, a major problem here is that saying too much about the construction of choice architecture may give away too much and lead to the failure of citizens to make the “best” choices according to governments.
A second concern is whether any government should be justified in pursuing policies where it knows best. Perhaps obesity should be reduced. But should governments influence my choice of diet? Or should it structure my decision frameworks so that I choose what the government believes is best in other individual decisions concerning my person? This then raises further the problem of governments pursuing the agenda of private-interest groups at the expense of the public. The concern here is that governments may be tempted to use nudges to support their future political fortunes instead of the public good. If governments seek to remain in power and it were possible to influence the public to provide further support through nudges, then many governments may choose to use nudges to promote their own political interests or the interests of their political supporters over the public good for which nudges have been justified. Nudges represent a Pandora's Box more likely to produce problems than acceptable solutions. Saint-Paul argues that nudges offer a stronger case for “imposing greater constitutional limits on government” than for freely steering the construction of public policy implementation (p. 150).
The book has many merits. It is political economy presented in an accessible way without being overly verbose. The chapters are tightly focused and arguments succinct. These factors contribute to producing an enjoyable and highly engaging book. While many arguments are well presented, some readers may find some claims too abrupt. For example, the book begins with a critique of utilitarianism and economic policy where I share broad sympathy with the general argument, but where a greater recognition of the wide tent that is “utilitarianism” might go some way to a more robust engagement with this opponent and an even more convincing critique.
Perhaps the biggest shortcoming is that the chief exemplar of its opponent, Thaler and Sunstein's Nudge, is nowhere mentioned. The authors receive one joint mention and Thaler is cited briefly on two other pages, although their jointly coauthored article “Libertarian Paternalism” (American Economic Review 93 [May 2003]: 175–179) receives some mention (pp. 84–85). This is not to suggest that Thaler and Sunstein are the only behavioral economists worth engaging; they are not, and many others receive substantial discussion, such as Daniel Kahneman. Indeed, much of the substance behind their position can be found in these pages, and Saint-Paul's critique is clearly applicable to Nudge. Nevertheless, Nudge is without doubt one of the best-known representatives of Saint-Paul's opponents. It would have been useful if there had been a more substantive engagement with Nudge if only to better attract the wider audience attached to that work.
Nevertheless, The Tyranny of Utility offers a forceful critique of the behavioral economics that has increasingly underpinned much of our public policymaking today. While it may not yet silence opponents, it provides rich arguments on why nudge theorists have much more work to do in defending libertarian paternalism. Anyone interested in nudges and behavioral economics will be rewarded amply by engaging with this important work.